Legal Ethics Opinion 1505

Conflict of Interest-Multiple Representation: Representation of
Corporation and its Chairman

You have indicated that Corporation X is sued and the chairman of
the board of Corporation X is sued in his individual and
"fiduciary"  capacities.  Attorney A represents both the
corporation and the chairman of the board in his individual and
fiduciary/representative capacities.  At the end of the trial of
the case, the judge found for the plaintiff and against the
corporation and the chairman in both the individual and
fiduciary/representative capacities.

You further advise that, in a brief in support of a post-trial
motion, the plaintiff raised matters outside the record that were
adverse to the chairman.  With respect to the chairman's
culpability, the plaintiff also made an argument that was
inconsistent with arguments previously made at trial.  The
chairman asked Attorney A to raise the issue of inconsistent
arguments before the trial court because he felt it would
strengthen his case.  However, Attorney A refused on the ground
that raising the issue before the trial court might adversely
affect the corporation.  In response to a suggestion that
Attorney A might have a conflict, Attorney A stated that there is
no conflict because the chairman is a fiduciary and, accordingly,
the interests of the chairman and the interests of the
corporation are identical.

Finally, you advise that the chairman then asked Attorney A to
send a letter to the court in his behalf rebutting the
extra-judicial comments that were made in plaintiff's post-trial
memorandum.  Attorney A refused to correct or rebut those
extra-judicial comments unless the chairman concurred with
Attorney A's filing of a letter with the court asking it to
strike from the record the plaintiff's inconsistent argument. 
Attorney A asserted that the tactic of asking the court to strike
plaintiff's inconsistent argument from the record benefitted the
corporation.  The chairman felt that striking the inconsistent
argument from the record would adversely affect his case on
appeal.  Accordingly, no letter was sent to the trial court.

You have asked the committee to opine whether, under the facts of
the inquiry, it is proper (l) for Attorney A to represent both
the chairman ofhe corporation on appeal and (2) for Attorney A to
represent the chairman in both his individual and
fiduciary/representative capacities. 

The appropriate and controlling disciplinary rules relative to
your inquiry are DR 5-l05(B), which precludes a lawyer from
continuing multiple employment if the exercise of his independent
professional judgment in behalf of a client will be or is likely
to be adversely affected by his representation of another client;
DR 5-l05(C) which permits the lawyer who encounters the type of
conflict described by subsection (B) to continue such multiple
representation if (a) it is obvious that he can adequately
represent the interest of each and (b) each consents to the
representation after full disclosure of the possible effect of
such representation on the exercise of the lawyer's independent
professional judgment on behalf of each; and DR 4-l0l which
defines "confidence" as information protected by the
attorney-client privilege and "secret" as other information
gained in the professional relationship that...would be likely to
be detrimental to the client.  DR 4-l0l further mandates that the
lawyer preserve the secrets and confidences of his client.  

Further guidance is available through Ethical Consideration 5-l5,
the pertinent part of which exhorts a lawyer faced with a
conflict as described in DR 5-l05(B) to "resolve all doubts
against the propriety of the representation"; Ethical
Consideration 5-l8 which, in describing the allegiance of a
lawyer employed or retained by a corporation or similar entity,
exhorts that a lawyer for an entity who is requested by a
stockholder, director, officer, employee, representative, or
other person connected with the entity, to represent him in an
individual capacity, may serve the individual "only if the lawyer
is convinced that differing interests are not present"; and
Ethical Consideration 5-l9 which cautions that "regardless of the
belief of a lawyer that he may properly represent multiple
clients, he must defer to a client whrary belief and withdraw
from representation of that client".  
The committee has previously opined that it would be ethically
improper for an attorney to continue his representation of both a
corporation and its president, if the corporation would be
entitled to recover substantial assets from the president in a
cross-action against the president should the cross-action prove
successful.  LEO #384.   The committee has also opined, in
circumstances involving an attorney's proposed simultaneous
representation of both a federal agency which placed a financial
institution into receivership and one of the institution's
officers/directors/shareholders who has been served with a
subpoena duces tecum seeking documents which may relate to either
the financial institution or the individual, that such
representation would be potentially improper if it developed that
the documents sought actually related to a matter on which the
attorney represented the agency.  Furthermore, the same opinion
found that, even where the conflict was potential rather than
actual, consent of both the agency and the individual would be
required to permit the simultaneous representation.  Finally, the
opinion also held that should the potential conflict develop intoan actual conflict, the attorney would then be required towithdraw from representation of both parties.  LEO #l454
[emphasis added].  In opining as to whether an attorney could
represent a mother in a custody contest after having previously
represented the child's paternal grandparents in a separate
custody proceeding, the committee cited the admonition of EC 5-l9
in requiring a lawyer to defer to a client who believes a
conflict exists even though the lawyer believes his multiple
representation is not improper.  LEO #ll9l.  
From the facts presented by you, the committee is of the opinion,
first, that an actual conflict has matured betwe in possession of
information relative to the chairman which would be likely to be
detrimental to him.  That being the case, the committee further
opines that, in contradiction to the requirements of DR 5-l05(C),
it is not obvious that Attorney A can adequately represent the
interests of each.  Since such adequate representation cannot be
provided, it is the committee's opinion that consent of both
Corporation X and its chairman will not cure the impropriety. 
Thus the committee concludes that Attorney A must withdraw from
representation of both the entity and its chairman.

Finally, the committee directs your attention to DR 2-l08(A)(l)
which, in pertinent part, requires a lawyer to withdraw from
representing a client if Legal continuing the representation will
result in a course of conduct that is inconsistent with the 
Disciplinary Rules. 

Committee Opinion
December 14, 1992