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The two lawyers may be retained simultaneously by the client at the out- set of a matter, or L2 may be brought in after L1 has begun his or her work. The task of arranging for L2's services may be handled by the client or left to L1. As co-counsel, both lawyers have direct responsibilities to the client.
No matter how well you know your attorney or how "simple" you think your case is, you should always have a written representation agreement (sometimes called a fee agreement) with your lawyer. These contracts set out the terms of the attorney-client relationship and the fees and compensation that you will owe.
As per the laws of the Law Society, an attorney cannot represent both parties simultaneously to avoid any possibility of conflict of interest. This is because both the parties will pressured for better rates and higher profits. However, the parties are allowed to hire different lawyers from the same law firm.
If attorneys have multiple clients in the same matter, they must disclose the existence of any current or potential conflicts, and where possible and proper, obtain waivers of such conflicts in compliance with the applicable rules of professional responsibility.
Rule 7 of the Rules of Professional Conduct of the State Bar states that: "A member of the State Bar shall not represent conflicting interests, except with the consent of all parties concerned."