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                                         141 N.J.L.J. 1405
                                        July 10, 1995

                                        4 N.J.L. 1485
                                        July 17, 1995


Appointed by the Supreme Court of New Jersey


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 Further, it is urged that, unless withdrawn, "Opinion 678 will make it difficult, if not impossible, for attorneys to obtain adequate legal representation."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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