ISBA February 1, 1989

Can a lawyer who sits on one lending institution's board also represent a competing lending institution in the same community?

Short answer: The opinion concluded a lawyer may represent two competing institutions in substantially unrelated matters, and may represent a competitor of an institution on whose board he serves only with the informed consent of both; the board seat heightens the risk of acquiring confidences that would force withdrawal from both.

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This page answers the general question as of 1989. Ezel answers yours: whether it's allowed on your facts, under the current Illinois Rules of Professional Conduct, with citations.

Disclaimer: Advisory only. Not binding precedent.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page) is the authoritative source for any reliance.

Plain-English summary

A lawyer represented a lending institution and also served on its board of directors, while at the same time representing another lending institution in the same community. The inquiry asked whether the lawyer could represent a competing lending institution under those circumstances. The committee split the question into two: whether a lawyer may represent two clients competing in the same business, and whether the board seat at one institution barred representing a competitor.

On the first, the committee applied former Rule 5-105(a): the fact that both institutions are in the same business does not by itself bar representing both, so long as the matters are not substantially related. If the matters become substantially related, the lawyer must obtain both institutions' consent after full disclosure of the possible effect on his independent judgment (Rule 5-105(c)). Under Rule 4-101, if the lawyer obtained confidential information beyond the scope of any consent, he would have to withdraw from both representations (Rule 5-105(b)).

On the board-seat question, the committee reasoned that a director owes a fiduciary duty to the institution and may have a personal interest in it, so under former Rules 5-101(a) and 5-107(a) the lawyer should not accept employment by a second lending institution without both institutions' consent after full disclosure. The committee added that the board membership creates a substantially greater risk that the lawyer will acquire confidential information, increasing the likelihood that he would have to withdraw as counsel for both.

Currency note

This opinion was issued in February 1989, under the former Illinois Code of Professional Responsibility and before Illinois adopted the 1990 (and later 2010) Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in May 2010 as generally consistent with the 2010 Rules (Rules 1.6 and 1.7, with Comment [6]), 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 lawyer represent two competing businesses at the same time?

A: The opinion concluded yes, where the matters are substantially unrelated; being competitors in the same business does not by itself bar dual representation under former Rule 5-105(a).

Q: What happens if the two competitors' matters become substantially related?

A: Per the opinion, the lawyer must obtain both clients' consent after full disclosure of the possible effect on his independent judgment, and must withdraw from both if he acquires confidential information beyond the scope of that consent.

Q: Does serving on one institution's board change the analysis?

A: The opinion concluded the board seat adds a fiduciary duty and personal interest, so the lawyer should not represent a competing institution without both institutions' consent, and the seat heightens the risk of acquiring confidences that would force withdrawal from both.

Background and rules framework

The opinion applied the former Illinois Code of Professional Responsibility: Rule 5-105 (declining or continuing employment that adversely affects independent judgment, with consent under (c) and withdrawal under (b)), Rule 5-101(a) (personal-interest conflicts), Rule 5-107(a) (undivided loyalty), and Rule 4-101 (client confidences). The Board's 2010 affirmation maps the analysis to current Illinois Rules of Professional Conduct 1.6 and 1.7, which correspond to ABA Model Rules 1.6 and 1.7.

Citations and references

Rules of Professional Conduct:

Illinois Code Rules 4-101, 5-101(a), 5-105(a),(b),(c), 5-107 (former Code, applied in the opinion)
Illinois RPC 1.6, 1.7 (2010 equivalents per the Board's affirmation)
MR 1.6 (confidentiality), MR 1.7 (conflicts of interest)

Source

Landing page: https://www.isba.org/ethics/opinions/8805

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