LEO: Corporate Practice - Conflict of Interest LE Op. 1353
Corporate Practice - Conflict of Interest - Dual Employment:
Corporate Counsel Also of Counsel to Corporation's
June 13, 1990
You have advised the Committee that you are employed by a parent company
and its subsidiaries ("corporate client") on a regular basis in the
capacity of Assistant General Counsel and Assistant Secretary. As such,
you provide day-to-day legal advice and counsel, and legal representation
before administrative agencies and local courts. In addition, you are
responsible for the selection and evaluation of outside counsel.
Furthermore, you indicate that you have been offered an opportunity to
join a law firm in the capacity of "of counsel," representing outside
clients through the law firm and sharing in the revenues of the law firm,
while retaining your current position with the knowledge and consent of
management of your corporate client. Finally, you indicate that, in your
capacity as of counsel to the firm, you will not provide representation to,
or bill the corporate client, although the firm may represent the
corporate client from time to time while segregating those fees from any
in which you share.
You have asked the Committee to opine as to the propriety of an attorney
who serves as corporate counsel retaining an outside law firm to represent
his corporate client while the attorney has an of counsel affiliation with
the firm and where the corporate client has knowledge and consents to the
arrangement but the attorney does not share in any revenues generated
The appropriate and controlling rule relative to the circumstances you
describe is DR:5-101(A), which requires that a lawyer not accept
employment if the exercise of his independent Professional judgment on
behalf of his client may be affected by his own financial, business,
property, or personal interests, except with the consent of his client
after full and adequate disclosure under the circumstances.
The Committee has earlier opined that it is not improper for a member of
the Virginia State Bar to simultaneously be a member of two or more
organizations for the practice of law ( LE Op. 802; see also ABA
Informal Opinion 83-1499) and further that it is not improper for an
attorney who is employed full-time as counsel to a corporation to maintain
a separate office for the private practice of law ( LE Op. 328), or to
furnish legal services to individual employees of his corporate employer (
LE Op. 226).
The Committee is of the opinion that, since the circumstances you
describe do not appear to involve any multiplicity of clients, a parity of
interests would exist between your position as corporate counsel and your
law firm's provision of legal services to the same corporate client.
Nevertheless, it is clear that your referral of your corporate client to
the outside law firm with which you would be affiliated would constitute a
personal interest, regardless of whether or not you would share in any
fees generated by services rendered to the corporate client. It is the
opinion of the Committee that consent of the corporate client after full
disclosure would, however, cure any impropriety arising under DR:5-101(A).
Furthermore, in order to avoid potential improprieties, the Committee
cautions that outside counsel should maintain direct communication and
reporting lines with either the corporation's General Counsel or the
corporate directors, rather than with a lawyer who enjoys a dual role as
corporate Assistant General Counsel and law firm "of counsel."
Committee Opinion June 13, 1990
See also LE Op. 1387.