A Priori . . . Dual Relationships . . . to Conflict of Interest

My background is in the health profession—specifically mental health. Anyone training and practicing in this area is well aware of the limitations on what the profession calls “dual relationships.” A dual relationship is where the professional has both a professional duty to the client and has another relationship which might compromise that duty. It is strictly advised against, could be the cause of an allegation of unprofessional behavior and, at it’s worst, could be the cause of losing one’s license to practice. To say that it’s emphasis as the apex of ethical professional behavior in the mental health world is not hyperbole.

In the consulting world there generally is no such restriction. Consultant regularly seek to be engaged with leaders and develop relationships with decision makers that may turn into clients. They become gold or hunting buddies, spend time at social functions together, perhaps even becoming close friends. In business this is not seen as problematic for many reasons, primary among them is that the client is not seen as somehow vulnerable or at risk of being harmed through the dual relationship. Fair, I think, since business leaders are not, on average, as vulnerable as patients being treated by a professional.

Unrecognized Conflicts of Interest Can hurt everyone

But, does this mean there is no risk? Hardly. Consider this . . . a consultant I once talked to had been invited into an organization by his best friend— a conflict of interest with high damage costs if the project ends badly. He accepted the contract but found, when he got deeply involved in the organization, that there were a lot of issues within the organization, issues that were intimately involved in his friend’s interactions with others in the organization. Awkward!

What’s this consultant to do? Unfortunately, this consultant did not realize the risks, find a way to extricate himself from the contract, and refer the organization to someone who could help with the particular problems they were facing. The result of not doing this was quite dramatic for the organization and there friendship.

Politics may be the most egregious sector for embracing situations that should raise concerns about possible conflicts of interest. I would speculate, for example, based on an article from the Washington Examiner and another in the Post, that Alexandria Ocasio-Cortez’s Chief of Staff, Saikat Chakrabarti, may present one example. Reading about the numerous organizations Saikat was involved in—Brand New Congress, Justice Democrats, Brand New Campaign and AOC’s campaign (multiple LLCs and Pacs)— it is hard to imagine how he could avoid conflicts of interest in this complex network. The actual, or appearance, of conflicts of interest—perhaps even rising to campaign law violations—may have led to his resignation.

Leaders Beware!

Leaders—especially leaders of family-based firms, where relationships are particularly vulnerable—need to be very careful about using consultants that become “too close” to the leaders. Danger lurks when consultants and leaders become more than business partners, because . . .

1. The objectivity the organization needs from the consultant is compromised . . . by the close connection the consultant has with the leaders. Consultants who become too close cannot help being influenced by those relationships. As in a family setting, decisions may be made based on the relationship itself and not on what is best for the organization.

   Consulting relationships naturally have a built-in conflict of interest. If I develop close relationships with the leaders, I may get more work. But consultants need to ask themselves, “What do I care about the most, my business or providing the best service to the organization"?’ Yes, building a friendship may be good for the bottom line but it willfully introduces risk for the leader and the organization.

2. While you can argue that the close relationship may be a strength, and probably is in good times—trust is heightened, loyalty is built, decisions are informal and quick—often when a crisis hits it can be a big liability. The same strengths of trust, loyalty, informality, can paralyze or misdirect the consultant’s role and exacerbate the problems.

   It is often during a crisis when one of the real dangers of forming a “too close” relationship presents itself. For the same reasons that families can struggle during critical moments—taking away Mom’s keys, putting Dad into assisted living, or estate planning—emotions often cloud good judgement and damage relationships. The consultant’s role as an “objective outsider” is lost when they cross into a close relationship with the leaders.

3. Consultants that are too close may not address the hard issues—choosing to remain on good terms instead of pointing out problems. Denial, avoidance, procrastination . . . there are many words that describe the tendency to not address problems—even ones that threaten the organization’s existence. Consultants who retain more distance can direct leaders and organizations to confront problems more easily.

   It may not only be at times of crisis that consultants who are “too close” may negatively impact the organization. The closeness also risks avoiding issues early on when they might be dealt with and a crisis avoided.

4. Most consultants come from business backgrounds and have little awareness of, and no training in, the risks of dual relationships—therefore, they may not maintain good boundaries and avoid these relationships. Any training in conflicts of interest also tends to give them only a cursory overview and little real insight into the potential traps. Ask a consultant to define the risks of dual relationships and you are likely to get a blank look. Ask them about avoiding conflicts of interest and you will get a general understanding of the danger . . . but little depth in what the real risks involve.

   Should the consultant attend the company party? Do they become “golf buddies” with the leaders? Do they circulate in the same social circles as the leaders or go on vacation together? If you are asking yourself, “What is the harm in that?”—then you may not have a deep understanding or the risks of dual relationships.

5. A consultant’s loyalty, or other factors, in close relationships may prevent them from walking away from a toxic issue. In other words, a consultant with less involvement may, due to some over-riding disfunction in the system, may choose to “not help” by walking away. This “walking away” may be what the organizations needs to address a chronic issue they have been avoiding. Sometimes this separation is needed to help leaders or organizations grapple with the issue and bot become depended on others to fix issues they will not/ can not address.

   It’s a hard reality, but sometimes a helper needs to walk away. Some individuals, and organizations, in chronic conditions will not turn away from their “addiction” until they have no choices left. Consultants, at times, need to—for the sake of the organization—walk away. If there are unethical practices, persistent poor judgement, hidden abuses, the consultant can enable and support real damage by continuing to prop up the leadership and the organization. The proper course may be to make the problem overt and disengage from the organization.

It is easy to assume that the turbulence of dual relationships can be navigated safely. In truth, despite the hidden risks and undisclosed damage, they often are accepted eagerly (see the political-organizational hegemony in the U.S. for example). But the predominance of these arrangements do not suffice for “best practice” in consulting and do not protect the leader or the organization from its harmful effects.

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