Can a firm withdraw from representing one client so it can take a position adverse to that client on behalf of another client who refuses to waive the conflict?

Plain-English summary

Opinion 272 (adopted May 21, 1997) addressed a firm that represented Client A over a long period in matters regulated by an administrative agency, and also represented Client B in unrelated contract matters on which no work had been done for some months. Client B, using separate counsel, started an adversary proceeding before the agency against Client A and refused to consent to the firm's representing A in it. The question was whether the firm could represent A against B.

The committee framed the answer around the difference between the current-client rule and the former-client rule. Under Rule 1.7(b), a firm cannot, without informed consent, take a position for one client that is adverse to another current client in the same matter; under Rule 1.9, a firm may take positions adverse to a former client, without consent, if the new matter is not substantially related to the prior representation. So the case turned on whether B was still a current client and, if so, whether the firm could withdraw to make B a former client. Although several facts (occasional consultations, B's subjective belief, the firm's own references to B as a client) led the committee to assume B was still a current client, it concluded the firm could withdraw under Rule 1.16(b) because withdrawal would cause no "material adverse effect" on B: B's matters were complete, no work was pending, and B had already retained other counsel. After a proper withdrawal, Rule 1.9 governed, and the firm could represent A so long as the proceeding was not substantially related to its prior work for B.

The committee then confronted the "hot potato" rule, the line of out-of-jurisdiction authority holding that a firm may not drop a client to take on an adverse matter even in an unrelated case. It declined to apply the broadest form of that rule, finding those cases distinguishable: they arose outside the District and under rules (including Canon 9's "appearance of impropriety," which the D.C. Rules deliberately omit) without D.C.'s "thrust-upon" conflicts provision in Rule 1.7(d), and in each the firm had affirmatively created the conflict while actively representing the dropped client. Adopting the "common sense" four-factor approach of the Alabama Supreme Court in AmSouth Bank v. Drummond Co., the committee weighed that the firm did not create the conflict, that A would be substantially prejudiced by losing its long-time counsel, that the firm promptly withdrew from B after consent was refused, and that B would suffer no material prejudice. The committee stressed the limit on its holding: a firm may not abandon an actively represented client to chase a more lucrative adverse matter, because that withdrawal would, virtually by definition, cause material adverse effect and would be impermissible under Rule 1.16.

Currency note

This opinion was issued in 1997, before the District of Columbia's adoption of the 2007 revisions to the Rules of Professional Conduct. 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, deadline, or requirement mentioned here.

Common questions

Q: Can a firm drop a client to avoid a conflict and sue that client for someone else?

A: Sometimes. The committee concluded a firm may withdraw and treat the client as former under Rule 1.9 where withdrawal causes no material adverse effect under Rule 1.16(b), the firm did not create the conflict, and the matters for the dropped client were complete.

Q: Does the "hot potato" rule apply in the District of Columbia?

A: Not in its broadest form. The committee declined to apply the categorical "hot potato" rule, distinguishing the out-of-jurisdiction cases and adopting the common-sense, fact-based four-factor approach from the Alabama AmSouth decision.

Q: When may a firm NOT drop a client this way?

A: The committee concluded a firm may not abandon a client during an active representation to pursue a more lucrative adverse matter, because that withdrawal would cause material adverse effect and is barred by Rule 1.16; in that case the conflict stays under Rule 1.7.

Q: How is "current" versus "former" client decided?

A: The committee noted the line can be ambiguous and that courts examine the parties' subjective expectations and conduct; it suggested lawyers define the scope and end of an engagement in writing and send close-out letters to avoid doubt.

Background and rules framework

The opinion interpreted the interplay of D.C. Rule 1.7(b) (no adverse representation against a current client without consent), Rule 1.9 (a lawyer may be adverse to a former client in unrelated matters), and Rule 1.16(b) (permissive withdrawal only without material adverse effect on the client), informed by the recently adopted Rule 1.7(d) "thrust-upon" conflicts provision. It expressly noted that the D.C. Rules omit the former Code's "appearance of impropriety" standard.

Citations and references

Rules of Professional Conduct:

• D.C. RPC 1.7(b), (d) / Model Rule 1.7 (current-client conflicts; thrust-upon conflicts)
• D.C. RPC 1.9 / Model Rule 1.9 (duties to former clients)
• D.C. RPC 1.16(b) / Model Rule 1.16 (permissive withdrawal without material adverse effect)

Cases:

• AmSouth Bank v. Drummond Co., 589 So. 2d 715 (Ala. 1991), common-sense withdrawal/four-factor approach
• Picker Int'l, Inc. v. Varian Assocs., Inc., 869 F.2d 578 (Fed. Cir. 1989), origin of the "hot potato" formulation

See also

• DC Ethics Op. 292: Thrust-Upon Conflicts Under Rule 1.7(d)
• DC Ethics Op. 356: Unidentifiable and Thrust-Upon Conflicts
• DC Ethics Op. 279: Screening to Cure Imputed Disqualification
• RI Ethics Advisory Panel Op. 2000-1: Conflict of Interest After Withdrawing to Represent a Client's Adversary

Source

• Landing page: https://www.dcbar.org/for-lawyers/legal-ethics/ethics-opinions-210-present/ethics-opinion-272