When a D.C. lawyer represents an organization's officer or director personally (not the entity), how should the lawyer handle the role and later conflicts adverse to the organization?
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This page answers the general question as of 2005. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
Opinion 328 (approved April 2005) addresses the lawyer who personally represents an individual constituent of an organization, such as a board member, corporate officer, or a member of an audit or special committee formed to meet obligations under the Sarbanes-Oxley Act. The opinion limits itself to personal representations in which the constituent's interests are potentially diverse from the organization's; it does not address the lawyer who represents the entity and, in that role, assists a constituent whose interests align with the entity. The fact that the organization pays the lawyer's fee is not determinative, so long as Rule 1.8(e) is satisfied.
On establishing the representation, the opinion stresses that representing the entity and representing a constituent personally are not the same thing. Under Rule 1.13, a lawyer who represents an organization represents the entity, not its constituents. A lawyer who fails to give sufficient consideration to the distinction can unwittingly create a de facto representation, for example by receiving sensitive information from an unwary constituent who reasonably believes the lawyer is acting as his lawyer too. At the outset the lawyer must determine which representation is being sought, inform the prospective client of the distinction, and reach a clear understanding; ideally the understanding is incorporated into the retainer agreement.
On carrying out the personal representation, the opinion (drawing on D.C. Opinions 216, 269, and 305) explains that the constituent is the lawyer's sole client and the lawyer should make clear to other, non-client constituents that the lawyer's interests may be separate from the entity's, before being told corporate confidences. The opinion adds that the constituent's adversity to the entity may be tempered by the constituent's own legal duties to the entity (for example, duties to maintain trade secrets), so the lawyer should chart a course consistent with both the client's interests and the client's legal duties to the organization.
On taking new matters adverse to the organization, the opinion concludes that the entity is not automatically "another client" under Rule 1.7(b)(1) merely because the lawyer represented a constituent, but the inquiry must go deeper and examine the de facto relationship. The lawyer must also weigh Rule 1.7(b)(2) through (b)(4) and the Rule 1.6 duty to preserve confidences. Citing ABA Formal Opinions 92-365 and 95-390 and Opinion 305, the opinion notes that when the constituent is a high-level official, the lawyer is likely to be privy to sensitive organization-wide information, so the organization may have a reasonable expectation that the lawyer will not later be adverse to it. Once the constituent becomes a former client, Rule 1.9 applies and adds the "substantially related" inquiry.
In practice
Under the D.C. rules as they stood at the time of the opinion, a lawyer who personally represents an organization's constituent should, per the opinion, make the limited scope of the representation clear at the outset, both to the client and to other constituents the lawyer deals with, and ideally record that understanding in the retainer agreement. The opinion treats the constituent as the lawyer's sole client and concludes the lawyer should signal to non-client constituents that the lawyer's loyalty runs to the constituent, not the entity, before receiving corporate confidences.
The opinion concludes that whether the lawyer may later take a matter adverse to the organization is fact-dependent and turns on whether the organization became a de facto client, measured by the lawyer's access to the entity's confidential information and the entity's reasonable expectations, with Rule 1.9's substantial-relationship test added once the constituent is a former client. Because the opinion predates later rule developments, verify the current D.C. rules before relying on specific requirements.
Common questions
Q: If I represent a company's officer personally, do I also represent the company?
A: The opinion concludes no, not automatically. Under Rule 1.13 the lawyer who represents the entity represents the entity, and a lawyer engaged to represent a constituent personally represents only that constituent, but the opinion warns the lawyer can create a de facto representation by carelessly receiving confidences from others.
Q: Can I later take a matter adverse to the organization whose officer I represented?
A: The opinion concludes it depends on whether the organization became a de facto client. The lawyer must examine the de facto relationship, the confidential information acquired, and the entity's reasonable expectations under Rule 1.7, and apply Rule 1.9's substantial-relationship test once the constituent is a former client.
Q: Does the company paying my fee make the company my client?
A: The opinion concludes that the entity's payment of the fee is not determinative, provided Rule 1.8(e) is met: the client consents after consultation, the payer does not interfere with the lawyer's independent judgment, and Rule 1.6 confidentiality is preserved.
Q: What should I do at the start of the engagement?
A: The opinion concludes the lawyer should determine which representation is sought, inform the prospective client of the distinction between representing the entity and representing the constituent, reach a clear understanding, and ideally incorporate it into the retainer agreement.
Background and rules framework
The opinion interprets D.C. Rule 1.13 (organization as client) together with Rule 1.7 (conflict of interest: general rule, including the de facto-client analysis under paragraph (b)), Rule 1.9 (duties to former clients), Rule 1.6 (confidentiality), and Rule 1.8(e) (compensation from someone other than the client). It relies on Comments 13 and 14 to Rule 1.7 and on prior D.C. opinions (216, 269, 305) and ABA Formal Opinions 92-365 and 95-390 for the principle that whether an affiliate or constituent has become a client turns on the disclosure of confidential information and the parties' reasonable expectations.
Citations and references
Rules of Professional Conduct:
- D.C. RPC 1.13 / Model Rule 1.13 (organization as client)
- D.C. RPC 1.7, 1.7(b)(1) / Model Rule 1.7 (conflict of interest; de facto client)
- D.C. RPC 1.9 / Model Rule 1.9 (duties to former clients)
- D.C. RPC 1.6 / Model Rule 1.6 (confidentiality)
- D.C. RPC 1.8(e) / Model Rule 1.8(f) (compensation from a third party)
Cases:
- Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir.), cert. denied, 439 U.S. 955 (1978) (when an attorney-client relationship is formed)
- Glueck v. Jonathan Logan, Inc., 653 F.2d 746 (2d Cir. 1981) (trade-association member as de facto client)
Other opinions cited:
- ABA Formal Op. 92-365: trade associations as clients
- ABA Formal Op. 95-390: conflicts in the corporate-family context
- D.C. Ethics Opinions 216, 269, 305 (entity-representation duties to related persons)
See also
- ABA Formal Op. 514: Advising an Organization on a Constituent's Legal Risk
- ABA Formal Op. 95-390: Conflicts in the Corporate-Family Context
- ABA Formal Op. 92-365: Trade Associations as Clients
- DC Ethics Op. 382: Lawyer-Directors Representing Entity Clients
Source
- Landing page: https://www.dcbar.org/for-lawyers/legal-ethics/ethics-opinions-210-present/ethics-opinion-328
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