LEO: Conflict of Interest - Multiple  LE Op. 990


Conflict of Interest - Multiple Clients.


November 4, 1987


You advise that an attorney has performed work for a closely-held

corporation consisting of collections of retail accounts, all of which

have been concluded. You wish to know whether or not said attorney may

represent one of the two 50 percent stockholders in the closely-held

corporation in litigation concerning one of the shareholder's right to

open a competing business under a different corporate name. You wish to

know whether there is a distinction between a "corporate attorney" and the

attorney described above whose sole involvement with the corporation has

been routine collection matters or other incidental legal services totally

unrelated to corporate structure, corporate policy, or the relationship

between the shareholders in the closely-held corporation.


Disciplinary Rule 5-105(D) [ DR:5-105] states 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 former client unless the

former client consents after disclosure". If you no longer represent the

corporation on collection matters, under DR:5-105(D), since the two

matters are not the same or substantially related, it would not be

improper for you to represent one of the 50 percent shareholders.


If, however, you continue to represent the corporation in collection

matters, DR:5-105(A) would apply. That Disciplinary Rule states that "a

lawyer shall decline proffered employment if the exercise of his

independent professional judgment on behalf of a client will be or is

likely to be adversely affected by the acceptance of the proffered

employment, except to the extent permitted under DR:5-105(C)." Under

DR:5-105(C), "a lawyer may represent multiple clients if it is obvious

that he can adequately represent the interest of each and if each consents

to the representation after full disclosure of the possible effect of such

representation of the exercise of his independent professional judgment on

behalf of each."


Committee Opinion November 4, 1987