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                                         116 N.J.L.J. 270
                                        August 22, 1985

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the New Jersey Supreme Court

OPINION 570

Conflict of Interest - Law Firm Representing
Plaintiff Where Defendant and Partner of Law Firm
have a Limited Partnership in Unrelated Business

    The inquirer's firm has been approached by a client to pursue an action against an individual, D. D and a partner in the inquirer's firm are associated in a limited partnership. The firm has never represented D in any proceedings, no member of the firm has ever received confidential communications from D, and the proposed lawsuit does not in any way involve the limited partnership in which both D and the member of the firm are associated. D contends that the inquirer's firm is precluded from representing its client in light of the relationship between D and the member of the firm.
    Given the facts presented, it appears that, contrary to D's assertion, it is the firm's client rather than D who should be concerned about the potential for ethical violations.
    D's relationship with the firm member is solely as a business associate. Neither the firm member/limited partner, nor any other members of the law firm have ever represented D in any legal matters. Thus, any information which the firm member/limited partner may possess concerning D's affairs would have had to have been obtained in a non-confidential setting. There is no ethical proscription against the use of such non-confidential information.

    The inquirer has cited this Committee's Opinions 154, 92 N.J.L.J. 353 (1969) and 425, 103 N.J.L.J. 495 (1979) in support of its position that it may represent its client against D. Both of these opinions concern firms suing their former clients; however, as noted in Opinion 425, supra, an attorney-client relationship must exist before the potential for the disclosure of confidences arises. The opinion went on to assume that such a relationship did exist. Here, there is clearly no attorney-client relationship between D and his limited partner and any disclosure is strictly in the hands of D.
    The facts presented do appear to leave some doubt as to the potential for the transmittal of confidences between the firm member and D, his limited partner. Depending upon the size of the limited partnership and the extent of any business or social contacts between the limited partners, circumstances could arise which might lead the inquirer's client to believe that confidential information given to the inquirer found its way to D through D's business associate, the inquirer's partner. This potential appearance of impropriety should be avoided by a full disclosure to the inquirer's client of the firm member's partnership with D and a written waiver outlining the relationship should be provided to and signed by the inquirer's client.

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