Can a D.C. lawyer serve on the board of directors of a company that the lawyer also represents as legal counsel?
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This page answers the general question as of 2021. 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 382 (published August 2021) addresses whether a lawyer who represents an entity may also serve on the entity's board of directors. The Committee concludes there is no per se prohibition, but the dual role raises conflicts among three sets of interests: the lawyer's duties to the entity as counsel, the lawyer's fiduciary duties to the entity as a director, and the lawyer's personal self-interest in serving both roles. Before accepting the dual role, the lawyer must determine whether the directorship creates a material risk of compromising independent professional judgment or otherwise creates a personal conflict, must have full and frank discussions of the material risks with the entity, and must obtain the entity's informed consent.
The opinion works through the rules implicated by dual service. Under Rule 1.13, the lawyer represents only the entity acting through its duly authorized constituents, not the directors or officers personally; the lawyer must make clear "which hat" she is wearing and, under Rule 1.4, must relay information to the client even when she learned it as a director. Under Rule 1.6 and Rule 5.7, the opinion distinguishes legal advice (protected by privilege and confidentiality) from business advice (which may be discoverable), and concludes that simply announcing "I am speaking as legal counsel" may be insufficient; the lawyer must take affirmative steps to mark the legal nature of a discussion, such as separate legal-only sessions. The opinion also notes that a lawyer-director may be held to a higher standard of care than a non-lawyer director under Rule 1.1.
The conflicts analysis centers on Rule 1.7(b)(4), which is triggered when the lawyer's professional judgment will be or reasonably may be adversely affected by responsibilities to a third party or the lawyer's own interests. The opinion concludes such a personal conflict may be cured only if the lawyer can obtain informed consent under Rule 1.7(c)(1) (which fails if doing so would require disclosing another client's confidences) and can satisfy the subjective and objective competence test of Rule 1.7(c)(2). Where consent is unavailable, the lawyer may sometimes limit the scope of representation under Rule 1.2 to carve out the conflict, or another firm lawyer may handle the matter, since personal conflicts are not ordinarily imputed under Rule 1.10. The Committee notes that recusing from representing the entity while serving as a director, or having a different firm lawyer represent the entity, can avoid most (though not all) of these conflicts.
In practice
Under this opinion, a D.C. lawyer considering a seat on the board of an entity-client must first assess whether the directorship would create a material risk to her independent professional judgment or a personal conflict under Rule 1.7(b)(4). If a conflict exists, the opinion concludes she may proceed only if she can obtain the entity's informed consent under Rule 1.7(c)(1) without revealing another client's confidences and can reasonably conclude under Rule 1.7(c)(2) that she will provide competent and diligent representation. For discrete matters such as setting the lawyer's own compensation or whether to retain the lawyer's firm, the opinion treats the personal conflict as one that informed consent cannot cure for that lawyer.
The opinion ties the day-to-day practice to keeping the roles distinct: under Rule 1.13 the lawyer represents only the entity, not its directors or officers; under Rule 5.7 and Rule 1.6 the lawyer must take affirmative steps so that legal advice is identifiable and protected, since business advice and director communications may not be privileged; and under Rule 1.4 the lawyer must convey to the client information learned in the director role. The Committee notes that recusing from the representation while serving as a director, or assigning the entity's representation to another firm lawyer, minimizes but does not eliminate these issues.
Common questions
Q: Can a lawyer sit on the board of a company the lawyer represents?
A: The opinion concludes there is no per se prohibition, but the lawyer must first evaluate whether the dual role creates a material risk to her independent judgment or a personal conflict, discuss the risks with the entity, and obtain its informed consent.
Q: Is a lawyer-director's legal advice still privileged?
A: The opinion concludes legal advice generally remains protected by privilege and Rule 1.6, but business-related advice may be discoverable; the lawyer must take affirmative, substantive steps (not just a verbal label) to mark when she is giving legal advice.
Q: How does the lawyer-director resolve a personal conflict under Rule 1.7(b)(4)?
A: The opinion concludes the lawyer must obtain informed consent under Rule 1.7(c)(1), which fails if consent would require disclosing another client's confidences, and must satisfy the subjective and objective competence test of Rule 1.7(c)(2); otherwise she may limit the scope of representation or step aside for the matter.
Q: Can another lawyer at the firm represent the entity if the lawyer-director is conflicted?
A: The opinion concludes personal conflicts are not ordinarily imputed under Rule 1.10, so another firm lawyer may handle the matter unless the conflicted lawyer's interest presents a significant risk of adversely affecting that representation; no firm lawyer can set the firm's own compensation free of conflict.
Q: Does the lawyer-director owe duties to the individual directors?
A: No. The opinion concludes that under Rule 1.13 the lawyer represents only the entity acting through its constituents, and must make clear she does not represent the directors, officers, or employees personally.
Background and rules framework
The opinion interprets the D.C. conflict-of-interest rules (Rule 1.7(b)(4) and 1.7(c)) together with Rule 1.13 (organization as client), Rule 1.6 (confidentiality), Rule 5.7 (responsibilities regarding law-related services), Rule 1.4 (communication), Rule 1.1 (competence), Rule 1.2 (scope and limited-scope representation), and Rule 1.10 (imputed disqualification). It frames the central problem as the overlap between a lawyer's duties to an entity-client and a director's fiduciary duties to shareholders, which do not map cleanly onto one another, and it builds on the analysis of personal conflicts in D.C. Legal Ethics Opinion 365.
Citations and references
Rules of Professional Conduct:
- D.C. RPC 1.7(b)(4), 1.7(c) / Model Rule 1.7 (conflicts, including personal-interest conflicts and consent)
- D.C. RPC 1.13 / Model Rule 1.13 (organization as client)
- D.C. RPC 1.6 / Model Rule 1.6 (confidentiality of confidences and secrets)
- D.C. RPC 5.7 / Model Rule 5.7 (law-related services)
- D.C. RPC 1.10 / Model Rule 1.10 (imputed disqualification; personal conflicts not ordinarily imputed)
- D.C. RPC 1.1, 1.2, 1.4 / Model Rules 1.1, 1.2, 1.4 (competence, scope, communication)
Other opinions cited:
- D.C. Bar Legal Ethics Op. 365: subjective and objective standard for personal-interest conflicts
See also
- ABA Formal Op. 98-410: Lawyer Serving as Director of Client Corporation
- ISBA Op. 02-01: Lawyer Serving on a Board of Directors
- Maine Ethics Op. 107: Attorney-Director's Duty to Maintain Client Confidences
- DC Ethics Op. 390: Prior-Work Conflicts and Lawyer as Witness
Source
- Landing page: https://www.dcbar.org/for-lawyers/legal-ethics/ethics-opinions-210-present/ethics-opinion-382
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