Ethics Opinion

Opinion No. 77-1

January 1977

Summary: A lawyer should not represent a new client against a former client in a matter which the former client discussed with the attorney during the course of an earlier representation.

Facts: Attorneys X and Y are associated together in the practice of law from the same law office. Their letterhead states "X and Y--Attorneys at Law." X has been asked to represent Z in a litigation matter against a person for whom X had done an estate plan within the past eight months. During the preparation of the estate plan, X's former client discussed with X the facts surrounding the problem which X's new client has asked X to handle. X asks whether he or Y can represent Z.

Discussion: Notwithstanding X's statement that he and Y conduct independent law practices, we believe that their common letterhead and single office make them "associates" for purposes of applying DR 5-105(D) which states that "[i]f a lawyer is required to decline employment [because of a conflict of interest] no partner or associate of his or his firm may accept ... such employment."

Questions concerning conflicts of interest account for a substantial number of the inquiries presented to us for decision. Many of those inquiries have involved possible suits against former clients of the inquiring lawyer or his firm. Several rules governing the conduct of lawyers in these situations have emerged. In one of our earliest opinions on the subject, MBA Opinion 75-7, we said that a lawyer should not accept employment in an adversary matter against a former client "under circumstances such that his employment could involve using confidences and secrets of the former client to the disadvantage of that former client." We also said that the disqualification applies where the former client "would be apprehensive that the lawyer's employment might involve the use of secrets or confidences of the former client, even if no such use is intended by the lawyer."

More recently, in dealing with the situation of handling matters against former clients, we have followed the lead of several courts and examined the facts to determine whether a "substantial relationship" exists between the subject matter of the contemplated representation and the former representation. MBA Opinion No. 76-12; 76-4. See Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 518 F. 2d 751 (2nd Cir. 1975); American Roller Co. v. Budinger, 513 F. 2d 982 (3rd Cir. 1975); Redd v. Shell Oil Company, 518 F. 2d 311 (10th Cir. 1975); Emle Industries, Inc. v. Patnetex, Inc., 478 F. 2d 562 (2nd Cir. 1973); T.C. Theatre Corp. v. Warner Bros. Pictures, 113 F. Supp. 265 at 268-269 (S.D.N.Y. 1953). Obviously, where a substantial relationship exists between the two matters, the likelihood that confidential information might be used to the disadvantage of the former client is far greater than where the matters are unrelated. In the case where the matters are substantially related, we have said that the lawyer can oppose his former client only if both parties consent after a full disclosure. MBA Opinion No. 76-14. Even where there is no substantial relationship between the matters, we have noted that it is always open for the former client to show that the lawyer had gained confidential information during the earlier representation which might be disadvantageous to him in the matter which the lawyer is about to undertake against him. MBA Opinion No. 76-12.

In the case presented to us, the facts that the former client discussed with X, the subject matter of the case which X is now being asked to take against his former client, clearly disqualify X from taking the case in the absence of the informed consent of both parties. The probability is great that X learned his former client's version of the dispute during the discussion. That being the case, X's former client would justifiably be apprehensive that X might use something learned during their discussion to his detriment, even if X did not intend to do so.

Because the earlier discussion between X and his former client precludes him from representing Z, we need not determine whether a substantial relationship exists between the preparation of an estate plan and a litigation matter. We do point out, however, that during the preparation of an estate plan, an attorney often learns the nature, extent and location of the client's property and that such information could be used by a lawyer in seeking an attachment or other security for a judgment.

Permission to publish granted by the Board of Delegates, 1977. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.