Ethics Opinions

Opinion No. 86-1

Summary: Although DR 5-101(A) states that with consent a lawyer may represent a client when his judgment reasonably may be affected by his own financial, business, property, or personal interests, other rules may in some cases preclude the representation. On the facts of this case, as presented to the committee, it would not be a per se violation for an attorney who is a defendant in a legal malpractice action brought by one of his longstanding, regular clients to continue to represent that client on other matters and to represent that client in new matters. The client, however, must freely consent to such representation after full disclosure of the ways in which the attorney's financial and personal interests relating to the malpractice action may affect the exercise of his professional judgment on behalf of the client as well as all possible adverse consequences to the client of the proposed representation. The presence of other facts not stated in the inquiry to the committee, however, could preclude such representation even with consent.

Facts: An attorney whose client is a defendant ("Attorney A") in a legal malpractice action brought by one of Attorney A's regular, longstanding clients, inquires whether Attorney A may continue to represent the client in pending matters unrelated to the legal malpractice action, and whether he may accept new matters on behalf of the client, including matters relating to the real estate which is the subject of the malpractice action. Apparently, the client wishes Attorney A to continue to represent him. Attorney A has been counsel to the client, a real estate developer, for years. He currently represents him in conveyancing and other real estate development matters and complex business dealings. The malpractice claim arises from one of several litigation matters that were transferred from another attorney (Attorney B) in Attorney A's office to Attorney A. During the transfer period, the file apparently was misplaced by Attorney A and an appeal period lapsed. The underlying claim was for money owed on a particular piece of property. There may be an issue of whether filing the appeal was the responsibility of Attorney B or Attorney A. Otherwise, the malpractice claim appears to be relatively straightforward. The claim is for approximately $20,000 to $25,000, well within Attorney A's policy limits. We are told that the amount of the deductible is probably $5,000 or less.
Discussion: Disciplinary Rule 5-101(A) provides:
Except with the consent of his client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of his client will be or reasonably may be affected by his own financial, business, property, or personal interests.
At the outset, the committee concludes that Attorney A's "professional judgment on behalf of his client . . . reasonably may be affected" by Attorney A's own interests in the malpractice action. For example, the action could affect Attorney A's reputation as a lawyer; it could cause his malpractice insurance premiums to increase, and he would have to pay the deductible if the client wins.
DR 5-101(A), however, does not operate as an absolute bar to Attorney A's continued representation of the client or representation of him on new matters. Rather, representation is permitted if the client consents thereto after full disclosure. However, as the committee emphasized in Opinion 79-2, "The attorney should be extremely cautious in making full disclosure and obtaining meaningful consent." To satisfy the "full disclosure" requirement, the client must be advised of (1) all of Attorney A's financial, business, property, and personal interests in the malpractice action which will or may affect his professional judgment on behalf of the client, and (2) any and all possible adverse consequences to the client of the proposed representation. See Opinion 79-2. Cf. Opinion 81-2 (interpreting DR 5-105).
Some of Attorney A's possible interests have already been noted. As to possible adverse consequences to the client, Attorney A may need to attack or question the client's credibility or reputation in order to defend successfully the malpractice claim. He might be forced at some point in the litigation to reveal or threaten to reveal, without consent, a "confidence" or "secret" of the client, in accordance with the permission granted by DR 4-101(C)(4). For example, part of A's defense may involve attempting to show that his client would not have prevailed even if the appeal had been timely filed. See Brown v. Gerstein, 17 Mass. App. Ct. 588, 565 (1964). Indeed, Attorney A may be compelled, at the risk of loss of insurance coverage, to make full disclosure of relevant client confidences to the insurance company under a duty to cooperate in the defense. Attorney A should bear in mind and articulate separately to the client the attorney's own interests and the possible adverse consequences to the client in connection with (1) matters of continuing representation, and (2) matters of new representation, especially those which may involve the real estate which is the subject of the malpractice claim. To satisfy the "meaningful consent" requirement, not only must there be full disclosure, but Attorney A should not pressure, or attempt to pressure, the client. The decision is the client's alone and he must make it freely. Opinion 79-2; Opinion 81-2.
Obtaining consent after full disclosure will be sufficient in most situations but there are extreme cases where the lawyer's personal interests are so potentially adverse to the client's interests that consent will not end the inquiry. In such cases, other disciplinary rules may be implicated by Attorney A's involvement in the malpractice case. For example, Attorney A's ability to represent the client competently and zealously in the other matters may be compromised, see DR 6-101 and DR 7-101(A), his conduct may be prejudicial to the administration of justice, DR 1-102(A)(5), and in such circumstances he may be required, at some point, to withdraw from representing the client, DR 2-110(B)(2). See also Canon 9, as referred to in Commonwealth v. Shraiar, 397 Mass. 16, 24, n.6 (1986). If, for example, attacking the client's credibility or revealing his confidences in a seriously detrimental way seems likely, the committee concludes that the rules just cited should be interpreted as preventing advance consent to conduct so seriously harmful to a client. The facts presented to the committee, however, do not suggest that likelihood.
The committee views this inquiry as presenting a close case, but given the apparently discrete and clear-cut nature of the malpractice claim; the small amount of that claim relative to the other business conducted for the client by Attorney A; the longstanding relationship between Attorney A and the client, and Attorney A's familiarity with the client's complex business dealings; the limited likelihood that either the client's or Attorney A's reputation will be at issue in the malpractice action (especially if it was Attorney B who failed to file the appeal); and the sophistication of the client and Attorney A, the committee cannot say that Attorney A's representation of the client after full disclosure and meaningful consent would be a per se violation of the Disciplinary Rules. But the committee cautions that every case will turn on its own facts and that any attorney who continues to represent a client or takes on new matters for a client in such a situation runs a risk that a court may find a disciplinary rule violation and such representation therefore prohibited even though the client has consented after full disclosure in accordance with DR 5-101(A). Indeed, the presence of facts apparently absent in this inquiry, such as the need to attack the client's credibility or to reveal his confindences, could lead the committee to conclude that this was such a case.


Permission to publish granted by the Board of Delegates on May 30, 1986. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.
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