LEGAL ETHICS OPINION 1718 CONFLICT OF INTEREST; ATTORNEY AS
MEMBER OF LOCAL GOVERNING BODY AND
MEMBER OF LAW FIRM WHICH REPRESENTS
A CLIENT IN MATTER WHICH MUST BE
ACTED UPON BY THAT GOVERNING BODY
You have presented a hypothetical in which Lawyer A and Lawyer B
are members of the same law firm. Lawyer A is a member of a
local governing body. Lawyer B represents a client of the law
firm in a zoning application before the local governing body.
Lawyer A will disclose his relationship with Lawyer B and will
abstain from participation in the local governing body's
consideration and decision concerning the zoning application of
the law firm's client. Based on those facts, you have asked the
committee to opine whether it is ethically permissible for Lawyer
B to represent a client in a matter before the local governing
body on which Lawyer A serves if Lawyer A discloses his
relationship with Lawyer B and abstains from participation in the
local governing body's consideration of the matter.
The appropriate and controlling disciplinary rules pertinent to
your inquiry follow:
DR 8-101(A): A lawyer who holds public office shall not:
(1) Use his public position to obtain or attempt to
obtain, a special advantage in legislative matters
for himself or for a client under circumstances
where he knows or it is obvious that such action
is not in the public interest.
DR 9-101(C): A lawyer shall not state or imply that he is
able to influence improperly or upon irrelevant grounds any
tribunal, legislative body or public official.
Guidance is also provided in the Ethical Considerations to the
Disciplinary Rules, as follows:
EC 8-8: Lawyers often serve as legislators or as holders of
other public offices. This is highly desirable, as lawyers
are uniquely qualified to make significant contributions to
the improvement of the legal system. A lawyer who is a
public officer, whether full or part-time, should not engage
in activities in which his personal or professional
interests are or foreseeably may be in conflict with his
official duties.
EC 9-6: Every lawyer owes a solemn duty ... to conduct
himself so as to reflect credit on the legal profession and
to inspire the confidence, respect, and trust of his clients
and of the public; and to strive to avoid not only
professional impropriety but also the appearance of
impropriety.
In prior LEOs the committee has addressed whether a lawyer may
lobby the General Assembly on behalf of a client when another
lawyer in the law firm is a member of the General Assembly. In
LEO #419, dated July 21, 1981, the committee opined that it was
not ethically permissible for a lawyer to lobby the General
Assembly or other legislative body when his partner was a member
of the legislative body, notwithstanding disclosure and
abstention by the lawyer-legislator and disclosure by the lawyer-
lobbyist. In LEO #537, dated January 18, 1984, the committee
affirmed LEO #419. In doing so, the committee observed that "the
Virginia Comprehensive Conflict of Interest Act does not obviate
[the conclusion reached in LEO #419] nor in any way diminish the
professional responsibility of the attorney."
The subject was revisited in LEO #1278, dated September 21, 1989.
The committee was asked to consider whether, in view of the
enactment of the detailed General Assembly Conflict of Interests
Act (Code of Virginia 2.1-639.30, et seq) a member of a law
firm was permitted to lobby the General Assembly when another
member of the law firm was a member of the General Assembly. The
committee affirmed LEOs #419 and #537, stating:
The Committee is of the view that the conclusions
reached in Legal Ethics Opinions Nos. 419 and 537
continue to be applicable to the situation you have
described, notwithstanding the greater detailed
disclosure now required of legislators under the
[Conflict of Interests] Act. It is the Committee's
opinion that the legal requirements of disclosure and
abstention imposed on members of Virginia legislative
bodies do not override the ethical admonitions of the
applicable disciplinary rules. The Committee continues
to believe that compliance with the Act by the
legislator is a legal, not an ethical, requirement and
will not obviate the need for both lawyer-legislators
and lawyer-lobbyists to adhere to the ethical
obligations of the profession.
* * *
Therefore, upon careful reconsideration, the Committee
reaffirms the prohibitions articulated in Legal Ethics
Opinions Nos. 419 and 537 and opines that, the General
Assembly Conflict of Interests Act notwithstanding, it
is improper for an attorney to lobby before the General
Assembly or other legislative body when a lawyer with
whom he shares a professional relationship is an
elected member of that body.
Ethics panels in most other jurisdictions have concluded that it
is not ethically permissible for a lawyer in the lawyer-
legislator's law firm to represent clients in matters before a
legislative body on which the lawyer-legislator serves. That the
lawyer-legislator recuses himself/herself from participation and
voting in the matter was found to be inadequate to cure what some
ethics panels described as a conflict of interest, and others, an
appearance of impropriety. However the ethical proscription was
described, it was imputed to the entire law firm. See Michigan
Op. RI-22 (1989); Connecticut Op. 37 (1988) and Op. 94-19 (1994);
Illinois Op. 90-17 (1991); Iowa Op. 92-31 (1993), 93-25 (1994),
and Op. 96-20 (1996); Rhode Island Op. 93-14 (1993); Kentucky Op.
E-347 (1991); Alaska Op. 76-1 (1976); Nebraska Op. 96-2
(undated); Philadelphia Bar Ass'n Op. 87-20; South Carolina Op.
90-20 (1990); and Maryland Op. 91-15 (1991); see In re Vrdolyak,
137 Ill. 2d 407, 560 N.E.2d 840 (1990), and In re Opinion 452 87
N.J. 45, 432 A.2d 829 (1981).
A different conclusion was reached in In re Ethics Op. No. 74-28,
111 Ariz. 519, 533 P.2d 1154 (1975) (en banc). In that case a
lawyer was an elected member of the city counsel. One question
presented was whether members of the city councilman's law firm
were prohibited from representing clients in civil matters before
the city council.
It was argued that the Arizona conflict of interests laws
controlled. The public interest was fully protected, it was
contended, by compliance with the statutory curative measures by
which public officials could avoid potential conflict of
interests. The Arizona Supreme Court turned away the
"exclusivity" of the conflict of interests laws, stating that
"This court can obviously set higher standards for the members of
the bar than the legislature has set for public officials in
general." 111 Ariz. at 521, 533 P.2d at 1156. The court reached
what it described as a common sense solution to avoid an
appearance of impropriety and to encourage public service by
lawyers:
[M]embers of the firm can appear before the city
council if: 1) the attorney public official publicly
announces his disqualification and, if there is a
record of proceedings, that disqualification appears in
the record, 2) the attorney public official refrains
from discussing the matters upon which the firm appears
with any of his colleagues on the council and any city
employees involved with the matters, and 3) there is a
separation of accounts so that the attorney public
official in no way shares in the fee or other
remuneration received by the firm.
Id.
In a concurring opinion, Chief Justice Cameron addressed the
Canon 9 axiomatic norm that lawyers are to avoid "even the
appearance of impropriety," stating at 522, 533 P.2d at 1157:
Canon 9 states, 'A lawyer should avoid even the
appearance of professional impropriety.' This is, of
course, a worthy and commendable goal, but that is all
it can be a goal that is often unattainable in the
practical world of private law practice. What is
professionally improper is frequently in the eye of the
beholder and ethical conduct to those outside the legal
profession can have the appearance of professional
impropriety. . . . [I]t should then be emphasized that
while we are concerned with avoidance of conduct that
would give the appearance of professional impropriety,
it is actual unethical conduct which is our primary
concern.
Ethical conduct which only incidentally creates the appearance of
professional impropriety in the minds of the public should not,
absent other factors, be proscribed. To be overly strict in
interpreting Canon 9 would prevent an attorney from discharging
his responsibility as a citizen to participate in public affairs
and hold public office. To deny an attorney this opportunity for
public service would not only unnecessarily restrict his rights
as a citizen, but would imply that attorneys are exempt from the
reasonable demands and responsibilities of citizenship, a result
which, we believe, would reflect unfavorably upon the legal
profession and be a loss to society.
See West Virginia Op. 84-5 (1985), permitting a lawyer to serve
as a hearing examiner for a state commission when his law firm
represented clients before the commission, provided he did not
participate in the matters in which his law firm or law firm
clients were involved; New Hampshire Op. 1996-92/14 (1992),
permitting law firm to represent clients before workers'
compensation appeals board on which one of its lawyers was an
appointed member, provided the lawyer-member publicly
disqualified himself and abstained from participation and did not
attempt to influence the other members, and the law firm did not
have access to information of the appeals board.
The ABA Standing Committee on Legal Ethics has issued two
opinions on the ethics issue presented. ABA Formal Opinion 296
(1959) concluded that there was an inherent conflict of interest
in a lawyer lobbying the legislature for a client when another
lawyer in the law firm was a member of the legislature. The
conflict of interest affected the public, and the public could
not consent.
Three years later, the ABA reconsidered and modified its
conclusion. In ABA Formal Opinion 306 (1962), the ABA said that
the unintended effect of its earlier opinion deterred lawyers
from serving in state legislatures, and that a modification was
warranted. Its modification was tied to states' conflict of
interests rules for legislators.
The ABA reasoned that when a state had adopted constitutional or
statutory conflict of interests rules requiring legislators to
disclose personal interests and abstain from voting, those rules
expressed the public policy of the state. Hence, a disclosure of
the lawyer-legislator's interest in and relationship to the
lobbying by a lawyer in his/her law firm, coupled with abstention
from voting on the matter, cured the conflict of interest. The
"implied consent" rule was stated, as follows:
We have concluded that if in any particular state there
are constitutional or statutory provisions or
legislative rules which expressly or by necessary
implication recognize the propriety of a lawyer
appearing before legislative committees, or otherwise
lobbying in the legislature for a client where a member
of his firm or associate was at the time a member of
the legislature, or where provision has been made
permitting a member of the legislature to disqualify
himself from voting on or participating in the
discussion of the matter involved, consent has been
given resolving the conflict of interest questions,
either by the people through the constitution or by the
legislature speaking for the state.
Notwithstanding the ABA's conclusion, the committee is not
persuaded that a lawyer-legislator's compliance with the
applicable conflict of interests laws ethically permits his law
firm to represent clients in matters before a state or local
governing body on which he serves. Such compliance discharges a
legal obligation only. Conduct that is permissible as a matter
of law is not necessarily permissible as a matter of ethics. The
distinction was clearly drawn in Gunter v. Virginia State Bar,
238 Va. 617, 621 (1989):
The lowest common denominator, binding lawyers and
laymen alike, is the statute and common law. A higher
standard is imposed on lawyers by the Code of
Professional Responsibility, many parts of which
proscribe conduct that would be lawful if done by
laymen....[W]e emphasize that more is expected of
lawyers than mere compliance with the minimum
requirements of that standard . . . .
* * *
[C]onduct may be unethical, measured by the minimum
requirements of the Code of Professional
Responsibility, even if it is not unlawful . . . .
State and local government conflict of interests laws express a
salutary public policy. The public policy expressed embraces
citizen legislators generally. Lawyers who hold public office
assume responsibilities beyond those of other citizens by virtue
of the Code of Professional Responsibility. See Annotated Rules
of Professional Conduct, Rule 8.4, com. 3 (3rd ed. 1996).
Moreover, the committee has opined in several opinions that the
Code of Professional Responsibility governs the conduct of
lawyers who serve in a capacity other than lawyer for a client.
See LEO #1443 (lawyer acting as "lender's agent"); LEO #1487
(lawyer acting as executor); LEO #1587 (lawyer acting as Chapter
7 bankruptcy trustee); LEO #1617 (lawyer acting as executor,
trustee, guardian, or attorney-in-fact). Hence, the committee
affirms its conclusion in LEO #1278 that the legal requirements
of disclosure and abstention applicable to all members of
legislative bodies do not override the ethical constraints under
the Code of Professional Responsibility applicable to lawyers who
are members of legislative bodies.
The committee recognizes that no Disciplinary Rule explicitly
answers the question presented. As the committee observed in LEO
#1702, legal ethics, like ethics generally, are fraught with gray
areas that do not fit under a literally dispositive Disciplinary
Rule. There is not an ethical vacuum, however. The polestar is
conduct that, consistent with the admonitions of EC 9-2 and EC 9-
6, reflects credit on and inspires public confidence in and
respect for the integrity of the legal profession and avoids the
appearance of impropriety.
Compliance with conflict of interests laws does not necessarily
satisfy those ethical admonitions. The Virginia Attorney General
has addressed the purpose of the conflict of interests law, as
follows:
Our system of government is dependent in large part
upon its citizens maintaining the highest trust in
their public officials. The conduct and character of
public officials is of particular concern to state and
local governments, because it is chiefly through that
conduct and character that the government's reputation
is derived. The purpose of the conflict of interests
law is to assure the citizens of the Commonwealth that
the judgment of public officers and employees will not
be compromised or affected by inappropriate conflicts.
To this end, the [Conflict of Interests] Act defines
certain standards or types of conduct which clearly are
improper. The law cannot, however, protect against all
appearance of conflict.
Attorney General COI Advisory Opinion No. 9-A10 (1989) (emphasis
supplied).
You express a concern that LEO #1278 is unduly restrictive and
could have a chilling effect on lawyers who wish to stand for
election to a local governing body. The committee is not
insensitive to your concern, yet a different rule could have a
chilling effect on the adequacy of a lawyer-legislator's
representation of his constituents. For example, if the lawyer-
member of the local governing body in your hypothetical is
associated with a law firm that has a substantial zoning practice
before the local governing body, his/her recusal from
participation in all of those applications would effectively
leave his constituents without a voice in the decision-making
process.
The sense of the committee is that public confidence in the legal
profession is not inspired, nor is an appearance of impropriety
avoided, if a law firm represents clients before a governing body
on which one of its lawyers is a member even if he/she abstains
from participation and voting. A likely public perception, and
an understandable one, is that the lawyer for the client has an
advantage or an "inside track" because another lawyer in the law
firm is a member of the governing body.
Regardless of the lawyer-member's recusal, his/her cultivation of
a relationship of trust and respect with the other members and
their inter-personal relations are likely to result in a public
perception that his/her law firm profits from that relationship
in its representation before the governing body. Conversely, if
the law firm's representation is unsuccessful, a nagging
suspicion for the client is whether the governing body's decision
was the result of an unarticulated concern that it not be accused
of impropriety in dealing with a member's law firm.
That the lawyer-legislator would not, as required in In re Ethics
Op. No. 74-28, receive any portion of the legal fee does not
diminish an appearance of impropriety. The requirement itself
seems to elevate form over substance. Even if a portion of the
defined fee is not distributed to the lawyer-member of the
governing body, the fee paid the law firm may well be used to pay
law firm overhead allocable to the lawyer-member and thus benefit
him/her. If the lawyer-member of the governing body produces
significant clients that the law firm represents before the
governing body, the law firm may consider his/her production of
business in arriving at his/her compensation or percentage of
profits. There, too, the lawyer-member has derived an economic
benefit from his law firm's representation of clients before the
governing body on which he/she serves.
Moreover, if a law firm represents clients before a governing
body when one of its lawyers is a member, there is the
appearance, if not the fact, of conflicting loyalties. The law
firm, which includes the lawyer who sits on the governing body,
owes a duty of loyalty to the client and must use all available
resources to achieve the client's lawful objective. The duty of
loyalty is diluted and the available resources impaired, however,
when the law firm must exclude the lawyer- legislator from the
representation, and the law firm cannot enlist his knowledge of
the subject matter or of the governing body in the
representation. The lawyer-legislator may have acquired non-
public or even confidential information as a member of the
governing body that would serve the client's interest. The
client is denied the benefit of such information, however. If
the law firm seeks client-consent to the limitation on its
resources, the law firm might well be asking for consent to less
than adequate representation.
Similarly, the lawyer-legislator has a duty to the governing body
on which he/she serves and to his/her constituents. When he/she
abstains from the governing body's decision-making because it
involves his/her law firm's representation of a client, then
his/her personal interest is elevated over his/her duty as a
public servant. Both the governing body and the lawyer-
legislator's constituents are deprived of the benefit of his/her
voice in the decision-making process.
The committee is not unmindful of Chief Justice Cameron's
observation that avoiding an appearance of impropriety is but a
worthy goal that is often unattainable in the private practice of
law. The rationale underlying the worthy goal is, as Plato's
allegory of the cave illustrated long ago, that appearance can be
understood to be reality. "[W]here public confidence is in
issue, what people think is true may be as important as what is
true." Association of the Bar of New York, Report of the Special
Committee on the Federal Conflict of Interest Laws, Conflict of
Interest and Federal Service 17 (1960). "The appearance of
conflict is as dangerous to public confidence in the
administration of justice as true conflict itself." Lloyd N.
Cutler, Conflicts of Interest, 30 Emory L.J. 1015, 1020 (1981).
Significantly, the appearance of impropriety test remains in the
ethics law of the federal government. See generally Daniel L.
Koffsky, The Appearance of Wrongdoing, 6 Georgetown J. of Legal
Ethics 501 (1993).
The sense of the committee is that whenever lawyers' conduct
presents an appearance of impropriety that can diminish public
confidence in and respect for the integrity of the legal
profession, as well as the administration of government, lawyers
must adhere to the "higher standard" of ethical conduct
emphasized in Gunter to avoid the appearance of impropriety The
committee concludes, therefore, that it is not ethically
permissible for a law firm to represent a client in a matter
before a governing body when one of the law firm's lawyers is a
member of the governing body even if he/she discloses the
conflict and abstains from participation and voting in the
matter.
Committee Opinion
December 2, 1998
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