Lawyers can’t represent their clients’ opponents in another matter.
I represent Client A against Business B. Business B now wishes to hire me on a matter totally unrelated to my representation of Client A. Can I do so?
As written under Rule of Professional Conduct 1.7(a), this representation of Business B on a matter unrelated to representation of Client A against Business B would be prohibited.
Under Rule 1.7(a), there is a concurrent conflict of interest if the representation of one client will be directly adverse to another. Also, there is a concurrent conflict of interest if there is a significant risk that the representation of one client will be materially limited by the lawyer’s responsibilities to another client or to the lawyer’s personal interests.
Under Rule 1.7(b), there can be a waiver if each client gives informed consent, but the waiver is conditioned if the lawyer reasonably believes the lawyer will not be able to provide competent and diligent representation, the representation isn’t prohibited by law and the representation does not involve the assertion of a claim by one client against another represented by the lawyer.
One of the major obstacles to allowing someone suing one client on behalf of another to represent the client being sued in totally unrelated matters is the issue of confidentiality. In the representation, a lawyer may gain confidential information, which could then be used against the client in the adversarial case. The classic situation is where a lawyer would then be cross-examining the president of a business he or she is suing, while at the same time on an unrelated matter representing that person.
Therefore, the rules as written would prohibit such a conflict and require a lawyer to not represent the adversary in an unrelated matter. Having said that, in recent years, there has been some scholarly questioning as to whether or not this stringent prohibition in Rule 1.9 should be allowed to continue.
There is a very interesting article titled "No Conflict" by Daniel Bussel that was published in the Georgetown Journal of Legal Ethics in Volume 25, No. 2, in the spring of 2012. Bussel discussed the history of ethics that ultimately resulted in Rule 1.7 prohibition. He noted that in almost any other profession, there is no prohibition against representing or treating parties in unrelated matters who are adverse to each other. He also noted that in Europe there is not the same stringent conflict rule.
The author suggested that before 1964, a lawyer could represent people on unrelated matters even though the lawyer was suing them or had an adversarial relationship in an ongoing, unrelated case.
The author pointed out that the first Canon of Ethics in the United States was the Alabama Code in 1887 and that code did not prohibit unrelated representation. The author pointed out that when the American Bar Association’s First Model Canons of Ethics were adopted in 1908, these rules were adopted because of President Theodore Roosevelt’s criticism at the graduation ceremony of Harvard University when the president called lawyers "hired cunning." As a result, Canon 6 was adopted. This canon prohibited a lawyer from representing different clients on inconsistent legal arguments and positions. But it did not specifically prohibit a lawyer from representing an adverse party in unrelated matters.
The author noted in the 1960s when the American Bar Association began the creation of the Model Rules of Professional Conduct to replace these old canons, the emphasis became more on regulation than lawyer’s independence. The author noted that the American Bar Association’s Model Rules of Professional Conduct did not attempt to limit concurrent representation on unrelated matters until 1974 and even then the language was somewhat vague.
It wasn’t until Informal Opinion 1495 of the American Bar Association in 1982 that the American Bar Association first specifically barred concurrent representation of adverse clients in unrelated matters. The article suggested that the rationale for that opinion was somewhat weak, but noted when the Model Rules were initially adopted in 1983, this concept was incorporated into the rules. As a result, the prohibition of representing an adverse party in an unrelated matter has been fairly much adopted throughout the various United States.
The author then discussed the policy aspect and how the world of lawyering has changed and why this rule creates many unfortunate consequences, both for clients and law firms. The author noted that a large business or institution could employ several dozen law firms and, as a result, disqualify thousands or tens of thousands of lawyers, particularly in areas where the specialization only has a number of qualified lawyers. The author expressed concerns that outsourcing could also result in disqualification.
"Institutional clients today at any one moment may be actively working with dozens of law firms on a large variety of matters. Every large institutional client is highly likely to find itself adverse in some context or other clients of one or another of the major law firms that it uses. As the law firms and their clients have grown, and the market for legal services has become more specialized and fragmented, the traditional rules imputing conflicts lawyers practicing within a firm, have become increasingly burdensome and divorced from reality."
The author discussed some of the myths that should not be a bar to broadening this rule to allow such unrelated representation. The article is an interesting article and has interesting historical anecdotes. The author suggested getting rid of Model Rule of Professional Conduct 1.7, which is the direct conflict rule, and utilizing the looser standard set forth in Model Rule of Professional Conduct 1.9, which currently deals with former client conflicts. The author ended by noting, "It is time for the American Bar Association to confess error, and start the process of moving the profession toward a more realistic and appropriate set of conflict of interest rules."
The article is very interesting and does raise some issues of valid concern. On the other hand, some of the rationale may apply more to institutional clients than to lay clients. It is hard to imagine a lawyer representing Person A against Person B can then represent Person B on totally unrelated matters and then come into court and cross-examine Person B. It would just be unseemly, would probably ruin the relationship with Person B and would almost certainly result in potential confidentiality issues being exposed or used against the client. But the article does make some good points that the nature of the practice of law and the specialization of the practice of law create problems for major firms that are representing various institutional clients.
In any event, the answer to the question is, at least now, such a conflict would not be allowed. Whether the rules will change remains to be seen, but clearly an evolving legal professional also has to ensure the Rules of Professional Conduct keep up with what is the reality of modern legal practice.
Going to your firm’s in-house counsel with ethics issues can raise concerns.
I am an attorney in a medium-sized firm and, in representing a client, I have discovered an issue that implicates some ethical rules and possibly suggests I acted inappropriately and could raise an issue of legal malpractice. My firm has a lawyer who handles ethical inquiries in-house in the firm. May I go and speak to that lawyer about my conduct?
The initial answer would appear to suggest there would be nothing wrong with such an inquiry. The lawyer is attempting to discover if he or she did something wrong and, at the same time, to educate him or herself. Further, by seeking knowledgeable advice in-house, the lawyer may be able to correct the situation or make a firm decision that the lawyer has to get out of the case. Further, by doing that, the lawyer may have to advise the client that the lawyer made a mistake. So, initially, it would appear that it would be a good thing for a lawyer in-house to discuss the questions of ethics and/or malpractice that the lawyer who is handling the case is concerned about to get advice and guidance.
But there are some commentators who suggest this might create a conflict with the client and, at a minimum, the client should be consulted and/or consent to this in-house ethics inquiry first. Further, some people have suggested that because there might be a conflict, the law firm should hire another firm to make the analysis because the in-house lawyer would have a conflict of interest because he or she is also part of the same firm.
The Pennsylvania Rules of Professional Conduct do not really cover this situation other than perhaps the general Rule 1.7(a) about concurrent conflict of interest and where a lawyer might put his or her own interest above a client’s interest. Some commentators feel by going to the in-house expert, there could be a breach of confidentiality with the client. But that position seems hard to rationalize because it is not unexpected a lawyer would talk to other lawyers in the firm about a case for advice and consultation and all of them are bound by the same attorney-client privilege.
This subject is discussed briefly in the Pennsylvania Ethics Handbook, 2011 Edition, edited by Michael Temin and Thomas G. Wilkinson Jr., which is prepared by the Pennsylvania Bar Association’s Committee on Legal Ethics and Professional Responsibility.
The book discusses this potential for a conflict. The book notes that Pennsylvania ethics committees have not addressed this issue, but notes a 2005 New York State Bar Association’s ethics committee found there was no conflict created by this type of in-house ethical consultation. That opinion also noted the law firm was not obligated to tell the client that there had been a consultation either before or after. But the opinion cautioned that the law firm may have to "disclose its conclusions if it determines that it has a conflict or that it has made a significant error." The New York committee also noted there was no need to hire outside counsel to review this if the law firm had in place "an internal guidance system."
The New York opinion’s rationale seems well grounded. The critical part is that if there were an error then there probably should be disclosure to the client and the client should make the decision whether the client should continue representation or not. Obviously, depending on what the inquiry was, the lawyer’s malpractice insurance carrier might have to be put on notice also.
Any lawyer who is seeking in-house consultation concerning the lawyer’s handling of a particular client’s case should clearly and carefully document the file as to the reasons, rationale and the conclusions.
Obviously, if the lawyer acted wrongly or prejudiced the client in some way, then there should be disclosure to the client, preferably in writing, for the client to be fully advised of the problem and so the client could then make a rational decision if the client wishes to remain with the lawyer. But it does not appear that the client’s consent is needed for the initial in-house consultation.
An open question is whether or not the client’s consent would be needed if outside counsel is sought. It is the opinion of this writer that the client’s consent may be needed if the firm goes to another firm to evaluate the lawyer’s handling of a particular client’s case. There also may be a need for the providing of confidential information so the outside firm can give a true and accurate analysis. Also, by going to an outside firm, there could be a conflict of interest created, depending on whether or not the outside firm has any involvement or any adverse situation with the client or family of the client or businesses of the client.
Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pa., 19381.