Can a lawyer serve on the board of trustees of a college that retains the lawyer's own firm?

Plain-English summary

The committee considered whether a lawyer could sit on the board of trustees of a college that employed the lawyer's firm on a retainer arrangement. It answered yes.

The committee pointed to DR 2-101(B)(3), which permits a lawyer to be identified in routine reports and announcements of a bona fide business, civic, professional, or political organization in which he serves as a director or officer. Though not precisely on point, the committee read that provision to indicate that a lawyer may be a bank director or a member of a college board of trustees without a conflict of interest.

The committee noted the question had arisen because a member of an auditing firm in a similar situation had felt compelled to resign, and it drew a distinction: lawyers owe undivided loyalty and fidelity to their clients, while CPAs have no such fiduciary obligation and are frequently required by the nature of their duties to view an employer's fiscal activities with aloofness or even suspicion. Because the natures of the services differ, the committee found no conflict of interest per se in an attorney's serving on a college board of trustees. It added that individual situations could still create a conflict or impropriety, but the opinion did not purport to anticipate such events.

Currency note

This opinion was issued in 1972 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 Treat this page as historical context, not current guidance.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 serve on the board of a client organization?

A: Yes. The committee held there is no per se conflict of interest in a lawyer serving on the board of trustees of a college that retains the lawyer's firm.

Q: Why is a lawyer's position different from an auditor's?

A: The committee reasoned that a lawyer owes undivided loyalty and fidelity to the client, while a CPA has no such fiduciary duty and must often view the employer's finances with aloofness or suspicion, so the auditor's need to resign does not apply.

Q: Does the opinion guarantee there will never be a conflict?

A: No. The committee noted that individual situations could create a conflict of interest or impropriety, but the opinion did not purport to anticipate such events.

Background and rules framework

The opinion drew on DR 2-101(B)(3) of the former Code of Professional Responsibility (identification of a lawyer who serves as a director or officer of a bona fide organization) and on the lawyer's general duty of undivided loyalty. The modern analog is Model Rule 1.7 (conflicts of interest), whose comment addresses a lawyer's service as a director of an organization the lawyer represents.

Citations and references

Rules of Professional Conduct:

• DR 2-101(B)(3) (identification of a lawyer serving as a director or officer of a bona fide organization); modern analog Model Rule 1.7

See also

• KBA Ethics Op. E-56: County Attorney Bond Conflict
• KBA Ethics Op. E-80: City Attorney vs Renewal Agency
• KBA Ethics Op. E-106: Board Counsel, Private Clients

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-060.pdf

Original opinion text

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

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-60
Issued: July 1972

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:

When a lawyer's firm represents the Board of Trustees of a college, should the lawyer accept an appointment as trustee of the college?

Answer:

Yes.

OPINION

We have received a request concerning the ethical propriety of a lawyer's being on the board of Trustees of a college which employs that lawyer's firm on a retainer fee arrangement.

DR 2-101(B)(3) concerns publicity in general and states that a lawyer is not prohibited form identification:

(3) In routine reports and announcements of a bona fide business, civic, professional, or political organization in which he serves as a director or officer.

This provision, though not precisely on point, suffices to indicate that a lawyer may be a bank director or member of a college board of trustees without any conflict of interest.

This question arose because a member of an auditing firm was in a similar fact situation and felt compelled to resign. There is no parallel between attorneys and CPA's in these situations in that the respective fields involve different duties and obligations with regard to clients. Lawyers have a responsibility demanding undivided loyalty and fidelity to their clients. CPA's have no such fiduciary obligation. Indeed, an auditor is frequently required by the very nature of his duties to be at "opposite poles" from his employer, and to view the employer's fiscal activities with a certain amount of aloofness, possibly even suspicion. Thus, since the respective natures of the services rendered can and must be distinguished, this distinction is the basis for finding no conflict of interest per se for an attorney's serving on a college board of trustees.

Obviously, individual situations could arise creating a conflict of interest or impropriety, but this opinion does not purport to anticipate such events.

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.