Can one partner represent a corporation's sole shareholder while another partner in the same firm represents someone the corporation is suing?

Plain-English summary

One partner in a firm represented Mrs. Jones in a workers' compensation claim against a corporation for her husband's on-the-job death; Mrs. Jones was the sole owner of that corporation, and in the compensation suit the corporation was the nominal defendant while its insurance carrier was the real party in interest. The corporation separately sued an unrelated individual, Mr. Smith, on an unrelated matter, and another partner in the same firm undertook to represent Mr. Smith. Neither partner represented the corporation. The committee was asked whether Canon 5 prohibited this.

The committee began with Rule 5-105, which bars accepting or continuing employment where one client's interests would impair the lawyer's independent judgment for another, and which provides that if a single lawyer could not represent both clients, two partners may not either; so the question is best framed in terms of the firm. On the first representation, the committee found the firm's judgment for Mrs. Jones would not be adversely affected by representing Mr. Smith: the outcome of the corporation's suit against Smith could not affect Mrs. Jones's compensation claim, and representing Smith gave the firm no motive to do a poor job for Mrs. Jones, so the firm could continue representing her.

On the second representation, the committee reached the opposite result: the firm could not exercise independent judgment for Mr. Smith because its other client, Mrs. Jones, had a financial interest in the corporation suing him. If Smith prevailed, Mrs. Jones would be damaged; if he lost, she would benefit. That her interest was indirect, and that she was not technically a party, did not matter, nor did the fact that the corporation (not Mrs. Jones) was the client, because her interests were the same as the corporation's. The committee concluded the firm's independent judgment for Mr. Smith was likely impaired, and that the conflict could be resolved only by the firm withdrawing from representing Mr. Smith, or alternatively by withdrawing from all representation of Mrs. Jones.

Currency note

This opinion was issued in 1983, under the former Illinois Code of Professional Responsibility and before Illinois adopted the 2010 Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in July 2010 as generally consistent with the 2010 Rules (Rules 1.7, 1.10, and 1.13), noting Opinion 91-26, while cautioning that the specific standards referenced may differ from the 2010 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 requirement mentioned here.

Common questions

Q: Can a firm represent a corporation's sole owner and also a defendant the corporation is suing?

A: The opinion concluded no; because the owner is the firm's client and has a financial interest in the corporation's suit, the firm's independent judgment for the opposing defendant is likely impaired.

Q: Does it matter that the firm does not represent the corporation itself?

A: No. The committee said the conflict exists because the sole owner's interests are the same as the corporation's, so it makes no difference that the corporation, rather than the owner, is the party suing the defendant.

Q: How can the firm resolve the conflict?

A: Per the opinion, the firm must withdraw from representing the defendant (Mr. Smith), or alternatively withdraw from all matters in which it represents the sole owner (Mrs. Jones).

Background and rules framework

The opinion applied former Illinois Code Rule 5-105 (declining or continuing employment that would impair independent judgment for another client, with the bar extended to all partners in a firm). The Board's 2010 affirmation maps the analysis to current Illinois Rules of Professional Conduct 1.7 (concurrent conflicts), 1.10 (imputation of conflicts within a firm), and 1.13 (the organization as client), corresponding to ABA Model Rules 1.7, 1.10, and 1.13.

Citations and references

Rules of Professional Conduct:

• Illinois Code Rule 5-105 (applied in the opinion)
• Illinois RPC 1.7, 1.10, 1.13 (2010 equivalents per the Board's affirmation)
• MR 1.7 (concurrent conflicts); MR 1.10 (imputation); MR 1.13 (organization as client)

See also

• ISBA Ethics Op. 803: Lawyer-Commissioner Repping the Body
• ISBA Ethics Op. 790: Suing a Former Joint Client
• ISBA Ethics Op. 871: Prosecutor's Private Practice

Source

• Landing page: https://www.isba.org/ethics/opinions/829