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141 N.J.L.J. 1405
July 10, 1995
4 N.J.L. 1485
July 17, 1995
ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
Appointed by the Supreme Court of New Jersey
OPINION 679
Conflict of Interest: Representation in a
Personal Injury Matter of an Attorney who
is an Adversary in an Unrelated Contract Case
(Supersedes Opinion 678)
Following the publication of Opinion 678, 138 N.J.L.J. 1186,
3 N.J.L. 2246 (November 21, 1994), Petitioners, numerous New Jersey
law firms and sole practitioners, requested that this Committee
reconsider the same and stay its effect pending reconsideration.
The Committee granted Petitioners' request. Upon reconsideration,
we issue this new opinion which is intended to supersede Opinion
678.
The underlying inquiry concerned the ethical propriety of the
inquirer's representation of an attorney in a personal injury
matter while that client/attorney is the inquirers's adversary in
an unrelated contract case. The inquirer stated that both parties
in the contract case had consented to the representation of the
adversary counsel after full disclosure of the circumstances and
after consultation.
In Opinion 678, this Committee analyzed the inquiry under Rule
of Professional Conduct (RPC) 1.7, concluding that quite apart from
an analysis under RPC 1.7(b), which would permit representation
upon the facts presented, the situation posed would constitute a
violation of RPC 1.7(c)(2) as giving rise to an "appearance of
impropriety."
Petitioners argue in their brief to the Committee on
reconsideration that the ban imposed by Opinion 678 is not
warranted, that ethical problems in the given circumstances will
not "occur if the attorneys involved remain sensitive to their
ethical obligations," that "an attorney's continuing obligation to
uphold the Rules of Professional Conduct is more than sufficient to
deal with potential problems on a case-by-case basis," and that
"representation of opposing counsel is not a particularly sensitive
circumstance in which any possible unethical conduct arising out of
such a representation will be seen by the public as a sign that the
legal system as a whole is less worthy of public confidence."
Further, it is urged that, unless withdrawn, "Opinion 678 will make
it difficult, if not impossible, for attorneys to obtain adequate
legal representation." Finally, Petitioners assert that the
underlying message of the Committee's "rationale for negating the
client's choice of counsel: that attorneys cannot be trusted to
uphold their ethical obligations to their clients," is one which is
"abrasive to public confidence."
We have carefully considered Petitioners' views and
accompanying authority.
This inquiry must be analyzed separately under both RPC 1.7(b)
and (c).
RPC 1.7(b) provides:
(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 a full
disclosure of the circumstance and
consultation with the client, except that a
public entity cannot consent to any such
representation. 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.
As we indicated in Opinion 678, on the information presented
we find the proposed representation permissible under RPC 1.7(b).
RPC 1.7(b) generally forbids a lawyer from representing a client if
responsibilities to that client may be materially limited by the
lawyer's responsibilities to another client, unless a two-part
exception applies. Although under the facts of this inquiry the
representation clearly could be "materially limited," the requisite
elements of the exception appear to be satisfied. The lawyer
proposing to provide the representation "reasonable believes the
representation will not be adversely affected" [RPC 1.7(b)(1)],
both clients are stated to have consented after full disclosure and
consultation, and neither client is a public entity [RPC
1.7(b)(2)].
While we conclude that RPC 1.7(b) appears to be satisfied on
the facts presented, we do pause to clarify and emphasize the
importance of proceeding meticulously in this area. In regard to
disclosure, consultation and consent, we first note the baseline
principle that "the consent must be 'knowing, intelligent and
voluntary.'" In re Dolan, 76 N.J. 13 (1978). The sufficiency of
the disclosure and consultation, and thus the adequacy of the
waiver, depends on the facts of the case, including, significantly,
the sophistication of the parties. See Opinion 527, 113 N.J.L.J.
384 (1984) ("The weight to be given to the consents of [well-
informed and sophisticated] litigants is considerably greater than
that usually involved in the consents referred to in other
cases...") and In re Lanza, 65 N.J. 347, 352 (1974) ("The extent of
the necessary disclosure ... is a question that must be
conscientiously resolved by each attorney in light of the
particular facts and circumstances that a given case presents").
We note the distinction between RPC 1.7(b)(2), which requires
consent after both full disclosure and consultation, and RPC
1.8(i), which requires consent after consultation. Accordingly we
agree with the suggestion in DeBolt v. Parker, 234 N.J. Super. 471,
483 (Law Div. 1988), that the Rules of Professional Conduct "treat
consultation as something different than full disclosure."
Although "consultation" is not defined in the RPC, The Model Rules
of Professional Conduct of the American Bar Association (1983)
define "consultation" as "communication of information reasonably
sufficient to permit the client to appreciate the significance of
the matter in question." We assume that the consultation will
include an explanation of the implications of the proposed
representation, including both its risks and advantages. See
generally DeBolt, supra, 234 N.J. Super at 483 ("[consultation]
certainly requires a broad spectrum of advice if it is to be
meaningful"). See also In re Wolk, 82 N.J. 326, 333 (1985) ("[The
attorney] cannot shield himself behind the glib recitation of a
disclosure the practical meaning of which was unknown to the
client.") In particular, we are concerned that an individual
client, as opposed to a corporate client, might feel compelled to
give consent. In those cases, it might be advisable to recommend
that the parties consult with separate and independent counsel
before giving requisite consent. In recommending consultation with
separate and independent counsel, the recommending attorney must
remain aware that the effectiveness of his or her advice depends
very much on the sophistication of the client. See In re Smyzer,
108 N.J. 47, 54-55 (1987) (when attorney and client engage in a
business transaction, the attorney "must carefully explain to his
client the need for independent legal advice ... . Nor will a
passing suggestion that the client consult a second attorney
discharge the lawyer's duty when he and his client have differing
interests").
Satisfaction of RPC 1.7(b), however, does not end the inquiry.
Under RPC 1.7(c), it is necessary to weigh the perceptions of
"ordinary knowledgeable citizens" as to whether there is an
"appearance of impropriety." See In re Opinion 552, 102 N.J. 194,
203 n.1 (1986); State v. Irizarry, 271 N.J. Super 577, 595 (App.
Div. 1994). We are mindful that the New Jersey Supreme Court has
in a line of recent cases been unwilling to find per se violations
of RPC 1.7(c)(2), requiring instead a case-by-case, fact-sensitive
analysis. See In re Opinion 662, 133 N.J. 22, 32 (1993) (finding
no per se ban on an attorney, or an attorney and associate, from
simultaneously serving as municipal attorney and municipal
prosecutor in the same municipality); In re Opinion 653, 132 N.J.
124, 136 (1993) (finding no per se ban prohibiting an attorney from
serving simultaneously as county counsel and as counsel to the
county vocational school board); In re Opinion 621, 128 N.J. 577,
602 (1992) (finding no per se ban restricting a legislative aide
from representing private parties before any State agency in any
branch of government, except that the legislative aide is
restricted from appearing in court only when the State is actually
an adverse party in litigation, and communicating with such
agencies on clients' behalf); In re Opinion 552, supra, 102 N.J. at
208 (finding no per se ban on a municipal attorney representing
both the municipality and individual officers or employees of that
municipality when all have been sued as co-defendants in a § 1983
civil rights action. On the other hand, in some circumstances such
per se rules have been upheld; see In re Opinion 569, 103 N.J. 325,
335 (1986) (approving the Advisory Committee's six-month
disqualification rule prohibiting a former Deputy Attorney General
from representing private clients in disciplinary proceedings
before the State licensing board for which he had served as counsel
and in which investigation of the Deputy Attorney General's client
had begun during his employment by the State); In re Opinion 452,
87 N.J. 45, 53 (1981) (upholding the Advisory Committee's per se
prohibition of an attorney or members of one firm from serving the
same municipality as both prosecutor and planning board counsel;
and In re Opinion 415, 81 N.J. 318, 327 (1979) (upholding the
Advisory Committee's per se ruling that an attorney cannot serve
simultaneously as counsel for a municipality and as county
counsel).
We conclude that the circumstances presented by the inquiry do
not justify a per se rule under RPC 1.7(c). Rather, it is the
responsibility of the attorney contemplating such dual
representation to consider, in light of the specific circumstances,
whether an "ordinary knowledgeable citizen" would find an
appearance of impropriety. We note that under RPC 1.7(c)(2) the
observing citizen must be presumed to be "acquainted with the
facts," requiring the attorney to conduct a careful and thoughtful
examination of the particular circumstances of the clients who are
involved.
A skeptical attitude about per se rules under RPC 1.7(c) does
pose one very real threat: that the ensuing situational relativism
and detailed fact inquiry can leave no clear standards for
attorneys to follow. At the same time, it is not the proper role
of this Committee to make detailed case-by-case reviews of every
instance of proposed dual representation. Consequently, in this
opinion we try to provide guidance to the bar by identifying the
key factors which an attorney must weigh in light of the particular
facts, in determining what an ordinary knowledgeable citizen would
conclude. They are:
(1) the level of sophistication of the
non-lawyer client who gave consent to the dual
representation, including whether an
individual or corporation is involved
(sophisticated clients would be less likely to
be subject to coercion or feel disloyal);
(2) whether the non-lawyer client
received independent legal advice in
determining whether to consent;
(3) whether the representation of the
attorney client preceded that of the non-
lawyer client, and whether the lawyer had ever
previously represented the attorney client
(such a prior relationship tends to negate any
inference of improper intention to influence
the other representation);
(4) whether the attorney client is
seeking representation in a highly specialized
matter, for which the pool of experienced New
Jersey attorneys is quite small;
(5) whether the representation of the
non-attorney client has just begun or is near
conclusion; at the outset of a matter, a
client may readily seek alternate
representation and may more comfortably
decline to consent to the requested additional
representation;
(6) whether the client's own counsel
seeks to represent the adversary counsel, or
whether an associate of the client's counsel
will carry forward the new representation; in
the latter circumstance, the representations
may be screened within the firm, presumably
reducing somewhat the likelihood of influence
on the other representation;
(7) whether at least one of the parties
seeking representation is a public entity; we
note that the presence or absence of a public
entity is one of a number of important factors
to be weighed, and not, as inquirers would
seem to suggest, an overriding or controlling
circumstance.
We think it clear that the proposed representation of opposing
counsel in another matter raises a particularly sensitive
circumstance, which an ordinary knowledgeable citizen could easily
conclude to be improper. We caution attorneys to exercise great
care in their review of the enumerated factors in the light of the
particular circumstances. This review should be conducted in light
of the purpose of RPC 1.7(c):
The "appearance" doctrine is intended not to
prevent any actual conflicts of interest but
to bolster the public's confidence in the
integrity of the legal profession. Matter of
Petition for Review of Opinion No. 569, 103
N.J. 325, 330 (1986).
It should be understood that, if evaluation of the various
applicable factors leave counsel with doubt as to proceeding with
the new representation of adversary counsel, such representation
must be declined.
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