LEO: Conflict of Interest - Representing LE Op. 1039

 

Conflict of Interest - Representing Client in Same Manner

as Former Client Fees - Interest on Past Due Accounts.

 

February 17, 1988

 

Your letter raises two separate questions. First, you inquire whether it

is improper for you to represent the plaintiff in a personal injury action

when, several months prior to you being contacted by the plaintiff, the

defendant in the action consulted with your law partner regarding the

possibility of representation. You further indicate that your firm was

never retained to represent the defendant, that no fees were charged for

the defendant's consultation, and that your partner remembers nothing

regarding the substance of the consultation.

 

Your inquiry is controlled by DR:5-105(D), which provides that,

 

A lawyer who has represented a client in a matter shall not thereafter

represent another person in the same or substantially related matter if

the interest of that person is adverse in any material respect to the

interest of the former client unless the former client consents after

disclosure.

 

Thus, because it is quite clear from the facts that you have given that

the proposed representation would involve the same matter and that the

plaintiff and defendant will have adverse interests, the key question is

whether, for purposes of DR:5-105(D), your partner "represented" the

defendant.

 

On point with this question is LE Op. 318, which provides that,

 

It is improper for an attorney to accept a case where a member of the firm

had previously consulted with the opposing party concerning the

possibility of representation unless the opposing party consents to such

representation.

 

Additionally, the Committee has previously opined that the payment of

fees is not a prerequisite to the initiation of an attorney-client

relationship. [ See, LE Op. 221 (Gratuitous Discussion of a Divorce

Action with Husband), LE Op. 452 (Gratuitous Discussion at a Social

Event); Rules of Court Part 6, I: Definition of the Practice of Law].

 

Therefore, the Committee opines that based on the fact situation which

you have presented, representation of the plaintiff without disclosure and

consent of the defendant would be improper.

 

Your second inquiry deals with the logic behind prohibiting lawyers from

charging interest on past due accounts. Extensively discussed in LE Op.

186B, the Council based this opinion on the rationale that the imposition

of an automatic finance charge ignores the personal element of the

attorney-client relationship inherent in Ethical Consideration 2-20's [

EC:2-20] admonition that, "the determination of a proper fee requires

consideration of the interests of both client and lawyer."

 

It is important to note that LE Op. 186B does not absolutely prohibit

the use of finance charges. Such charges are allowed if the client has

agreed to the amount of the attorney's fee, is able to pay, but desires

payment be deferred for his convenience. This arrangement is acceptable

provided that the client agrees to the terms, retains the right to

prepayment without penalty, and is not assessed a finance charge on fees

prior to the time that the fees are earned by the attorney.

 

Committee Opinion February 17, 1988

 

CROSS REFERENCES

 

See also LE Op. 1146.