After withdrawing from representing a corporation, can a lawyer sue that corporation on behalf of a former officer and stockholder?

Plain-English summary

The committee considered whether a lawyer who had withdrawn from representing a corporation by written notice could later represent a stockholder, and former officer and director, of that corporation in litigation against it, in a matter in which the lawyer had not previously been involved. It gave a qualified yes, conditioned on the relationship between the old and new matters.

The committee drew three boundaries. If the new litigation concerned a matter in which the lawyer had formerly represented the corporation, the lawyer could not accept the employment, citing Silver Chrysler Plymouth v. Chrysler Motor Corp. If the new litigation was substantially related to a matter in which the lawyer formerly represented the corporation, or involved information obtained while so employed, the lawyer again could not accept it, citing United States v. Standard Oil. And if the litigation was related to a former matter or involved information to which the lawyer had been privy, the lawyer could not accept the employment. The committee assumed the lawyer had complied with the withdrawal rules of DR 2-110 to the extent they applied.

Currency note

This opinion was issued in 1976 under Kentucky's former Code of Professional Responsibility (in effect 1971 to 1990), before the Kentucky Bar Association's 1990 adoption of the Rules of Professional Conduct (SCR 3.130) and the substantial 2009 revisions to those rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer who once represented a corporation later sue it?

A: Sometimes. The committee said the lawyer could proceed only if the new matter was not the same as, substantially related to, or informed by information from the prior representation.

Q: What makes the new case off-limits?

A: Under the opinion, the case is barred if it concerns the former matter, is substantially related to it, or involves information the lawyer obtained while representing the corporation.

Q: Did withdrawing from the corporation change the analysis?

A: The committee assumed proper withdrawal under DR 2-110 but rested its answer on the substantial-relationship test, not on the fact of withdrawal alone.

Background and rules framework

The opinion applied the former Code's conflict and withdrawal provisions, principally DR 2-110 (withdrawal) and the substantial-relationship principle later codified for former clients. The modern analog is Model Rule 1.9 (duties to former clients), which bars representation adverse to a former client in the same or a substantially related matter absent informed consent.

Citations and references

Rules of Professional Conduct:

• DR 2-110 (withdrawal from employment); modern analog Model Rule 1.9 (former clients)

Cases:

• Silver Chrysler Plymouth v. Chrysler Motor Corp, 518 F.2d 751 (2d Cir. 1975), former-client disqualification
• United States v. Standard Oil, 136 F. Supp. 345 (S.D.N.Y. 1955), substantially related matters

Other opinions cited:

• KBA Opinions E-146 (1976) and E-148 (1976)

See also

• KBA Ethics Op. E-178: Adverse to a Helped Nonclient
• KBA Ethics Op. E-242: Codefendants and One Office

Source

• Landing page: https://kybar.org/For-Members/Rules-Ethics-Information/Ethics-Opinions
• Original PDF: https://kybar.org/Portals/0/Admin/Ethics%20Opinions/KBA_E-155.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-155
Issued: September 1976

This opinion was decided under the Code of Professional Responsibility, which was in effect from 1971 to 1990. Lawyers should consult the current version of the Rules of Professional Conduct and Comments, SCR 3.130 (available at http://www.kybar.org), before relying on this opinion.

Question:

A lawyer has withdrawn from representation of a corporation by written notice. May he subsequently represent a stockholder in, and former officer and director of, the corporation, in litigation against the corporation in which the attorney was previously neither directly nor indirectly involved?

Answer:

Qualified yes.

References:

DR 2-110, Opinion KBA E-146 (1976), E-148 (1976); Silver Chrysler Plymouth v. Chrysler Motor Corp, 518 F.2d 751 (2d Cir 1975); United States v. Standard Oil, 136 F.Supp. 345 (S.D. New York 1955)

OPINION
We assume that the lawyer complied with the rules concerning withdrawal from representation, DR 2-110, to the extent they were applicable.
If the present litigation concerns a matter in which the lawyer formerly represented the corporation, he may not accept the employment, Silver Chrysler Plymouth v. Chrysler Motor Corp, 518 F.2d 751 (2d Cir 1975). See Opinion KBA E-146 (1976). If the litigation is substantially related to a matter in which he formerly represented the corporation or involved information obtained by the lawyer while so employed, he may not accept the employment, United States v. Standard Oil, 136 F.Supp. 345 (S.D. New York 1955). If the litigation is related to a matter in which he formerly represented a corporation or involved information to which he was privy, he may not accept employment.

Note to Reader
This ethics opinion has been formally adopted by the Board of Governors of the Kentucky Bar Association under the provisions of Kentucky Supreme Court Rule 3.530 (or its predecessor rule). The Rule provides that formal opinions are advisory only.