Can a legal-services organization's board review client eligibility, and can a board member's firm represent parties adverse to the organization's clients?

Plain-English summary

The Committee addressed two questions about the Alaska Legal Services Corporation (ALSC): whether its Board of Directors may review client eligibility determinations, and whether a conflict of interest arises where a board member or the member's firm represents an opponent of an ALSC client in the same litigation.

On the first question, the opinion concluded that board review of eligibility information is not prohibited by any ethical principle unless the particular information is protected by the attorney-client privilege, which depends on the facts of each case and ordinarily would not apply. It reasoned that the fact of representation, and basic eligibility, are generally not confidential; that intake and eligibility determinations are largely administrative and often handled by non-attorneys; and that clients cannot be assumed to expect eligibility data to be shielded from the corporation's own review, an expectation that can be removed by advising the client that eligibility is subject to review. Drawing on Alaska Evidence Rule 503 and ABA Formal Opinions 324 and 334 (limiting a legal-aid board to broad policy and barring interference with the lawyer-client relationship in individual cases), the opinion concluded the board may review whether eligibility standards are being applied, but where specific eligibility information is privileged, a staff attorney may not disclose it to the board or anyone outside the direct attorney-client relationship.

On the second question, the opinion adopted the reasoning of ABA Formal Opinion 345, concluding that a board member or the member's firm may represent a party adverse to an ALSC client. Because the program staff lawyers are the client's lawyers, the board member has no lawyer-client relationship with the program client, so the situation is not one lawyer representing conflicting clients. The opinion stressed safeguards: both sides should be made aware of the board member's role; counsel must ensure neither client is deprived of independent representation and assist a change of counsel if it is not; a board member cannot review eligibility in a case where he represents an adverse party, and should not set individual staff salaries while opposing a staff attorney. Given Alaska's small population and the need for qualified lawyer board members, the opinion concluded the mere fact of adverse representation does not disqualify a board member, while warning that the propriety of such representation is not absolute.

Currency note

This opinion was issued in 1980, before the Alaska Bar Association's adoption of the Alaska Rules of Professional Conduct (it applies the former Code of Professional Responsibility) and before the 2009 revisions to those rules. The cited authorities and the modern rules on legal-services organizations have since developed. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or safeguard mentioned here.

Common questions

Q: Can a legal-services board review a client's eligibility information?

A: The opinion concluded the board may review eligibility determinations unless the particular information is protected by the attorney-client privilege, which generally does not apply to eligibility data.

Q: Can a board member's firm represent someone adverse to a program client?

A: The opinion concluded it may, because the program staff lawyers (not the board member) represent the program client, provided the conflict rules and independent professional judgment are observed and both sides are made aware of the board member's role.

Q: What limits apply to a board member who opposes a program client?

A: The opinion concluded the board member cannot review eligibility in a case where he represents an adverse party, should not set individual staff salaries while opposing a staff attorney, and should disqualify himself in proper cases.

Background and rules framework

The opinion applied the former Code's conflict and independent-judgment rules (DR 5-101(A), DR 5-105, EC 5-24) and the confidentiality protections of Alaska Evidence Rule 503, subjects now treated by Model Rules 1.6 (confidentiality), 1.7 (conflicts), and 6.3 (membership in a legal-services organization). It adopted the reasoning of ABA Formal Opinions 324, 334, and 345.

Citations and references

Rules of Professional Conduct (former Code; cf. Model Rules):

• DR 5-101(A), DR 5-105 (conflicts; independent judgment) (cf. Model Rules 1.7, 6.3)
• EC 5-24 (lawyer's independence when employed by a legal-aid board)

Rules of Evidence:

• Alaska Evidence Rule 503 (attorney-client privilege)

Cases:

• People v. Canfield, 527 P.2d 633 (Cal. 1974), financial-eligibility information and privilege
• Estep v. Johnson, 383 F. Supp. 1323 (D. Conn. 1974), board-member adverse representation
• Dimmick v. Watts, 490 P.2d 483 (Alaska 1971), eligibility determinations and review

Other opinions cited:

• ABA Formal Opinions 324, 334, 345; ABA Informal Opinions 1208, 1309, 1395; California Bar Opinion 358

See also

• Alaska Ethics Op. 83-5: Disqualification After a Lateral Hire
• Alaska Ethics Op. 84-2: Partnership Lawyer Against a Former Partner
• Alaska Ethics Op. 2000-01: Tribal Entity and Tort Claimant Conflict

Source

• Landing page: https://alaskabar.org/ethics-discipline/ethics-opinions/adopted-ethics-opinions-chronological/
• Original PDF: https://alaskabar.org/wp-content/uploads/79-4.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Ethics Opinion No. 79-4
Whether it is Proper for the ALSC Board of Directors to Review Client
Eligibility Determinations and Whether a Conflict of Interest Exists Where
a Board Member and His Firm Re p resents an Opponent of an ALSC
Client.
Summary
The Ethics Committee has been asked, 1) whether it is proper for the
Alaska Legal Services Corporation (ALSC) Board of Directors to review client
eligibility determinations for legal services clients, and 2) does a conflict of
interest exist where a Board member or his firm represents an opponent of an
ALSC client in the same litigation.
It is our conclusion that the review of client eligibility information by the
ALSC board is not prohibited by any ethical principle unless the information is
protected by the attorney- client privilege. Whether the information is protected
by the attorney-client privilege depends on the facts in each particular case. As
a general proposition, absence unusual factual circumstances, it would not
appear that the attorney-client privilege ordinarily applies.
We also conclude that members of the ALSC Board of Directors and
members of their firms can represent parties adverse to clients represented by
ALSC staff lawyers provided requisite consideration is given to the conflict of
interest provisions of the Model Code of Professional Responsibility to assure
independent professional advice and judgment to each client.
Issue No. 1
The first issue presented for consideration is whether it is proper for the
Alaska Legal Services Corporation Board of Directors to review client eligibility
determinations for legal services clients.
Outside of the legal services context, eligibility for publicly funded
programs is subject to internal review by the program administration and
directors. This is true even in a program where eligibility depends upon income
(or available assets) being below a certain threshold level. In most cases, the
fact that an individual is represented by Alaska Legal Services is a matter of
public knowledge and record. The fact of representation carries the implication
that the client is eligible for such representation. In other words, the basic fact
of eligibility is not ordinarily confidential.
There is nevertheless some authority for the proposition that specific
information relating to client eligibility for representation by ALSC may be
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protected by the attorney-client privilege. The ALSC Board of Directors is made
up of both lawyers and lay persons. The attorney-client relationship between a
staff attorney and his client extends to other, attorneys on the staff, but it does
not extend to attorney or non-attorney members of the organization's governing
body. See, ABA Formal Opinion 324, ABA Informal Opinion 1208, and
California Bar Association Opinion 358. In an Informal Opinion, the California
Bar Association found that client financial data, including documents related
to income and assets, may not be disclosed to the board of directors of a legal
aid foundation by a staff attorney (Informal Opinion 358). That opinion is based
in part on a California Supreme Court decision that financial eligibility
information given by a client to a public defender agency is protected by the
attorney-client privilege. People v. Canfield, 10 Cal.3rd 699, 527 P.2d 633
(1974). It should be noted however, that in some districts the Alaska Court
System, in determining eligibility for representation in criminal cases by the
public defendant, examines potential clients on the question of eligibility in
open court. Under such a procedure all the factual details are made available
not only to the court and to the agency that may provide legal services, but also
to any member of the general public who wishes to listen in. While we do not
express approval for this procedure, its employment by the court system in
Alaska would seem to indicate that there is no present authority for the
proposition that eligibility information is inherently privileged. (see endnote 1)
Rule 503 of the Alaska Rules of Evidence provides that the lawyer-client
privilege extends to communications "not intended to be disclosed to third
persons other than those to whom disclosure is in furtherance of the rendition
of professional legal services to the client or those reasonably necessary for the
transmission of the communication." Communications protected by the
privilege include not only those directly to the lawyer, but also those to the
lawyer's representatives. The commentary to the rule provides that the
definition of "client" extends to a person consulting a lawyer preliminarily with
a view to retaining him, even though actual employment did not result. In other
words, there is authority for the proposition that communications to ALSC
staff, including nonlawyers, may be privileged whether or not the client is
determined to be eligible for representation by legal services. Nevertheless,
there are factors indicating that communications concerning eligibility are
administrative or ministerial in nature and are not necessarily covered by the
attorney-client privilege.
It does not appear that determinations of client eligibility by ALSC are
necessarily, or even usually, made based on privileged attorney-client
communication. ALSC intake procedures are regularly conducted by
nonattorneys for the preliminary purpose of determining eligibility for legal
representation. If the potential client is found to be ineligible, ALSC declines to
take the case and in most cases the applicant never meets with an ALSC
attorney to discuss the substance of the matter upon which he was seeking
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representation. The potential client is aware that eligibility must be shown
before Alaska Legal Service can undertake representation. Moreover, it cannot
be assumed that a potential client has any expectation that eligibility
information is protected from review by the corporation, and the persons or
boards within ALSC which it designates to make internal reviews of eligibility
determinations. (see endnote 2) The client may have an expectation that
eligibility information will be kept confidential from the general public, but that
is not a question here. The Board of Directors can review client eligibility
information without disclosing that information publicly.
In some cases information having a bearing on client eligibility may be
disclosed as part of a privileged communication between lawyer and client. In
those cases, each of which must be considered on its facts, disclosure of the
privileged information to the Board of Directors would be prohibited. The
possibility of such an occurrence, however, does not mean that eligibility
information generally is privileged from disclosure or review by the Board of
Directors.
ABA Formal Opinion 324 emphasizes that an attorney has a duty to
exercise professional judgment solely on behalf of the client. EC 5-24 warns
that:
Various types of legal aid offices are administered by boards of directors
composed of lawyers and laymen. A lawyer should not accept employment from
such an organization unless the Board sets only broad policies and there is no
interference in the relationship of the lawyer and the individual client he serves . .
. The responsibility of the lawyer to maintain his professional independence
remains constant, and the legal profession must insure that changing
circumstances do not result in loss of the professional independence of the lawyer.
Opinion 324 concludes that the functions of the board of directors of a
legal aid organization should be limited to formulating broad goals and policies,
including the establishment of guidelines delineating categories or kinds of
clients and cases the staff attorneys may represent.
Once the attorney has accepted a client or case of the nature and type sanctioned
by board policy, the board must take special precautions not to interfere with its
attorney's independent professional judgment in the handling of the matter.
(Formal Opinion 324, p.7).
ABA Formal Opinion 334 states that:
there should be no interference with the lawyer/client relationship by the directors
of a legal aid society after a case has been assigned to a staff lawyer and . . . the
board should set broad guidelines respecting the categories or kinds of cases that
may be undertaken, rather than act on a case by case, client by client basis.
(Opinion 334, p. 5).
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Nothing in these admonitions indicates that the legal services
corporation, through its Board of Directors or by some other procedure, may
not review the question of client eligibility in particular cases (again, assuming
no privileged communications will be revealed). Such a review merely seeks to
determine whether general eligibility standards previously established are
properly being applied. In Formal Opinion 334, the American Bar Association
found that the board of directors at a legal aid office may require staff attorneys
to disclose information that is reasonably required for a legitimate purpose,
such as determining whether the board's policies are being carried out. The
review process should not involve interference with decisions and judgments by
staff attorneys on how a case is handled as opposed to the more basic question
of the client's eligibility for representation by ALSC.
In some cases the question of compliance with eligibility guidelines may
involve decisions based upon professional judgment and interpretation of
eligibility guidelines rather than simple application of financial or other
guidelines. In those cases it may be inappropriate for the ALSC Board of
Directors to attempt to alter a decision by staff attorneys to undertake
representation in a particular case. Nevertheless, this would not appear to
preclude a review of how eligibility standards have been applied so that the
Board can assess whether its policies generally need clarification or revision,
nor would it appear to preclude a determination by the Board, where
appropriate, that under any reasonable interpretation, its eligibility standards
have not been complied with.
As a matter of public policy it is desirable for ALSC to be able to review
how its client eligibility standards are applied by its staff. The particular
entities to conduct the review should be established by ALSC and the National
Legal Services Corporation according to their own policies and regulations. It is
assumed for purposes of this opinion that ALSC has determined that its Board
of Directors is an appropriate entity to review eligibility determinations, absent
an ethical prohibition applicable to such a procedure. It should be noted that if
client eligibility information is subject to the client privilege, its disclosure
would be prohibited not only to the legal services board of directors, but also to
the executive director of Alaska Legal Services (who is not currently an
attorney) and to the parent national corporation, the very person and entity
ultimately charged with administering the operations of ALSC, including the
application of prescribed eligibility standards for expenditure of federal (and
state) funds. If it were determined that the attorney-client privilege precluded
review of eligibility determinations by the Board of Directors, it would also
appear to preclude review by virtually everyone except the very staff person
whose action was supposed to be the subject for review.
In balancing the competing considerations, it appears that while client
eligibility information should generally be kept confidential, its disclosure to
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the ALSC Board of Directors, so that it may review questions of client eligibility
constitutes a reasonable use of that information to insure compliance by ALSC
with its own governing statutes, regulations and policies. It cannot be assumed
that clients reasonably expect that the information they provide to ALSC to
demonstrate eligibility for services cannot be reviewed by ALSC's own board in
accordance with the corporation's established procedures. Any doubt about the
client's expectations can be eliminated by advising the client that eligibility is
subject to review. In situations where information relating to client eligibility is
protected by the attorney-client privilege, disclosure of the particular
information involved by a staff attorney to the Board of Directors, or anyone
not a party to the direct attorney-client relationship, is prohibited. This
prohibition, however, is strictly limited by the parameters of the privilege and
does not extend to other eligibility information not protected by the privilege.
Issue No. 2
The question has also been asked whether a conflict of interest exists
where a member of the ALSC board or his firm represents an opponent of an
ALSC client in the same litigation.
There is conflicting authority on the propriety of legal services board
members or their firm representing parties adverse to clients represented by
legal services staff attorneys. Some authorities have concluded that such
representation may be improper. E.g., Estep v. Johnson, 383 F.Supp. 1323 (D.
Conn. 1974). See also New Jersey Bar Opinion 126, 91 N.J. 257 (1968); ABA
Informal Opinions 1309 and 1395. Other authorities suggest that where the
board restricts its activities to the formulation of broad policies and guidelines
and refrains from involvement with individual cases, board members can
appropriately represent such parties providing requisite consideration is given
to conflict of interest provisions of the Code of Professional Responsibility. See,
e.g., 44 Florida B.J. 407 (1970). ABA Formal Opinion 345 (July 12, 1979)
considers the competing authorities and concurs with the latter conclusion.
The principles set forth in that opinion are persuasive and should govern in
Alaska.
ABA Formal Opinion 345 states:
The committee, upon due reflection, has concluded that these provisions (D.R. 5101(A) and D.R. 5-105 relating to the exercise of independent judgment by an
attorney] would not be violated necessarily by the representation by the board
member or his firm of a client involved in litigation with a program client. The
program staff lawyers are the lawyers for the client. Accordingly, the lawyerboard member does not have a lawyer-client relationship with the program client
so the problem is not one of a lawyer representing clients with conflicting
interests.
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Having said all this, the committee does not concur that there is no problem in a
board member's representation of a client adverse to a program client. Depending
upon the nature of the case, the circumstances of the clients or otherwise, one
counsel or the other may feel unexpectedly self-restrained from representation of
the client in the fullest sense. From the client's side it should not be overlooked
that clients in the poverty group, particularly, may tend to be submissive and to
acquiesce in the representation feeling that they have no choice, but at the same
time feeling concerned that they may not be getting independent representation.
The real possibility of an appearance of impropriety, even though no actual
impropriety may exist, is also troubling to the committee.
Accordingly, it is important that the board and clients on both sides be made
aware of the board member's role and the fact that he or a lawyer in his firm is
representing a client opposing a program client. The clients and counsel on both
sides must feel comfortable that in the particular circumstances neither client will
be deprived of independents and uninhibited representation. Lawyers on both
sides must be sensitive and alert to these possibilities and, if, in the course of the
representation, it becomes apparent that independent representation is not being
afforded on both sides or one or the other of the clients perceives that it is not
afforded, no matter what the reality, then the lawyers should assist in change of
counsel for one or both clients.

Because of the extreme value of having active practitioners who are litigators
themselves (or who have partners who are) serve as board members, the
committee does not wish to raise artificial barriers to their participation on
program boards by forcing them to choose between service on a board and
representation of their clients. It should be noted that in some smaller
communities it is impossible to secure qualified lawyer-members for boards who
would not be involved from time to time representing clients opposing persons
represented by program staff lawyers. Recognizing the need for qualified lawyer
board members, program staff lawyers should not seek unfairly to gain advantage
for their clients by disqualification of the board member or his firm. To the extent
that the program can make available to its clients competent volunteer legal
counsel in these situations, program clients can be offered an alternative. On the
other side, a board member should be sensitive to the possible problems posed by
such relationships and should be quick to disqualify himself and his firm in proper
cases.
On balance, the committee concludes that the compelling need for resources, not
the least of which is strong interest in legal services and participation on program
boards by active practitioners, to provide legal services for the indigent outweighs
the risk of any possible appearances of impropriety in those cases where adequate
representation is provided by board members (or members of their firms) for one
side and program staff attorneys for the other. The committee is confident that
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there will be no actual impropriety provided the strictures contained in this
opinion are followed conscientiously.
As noted in the ABA opinion, in a state with a small population such as
Alaska, the need to obtain qualified lawyer members for boards, particularly
from smaller communities, indicates that on balance board members should
not automatically be disqualified from representing parties adverse to clients of
legal services. On the other hand, the propriety of undertaking or continuing
such representation is not absolute. It should be obvious that a board member
cannot consider client eligibility in a case where he represents an adverse
party. It would also seem to be improper for the board to set the salaries of
individual staff attorneys where a staff attorney may simultaneously be
involved in litigation adverse to a board member. Other potential conflicts of
interest must also be recognized, but the mere fact of representation of a party
adverse to a client represented by ALSC does not disqualify an attorney from
board membership.
Conclusion
The committee concludes that members of the ALSC Board of Directors
may review the eligibility of ALSC clients provided that no disclosure is made to
them of information protected by the attorney-client privilege. The committee
also concludes that an ALSC board member or his firm may represent an
opponent of an ALSC client in the same litigation provided that ethical
considerations governing conflicts of interest and the need for a lawyer to
exercise independent professional judgment are observed in particular cases.
Adopted by the Board of Governors on May 1, 1980.
Endnotes:
Endnote 1
The Alaska Supreme Court has cautioned that requiring a legal aid client to
prove his eligibility in court may be undesirable, before the merits of his case
are heard, because "this may involve a showing that several attorneys refused
to handle the case because it was too weak." Dimmick v. Watts, 490 P.2d 483,
486 (1971). It should be noted, however, that in Dimmick the Supreme Court
also found that: "Eligibility determinations by Legal Services attorneys are
reviewed by the Alaska Legal Service Coporation Board of Trustees." 490 P.2d
at 487. The court also declined to decide the difficult question of who has
standing to challenge the eligibility of a particular Legal Services client.
Endnote 2
As a matter of policy it would seem to be desirable to advise potential clients
that the question of financial eligibility is subject to review and to explain
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review procedures to the client. The review procedures established by ALSC are
not a subject for consideration here. It is assumed for purposes of this opinion
that client eligibility may be reviewed by the Board of Directors, but the exact
procedure and the persons or entities who should be involved are determined
by ALSC according to its own policies and regulations.

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