Can a lawyer who represented a partnership later represent one partner against another partner in a partnership dispute?

Plain-English summary

The Committee was asked whether an attorney for a partnership can later represent one of the partners against another partner in a partnership dispute, and concluded this ordinarily cannot be done. It applied DR 4-101(B)(2), which bars a lawyer, during or after the professional relationship, from using a client's confidence or secret to the client's disadvantage, and emphasized (citing EC 4-1) that preserving a client's confidences and secrets is essential to the attorney-client relationship and the proper functioning of the legal system.

The opinion reasoned that an attorney who represents the entity of a partnership represents the partnership interest of each individual partner; a partnership is an association of two or more persons to carry on a business as co-owners for profit (AS 32.05.010). If a partner has divulged secrets and confidences to the partnership's attorney, those may not be used to that partner's disadvantage. The opinion stated that if there is the slightest doubt whether accepting the employment would involve a conflict between partners or with a former partner, or would require the use of information obtained in serving the partnership, the employment should be refused.

Drawing on the substantial-relationship test, the opinion noted the Alaska Supreme Court has held that an attorney may not represent a third party against a former client where there is a substantial possibility that knowledge gained in the earlier relationship can be used against the former client, or where the subject matter of the present undertaking is substantially related to the prior representation (Aleut Corp. v. McGarvey, citing T.C. Theatre Corp. v. Warner Bros. Pictures; see also Gause v. Gause). It concluded the partnership's attorney should not represent one or more partners against another partner where such a substantial possibility or substantial relationship exists.

Currency note

This opinion was issued in 1984, 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. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or test mentioned here.

Common questions

Q: Can a lawyer who represented a partnership later sue one partner on behalf of another?

A: The opinion concluded this ordinarily cannot be done, because the lawyer represented each partner's partnership interest and may not use a partner's confidences against him.

Q: What is the test for when the conflict bars the later representation?

A: The opinion applied the substantial-relationship test: the representation is barred where there is a substantial possibility that knowledge gained in the earlier representation could be used against the former client, or where the matters are substantially related.

Q: What should the lawyer do if it is unclear whether a conflict exists?

A: The opinion concluded that if there is the slightest doubt whether the employment will involve a conflict or require use of information obtained in serving the partnership, the employment should be refused.

Background and rules framework

The opinion applied the former Code's confidentiality rule (DR 4-101(B)(2), with EC 4-1), the subject now treated by Model Rule 1.9 (duties to former clients) and informed by Model Rule 1.13 (organization as client). It drew the governing substantial-relationship standard from the Alaska Supreme Court's decision in Aleut Corp. v. McGarvey and the partnership definition from AS 32.05.010.

Citations and references

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

• DR 4-101(B)(2), EC 4-1 (not using a client's confidence or secret to the client's disadvantage) (cf. Model Rules 1.9, 1.6)

Statutes:

• AS 32.05.010 (definition of partnership)

Cases:

• Aleut Corp. v. McGarvey, 573 P.2d 473 (Alaska 1978), substantial-relationship test for former-client conflicts
• T.C. Theatre Corp. v. Warner Bros. Pictures, 113 F. Supp. 265 (S.D.N.Y. 1953), origin of the substantial-relationship test
• Gause v. Gause, 613 P.2d 1257 (Alaska 1980), former-client conflicts

See also

• Alaska Ethics Op. 2012-3: Closely-Held Organization Owner Conflicts
• Alaska Ethics Op. 86-2: Creditors' Committee in a Former Client's Bankruptcy
• Alaska Ethics Op. 91-5: Dual Representation of Conflicting Estates

Source

• Landing page: https://alaskabar.org/ethics-discipline/ethics-opinions/adopted-ethics-opinions-chronological/
• Original PDF: https://alaskabar.org/wp-content/uploads/84-2.pdf

Original opinion text

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

Ethics Opinion No. 84-2
Whether an Attorney for a Partnership Can Subsequently Represent One
of the Partners Against Another Partner in a Partnership Dispute.
The Ethics Committee has been asked to clarify whether or not an
attorney for a partnership can subsequently represent one of the partners
against another partner in a partnership dispute. This ordinarily cannot be
done.
DR 4-101(B)(2) provides that a lawyer shall not knowingly during or after
termination of the professional relationship, use a confidence or secret of a
client to the disadvantage of the client.
The preservation of confidences and secrets of a client are essential to
the attorney/client relationship and should be protected. Both the fiduciary
relationship existing between lawyer and client and the proper functioning of
the legal system require the preservation by the lawyer of confidences and
secrets of one who has employed or sought to employ him. A client must feel
free to discuss whatever he wishes with his lawyer and the lawyer must be
equally free to obtain information beyond that volunteered by his client. The
observance of the ethical obligation of a lawyer to hold inviolate the confidences
and secrets of his client not only facilitates the full development of facts
essential to proper representation of the client, but also encourages laymen to
seek early legal assistance (EC 4-1).
An attorney represents the partnership interest of each individual
partner of a partnership when he represents the entity of a partnership. A
partnership is an association of two or more persons to carry on as co-owners
as a business for profit. AS 32.05.010. If a partner has divulged his secrets and
confidences to an attorney for the partnership, that confidence or secret may
not by used to the disadvantage of the client. (DR 4-101(B)(2))
If there is the slightest doubt as to whether or not the acceptance of
professional employment will involve a conflict of interest as between the two
partners or with a former partner, or may require the use of information
obtained through the services rendered to the partnership, the employment
should be refused. The Alaska Supreme Court has ruled that an attorney may
not represent a third party against a former client where there exists a
substantial possibility that knowledge gained by the attorney in the earlier
professional relationship can be used against the former client or where the
subject matter of his present undertaking has a substantial relationship to that
of his prior representation. The former client need show no more than that the
matters embraced within the impending suit, wherein his former attorney
appears on behalf of his adversary, are substantially related to the matters or
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cause of action, wherein the attorney previously represented the former client.
Aleut Corp. v. McGarvey, 573 P.2d 473 (Alaska 1978) citing T.C. Theater Corp. v.
Warner Brothers Pictures, 113 F.Supp. 265 (S.D.N.Y. 1953). See also Gause v.
Gause, 613 P.2d 1257 (Alaska 1980).
Therefore, an attorney for a partnership should not represent one or
more of the partners against another partner in a partnership dispute where
there exists a substantial possibility that knowledge gained by him in the
earlier professional relationship can be used against the former client, or where
the subject matter of the present undertaking has a substantial relationship to
that of the prior representation of the partnership.
Adopted by the Alaska Bar Association Ethics Committee on November 22,
1983.
Approved by the Board of Governors on January 13, 1984.

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