1996-06

OUESTION:

“We are writing to you to request, on behalf of the law
firms A and B, an informal opinion concerning the
respective
ethical obligations of the firms in the circumstances
described below. This request seeks advice as to whether
Firm B may represent Firm A in certain employment law
matters, without both firms disclosing this representation
to their respective clients (who are adverse in litigation)
and obtaining their consent. This request is urgent in that
Firm A anticipates the imminent filing of a lawsuit and,
therefore,the firms respectfully request the Bar’s guidance
on an urgent basis.

Firm A is a professional corporation providing legal
services in Anytown, Alabama. Among other practice areas,
it engages in a substantial employment discrimination
practice, primarily on behalf of plaintiffs. Although
empirical data is not readily available, the employment
discrimination practice of Firm A is likely the
largest in the City of Anytown, as well as the State of
Alabama. Firm B is a general law partnership practicing
primarily civil law in Anytown. Among other practice areas,
Firm B represents employers and defends employment
discrimination litigation. As a result of the practice of
both firms, Firm A and Firm B are frequently and routinely
adverse as litigants. That is, Firm B lawyers routinely
defend employment discrimination claims brought by Firm B
on behalf of its clients primarily in the federal courts in
of Alabama. A number of such cases are now pending in the
federal courts. By Alabama standards, both Firm A and Firm
B
are large law firms.

Firm A has three employment discrimination charges, one of
which may matriculate into a lawsuit at any time. These
claims involve employees, or former employees of Firm A.
Firm A seeks immediate counseling with respect to
these matters and may, or may not, elect to secure the
representation of Firm B in the event of litigation.

Firm A reasonably believes, because of the breadth of its
plaintiffs’ employment law practice, that it cannot retain
experienced employment discrimination defense counsel
locally who is not defending actions brought by that firm.
In short, if it is that Firm A cannot retain Firm B without
disclosure and consent of the clients of both firms, then
the same ethical impediment will affect its ability to
engage other experienced defense counsel in Alabama. While
Firm A is widely experienced in employment law, it
desires the perspective of defense counsel for advice.

In considering this engagement, Firm B does not believe
that
it has any conflict in terms of representing another law
firm (including one representing clients with whom it is
litigating) with respect to a claim of this type. However,
because of the number of active cases it has with Firm B,
it
does not believe that it is practicable to notify the
firm’s
existing clients, which are in litigation with Firm A and
disclose the fact of the representation of Firm A and seek
their consent. Such disclosure would, of course, also first
require the consent of Firm A. Firm B has reached the
decision not to accept the engagement, if it is required to
notify its clients. Firm A has reached the same conclusion
and for that reason, we seek instructions from the Bar.

Specifically, the firms request instructions from the Bar,
in the event that the engagement proceeds whether they
would
be required to disclose the fact of representation to their
existing clients and obtain their consent.

In examining this question, we believe that the rules
implicated are 1.7(a) and (b), Alabama Rules of
Professional
Conduct. We note that three Bar associations have taken the
position that such representation does not involve
unethical
behavior and does not require disclosure and consent: Iowa
State Bar Association, Committee on Professional Ethics and
Conduct, Formal Opinion 92-28 (February 18,1993);
Philadelphia Bar Association, Professional Guidance
Committee, Opinion 86/163 (December 18,1996); and Kentucky
Bar Association, Ethics Committee, Formal Opinion E-355
(1993). Other ethics committees have reached contrary
results; see, e.g., New Jersey Advisory Committee on
Professional Ethics, Opinion 679 (1995); Maryland State Bar
Association, Inc., Committee on Ethics, Docket 82-4
(December 3, 1981 ); Illinois State Bar Association,
Committee on Professional Ethics, Opinion 822 (April 9,
1983).

We point out that the circumstances presented by this issue
and the local representation of Firm A are not unique to
Firm B. Moreover, the lawyers involved do not anticipate
that the proposed representation would affect either the
anticipated attorney/client relationship between Firm B and
Firm A or the existing attorney/client relationships
between
those firms and their traditional present and anticipated
clients. Both firms would anticipate that they would
aggressively pursue the interests of their clients in
matters where they remain (or will be) adverse litigants
and
that the relationship between Firm A and Firm B would be
nothing other than the relationship between an employer and
its counsel. See, e.g., Krane, ‘When Lawyers Represent
Their
Adversaries: Conflicts of Interest Arising Out the Lawyer
Lawyer Relationship,’ 23 Hofstra L. Rev. 791
(1995).”

* * *

ANSWER:

Your law firms are not required to notify their respective
clients of the fact that one firm is representing the other
if, but only if, the attorneys involved can make a good
faith determination that the attorney-client relationship
between the firms will not cause the lawyers in either firm
to be less aggressive or zealous in the representation of
their clients, or interfere in any way with their
independent professional judgment.

DISCUSSION:

The type of conflict here presented is addressed in Rule
1.7(b) of the Rules of Professional Conduct of the Alabama
State Bar. This rule provides as follows:

“Rule 1.7 Conflict of Interest
General Rule

(b) 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 or to
a third person, or by the lawyer’s own
interests, unless:

(1) The lawyer reasonably believes the
representation will not be adversely
affected; and

(2) The client consents after consultation.
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.”

Under the provisions of this section, a lawyer has a
conflict of interest if his ability to represent his client
could be “materially limited” by his responsibilities to
another person or by his own interests. If a lawyer’s
relationship with another person or considerations for his
own interests could interfere with the exercise of his
independent professional judgment, or if it could cause him
in any way to be less aggressive or zealous in the course
of
representing his client than he would be if the
relationship
or the personal interests did not exist, then the lawyer
has a conflict of interest. In other words, a lawyer has
a conflict of interest if there are factors, personal or
professional, which might cause the lawyer, either
consciously or subconsciously, to “pull his punches”, so
to speak, when dealing with opposing counsel or otherwise
advocating his client’s interest. Obviously, the attorneys
involved in the representation and those who have a
personal
interest in the outcome of the litigation against the firm
are the individuals best qualified, and perhaps the only
individuals totally qualified, to make this determination
in advance. Some of the factors which should be considered
in reaching this determination are: (1) the size of the two
firms since this will impact on whether the attorneys
involved in the litigation against the law firm are also
involved in representing clients against the other law
firm;
(2) the extent to which an adverse ruling could affect the
continued existence or success of the firm being sued;
(3) the complexity, monetary value, seriousness and
contentiousness of the cases in which the two firms are on
opposing sides; and, (4) the relationship between lawyers
in both firms and their individual clients.

There are other factors which, while possibly not
determinative on the issue of whether the representation
will be materially limited, are nonetheless relevant to
consideration of this issue. One such factor is whether
other representation is available. If there are other firms
which could provide Firm A substantially the same
caliber of representation, but who are not that firm’s
opposing counsel in pending cases, the Disciplinary
Commission is of the opinion that the possibility of
representation by such a firm should be pursued
exhaustively. Another factor is the number of clients of
both firms who could conceivably be impacted. Rule 1.7(b)
(1)
requires consultation with the client prior to consent. If
the number of clients is so large that the process of
obtaining consent after consultation is impractical to the
point of impossibility, then this consideration would, as a
practical matter, have a significant bearing on the issue,
and would tend to lend support for a more liberal
application of 1.7(b).

If after taking all relevant factors into consideration,
the individual lawyers involved can make a good faith
determination that the representation of one firm by the
other will not threaten the exercise of their independent
professional judgment in those cases where the two firms
are on opposing sides, and if the attorneys involved are
satisfied in their own mind that the attorney-client
relationship between the two firms would not cause them to
be less aggressive or less zealous in representing their
clients when the other firm is opposing counsel, then it is
the opinion of the Disciplinary Commission that there is
not
a conflict of interest which would require both firms to
notify all of their clients of the relationship and obtain
the client’s consent thereto. Obviously, the attorneys
making this determination bear the risk of making it in
good
faith. If it should develop in the course of any of the
pending representations that the attorneys were not able to
exercise their independent professional judgment or failed
to be as aggressive and zealous in the representation of
their clients as they would be under other circumstances,
then those attorneys would bear the burden of
accountability
to their clients and to their profession.

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