Freivogel on Conflicts

Lawyers Representing Lawyers

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Lawyer A is representing Client A in a lawsuit against Party B, who is being represented by Lawyer B (suit A v. B).  While the suit is pending, Lawyer A is subpoenaed before a federal grand jury on a federal income tax related matter.  Lawyer B has a good reputation in handling such matters, so Lawyer A hires Lawyer B to represent him in connection with the grand jury proceeding.

        May these two lawyers continue in A v. B, while Lawyer B represents Lawyer A?  If so, under what circumstances must they tell their respective clients about the second representation?  Must either or both of their consents be obtained?

        ABA Op. 97-406 (1997) contains a very thoughtful discussion of these issues, as well as several additional issues that we will discuss below.  First, it would be useful to quote part of the ABA Committee's summary of the opinion:

When one lawyer represents another, the ethical propriety of their representing persons whose interests are directly adverse depends upon the effect of such representation on each lawyer's ability to represent his "third-party" client in full compliance with the Model Rules of Professional Conduct.  If either lawyer concludes that an informed, objective observer would conclude that the representation of his "third party" client may be materially limited by his relationship with the opposing lawyer, he must consider whether that representation will be adversely affected by that relationship.  If he reasonably believes that it will not, he must consult with the "third party" client and obtain her consent before accepting that representation.

        This is the classic Rule 1.7(a)(2) formulation.  In a concurrence, Lawrence Fox said that he would have gone farther than the majority and opined that a lawyer may have to disclose the "lawyer-lawyer" representation to her client even though Rule 1.7 did not require it.  He cited Rule 1.4's requirement that the lawyer keep clients informed of important events.  He ventured that many clients will feel they had a right to know of the other representation under Rule 1.4 regardless of the effect of Rule 1.7.

        The Committee makes the correct point that Rule 1.7(a)(1) could also be involved.  In the above example, suppose Lawyer A believes he must bring a motion for sanctions against Lawyer B and Client B in A v. B.  This would require Lawyer A to be "directly adverse" to his client, Lawyer B.  That would require that, along with everything else, Lawyer A get a consent from Lawyer B to proceed with the motion for sanctions.

        The Committee opines that the same rules would apply whether A v. B is litigation or the negotiation of a business transaction.

        To what extent are any Rule 1.7 consequences imputed to others in the law firms of Lawyers A and B under Rule 1.10(a)?  Again, a quote from the summary of ABA Op. 97-406 would be appropriate:

The conflict that a lawyer may have because he represents his opposing counsel in a separate matter is imputed to others in his firm.  However, whether the conflict that a represented lawyer may have because of his personal interest in the separate matter is imputed to others in his firm in dealing with representing lawyer depends on the nature of the separate matter and the knowledge of the other lawyers in the firm.

        Note that the Committee makes a distinction between the "representing" lawyer and the "represented" lawyer.

         We are aware of only one case citing ABA Op. 97-406 (1997), Burrow v. Northeast Illinois Regional Railroad Corp., 2002 U.S. Dist. LEXIS 8100 (N.D. Ill. May 6, 2002), and the issue there was slightly different from the one discussed here.  A description of Burrow appears just below.

        The Cases. We are aware of several decisions that deal directly with the conflicts ramification of one lawyer representing another.  The earlier is Adelman v. Adelman, 561 So. 2d 671 (Fla. App. 1990).  Mr. Adelman sued Mrs. Adelman for divorce.  Mr. Adelman was being represented by the Vogelsang Firm.  Mrs. Adelman changed lawyers during the divorce proceeding.  Her first lawyer, whom she later fired, was Fred Dellapa.  While the divorce proceeding was still pending, she sued Dellapa for malpractice in the divorce case.  Dellapa hired the Vogelsang Firm to represent him in the malpractice action.  Mrs. Adelman moved to disqualify the Vogelsang Firm in the divorce action, because, in defending Dellapa for malpractice, the Vogelsang firm would necessarily have to find out everything about Dellapa's handling of the divorce case for Mrs. Adelman.  This would include learning Mrs. Adelman told Dellapa during the course of the divorce representation.  For those very reasons, the trial court granted the motion to disqualify, and the appellate court affirmed.  Frye v. Ironstone Bank, 2011 Fla. App. LEXIS 14850 (Fla. App. Sept. 21, 2011), involved a very similar situation and followed Adelman.

        Referral Relationship.  Estate of Re v. Kornstein, Veisz & Wexler, 958 F. Supp. 907 (S.D.N.Y. 1997).  Paul Weiss referred substantial business to the Kornstein firm.  The Kornstein firm represented Re in an arbitration against Bear Sterns, Re's former employer.  Bear Sterns was an important client of Paul Weiss, although Paul Weiss did not handle the Re arbitration.  A Paul Weiss partner testified against Re in the arbitration.  The Kornstein firm lawyer did not cross examine him.  In a malpractice action against the Kornstein firm, Re claimed that the Kornstein firm breached its fiduciary duty to him by not telling him about the referral relationship and by not cross examining the Paul Weiss partner.  In this opinion the court denied summary judgment to the Kornstein firm on the breach of fiduciary count. 

        Burrow v. Northeast Illinois Regional Railroad Corp., 2002 U.S. Dist. LEXIS 8100 (N.D. Ill. May 6, 2002).  Burrow is suing the railroad for personal injuries.  His law firm is also representing a former in-house lawyer from the same railroad.  While with the railroad, the in-house lawyer supervised this case.  The railroad has moved to disqualify Burrow’s law firm.  The court denied the motion, principally because it was satisfied that the former in-house lawyer would not reveal confidences about this case to Burrow’s lawyers in this case.  The Northern District of Illinois has its own set of ethics rules, which includes a liberal screening rule for lawyers changing firms – similar to the Illinois rule.  While this case is not strictly about a lawyer changing firms, the court relied, in part, on the court’s screening rule.  Keane v. Northeast Illinois Regional Railroad Corp., 2002 U.S. Dist. LEXIS 8415 (N.D. Ill. May 13, 2002), was yet another action brought by the same law firm for another plaintiff.  The former in-house lawyer had worked on that case, as well.  The same motion was made and denied by a different judge.  Here's another one, Williams v. Northeast Illinois Regional Railroad Corp., 2002 U.S. Dist. LEXIS 9743 (N.D. Ill. May 29, 2002).  Different plaintiff; same result.

        The Ethics Opinions.  The following opinions basically stand for the position that these representations are ethically permissible, provided that the lawyers make full disclosure and get their clients' consents: Alabama Op. RO-96-06 (1996); Conn. Op. 2012-10 (2012); Ill. Op. 822 (1983); Maine Op. 205 (2011); Md. Op. 82-4 (1981); N.J. 679 (1995); N.Y. State Op. 579 (1987); R.I. Op. 93-3 (1993); Wis. Op. E-87-4 (1987); N.Y. City 1996-3; RI 96-23 (1996); Pa. Op. 2007-27; and Philadelphia Op. 86-163 (1986).  Iowa Op. 92-28 (1993) approves the practice of opposing lawyers representing each other but says nothing about disclosure and consent.  Ky. Op. E-355 (1993) approves the practice and says that in some cases disclosure and consent are not necessary.  Mich. Op. CI-649 (1981) holds that a divorce lawyer cannot represent another divorce lawyer in a divorce matter, if they have cases against each other.  That is because she would learn about the other's strategies, which could disadvantage the other's clients.  Neb. Op. 93-1 (undated) holds that a lawyer acting as guardian ad litem cannot represent the county attorney who normally represents the county in neglect matters.  Consent is not an option because the lawyer has a client who is incapable of consenting.  Va. Op. 1767 (2002) is very negative on a lawyer representing a prosecutor’s office in collecting fines, costs, forfeitures, and penalties, while at the same time defending criminal actions brought by that office.  In Del. Op. 1997-1 (1997) the committee said that a lawyer could be an expert witness for a law firm that is opposing that lawyer on an unrelated matter.

        Treatises.  Hazard, Hodes, & Jarvis § 11.7; Rotunda & Dzienkowski § 1.7-6(h)(1).

        Law Review.  Steven C. Krane, When Lawyers Represent Their Adversaries: Conflicts of Interest Arising Out of the Lawyer-Lawyer Relationship, 23 Hofstra L. Rev. 791 (1995) (discusses in detail many of the opinions cited above); Peter Geraghty, ABA Ethics Tip, Representing Opposing Counsel (Oct. 2016).

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