I. PERSONAL CONFLICTS OF A LAWYER

A. Duty of Loyalty and Avoidance of Conflicts of Interest

A lawyer may not represent a client if the representation of that client will be directly adverse to another client or if there is a significant risk that the representation will be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless:

(1)  the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2)  the representation is not prohibited by law;

(3)  the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and 

(4)  the consent from the client is memorialized in writing.

Rule 1.7 (b). Loyalty to a client is impaired when a lawyer cannot consider, recommend or carry out an appropriate course of action for the client because of the lawyer's other responsibilities or interests. Comment [8], Rule 1.7.

B. Lawyer's Self-Interests

There are a number of ways in which a lawyer's self-interests may affect adversely the duty of loyalty and professional judgment and, consequently, representation of a client. Each of the areas below will be addressed in detail later.

1. A lawyer's own financial, business, property or personal interests may affect the exercise of his or her professional judgment. Rule 1.7(a)(2)

2. Certain business transactions with a client can affect judgment and loyalty. Rule 1.8 (a).

3. Acquisition of a proprietary interest in a cause of action can affect representation. Rule 1.8 (d).

4. Acceptance of gifts from clients may raise questions of overreaching and undue influence. Likewise, the lawyer generally may not prepare the instrument making the gift. Rule 1.8 (c).

5. An example of how a lawyer allowed his own interests to affect client representation is provided in Matter of Mercer, 133 Ariz. 391, 652 P.2d 130 (1982).

a. Mercer, a lawyer, developed a professional relationship with clients (husband and wife) for "legal, business, accounting and tax reporting services." During the course of the representation:

i. Mercer arranged for his partnership to purchase real estate belonging to the client without disclosing to the client the nature of his relationship with the partnership;

ii. Mercer drafted the document embodying the purchase agreement, thereby representing both the sellers and the buyer;

iii. In order to set up a tax deduction for the clients who were in an unfavorable tax position after the sale of the real estate, Mercer billed them $40,000 for legal fees. The clients paid the fee, and Mercer promptly loaned the clients the $40,000, evidencing the debt by a promissory note; and

iv. Mercer drew up trust articles setting up a trust for the proceeds of the real estate sale. Mercer named himself trustee and beneficiary and gave himself the power to pay off sums due him and his partnership.

b. Relying on the Disciplinary Rules, the Court found that Mercer had allowed his professional judgment and loyalty to be affected by his own financial and business interests, improperly had entered into business dealings with his clients, and improperly had represented multiple parties. He was disbarred.

C. Conflicts Arising From a Lawyer's Financial, Business, Property or Personal Interests

(footnote [1]   Many of the LEOs in this outline analyze former DR 5-101 or the former revision of Rule 1.7.  Note that current Rule 1.7(b) requires more to “cure” a conflict of interest.  These LEOs still provide usefull guidance to the identification of conflicts of interest.)

A lawyer may not allow business or personal interests to affect representation of a client. For example, a lawyer's need for income should not lead the lawyer to undertake matters that cannot be handled competently and at a reasonable fee. See Rules 1.1 and 1.5. Similarly, a lawyer may not refer clients to an enterprise in which the lawyer has an undisclosed interest. A lawyer's romantic or other intimate personal relationship can also adversely affect representation of a client. Comment [1], Rule 1.7. Rule 1.8(i) prohibits a lawyer from representing a client when it will place the lawyer directly adverse to another lawyer to whom the first lawyer is related as parent, child, sibling or spouse or with whom the lawyer is intimately involved unless the client consents after consultation regarding the relationship. This disqualification is personal and is not imputed to members of firms with whom the two lawyers are associated.

1. A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client, a former client, or to a third person, or by the lawyer's own interest, unless the lawyer complies with all requirements of Rule 1.7 (b).

2. There are many examples of financial, business, property and personal interests which may affect judgment and loyalty. The Virginia Legal Ethics Committee (hereinafter "the Committee") has provided guidance as to various types of interests which may affect judgment.

a. LEO 1515, which is a reconsideration of LEO 1358, addresses the circumstances under which an attorney may draft an instrument in which the client names the attorney either as executor or trustee or which specifically directs that other persons whom the testator/grantor/client designates as executor or trustee consult the attorney/draftsman for legal services.

b. Receipt by a lawyer of an originator's fee from a lending institution for referring clients may affect the lawyer's judgment and loyalty. Such receipt, however, is not improper, provided:

i. full and adequate disclosure is made to the clients; and

ii. the clients consent.

LEO 489¹.

([1]   Many of the LEOs in this outline analyze former DR 5-101 or the former revision of Rule 1.7.  Note that current Rule 1.7(b) requires more to “cure” a conflict of interest.  These LEOs still provide useful guidance to the identification of conflicts of interest.)

c. Representation of the administrator of an estate where the lawyer's firm was a creditor of the estate has the potential for a conflict. Such representation is not improper provided the administrator consented after full disclosure. LEO 811.

d. Attorney relationships with title insurance agencies have raised many ethical questions. The Committee issued a compendium opinion (LEO 1564) which provides a detailed analysis of the DRs and the LEOs as of December 1994.

e. Provided there is full disclosure to the client, it is not per se unethical for a law firm to develop an ancillary business to complement the legal services provided by the firm. The ancillary business may send its clients to the law firm, and the law firm may send its clients to the ancillary business. For an opinion addressing the ethical implications and considerations, see Legal Ethics Opinion 1658 (law firm handling labor and employment law litigation owns and operates consulting firm specializing in human resources and behavioral science to which it refers clients). Where an attorney is also an insurance agent, it is not improper to share the commission generated by the client's purchase of a survivorship policy to fund client's irrevocable life insurance trust. Attorney must, however, disclose to client his business or financial interest in the transaction, the purchase by the client must be fair and reasonable, and the client must be advised of the opportunity to seek independent counsel. LEO 1754; Rule 1.8 (a).

f. A lawyer's aunt sought advice with respect to the rescission of an agreement between her and her niece and the niece's husband for the purchase of real estate. The mortgage on the real estate was in default, and the bank had agreed to loan the lawyer money to purchase the property. According to the Committee, the lawyer should either:

i. Decline the representation; or

ii. Represent her only after advising her of the lawyer's personal interest and obtaining her consent.

LEO 814.

g. A lawyer may not appear before a judge who employs the lawyer's spouse as a law clerk in any matter in which the spouse is in any way involved or has responsibility. It also is improper for the lawyer to appear in preliminary proceedings where the judge does not preside if the case ultimately will be assigned to the judge and the lawyer's spouse will have some responsibility. LEO 881.

h. A lawyer may not represent a criminal defendant in an appeal of the client's conviction where one of the bases for appeal is ineffective assistance of counsel. LEO 1122. However, a criminal defense lawyer who has failed to properly perfect an appeal must under Rule 1.4 "notify the client of the dismissal of the appeal, the reasons for the dismissal and what rights or recourse the client has under those circumstances" (which "would include advising the client of the right to file a petition for a writ of habeas corpus alleging ineffective assistance of counsel; or a claim for legal malpractice based upon the lawyer's act or omission"). Although this situation obviously involves the lawyer's own interests (which might otherwise prevent the lawyer from proceeding on the client's behalf), Virginia Code §§19.2-321.1 and 19.2-321.2 requires the lawyer to assist the client in preparing and filing an affidavit explaining the lawyer's error. To the extent that this new statute requires a continuing representation (thus trumping the ethics rules), it overrules the holdings of Virginia LEO 1122 and 1558.  LEO 1817 (2005). 

i. Where a law firm is sued by its client for malpractice and where the client is currently represented by the same firm on a totally unrelated matter, there is a conflict under Rule 1.7 (a)(2). This conflict is curable only by informed consent after full disclosure. LEO 1637.

j. Where a Commonwealth's Attorney withdraws from a private law firm but retains stock in his former law firm, personal conflicts arise under Rule 1.7 if he prosecutes cases defended by attorneys in his former law firm. The conflict is not curable since the Commonwealth's Attorney does not represent a "client" to whom full disclosure can be made and from whom consent may be obtained. LEO 1619. Similarly, an Assistant Commonwealth’s Attorney will face conflicts under Rule 1.7 where he maintains substantial involvement in his former partner’s criminal defense practice.

k. Representing a personal injury client against a defendant insured by an insurance policy issued by the claimant's attorney who sells insurance in his dual capacity as an independent insurance agent raises a personal conflict under DR 5-101(A) (now Rule 1.7(a)(2)) curable by consent after full disclosure. LEO 1612.

l. An attorney who serves as a mediator cannot thereafter represent either of the parties involved in the mediation in subsequent litigation. This is prohibited by Rule 2.10(e) and by Rule 1.7(b); the mediator/attorney would be materially limited by his/her duties to third persons (parties in mediation) to maintain confidentiality of the mediation and therefore could not represent one of these parties against the other in litigation. LEO 1759.

m. Impermissible conflict of interest for defense attorney to defend cases prosecuted by commonwealth’s attorney when defense attorney’s firm represents commonwealth’s attorney in collection of unpaid fines; defense attorney cannot be beholden to prosecutor for income. LEO 1767.

3. Representation with client consent -- As the above examples demonstrate, a client may consent to representation where a lawyer's interest may affect the attorney's judgment. Rule 1.7 (b) allows such consent after full and adequate disclosure.

a. Such full and adequate disclosure includes:

i. A clear explanation of the nature of the differing interests involved;

ii. A detailed explanation of the risks and disadvantages to the client, including any liabilities that foreseeably may accrue. Matter of James, 452 A.2d 163, 167 (D.C. App. 1982), cert. denied, 460 U.S. 1038 (1983); and

iii. ii. An explanation of the advantages of seeking independent legal counsel. Id.; In re Boivin, 271 Or. 419, 533 P.2d 171 (1975).

iv.    A memorialization in writing.

b. When providing the consultation the lawyer must consider the level of sophistication of the client. Is the client capable of understanding that position? Is the client capable of taking appropriate steps to protect the client's interests? In re Boivin, 271 Or. 419, 533 P.2d 171 (1975).

c. Remember that a client may subsequently withdraw consent, under certain circumstances, compelling the lawyer to withdraw. LEOs 1652, 1354. See also Commercial & Sav. Bank v. Brundige, 5 Va. Cir. 33, 34 (1981).

d. Consent should not resolve a conflict of interest triggered by an attorney representing two criminal defendants in separate cases where one defendant unlawfully carried a firearm to defend himself from the other defendant, on trial for trying to kill the first defendant.  This lawyer had a conflict under Rule 1.7 as his responsibility to each defendant was materially impaired.  Consent would not have been appropriate as the facts did not support a reasonable belief that the attorney’s representation of these two defendants would not be adversely affected.  LEO 1796

4. Violation of Rule 1.7 (b) can lead to disciplinary action and disqualification.

a. In Conduct of Robeson, 293 Or. 610, 652 P.2d 336 (1982), a lawyer was disbarred permanently for accepting employment where the exercise of his judgment was affected by his own financial interests. During a six-month period, the lawyer parlayed his contingent interest in land into $199,389.97 through improper use of the client's assets.

b. For additional examples of disciplinary action, see Matter of James, 452 A.2d 163 (D.C. App. 1982), cert. denied, 460 U.S. 1083 (1983) (two year suspension); Matter of Mercer, 133 Ariz. 391, 652 P.2d 130 (1982) (attorney disbarred). Both these cases are discussed above.

c. In Greene v. Greene, 47 N.Y.2d 447, 391 N.E.2d 1355 (1979), a law firm was disqualified from representing a plaintiff in a legal malpractice action arising from the creation and management of an inter vivos trust. Two members of the firm representing the plaintiff were former members of the defendant law firm and themselves were third-party defendants who might be jointly and severally liable in the malpractice action. The defendant firm moved for disqualification on conflict of interest grounds. The motion was granted. The court concluded that the firm representing the plaintiff had a financial interest in the lawsuit and could not continue the representation.

d. In certain circumstances, a personal conflict may be de minimus. LEO 1465 (Commonwealth's Attorney/member of condominium association prosecuting trespassers on condominium property); LEO 1479 (attorney representing plaintiff against a tortfeasor who is insured by an insurance carrier from which carrier attorney obtains liability, disability, and auto insurance coverage).

D. Business Dealings With Clients

1. A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which can be reasonably understood by the client; the client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and the client consents in writing thereto. Rule 1.8 (a).

2. While not prohibited absolutely, business dealings with clients are disfavored and viewed with suspicion. Committee on Professional Ethics v. Mershon, 316 N.W.2d 895 (Iowa 1982). Reasons ascribed to the disfavor and suspicion include:

a. The superior knowledge and ability of the lawyer and the consequent influence over the client; and

b. The possibility that a lawyer could use this position of influence to take advantage of the client in the business dealing.

3. Prior to entering into a business transaction with a client wherein the lawyer and client have differing interests and the client expects the lawyer to exercise professional judgment for his or her protection, a lawyer must satisfactorily disclose any potential for conflict and must obtain the client's consent. Moreover, the transaction must be fair and equitable.

a. "Differing interests" were defined by the Code of Professional Responsibility to include "every interest that will adversely affect either the judgment or the loyalty of a lawyer to a client, whether it be a conflicting, inconsistent, diverse or other interest."

b. Satisfactory disclosure includes:

i. All relevant circumstances known to the lawyer;

ii. The nature of the transaction and its effects on the client's interests;

iii. The nature of the lawyer's interests and the effect those interests could have on the exercise of professional judgment (Committee on Professional Ethics v. Mershon, 316 N.W.2d 895, 899 (Iowa 1982));

iv. The risks and disadvantages to the client entailed in the transaction, including all liabilities that will or may foreseeably accrue (Matter of James, 452 A.2d 163, 167 (D.C. App. 1982), cert. denied, 460 U.S. 1063 (1983)); and

v. The advantages of seeking independent legal advice. Id.

c. If a transaction is challenged, the lawyer has the burden of showing that it was fair and equitable, that the lawyer fully informed the client of the effect of the transaction on the client's interests, and, if the client declined independent legal advice, that the client received the same advice the lawyer would have given had the transaction been between the client and a stranger. Committee on Professional Ethics v. Mershon, 316 N.W.2d 895, 899 (Iowa 1982).

d. A lawyer may serve as legal advisor to a business in which he or she has a financial interest, provided there is full disclosure, the client gives its consent, and the representation does not affect the lawyer's professional judgment. LEO 1027.

e. While it is not per se improper for an attorney to obtain a loan from his client during the pendency of contested litigation, there must be full and adequate disclosure as to all possible consequences of such a transaction and the transaction must not be unconscionable, unfair or inequitable when made. Furthermore, the attorney must ensure that the client understands that the attorney is not representing the client or in any way using his legal expertise for the protection of the client. The Committee has consistently opined that all doubts regarding the sufficiency of the disclosure must be resolved in favor of the client. LEO 1489.

4. Examples of prohibited conduct leading to disciplinary action:

a. A lawyer entered into a partnership agreement with the client and a third party, drafted the documents necessary to create the partnership, and acted as lawyer for the partnership. The court found differing interests and a failure on the part of the lawyer to disclose the interests, to advise the client to seek independent advice, and to gain consent. The lawyer was suspended for three months plus one day and ordered to pay costs. The Florida Bar v. Bern, 425 So.2d 526 (Fla. 1982).

b. A lawyer, when approached by several clients seeking investment advice, encouraged them to make investments in financially troubled companies in which the lawyer had an interest. The lawyer did not disclose those interests, nor did the lawyer advise the clients to seek independent advice regarding the propriety of the investments. The lawyer was disbarred. Matter of Smyzer, 108 N.J. 47, 527 A.2d 857 (1987).

c. A lawyer, after assisting the client in recovering $750,000 for the client's personal injuries, received a fee of $250,000 and borrowed $100,000 from the client with which to make an investment. The lawyer failed to advise the client that the client should seek independent legal advice, that the interest rate on the loan was usurious and could have legal consequences to the client, and that the client should perfect security interests in the property offered as collateral. The lawyer made one interest payment and eight principal payments and then defaulted on the loan. The lawyer was suspended for three years, with execution stayed on all but 30 days, and placed on probation. Giovanazzi v. State Bar, 169 Cal. Rptr. 581, 619 P.2d 1005 (Cal. 1980). See also Matter of James, 452 A.2d 163 (D.C. App. 1982), cert. denied, 460 U.S. 1038 (1983) (two-year suspension); Matter of Mercer, 133 Ariz. 391, 652 P.2d 130 (1982) (lawyer disbarred). Both of these cases are discussed above.

d. The Virginia State Bar Disciplinary Board revoked the license of William J. Powell to practice law, in a case which prompted the Board to note: "Seldom have we seen such an egregious pattern of self-dealing on the part of a Virginia lawyer at the expense of an enfeebled client." In the Matter of William J. Powell, VSB Docket No. 93-041-1723 (VSB Disc. Bd. 1995).

Powell met Ronald Kirby through Ellen Long, a friend of Powell's. Mr. Kirby was 83 years old; physically, mentally and emotionally impaired. Powell took control of Mr. Kirby's $1,700,000.00 in assets, and rewrote Mr. Kirby's will, leaving one half of the estate to Ellen Long. Powell prepared an unsecured note for $345,000.00, gave it to Mr. Kirby, and used the funds to reconvert Powell's Chapter 7 bankruptcy to a Chapter 11 bankruptcy. Powell paid himself $300,000.00 in legal fees to administer Mr. Kirby's assets. Powell prepared a letter for signature by Mr. Kirby, forgiving the $365,000.00 note.

5. A specific type of business transaction with a client that warrants particular scrutiny is the acquisition of publication rights in a client's story.

a. A lawyer should scrupulously avoid receiving a beneficial ownership in publication rights relating to the subject matter of the lawyer's employment prior to the termination of all aspects of the matter. Rule 1.8 (d).

b. A lawyer in a criminal case who obtains book, magazine, newspaper, television, radio, motion picture or other rights with respect to the client's life story may be influenced toward a course of action which would enhance the value of the lawyer's rights at the expense of the client. Rule 1.8 (d).

c. Defense counsel's acquisition of publication rights does not necessarily mandate reversal of a conviction on grounds of ineffective assistance of counsel. A defendant who does not object at trial to the lawyer's conduct must establish that an actual conflict of interest did, in fact, adversely affect representation. United States v. Hearst, 638 F.2d 1190 (9th Cir. 1980), cert. denied, 451 U.S. 938 (1981).

d. In People v. Corona, 80 Cal. App.3d 684, 145 Cal. Rptr. 894 (1978), the court found such an adverse effect and reversed the defendant's conviction on twenty-five counts of first degree murder.

i. By entering into a fee arrangement with the defendant that gave the lawyer exclusive literary and dramatic property rights to the defendant's life story in return for legal services, the court found that the lawyer violated a duty of loyalty.

ii. From that moment, trial counsel "was devoted to two masters with conflicting interests - he was forced to choose between his own pocketbook and the best interests of his client." Id. at 915.

iii. This conflict of interest resulted in prejudice to the client when the lawyer withdrew crucial defenses and reduced the trial to a "farce and a sham." Id.

6. A lawyer's or law firm's business transactions with clients, through ancillary businesses, raise substantial concerns about conflicts:

a. attorney acting as stockbroker (LEO 430);

b. title insurance, settlement service (LEO 1564);

c. court reporting service (LEOs 1198, 1345);

d. bail bonds (LEOs 1254, 1343);

e. business consultant (LEO 1318); and

f. insurance (LEO 1311); and

g. non-legal consulting firms (LEO 1658).

7. A common business transaction with a client is the inclusion of a mandatory fee arbitration clause in the initial retainer agreement. Such a provision is permissible only if the mandates of Rule 1.8 (a) [formerly DR 5-104 (A)] are followed. LEO 1586. See also LEO 1707 (inclusion of mandatory arbitration of malpractice claim in lawyer's contract with client permitted only if full disclosure and consultation requirements are met).

E. Acquiring Proprietary Interest in Subject Matter of Litigation

A lawyer is prohibited from acquiring a proprietary interest in a cause of action or the subject matter of litigation. Disclosure and consent cannot cure the problem.

1. A lawyer is prohibited from acquiring a proprietary interest in the cause of action or subject matter of the client's litigation. Exceptions are provided for acquisition of a lien to secure fees or expenses and a contract for a reasonable contingent fee in a civil matter. Rule 1.8 (j).

2. A divorce lawyer may not take a deed of trust on the marital home as security for the payment of legal fees by the client where the client's interest in the subject marital property is to be determined in an equitable distribution proceeding. LEOs 1390, 1653.

3. Similarly, a lawyer is limited in the instances in which the lawyer can provide financial assistance to a client in connection with contemplated or pending litigation. The lawyer may advance or guarantee the expenses of the litigation, which include court costs, investigation fees, expenses of medical examination and costs associated with obtaining and presenting evidence, provided the client remains ultimately responsible. Also, a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client. Rule 1.8 (e).

a. The limitation on the types of advancements which can be made and the necessity that repayment be required are designed:

i. To prevent a lawyer from acquiring an interest in the subject of the litigation;

ii. To prevent a personal interest of the lawyer from posing a conflict; and

iii. To prevent an improper inducement to clients to employ the lawyer.

ABA Formal Opinion 288, Oct. 11, 1954. See also Rule 1.8.

b. In the limited instances in which a lawyer may advance court costs and litigation expenses to a client, the client must remain ultimately responsible. See e.g., LEOs 892, 820, 485 (requirement that client remain ultimately liable for costs is present in a class action even though there is no readily identifiable client and class members are indigent) Now that there is a limited exception for indigent clients per Rule 1.8(e)(2), does this still apply? See Matter of Carroll, 124 Ariz. 80, 602 P.2d 461 (1979) (retainer agreements, requiring repayment of advances only if there is a recovery, are unethical).

c. Costs have been interpreted as charges that a party may recover in litigation. These include filing fees, fees for service of process and other disbursements that are taxable and includable in a judgment.

d. Expenses cover such items as the costs of investigation, expenses of medical examination and costs of obtaining and presenting evidence.

i. Expert witness fees are expenses. Bennett v. Home Ins. Co., 347 F. Supp. 451 (S.D. Fla. 1972).

ii. Fees for legitimate travel related to litigation are expenses. Superior Testers, Inc. v. Damco Testers, Inc., 336 F. Supp. 37, 41 (E.D. La. 1971), aff'd, 468 F.2d 629 (5th Cir. 1972), cert. denied, 411 U.S. 967 (1973).

iii. Advances for medical expenses are appropriate but should be limited to costs of diagnostic work connected with the matter under litigation and not payment for treatment. ABA Informal Opinion 664, May 21, 1963. Accord LEO 582 (not improper to make payments to a physician for litigation-related activity); LEO 1182.

iv. Costs for medical records are expenses. LEO 820.

v. Court reporter fees are expenses. LEO 892.

vi. Assisting clients with living expenses during litigation is not permitted.  Shea v. Virginia State Bar, 236 Va. 442, 374 S.E.2d 63 (1988).  (The Virginia Supreme Court specifically considered and rejected Shea’s argument that the advancing of living expenses was a widespread and long-standing practice within the plaintiff’s bar in maritime cases.).  But see LEO 1830 (2006)( Lawyers in a public defender's office may provide nominal gifts to indigent clients for the purchase of personal items or food, as long as such "occasional de minimus humanitarian gifts" do not affect the lawyer's independent judgment (such as when the lawyers are "trying to persuade some of these clients to accept plea agreements to which the clients are initially resistant.") The majority of states totally prohibit such "financial assistance" under Rule 1.8(e). Such minor gifts do not run afoul of Rule 1.8(a), because they are gifts and do not constitute "business transactions" with the client. Although the rules "do not directly regulate nonattorneys," lawyers cannot do indirectly through a staff person what they cannot do directly -- although in this case the lawyer's staff may likewise provide such nominal humanitarian gifts to indigent clients.

e. Since the client is responsible for the actual costs and expenses associated with litigation, an attorney who has advanced or guaranteed such expenses may properly take appropriate collection actions to recover such amounts. The Committee has opined that an attorney is not required to undertake collection efforts against the client if such efforts would be futile or cost ineffective. However, a "consistent policy of not proceeding against clients for the collection of expenses advanced would be improper." See LEO 1237.

F. Gifts from Clients

1. Acceptance of gifts from clients is closely scrutinized for fraud, overreaching and undue influence. A lawyer should urge a client desiring to make such a gift to consult a disinterested person before making the gift. Generally, an independent person must prepare the documents necessary to make the transfer. See Rule 1.8 (c) and Comment 6 to Rule 1.8.

a. Courts reviewing gifts, both inter vivos and testamentary, from clients to lawyers have presumed the gifts to be the result of undue influence, fraud or overreaching:

i. Upon proof of a lawyer-client relationship and the fact that the lawyer/beneficiary prepared the document by which the lawyer profits, a presumption of undue influence arises. In re Anderson, 52 Ill. 2d 202, 287 N.E.2d 682 (1972).

ii. A presumption of undue influence arises where a lawyer drafts a will under which the lawyer is a beneficiary. This presumption arises regardless of the mental condition of the testator and shifts the burden of proof to the lawyer to show that the gift arose from the free will of the client. Estate of Younger, 461 A.2d 259 (Pa. Super. 1983).

iii. Where a client advised a lawyer that the client wanted to deed a home to the lawyer, it was the lawyer's duty to insist that the client receive independent advice. Failure to do so raises a presumption of undue influence. Toomey v. Moore, 213 Or. 422, 325 P.2d 805 (1958).

b. A lawyer is prohibited from preparing any instrument giving the lawyer or a member of the lawyer's family any gift, including a testamentary gift, from a client. An exception is made where the client is a relative of the donee. Rule 1.8 (c).

i. In LEO 571, the Committee warned that although a lawyer/donee who is related to a client is not prohibited per se from writing a testamentary document in which the lawyer or a member of the lawyer's family is a beneficiary, the lawyer still must exercise independent professional judgment on behalf of the client and may not accept or continue employment if the lawyer cannot do so. See VSB v. Jaffe (Circuit Court, City of Richmond, July 10, 1987).

ii. LEO 1534 concludes that a godmother is not a relative for purposes of DR 5-104(B). Now Rule 1.8 (c).

c. Violation can lead to revocation of the gifts and to disciplinary action. See, e.g., Committee on Professional Ethics and Conduct v. Behnke, 276 N.W.2d 838 (Iowa 1979) (indefinite suspension of lawyer for drafting wills naming lawyer as contingent beneficiary and executor).

G. Sexual Relationships With Clients.  LEO 1853 (December 29, 2009)

On December 29, 2009, the Virginia State Bar Standing Committee on Legal Ethics approved advisory Legal Ethics Opinion 1853, which addresses issues involved when a lawyer enters into a sexual relationship with a client during the course of representation. Although warning lawyers that initiating a sexual relationship with a client during the course of a representation will almost always be unethical for various reasons, the Committee declines to adopt a per se ban on such relationships.

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II. CONFLICTING INTERESTS OF CLIENTS

A. Concurrent Representation

1. A lawyer may not represent a client if the representation of that client will be directly adverse to another existing client, unless:(1)  the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;  (2)  the representation is not prohibited by law; (3)  the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and(4)  the consent from the client is memorialized in writing. Rule 1.7 (b). A lawyer may not represent any person or entity whose interests are adverse to those of an existing client, even where the matters are wholly unrelated, unless the curative requirements of Rule 1.7(b) are met. Rule 1.7 (a) & (b); ABA/BNA, Lawyers' Manual on Professional Conduct, 51:101 (1984). See O'Dell v. Commonwealth, 234 Va. 672, 364 S.E.2d 491, cert. denied, 488 U.S. 871, 109 S.Ct. 186, 102 L.Ed.2d 154, 488 U.S. 977, 109 S.Ct. 521, 102 L.Ed.2d 554 (1988).

2. Broad scope of prohibition -- A lawyer should not accept employment adverse to an existing client even in an unrelated matter. Moreover, this prohibition applies even where the existing client employs most of the law firms in the community thereby making it difficult for the adversary to retain equivalent counsel. ABA Informal Opinion 1495, Dec. 9, 1982 (lawyer prohibited from accepting employment that would require lawyer to bring suit on a commercial claim against a corporation the lawyer already was defending in an unrelated personal injury action). Prohibition applies:

a. Where an opponent of an existing client in an ongoing matter attempts to retain the lawyer to represent the opponent in an unrelated matter (In re Hansen, 586 P.2d 413 (Utah 1978) (plaintiff in a civil proceeding attempted to employ defendant's counsel to represent plaintiff in unrelated criminal matter)); and

b. Where a lawyer is asked to bring suit on behalf of a new client against an existing client. Unified Sewerage Agency v. Jelco, Inc., 646 F.2d 1339 (9th Cir. 1981) (lawyer brought suit on behalf of subcontractor against prime contractor whom lawyer already represented).

3. The prohibition is based on two considerations:

a. Concern over the diminution in the vigor of representation of one client. International Business Machines, Corp. v. Levin, 579 F.2d 271, 280 (3d Cir. 1978).

b. The expectation of each client that the client will receive the undivided loyalty of the lawyer. Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976) (client who retains counsel is entitled to believe that client has lawyer's undivided loyalty and can rely upon lawyer's "undivided allegiance and faithful, devoted service"). See also ABA Informal Opinion 1495, Dec. 9, 1982.

4. Simultaneous representation adverse to an existing client is prima facie improper and raises a presumption of an adverse effect on professional judgment and loyalty.

a. In Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384, 1387 (2d Cir. 1976), the Court rejected a substantial relationship test as not setting a high enough standard in cases of simultaneous representation adverse to an existing client. In such a case, "adverse representation is prima facie improper." Id.

b. The Virginia Legal Ethics Committee reached a similar conclusion when it opined that it is improper for a lawyer or firm to represent a client at the same time they are suing the client regardless of whether the matters are the same or substantially related. LEO 947 (improper for lawyer to represent relatives of decedent in a will contest where adverse party was apparent spouse of decedent and the lawyer's partner was representing that spouse in an unrelated matter).

c. The Committee also opined that a lawyer cannot represent simultaneously one subdivision of a company while representing a client against another subdivision of the same company in an unrelated matter, even with the consent of both subdivisions and opposing client. LEO 1408.

d. When a lawyer takes a position adverse to an existing client, an adverse effect on that lawyer's professional judgment is presumed. Unified Sewerage Agency v. Jelco, Inc., 646 F.2d 1339, 1345 (9th Cir. 1981); International Business Machines Corp. v. Levin, 579 F.2d 271 (3d Cir. 1978).

e. The Virginia Legal Ethics Committee reached the same conclusion - "simultaneous representation of adverse clients creates a presumption of adverse effect on the attorney's absolute duty of loyalty." LEO 706 (absent consent from a firm's client physicians and client malpractice plaintiff, the entire firm is disqualified from representing either side in a malpractice action).

5. A lawyer may accept representation adverse to an existing client under very limited circumstances.

a. Rule 1.7 (b) provides that a lawyer may accept representation adverse to an existing client provided:

(1)  the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2)  the representation is not prohibited by law;

(3)  the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

(4)  the consent from the client is memorialized in writing.

b. Full disclosure includes discussion of all the facts, legal implications and possible effects of the proposed representation. Financial Gen. Bankshares, Inc. v. Metzger, 523 F. Supp. 744 (D.D.C. 1981). See I.(D)(3)(b) supra.

c. If challenged, the burden is on the lawyer to show that full disclosure was made and consent obtained. In re Hansen, 586 P.2d 413 (Utah 1978). LEO 1489.

d. Moreover, consent is insufficient to keep counsel from disqualification if a lawyer cannot adequately represent the interests of each client. Dowell v. Commonwealth, 3 Va. App. 555, 351 S.E.2d 915 (1987). Sapienza v. New York News, Inc., 481 F. Supp. 676 (S.D.N.Y. 1979). See also Model Rules of Professional Conduct and Code of Judicial Conduct Rule 1.7 (1984).

e. In Unified Sewerage Agency v. Jelco, Inc., 646 F.2d 1339, 1350 (9th Cir. 1981), the court analyzed whether counsel could adequately represent all interests. In determining whether two clients can be adequately represented, the following factors were evaluated:

i. The nature of the litigation;

ii. The kinds of client information the lawyer may have had access to;

iii. The level of sophistication of the client, the client's ability to perceive his position and to protect his interests; and

iv. The issues in dispute, whether legal or factual.

f. While clients can consent, a withdrawal of consent may result in the necessity of withdrawing from representation of both clients. See LEOs 1354, 1652.

i. In Commercial & Savings Bank v. Brundige, 5 Va. Cir. 33 (1981), the Circuit Court of the City of Winchester required withdrawal by counsel when the client withdrew consent to conflicting representation.

(a.) Brundige approached a lawyer for legal assistance in establishing real estate investment trusts.

(b.) The lawyer advised Brundige that neither the lawyer nor any member of the firm could represent Brundige unless Brundige agreed that the firm continue to represent Commercial & Savings Bank against Brundige and others in an effort to collect on notes.

(c.) Brundige requested the lawyer to proceed.

(d.) During the course of representation, the lawyer acquired information about Brundige's assets which, if used by the law firm, would benefit the Bank in its collection efforts.

(e.) Brundige withdrew the consent to continued representation of the Bank by the lawyer's firm.

(f.) The court disqualified the Bank's counsel stating: "The court does not believe DR 5-105(C) [now Rule 1.7 (b)] permits continued representation where the client later withdraws consent." Id. at 34.

g. Identify who the client actually is: members of an entity client may not be your client. See LEO 1168 (members of homeowners' association); LEO 1458 (partnerships); Rule 1.13 (corporations). But see LEOs 1452 and 1599 (attorney for estate represents only the executor or personal representative).

6. The Virginia Legal Ethics Committee has been called upon to review an opinion on a number of factual situations involving simultaneous representation of adverse interests.²

([2]    Many of the LEOs in this outline analyze former DR 5-101 or the former revision of Rule 1.7.  Note that current Rule 1.7(b) requires more to “cure” a conflict of interest.  These LEOs still provide useful guidance to the identification of conflicts of interest.)

a. A county attorney sought to represent the county before a local retirement board, even though the county attorney normally acted as legal advisor to that board. Representation of the county was not improper provided:

i. Independent counsel was appointed for the board;

ii. The county attorney began representing the county in the matter before it was brought before the board; and

iii. Both the county and board consented after full disclosure.

LEO 394. See also LEO 843 (improper for county attorney, whose duties included representation of interests of county subdivision committee, to represent developer in a subdivision application before committee unless county and developer consent and county retains independent counsel for the subdivision committee). But see LEO 1683 (city attorney may defend employee grievance before Personnel Board to whom city attorney gives legal advice but cannot represent City Administration before Board if there is a challenge to the Board's rules and policies in which city attorney acted as legal advisor).

See also LEO 1815 (local government attorney may represent BZA in one matter against Zoning Administrator and simultaneously represent Zoning Administrator against BZA in another unrelated matter only if requirements of Rule 1.7(b)(2) are satisfied; distinguishing LEO 1785).

b. A lawyer who represented a county and the county's law enforcement officers sought to defend an indigent in criminal cases that had been investigated by the county's law enforcement officers. Such representation is not improper provided that before undertaking the representation, the lawyer:

i. Discloses the relationship with the county and its law enforcement officers; and

ii. Obtains the indigent's informed consent.

LEO 518.

c. A lawyer had represented the corporation over a period of years. Shareholder A owned 55% of a corporation, and Shareholder B owned 45%. The lawyer's partner had prepared a will for A. Under these circumstances, it would be improper for the attorney to represent B against A in a dispute over the running of the corporation. LEO 400.

d. Conflicts may arise even when the attorney's roles are not both strictly in the context of an attorney-client relationship, i.e., when the attorney first acted as a C.P.A. See LEO 1634 (attorney precluded by Rule 1.7 (b) from representing client before IRS on a tax matter arising out of a return which he filed on behalf of client and wife some years earlier because of possible adverse effect on wife/former client).

e. A city attorney may defend both the city and a police officer in a civil rights action in which conduct warranting punitive damages is alleged, provided there is full disclosure and consent (including advising police officer of right to employ independent counsel) and it appears that the positions of the city and police officer are not antagonistic. LEO 1661.

f. May one member of a law firm write a validity opinion for one client where the patent in question is currently held by another client who is represented by another member of the firm in an unrelated matter? No, not unless consent is obtained, after consultation, from each client. Even though the firm represents the second client on patents involving different technology than the patent which is the subject of the validity opinion, for the attorney to assist the first client in invalidating the patent held by the second client would create direct adversity between the two clients. Rule 1.7 applies and the conflict is imputed to all members of the firm under Rule 1.10. LEO 1774.

g. The committee has opined that simultaneous representation can occur in a situation where a corporation lends its in-house counsel to a sister corporation to provide legal services as long as the lawyer protects the confidences of both and does the proper conflicts analysis. Additionally, the parent corporation can only collect remuneration from the sister corporation for the “actual costs” the corporation incurs in employing the lawyer.  LEO 1838.

7. Sanctions exist for conflicts violations.

a. Violation can lead to the imposition of disciplinary sanctions.

i. Suspension for ninety days is proper where the lawyer violated Rule 1.7 by failing to get client consent to concurrent representation. Kentucky Bar Ass'n v. Roberts, 579 S.W.2d 107 (Ky. 1979).

ii. Public reprimand and payment of fees for former client is proper where the lawyer filed suit to foreclose on behalf of one client against another client then being represented in bankruptcy proceeding without consent. Complaint of Hershberger, 288 Or. 559, 606 P.2d 623 (1980).

b. Violation can lead to disqualification from representation. See e.g., Sapienza v. New York News, Inc., 481 F. Supp. 676 (S.D.N.Y. 1979); International Business Machines, Corp. v. Levin, 579 F.2d 271 (3rd Cir. 1978); Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2nd Cir. 1976). All these cases are discussed above. In another case, a law firm was disqualified for representing grocery chain employees in an action under the Fair Labor Standards Act while simultaneously representing the union in its efforts to organize those employees. Brooks v. Farm Fresh, Inc., 759 F. Supp. 1185 (E.D. Va. 1991). In reaching its conclusion, the court observed: (1) the court has broad discretion in determining whether disqualification of counsel is required; (2) the court may require an attorney to withdraw when only the appearance of impropriety exists; (3) the court must balance a party's right to counsel of choice with its responsibility to insure that the integrity of the proceedings before it and public confidence in the integrity of the bench and bar; and (4) the Virginia Code of Professional Responsibility governs the conduct of attorneys practicing in the federal courts in the Eastern District of Virginia. 759 F. Supp. at 1190. See, e.g. United States District Court Rules, E.D. Va., Appx. B, Federal Rules of Disciplinary Enforcement, FRDE Rule IV.

c. Violation also can lead to a malpractice claim against the lawyer resulting in damages including disgorgement of fees and punitive damages. Financial Gen. Bankshares, Inc. v. Metzger, 523 F. Supp. 744 (D.D.C. 1981).

8. When a lawyer is required to refuse employment under Rule 1.7, associates, partners or any other lawyers associated with the lawyer or the firm may not take on or continue such employment. Rule 1.10.

B. Former Clients

1. A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless both the present and former client consult after consultation. Rule 1.9 (a); see LEO 933 (permissible for lawyer to represent A against B, a former client, if the matters are not the same or substantially related); see also LEO 1313; In re Chantilly Constr. Corp., 39 B.R. 466, 469 (E.D. Va. 1984).

2. A former lawyer-client relationship must have existed to trigger this prohibition. A conflict will not be ignored, however, simply because no "formal" lawyer-client relationship existed in the former relationship. A key concern is whether the lawyer may have received confidential information that may be used to the detriment of the person who provided that information. National Souvenir Center v. Historic Figures, Inc., 728 F.2d 503, 517 (D.C. Cir. 1984). See LEO 1546.

a. Where a lawyer receives confidential information from a person who believes that the lawyer will respect such confidences, the law will imply a lawyer-client relationship and will enforce upon the lawyer the obligation of confidence. Nichols v. Village Voice, Inc., 417 N.Y.S.2d 415, 418 (Sup. Ct. 1979).

b. Examples where an implied professional relationship have been found include:

i. Between a lawyer and prospective client who had a preliminary consultation with a view toward retention of the lawyer even though actual employment did not result. Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1319 (7th Cir.), cert. denied, 439 U.S. 955 (1978).

ii. Between an insured, who cooperated by providing information to lawyer retained by the insurer to investigate a claim, and the lawyer conducting the investigation. Id. at 1319.

iii. Between a lawyer and a woman with whom the lawyer previously and gratuitously discussed her marital situation during a social gathering. LEO 452 (improper for lawyer to later represent husband in a divorce). See also LEO 1546 (after initial consultation with wife in which marital information was disclosed to attorney, but no employment of lawyer followed, neither lawyer nor his firm could represent husband in subsequent divorce three years later ); LEO 1794 (also finding that a conflict may be triggered by an initial consultation where the potential client met with the lawyer in good faith).

3. Once a former client has been identified, it is necessary to determine whether the current representation is in the same or a substantially related matter. The test itself is simply stated:

a. The former client need show only that the matters involved in the pending suit are substantially related to the matters or cause of action in which the lawyer previously represented the client. T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265, 268 (S.D.N.Y. 1953).

b. While the test may be stated simply, differences arise in the interpretation of what constitutes substantially related matters.

i. Some courts find matters substantially related if the factual context of the two representations is similar. Once such a substantial relationship is shown, a presumption arises that a client revealed facts to the lawyer that require that representation not be undertaken or be discontinued. Smith v. Whatcott, 757 F.2d 1098, 1100 (10th Cir. 1985); In re Chantilly Constr. Corp., 39 B.R. 466, 469 (E.D. Va. 1984). See Tessier v. Plastic Surgery Specialist, Inc., 731 F.Supp. 724 (E.D.Va. 1990) and Rogers v. Pittston Company, 800 F.Supp. 350 (W.D.Va. 1992), aff'd 996 F.2d 1212 (4^th Cir.1993).

ii. Other courts, in particular the Seventh Circuit, use a three-prong test for determining the existence of a substantial relationship:

a. What was the scope of the prior representation?

b. Is it reasonable to infer that confidential information would have been given to a lawyer representing a client in those matters?

c. Is that information relevant to the issues raised in the pending litigation?

Novo Terapeutisk Laboratorium A/S v. Baxter Travenol Laboratories, Inc., 607 F.2d 186, 190 (7th Cir. 1979).

iii. The Second Circuit requires that the issues involved in the pending litigation be "identical" or "essentially the same" before a substantial relationship is found. Government of India v. Cook Indus., Inc., 569 F.2d 737, 739 (2d Cir. 1978). See also Rogers v. Pittston Company for the substantial relation test. Moreover, the inquiry does not end with the determination that the issues are the same. The lawyer's prior involvement is scrutinized to determine whether it was such that the lawyer had access to relevant, privileged information. Id. If it is found that the matters are substantially related and there is a reasonable chance that the attorney received confidences in the first matter an irrebuttable presumption arises that confidences were exchanged. No actual receipt of confidences must be shown. Rogers v. Pittston Company, supra.

iv. Client Consent -- The protections afforded under Rule 1.9 to a former client may be waived if both the present and former client consent. The discussion of disclosure requirements above sets forth the appropriate standard. The Virginia Legal Ethics Committee has provided guidance regarding the requirement of consent.

(a.) A lawyer may continue to represent a plaintiff against defendants A and B where the lawyer's partner represented A when A was convicted of criminal charges arising from the accident that gives rise to the present litigation, provided consent was obtained following full disclosure. The Committee seriously questioned, however, whether fully informed consent would be obtainable if A were not represented by counsel. LEO 401.

(b.) A lawyer may defend the husband/driver on a traffic offense and subsequently represent wife/passenger in a personal injury action against her husband provided the lawyer makes full disclosure and obtains informed consent. LEO 566; see also LEO 1337.

4. Specific Situations

a. The fact that an attorney has served as a registered agent for a party is not grounds for disqualifying him or her from representing an opposing party in litigation. In re Chantilly Constr. Corp., 39 B.R. 466 (E.D. Va. 1984).

b. An attorney's familiarity with the general corporate working of a former client and with its employees is not a basis for disqualifying an attorney, unless it is shown he or she might have acquired information related to the pending litigation. In re Chantilly Constr. Corp., supra.

c. A lawyer may not represent a criminal defendant where a former client of the lawyer will testify against the present client and the cases are substantially related, unless the former client and present client consent after full disclosure. LEO 998. Be cautious however, a conflict of interest allegation might form the basis of a finding of ineffective assistance of counsel in a habeas corpus proceeding. Dowell v. Commonwealth, 3 Va. App. 555, 351 S.E.2d 915 (1987).

d. It is improper for an attorney to represent the wife in a divorce action when two years earlier the attorney conferred with the husband about a legal separation. LEO 1015. See also LEO 1546 (improper to represent husband in divorce after wife consulted with attorney three years earlier).

e. It is improper for a lawyer to be hired by a mother to represent the interests of a minor child in a personal injury claim where the lawyer had previously represented the mother for her claims in the same accident against the same tortfeasor and where there is also a potential, though weak, claim against the mother. If there is a non-frivolous claim that could be asserted against the mother, then the child's matter would be adverse to the mother's (attorney's former client). This triggers a Rule 1.9 conflict which can only be cured by consent of the client, in this case the minor, and a minor cannot give consent. See LEO 1762.

f. It is improper for a county attorney to represent a Board of Supervisors regarding a petition that names the Board of Zoning Appeals as an adverse party where the Board of Zoning Appeals is a former client and the county attorney advised the Board of Zoning Appeals both on the zoning variance at issue and as to whether the Board of Zoning Appeals needed counsel for the lawsuit. LEO 1785

g. Where a law firm represented three landowners in the past, and now represents a neighbor against them, Rule 1.9 applies regarding the three former clients even though, when clients of the law firm, they held the land as individuals but now, as opposing parties, hold the land as trustees. LEO 1806.

5. Violation of the consent requirement can result in disqualification.

a. In Richmond Redev. and Hous. Auth. v. Joseph S. Terrell, Inc., 9 Va. Cir. 145 (1987), the City of Richmond Circuit Court was faced with a motion to disqualify based on the representation by a lawyer's former law firm of an adverse party in a substantially related matter while the lawyer in question was with the firm.

i. The lawyer in question had been a member of a firm that served as general counsel to Richmond Redevelopment and Housing Authority (RRHA).

ii. That lawyer, at the time of the decision, was a member of the firm representing Terrell and co-defendant Grier.

iii. The lawyer in question denied recollection of personal involvement in matters substantially related to the case. Counsel for Terrell, however, appeared "not to dispute" that other lawyers in the firm did represent RRHA in substantially related matters.

iv. The court, relying on DR 5-105(D), Canons 4 and 9 of the Code and case law in other jurisdictions, disqualified the lawyer in question and, under DR 5-105(E), his present firm as well. Id. at 148. Now, Rule 1.9.

v. The court noted the representation could have been undertaken with full disclosure and consent but found consent had not been obtained. Disqualifications, therefore, were appropriate. Id.

6. Lawyer Switching Law Firms (Lateral Hires)

When a lawyer changes law firms, there may be a former client conflict if the new firm represents a party adverse to a client represented by the old firm. But if the lawyer changing firms did not participate in the handling of a particular client's case at the old law firm, the lawyer and his new firm may represent a client adverse to the old firm's client. The key issue is whether the lawyer changing firms can rebut the presumption of shared confidences and secrets. LEOs 1700, 1629, 993. See Comments 4-5 to Rule 1.9.

7.       Law Firm Hiring Support Staff of Opposing Counsel

If a law firm hires a nonlawyer staff member from opposing counsel’s firm mid-litigation, that hiring does not trigger a conflict of interest.  Rules 1.7 and 1.9 do not apply to nonlawyers.  However, the lawyers in the hiring firm have a duty of supervision under Rule 5.3 that includes an obligation, in this instance, to screen the new staff member from any involvement with the matter.  Similarly, the firm from which the staff member is departing would have a duty under Rule 5.3 to instruct the employee before departure to protect the confidentiality of client information. See LEO 1800.

8.       Lawyers Employed By Temporary Staffing Agencies (Contract Lawyers)

A contract lawyer is treated like a lateral hire for conflicts purposes.  See item 6, supra. However, contract lawyers who are not given “broad access to client files and client communications” could more easily argue that they had not obtained confidences from firm clients for which they had not directly worked.  As with lateral hires, screening contract lawyers does not cure conflicts.  LEO 1712.

9.      Conflicts Created By Communications with Prospective Clients

Virginia Rule 1.18 adopted in June 2011 defines a “prospective client” a person who communicates with a lawyer  for the possibility of forming a client-lawyer relationship.  The rule affirms prior opinions holding that communications between a prospective client and a lawyer are confidential but allows the interviewing lawyer to represent a person adverse to the prospective client in the same matter unless the lawyer has obtained “significantly harmful” information.  Even then, another lawyer in the firm may represent the party adverse to the prospective client if the interviewing lawyer is “screened” and the prospective client is given timely notice of the “screen.”  Rule 1.18 provides a means by which a law firm can avoid imputation of conflict created by an initial contact or communication with a prospective client.

 

C. Multiple Representation

1. Representation of multiple clients in one matter is governed by Rule 1.7. A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client, a former client, or to a third person the curative provisions Rule 1.7(b) are met. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved. Rule 1.7 (b) ; Dowell v. Commonwealth, 3 Va. App. 555, 351 S.E.2d 915 (1987). Any doubt concerning the propriety of representation should be resolved against it. Rule 1.7.

2. In instances where a lawyer is justified in representing multiple clients (i.e., where their interests are aligned or consent has been given), the lawyer must withdraw if it becomes evident that the lawyer cannot continue to provide competent and diligent representation to each party or if any client revokes consent. Comment 2 to Rule 1.7.

a. In the litigation context, withdrawal presents a significant likelihood of hardship to the client. Rule 1.16.

b. Withdrawal is less likely to have a disruptive effect in the nonlitigation arena. Rule 1.16.

3. In circumstances where a lawyer may not represent multiple parties, the lawyer may not cure the conflict by simply dropping one of the clients. Margulies by Margulies v. Upchurch, 696 P.2d 1195, 1203 (Utah 1985). If this were the case, little incentive would exist for avoiding representation of multiple clients with differing or potentially differing interests.

4. There are a number of recurring situations involving potentially differing interests in which a lawyer is asked to represent multiple parties:

a. Co-defendants in a criminal case;

b. Co-plaintiffs in a personal injury case;

c. An insured and the insurer;

d. Beneficiaries of an estate; and

e. Buyer and seller in a real estate transaction. In this situation, the lawyer must advise both parties at the outset that he or she will not be able to represent either if a dispute arises over the transaction. LEO 1000. See also LEO 1022.

Whether a lawyer can protect the interest of multiple clients in these situations depends upon a case-by-case analysis. See Rule 1.7. These and other situations posing potential conflicts are discussed below.

5. Multiple representation of criminal defendants can violate a defendant's Sixth Amendment rights. See also Fed.R.Crim. P.44(c). Comment 23 to Rule 1.7 states that “The potential for conflict of interest in representing multiple defendants in a criminal case is so grave that ordinarily a lawyer should decline to represent more than one co-defendant”.

a. Such representation can implicate not only ethical obligations, but also the defendant's Sixth Amendment right to effective assistance of counsel. Holloway v. Arkansas, 435 U.S. 475 (1978). Dowell v. Commonwealth, 3 Va. App. 555, 351 S.E.2d 915 (1987).

b. Such a conflict can arise at many stages:

i. In plea bargaining;

ii. When developing trial tactics that may promote interests of one defendant over interests of another;

iii. From testimony of the individual defendants or their witnesses;

iv. In closing arguments; and

v. In connection with sentencing.

c. A trial court may not appoint a lawyer to represent co-defendants or permit a lawyer to continue joint representation over the objection of a defendant or lawyer without inquiring into whether the defendants have or may have conflicting interests. Holloway v. Arkansas, 435 U.S. 475 (1978).

d. If, however, there is no timely objection to multiple representation, a defendant seeking to overturn a conviction on conflict of interest grounds must show that the lawyer "actively represented conflicting interest" and that the "actual conflict of interest adversely affected his or her lawyer's performance." Cuyler v. Sullivan, 446 U.S. 335, 348 (1980).

e. If the defendant can make such a showing, counsel breached his or her duty of loyalty, and the prejudice needed for an ineffective assistance of counsel claim is presumed to have occurred. Strickland v. Washington, 466 U.S. 668, 692 (1984).

f. A defendant may waive a conflict of interest, but such a waiver must be voluntary and intelligent. Dowell v. Commonwealth, 3 Va. App. 555, 561 n.2, 351 S.E.2d 915 (1987). Moreover, all parties involved must consent.

g. In O'Dell v. Commonwealth, 234 Va. 672, 364 S.E.2d 491 (1988), O'Dell, in appealing a conviction of capital murder, rape and sodomy raised as a ground of reversal the discharge of his court-appointed counsel.

i. Counsel requested withdrawal because of a potential conflict in representation of O'Dell and another client, Pruitt.

ii. Pruitt, according to O'Dell, had confessed to the murder for which O'Dell was convicted.

iii. O'Dell was willing to waive the conflict, however, the court found no showing that Pruitt was willing to consent.

iv. The lawyer was permitted to withdraw.

v. The Court held that where a lawyer seeks to represent multiple clients with differing interests, each client must consent in order for the lawyer to continue representation. O'Dell, therefore, has no right to force counsel to continue. Id. at 500.

h. Virginia Legal Ethics Opinions pertaining to multiple representations:

i. A lawyer may not continue to represent three co-defendants charged with the same crimes when two of the co-defendants made incriminating statements against the third. LEO 391; see also LEOs 1181, 1796.

ii. LEO 916 presents the following fact pattern:

(a) A lawyer:

1) Represents defendant J on a burglary charge;

2) Represents defendants X and Y on traffic charges; and

3) Previously represented defendant Z.

(b) X is J's alleged victim.

(c) Y and Z are Commonwealth witnesses against J.

(d) The Committee assumed the traffic charges were neither related to each other nor to the burglary charge.

(e) The lawyer may continue to represent all the parties provided each client is fully advised of the lawyer's representation of all other clients and each client consents to continued representation. Moreover, the lawyer must be satisfied that all clients can be adequately represented.

6. Consent from a Legal Aid client may not be truly free and volitional if the client believes he or she has no other choice in securing other counsel. LEO 1193.

a. Multiple representation of personal injury plaintiffs may be permitted with consent after disclosure.

i. A lawyer may represent three brothers in personal injury claims resulting from an automobile accident in which the brother who was driving may have been at fault, provided the brothers have all consented after disclosure and it is possible for the lawyer to represent adequately the interests of each brother. LEO 620.

ii. i When a lawyer represents multiple personal injury clients and a counterclaim is filed against one, but not all, the clients' interests may become actually adverse, and multiple representation is no longer proper. Jedwabny v. Philadelphia Transp. Co., 390 Pa. 231, 135 A.2d 252 (1957), cert. denied, 355 U.S. 966 (1958) (Granting new trial was not abuse of discretion where lawyer represented all plaintiffs and defendant filed a counterclaim against one plaintiff whereby plaintiff became jointly liable with defendant to the remaining plaintiffs.).

7. Lawyers employed by insurers to represent an insured face peculiar conflict issues.

a. "Where a liability insurer retains a lawyer to defend an insured, the insured is the lawyer's client." ABA Informal Opinion 1476, Aug. 1, 1981. This is the rule in Virginia. Norman v. Insurance Company of North America, 218 Va. 718, 727, 239 S.E.2d 902, 907 (1978). LEO 598.

b. A conflict may exist where the policy excludes coverage for intentional acts and the plaintiff alleges that the insured acted negligently, willfully and intentionally. Both insurer and insured share in the objective to defeat the claim on all grounds. Where the facts as to intent are unclear, however, the insurer naturally wants liability to be based on intentional conduct, while the insured wants liability founded on negligence.

i. In this situation, counsel cannot take direction from the insurer to the detriment of the insured, because he or she risks helping the insurer on the coverage issue by harming the insured's defense of the underlying claim. San Diego Navy Federal Credit Union v. Cumis Insurance Society, Inc., 162 Cal. App. 3d 358, 208 Cal. Rptr. 494 (1984).

ii. In most jurisdictions, courts presented with this conflict have required the insurer to provide the insured with independent counsel of his or her own choice. See, e.g., Fireman's Fund Ins. Co. v. Waste Management of Wisconsin, Inc., 777 F.2d 366, 368 (7th Cir. 1985); Previews, Inc. v. California Union Ins. Co., 646 F.2d 1026 (9th Cir. 1981).

iii. In Virginia, it is not clear whether independent counsel is required. In Norman v. Ins. Co. of North America, supra, the Virginia Supreme Court stressed that counsel owes a duty of undivided loyalty to the insured and implied that counsel may be liable for malpractice if continuing to defend an insured whose interests conflict with the insurer.

c. A similar conflict arises where some, but not all, counts of the complaint are covered by insurance. Counsel must take care to vigorously defend all counts alleged in the complaint or risk breaching his or her duty of loyalty to the insured. See City of Virginia Beach v. Aetna Cas. and Surety Co., 426 F. Supp. 821 (E.D. Va. 1976); United States Fidelity and Guaranty Co. v. Louis A. Roser Co., 585 F.2d 932, 938 (8th Cir. 1978).

d. Other conflicts may arise in the settlement context. For example, where a case probably can be settled within the policy limits, an insurer may decide to litigate for the potential savings, while the insured would prefer to settle and avoid potential excess liability. Or the insurer may want to settle a case, but the insured may wish to litigate to preserve his or her reputation. Counsel should review the particular facts in these situations to determine whether he or she is able to provide undivided loyalty to the insured.

e. Even communications with the insurer may present a conflict, especially where there is a reservation of rights.

i. Counsel cannot provide confidential information to the insurer obtained from the insured without the insured's consent, if it is obvious the information could be used later to support a denial of coverage. San Diego, supra, 208 Cal. Rptr. at 499.

ii. For example, in ABA Informal Opinion 1476, the ABA Committee found that counsel could not reveal to an employer's insurer that the employee, who had allegedly committed the tortious acts at issue in the lawsuit, had admitted he was acting outside the scope of his employment at the time of the accident.

f. Litigation management rules or guidelines imposed by insurance companies which require defense attorneys to limit their tasks on behalf of the insured or require the attorney to turn over case file materials to third party auditors present ethical problems for the defense attorney. See LEO 1723 (requiring client's written consent before attorney may follow limits imposed by insurance company)

8. Other areas where multiple representation may involve differing or potentially differing interests include:

a. Multiple representation in family law matters is generally prohibited.

i. A lawyer may, however, represent both husband and wife in preparation and execution of reciprocal wills containing a contract clause prohibiting the survivor from changing beneficiaries if it is obvious that the lawyer can adequately represent both interests and if the husband and wife consent after full disclosure of the possible effects of the multiple representation. LEO 728. For a complete discussion of these issues, see Development Regarding the Professional Responsibility of the Estate Planning Lawyer: The Effect of the Model Rules of Professional Conduct, 22 ABA Real Property, Probate and Trust Journal 1 (1987).

ii. It is improper to represent adoptive parents in an adoption and simultaneously represent the biological parent, even if only to counsel in regard to anticipated questions from the court. LEO 741.

iii. It is not improper for counsel for the defendant in a divorce suit grounded on adultery to represent several witnesses subpoenaed by the plaintiff and identified as adultery correspondents. Such representation is assumed to be for the purpose of invoking the privilege against self-incrimination. LEO 749.

iv. In a case where the attorney represented the interests of a mother/ex-wife concerning a petition filed by the father/ex-husband to have custody transferred to the father because of allegations of lack of parental supervision by the mother, it was improper for the attorney of the mother to represent the child in proceedings involving criminal charges in the Juvenile Court. The multiple representation would be improper because of the potential for the disposition of the child's criminal charges to have an adverse affect on the custody issue. Furthermore, because the child's interests may be adverse to the mother, the attorney should avoid employment which may affect independent judgment or dilute loyalty to a client. LEO 1304.

b. Law Firm's Use of Temporary or Contact Lawyers

Law firms may hire temporary or contract lawyers through non-lawyer placement agencies so long as firms and lawyers comply with disciplinary rules on conflicts of interest. A temporary lawyer may simultaneously perform work at several law firms so long as the assignments do not create multiple party or former client conflicts. Whether a contract lawyer is deemed "associated with" the hiring firm for purposes of imputed disqualification under Rule 1.10 must be analyzed on a case by case basis and is tied to the contract lawyer's access to client information. Lawyers and law firms hiring contract lawyers should attempt to check for possible client conflicts beforehand and maintain accurate records to demonstrate the contract lawyer's restricted access to client files and information. LEO 1712.

c. Multiple representation in civil rights cases may create potentially conflicting positions.

i. The decision in Monell v. New York City Dept. of Social Services, 436 U.S. 658 (1978) placed a municipality and its employees in potentially conflicting positions in §1983 actions.

ii. A municipality may avoid liability by showing its employee's acts were outside the scope of their official duties. The employee, on the other hand, may partially or completely avoid liability by showing that the employee acted within the scope of official duties. Duton v. County of Suffolk, 729 F.2d 903, 907 (2d Cir.), modified, 748 F.2d (1984).

iii. See also LEO 1661, supra discussing city attorney's representation of both city and individual police officer named in a civil rights action.

d. Multiple representation in a partition suit may in some instances be impermissible.

i. A partition suit was filed in which a widow/mother and her minor children have potential interests.

ii. The widow/mother's interest was challenged based on her alleged desertion of her husband prior to his death.

iii. Because of this challenge, the mother's interests and those of her children are potentially adverse.

iv. It is improper for a lawyer to represent both the mother and her children absent consent. The minor children are not capable of giving the necessary consent, and the lawyer may not continue to represent the mother. The lawyer may continue to represent the children, however, provided the mother consents. LEO 786.

e. Multiple representation of mechanics' lien claimants is permitted under certain circumstances.

i. Where there is no competition among the mechanic's lien claimants and the sale of property against which the liens are being enforced will yield more than enough money to satisfy all liens, one lawyer may represent all of the claimants.

ii. Where there is competition for the proceeds, however, multiple representation is no longer proper. LEO 418.

f. Multiple representation of creditors is permitted with consent after full disclosure.

A lawyer may represent several creditors against a single debtor, if, after full disclosure to each creditor, all consent to the multiple representation and all agree as to the distribution of funds collected should the amount be inadequate to pay all claims in full. LEO 478.

D. Aggregate Settlement of Claims

1. Aggregate settlement of claims may not be made without full disclosure and consent. A lawyer representing two or more clients may not make an aggregate settlement of the claims unless each of the clients consents to the settlement after being advised of:

a. The existence and nature of all claims;

b. The total amount of the settlement; and

c. The participation of persons in the settlement.

Rule 1.8 (g).

2. In Hayes v. Eagle-Picher Indus., Inc., 513 F.2d 892 (10th Cir. 1975), the court found an agreement between a lawyer and clients that allowed a majority vote to accept settlement was contrary to the duty of loyalty owed by a lawyer to the clients and a violation of DR 5-107 (now, Rule 1.8 (g).

3. Some Virginia Legal Ethics opinions affecting aggregate settlement of claims are as follows:

a. It is not improper for an attorney to represent several creditors against a single debtor, if, after full disclosure to each creditor, all creditors consent to the multiple representation and concur as to the distribution of any funds collected should the amount be inadequate to pay fully each creditor's claim. LEO 478.

b. It is improper for a lawyer retained by an insurer to represent several insureds to accept an aggregate settlement in a malpractice case contrary to the wishes of one of the insureds. LEO 616.

c. It is not unethical for defense counsel to tender offers to co-plaintiffs with the condition that if either rejects the offer, then both offers will be withdrawn. The lawyer for the co-plaintiffs must abide by. LEO 781. Now Rule 1.8 (g).

d. It is not improper for a lawyer to propose settlement of two clients' claims against the same employer when one condition of the settlement is that the employer not fire one of the two plaintiffs and where both clients fully understand and agree with the proposal. LEO 1069.

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III. IMPUTED DISQUALIFICATION

1. Rule 1.10 provides that while attorneys are associated in a firm, none shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.6, 1.7, 1.9 or 2.10(e). Rule 1.10(a). The rule allows that when an attorney leaves a firm, the firm is not prohibited from representing a client with interests materially adverse to a client whom the former attorney represented and who is not currently represented by the firm so long as the matter is not the same or substantially related to the representation by the formerly associated attorney and no lawyer remaining in the firm has information protected by Rules 1.6 and 1.9(c). Finally, this rule allows that disqualification under the rule can be waived by the client under the conditions set out in Rule 1.7.

2. May an associate in the firm of an attorney who has served as mediator to parties represent one of the parties in related litigation? In LEO 1759, the Ethics Committee determined that there was an imputed disqualification of the associate. The attorney who served as mediator has a duty of confidentiality for the mediation. Under Rule 1.7 this duty would materially limit the attorney/mediator from representing either party in subsequent litigation. Under Rule 1.10, if an attorney is prohibited from representing a client by Rule 1.7, all attorneys associated in the same firm are also prohibited from such representation unless the client consents. See also LEO 1863.

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IV. LAWYER AS WITNESS

A. Refusal of Employment

1. A lawyer shall not act as an advocate in an adversarial proceeding in which the lawyer is likely to be a necessary witness except where the testimony relates to an uncontested issue or the nature and value of legal services rendered in the case, or disqualification of the lawyer would work substantial hardship on the client. Rule 3.7.

2. The rationale behind the prohibition of a lawyer acting in the dual role of advocate and witness as to contested matters is twofold:

a. The client's case, at least to the extent it is presented through the lawyer's testimony, will be presented by a witness with an obvious interest who is subject to impeachment on that ground.

b. The lawyer as advocate is put in the unseemly position of arguing the lawyer's own credibility.

ABA Formal Opinion 339, Jan. 31, 1975.

3. Doubts should be resolved in favor of the lawyer testifying and against his or her becoming or continuing as an advocate. LEO 1226.

4. The client's need for disinterested testimony and the client's entitlement to a lawyer whose effectiveness in not impaired by a self-serving credibility argument is the foundation of the prohibition. ABA Formal Opinion 339, Jan. 31, 1975.

5. Notwithstanding those considerations, the rules permit a lawyer to testify in three instances:

a. Where the testimony relates to an uncontested issue. Rule 3.7 (a)(1).

i. See Matney v. Cedar Land Farms, Inc., 216 Va. 932, 224 S.E.2d 162 (1976) (It is neither error nor violation of the Code of Professional Responsibility to allow lawyer to testify that he or she prepared deeds and concerning their execution since this is a matter of formality and there was no reason to believe substantial evidence in opposition would be offered).

ii. Disqualification also may not be warranted where the other party calls the attorney as a witness and his or her testimony would be cumulative. Chantilly Constr. Corp. v. John Driggs Co., 39 B.R. 466 (E.D. Va. 1984).

iii. An attorney may testify as to the accuracy of a collection client's account where the matter is uncontested. LEO 1424.

b. Where the testimony relates to the nature and value of legal service rendered in the case. Rule 3.7 (a)(2).

c. Where the disqualification of the lawyer would work substantial hardship on the client. Rule 3.7 (a)(3).

6. The first two exceptions pose little difficulty in interpretation. Moreover, they do not require the lawyer to testify as to contested matters and do not pose a significant risk to a client's case.

7. The third exception, however, does pose the risks of presenting the client's case through the testimony of a witness with an obvious interest and placing a lawyer in a position of asserting a self-serving credibility argument. Therefore, it is necessary to determine in each case whether those disadvantages are outweighed by the hardship to a client of having to retain new counsel.

a. ABA Formal Opinion 339 gives some examples of the exceptional situations under which representation is appropriate under this exception:

i. Where a lawyer has represented a client in complex litigation over a long period of time and where an unanticipated development makes the lawyer's testimony essential, it may be unfair to force the client to retain new counsel at significant cost, both monetarily and in the possible delay that may result from substituting counsel.

ii. Where a lawyer and a client have had a long or extensive professional relationship that has permitted the lawyer to develop an extraordinary familiarity with the client's affairs, the value to the client of having that lawyer in litigation involving the areas of familiarity may outweigh the disadvantages of having the lawyer testify. See In re Chantilly Constr. Corp., 39 B.R. 466 (E.D. Va. 1984).

iii. Where a lawyer has knowledge of juror misconduct during a trial, the lawyer should not be required to withdraw in order to testify to the facts. See also, LEOs 976, 1136, 1386.

b. If the lawyer, after discussing the matter with a client, concludes that there are exceptional circumstances and that the lawyer will serve as both advocate and witness, the ABA Committee advises that:

i. The lawyer should advise the court and opposing counsel that the lawyer intends to testify and the nature of the testimony.

ii. The lawyer should avoid expressly arguing the credibility of the lawyer's own testimony.

ABA Formal Opinion 339, Jan. 31, 1975.

8. While Rule 3.7 does not distinguish between a lawyer who ought to be called by a client and one who ought to be called by the opposing side, courts generally discourage motions to disqualify based upon the intent of the opposing side to call the attorney as a witness. See, e.g., Optyl Eyewear Fashion International Corp. v. Style Companies, Inc., 760 F.2d 1045 (9th Cir. 1985); Ross v. Great Atlantic & Pacific Tea Co., 447 F. Supp. 406 (S.D.N.Y. 1978); People Ex. Rel. Woodard v. District Court, 704 P.2d 851 (Colo. 1985). Nevertheless, a lawyer contemplating employment that will require the lawyer to be called by the opposing party must consider:

a. That it would be infrequent that an opposing party would call the lawyer under exceptions (1) or (2) (as to formal matters or nature and value of legal services);

b. There are very few situations in which such exceptional circumstances would be present that would justify a lawyer in accepting employment where the lawyer will be called as an adverse witness. ABA Formal Opinion 339 ("Because there are degrees of 'adverse' evidence, however, we are not prepared to hold that it would never be ethically permissible.").

c. When testimony may be adverse to a client, a lawyer, when making the decision whether such exceptional circumstances are present, should consult with the client and should consider the following:

i. It is difficult even for an experienced and skilled litigator to assess the impact of particular testimony.

ii. The resultant prejudice from unfavorable testimony coming from a party's advocate.

iii. The effect of fulfilling the obligation to testify truthfully while honoring the duty to the client of maintaining secrets and confidences.

9. The application of the witness-advocate rule does not depend on whether a lawyer will be called as a witness on behalf of his or her client, but whether the lawyer ought to be called. J.P. Foley & Co. v. Vanderbilt, 523 F.2d 1357 (2d Cir. 1975) (no distinction as to whether a lawyer will be called as a witness in the case in chief or in rebuttal; if the lawyer ought to appear, the lawyer should withdraw). Rule 3.7 replaces DR 5-101(B) and indicates that the test is whether a lawyer is likely to be a necessary witness.

10. The rules concerning lawyer as witness apply to arbitration proceedings. LEO 655.

11. The prohibitions follow the case from trial through the appellate level of a case. LEO 1513.

12. The rules require complete withdrawal. A lawyer may not withdraw only while testifying and then return as an advocate. People v. Spencer, 182 Colo. 189, 512 P.2d 260 (1973).

13. Sanctions for violation of the witness rules above include:

a. Counsel may be disqualified. Draganescu v. First Nat'l Bank of Hollywood, 502 F.2d 550 (5th Cir. 1974), cert. denied, 421 U.S. 929 (1975).

b. A court may compel a party to choose between having his or her lawyer appear as an advocate or a witness. People v. Smith, 13 Cal. App. 3d 897, 91 Cal. Rptr. 786 (1970).

c. A lawyer's fee for legal services rendered after the lawyer should have withdrawn may be denied. Hill v. Douglass, 271 So. 2d 1 (Fla. 1973).

d. While courts generally will not reverse a civil judgment, they will reverse a criminal conviction where the prosecutor who could have withdrawn testifies to material facts. People v. Spencer, 182 Colo. 189, 512 P.2d 260 (1973) (prosecutor's behavior denied defendant a fair trial).

14. A lawyer who testifies on behalf of plaintiff in a venue hearing as to defendant's statements before suit was filed may not continue to represent the client through the rest of the litigation, even if the venue issue will not "come up again during the trial on the merits." If the lawyer had to testify, it could not have been an uncontested matter. The "substantial hardship" exception did not apply because the lawyer did not allege "a distinctive value to the client as a result of any long-standing relationship with the client and familiarity with the client's affairs such that changing lawyers would pose a 'substantial hardship' to the plaintiff." Even though the venue question would not arise before the jury, the witness advocate rule applies with equal force to issues addressed to the judge. The witness-advocate rule "is a broad prophylactic rule designed to prevent even the appearance of impropriety," and therefore a lawyer who "testifies as a witness as to some contested pretrial issue" may not later appear as an advocate on the client's behalf. The lawyer may not arrange for another lawyer to file the lawsuit and handle the pretrial hearing examination (and then replace that lawyer as advocate), because it would circumvent the witness-advocate rule "through the actions of another." LEO 1709.

15. The current witness-advocate rule, Rule 3.7, only requires that the lawyer-witness withdraw as counsel of record. The law firm is not disqualified and another attorney in the firm can appear and try the matter even if his partner is likely to testify.

16. The witness-advocate rule does not apply to a lawyer serving in the capacity of a GAL in a domestic relations case. Even though the lawyer is called upon to act as an advocate for the child in a custody case, for example, the witness-advocate rule is inconsistent with the GAL's statutory duty to investigate and advise the court of the results of his investigation. Thus, the nature of the GAL's role is to report factual matters to the court and Rule 3.7 cannot preclude the GAL from discharging his statutory duty. LEO 1729.

B. Withdrawal From Representation Once Undertaken

1. Withdrawal from representation once undertaken is indicated under certain circumstances. If, after undertaking representation in contemplated or pending litigation, a lawyer learns that the lawyer (or a lawyer in his or her firm) is likely to be called on behalf of his or her client, the three exceptions and the standards discussed above apply.

2. If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that the lawyer may be called as a witness other than on behalf of the client, the lawyer may continue the representation until it is apparent that the testimony is or may be prejudicial to the client. Rule 3.7(b); see also LEOs 1032, 1455.

a. To "disqualify an attorney on any lesser showing (than prejudice to his or her client) would sanction an intolerable tactic whereby an attorney could disqualify his or her adversary merely by calling him (or her) to the witness stand." Ross v. Great Atlantic & Pacific Tea Co., 447 F. Supp. 406 (S.D.N.Y. 1978).

b. A lawyer may continue representation of a plaintiff in a personal injury action notwithstanding defense counsel's expressed intent to call the lawyer as a witness until it becomes apparent the lawyer's testimony will be prejudicial to his or her client. LEO 641; see also LEO 866.

c. Courts have discretion whether to allow a party to call opposing counsel as a witness.

i. Attempting to call opposing counsel to establish a fact readily proved in a different manner should be discouraged. Rude v. Algiers, 11 Wis. 2d 471, 105 N.W.2d 825 (1960).

ii. See also Rule 4.4 (In representing a client, a lawyer shall not use means that have no purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such person).

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V. PUBLIC EMPLOYEES ENTERING PRIVATE EMPLOYMENT

A. Judges Entering Private Employment

A former judge shall not accept private employment where he or she has acted on the merits of a matter in a judicial capacity. Rule 1.11 (b).

B. Former Government Lawyers Entering Private Employment

1. Except as law may otherwise expressly permit, a lawyer shall not represent a private client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the private client and the appropriate government agency consent after consultation. Rule 1.11 (b).

2. What constitutes a "matter" under Rule 1.11(b) includes both litigation and non-litigation matters. It is defined as "a discrete and isolatable transaction or set of transactions between identifiable parties." ABA Formal Opinion 342 (1975).

a. The term "matter" includes rulemaking functions when the lawyer was employed by a federal agency. LEO 1299 (lawyer not prohibited from challenging the federal interpretation of a regulation, even though he was responsible for promulgating part of the law when employed by a federal agency); LEO 1520 (supervisory patent examiner's duties in reviewing patent applications, are included in "matter").

b. A former prosecutor and his or her firm may not represent criminal defendants in cases related to matters for which the lawyer had substantial responsibility when he or she was a prosecutor. LEO 1243, 1250.

c. Similarly, a former prosecutor and his or her law firm may not defend an insured in a matter arising from an automobile accident where the lawyer had prosecuted the client in an underlying juvenile or criminal proceeding. See LEO 1241.

d. A former city attorney who participated in drafting zoning ordinances may not represent a private client in a lawsuit challenging the validity of those ordinances, or current ordinances that incorporate the former city attorney's work product. LEO 1699.

3. A similar restriction applies to a lawyer who leaves private practice to work for a government agency. A lawyer may accept a position with a government agency provided the new representation is neither substantially related to the matters in which he or she was involved in private practice nor adverse to the interests of his or her former clients. Rule 1.11 (d); LEO 1105.

4. In Legal Ethics Opinion 1299, supra, the committee concluded that the former government attorney was not disqualified under Rule 1.11(b) because, under the facts presented, the former government attorney's involvement with an earlier version of the regulation ended before the new regulation was adopted and utilized a third draft for which the attorney had no substantial responsibility. Thus, it was not improper for the former attorney to represent private parties challenging the new regulation as arbitrary or capricious, provided that the language of that rule was proposed and adopted subsequent to any proposed draft for which the former government attorney had substantial responsibility. But see LEO 1699, holding that former assistant city attorney could not represent private client challenging repealed and reenacted city ordinance, under the Dillon rule, where former assistant city attorney's work product is contained in the ultimate version of the ordinance.

5. In determining whether a former prosecutor may represent a private client free of any conflict of interest, that attorney must resolve two issues: whether the new representation involves a prohibited transition from public to private practice and whether the attorney has received any pertinent information that he is required to keep confidential. Both of these hurdles must be cleared for the attorney to accept the new private representation. LEO 1746. With the adoption of Rule 1.11, effective January 1, 2000, prior legal ethics opinions on this subject issued under the predecessor DR 9-101 (B) provide little guidance. A major difference between Rule 1.11 and DR 9-101 (B) is that the new rule allows the former prosecutor to cure the conflict with the consent of his former agency and the current client in private practice. With the exception of LEO 1570, the prior ethics opinions did not permit consent to cure the conflict.

In identifying potential conflicts of interest under Rule 1.11, two competing interests should be weighed: the risk that the "power or discretion vested in public authority might be used for the special benefit of a private client" versus the need not "to inhibit the transfer of employment to and from the government (thereby impairing the government's ability to attract qualified attorneys)." LEO 1746. As guidance for that balance, a conflict should be found not only where the same litigation is involved but also where the same issues of fact involving the same parties and the same situation are involved. See, ABA Formal Opinion 342 (1975). Where the private attorney's new representation is in connection with a matter from his previous public employment, he then needs to determine whether, during that public employment, he was "personally and substantially" involved in the matter. Id.

There is a sufficient factual nexus in the following scenarios to create a conflict under Rule 1.11:

a. A prospective client, who is a convicted felon, asks the attorney to petition the court for permission to possess a firearm. The prospective client was convicted of a felony prior to the attorney's term as Commonwealth's Attorney and was also convicted of possession of a firearm after a felony conviction during the attorney's term as Commonwealth's Attorney.

b. A prospective client asks the attorney to defend him on a charge of possession of a firearm after a felony conviction. The underlying felony conviction occurred during the attorney's term as Commonwealth's Attorney.

c. A client seeks the attorney's representation in defense of driving after having been declared an habitual offender when

i. The client was declared an habitual offender by court order during the attorney's term as Commonwealth's Attorney;

ii. The client was declared an habitual offender in another jurisdiction, but one of the predicate offenses was a conviction in the jurisdiction where the attorney was serving as Commonwealth's Attorney; or

iii. The client was declared an habitual offender under the law wherein the declaration process was handled exclusively by DMV administrative procedures.

In sum, the former prosecutor in such scenarios must make two determinations before accepting any of these private representations: whether the new representation is in connection with a matter in which he personally and substantially participated while in public office and whether he received any information while in public office that, while pertinent to the present case, must be held confidential. Such determinations are fact-specific and must be made on a case-by-case basis. LEO 1746.

 

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