Ben Small, a sole practitioner, has just decided to form a law partnership with his lifetime friend, Harvey Steptoe. They agree to name the firm Steptoe and Small and to split all profits. Ben is also a director for a publicly-traded telecommunications firm, NewVector, Inc. Ben has just learned that Harvey is lead counsel is a lawsuit against NewVector. Ben continues to serve as a board member and participates in sensitive discussions about the lawsuit. Ben does not disclose that Steptoe is his partner. Ben's feeling is that he and Harvey are as honest as the day is long and neither would compromise their duties to NewVector and client, respectively.
A) Ben has a conflict of interest and must either resign as a director or leave the partnership.
B) The pledge of both Ben and Harvey is sufficient to cover the ethical issues on conflict.
C) It is Harvey's obligation to take action, not Ben's.
D) None of the above

Question

Quizplus · Accepted Answer

Ben has a conflict of interest and must either resign as a director or leave the partnership because he is participating in sensitive discussions about a lawsuit against a company he is a director for while not disclosing his partnership with the lead counsel of the lawsuit. This creates a conflict of interest that cannot be resolved simply by relying on the honesty of the parties involved.

Ben Small, a Sole Practitioner, Has Just Decided to Form