Can a firm that is suing a company in one matter also take that company's referrals to represent its employees in unrelated immigration cases?

Plain-English summary

In one firm, Attorney A represents an individual (Client 1) in an employment matter against an entity. The same entity asks Attorney B to handle immigration matters for people coming to work for it, paying for the employees' representation. The firm asks whether this creates a conflict and, if so, whether it can be waived so Attorney B can take the entity's referrals.

The committee concludes there is a waivable conflict. While there is no direct adversity under Rule 1.7(a)(1), the firm's existing litigation against the entity creates a Rule 1.7(a)(2) risk that its representation of Client 1 could be materially limited by its relationship with the entity and its employees. Following Comment 2's steps (identify the clients, determine the conflict, decide if it is consentable, consult for consent), the firm must treat Client 1, the entity, and each employee as separate clients and ask whether aggressive prosecution of Client 1's case would be chilled by the entity relationship; if Attorney A cannot diligently represent Client 1 (Rules 1.1 and 1.3), the conflict is nonconsentable. The committee cites ISBA Opinion 94-21 and Illinois case law that suing a current client in an unrelated matter is not automatically improper if both clients consent after full disclosure, and contrasts Ohio Board Opinion 2019-1.

On the entity and employees, the committee explains that the entity may pay the employees' fees under Rule 1.8(f), but Attorney B must obtain each employee's informed consent, must not let the entity interfere with professional judgment, and must keep each employee's information confidential, including from the entity. Because the firm is already adverse to the entity, each employee must also waive the Client 1 conflict. The committee devotes extended attention to the advance-waiver question: drawing on D.C. Opinions 309 and 265, the ABA Ethics 2000 Commission, and other authorities, it explains that a general, open-ended "blanket" waiver is ordinarily ineffective because the client will not understand the material risks, and that the firm should consider requiring Client 1 to execute a separate waiver for each employee referral. The committee concludes Attorney B may proceed only if the representation of Client 1 will not be materially limited and each affected client gives informed consent; written waivers are not required but are best practice.

In practice

Under this opinion, a firm adverse to a company in one matter may take the company's unrelated referral work for its employees only after running the full Rule 1.7 analysis and confirming it can competently and diligently serve everyone, then obtaining informed consent from Client 1, the entity, and each employee. The opinion treats the third-party-payment arrangement as governed by Rule 1.8(f) (no interference, employee confidentiality preserved), treats a diligence failure toward Client 1 as making the conflict nonconsentable, and treats open-ended blanket advance waivers as ordinarily ineffective.

Common questions

Q: Is there a conflict if the firm sues a company and also represents its employees in unrelated matters?

A: Yes, a Rule 1.7(a)(2) conflict. The committee finds no direct adversity under 1.7(a)(1), but the existing litigation against the entity creates a significant risk that the firm's representation of its litigation client could be materially limited.

Q: When is the conflict nonconsentable?

A: If the firm cannot reasonably conclude it will provide competent and diligent representation to each client. The committee says if the lawyer cannot vigorously represent the litigation client for fear of losing the entity's business, that implicates Rules 1.1 and 1.3 and makes the conflict nonconsentable.

Q: Can the company pay for its employees' immigration matters?

A: Yes, under Rule 1.8(f), but the lawyer must get each employee's informed consent, must not let the entity interfere with professional judgment, and must keep the employee's information confidential, including from the entity.

Q: Can the firm use a single blanket advance waiver?

A: The committee cautions against it. A general, open-ended waiver is ordinarily ineffective because the client will not understand the material risks; the committee suggests a separate waiver for each employee referral as best practice.

Background and rules framework

The opinion interprets Illinois Rule of Professional Conduct 1.7 (concurrent conflicts; 1.7(a)(2) material limitation and 1.7(b) waiver, with Comments 2, 3, 6, 8, 15, and 22), read with Rules 1.1 (competence), 1.3 (diligence), 1.6 (confidentiality), and 1.8(f) (third-party payment). These track the corresponding Model Rules. The committee draws on ISBA Opinion 94-21, Illinois case law, Ohio Board Opinion 2019-1, and out-of-state advance-waiver authorities (D.C. Opinions 309 and 265; LACBA Formal Op. 471; NYCLA Op. 724; the ABA Ethics 2000 Commission).

Citations and references

Rules of Professional Conduct:

• MR 1.7 / IL RPC 1.7 (concurrent conflicts; waiver; advance waivers)
• MR 1.1, 1.3 / IL RPC 1.1, 1.3 (competence; diligence)
• MR 1.6 / IL RPC 1.6 (confidentiality)
• MR 1.8(f) / IL RPC 1.8(f) (payment of fees by a third party)

Cases:

• ABC Trans Nat'l Transport, Inc. v. Aeronautics Forwarders, Inc., 90 Ill. App. 3d 817 (1st Dist. 1980)
• Rogers v. Robson, Masters, Ryan, Brumund & Belom, 74 Ill. App. 3d 467 (3d Dist. 1979)

Other opinions cited:

• ISBA Opinion 94-21; Ohio Board of Professional Conduct Op. 2019-1
• D.C. Bar Opinions 309 and 265; LACBA Formal Op. 471; NYCLA Op. 724

See also

• ISBA Ethics Op. 13-02: Representing Business Partners Adverse to One Another
• NY State Bar Op. 1000: Fees Paid by a Third Party With Adverse Interests
• NY State Bar Op. 1063: Conflict When Fees Are Paid by a Third-Party Relative

Source

• Landing page: https://www.isba.org/ethics/opinions/2103