When a California law firm undertakes joint representation of co-defendants, may it seek the parties' advance informed written consent to later representing one client adversely to the other if a conflict materializes?

Currency note

This opinion was issued in 1992, before California's November 1, 2018 adoption of the renumbered Rules of Professional Conduct. Former Rule 3-310 corresponds to current Rule 1.7; former Rule 3-110 corresponds to current Rule 1.1; former Rule 3-400 corresponds to current Rule 1.8.8; former Rule 3-700 corresponds to current Rule 1.16. 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.

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Plain-English summary

The committee considered an indemnity arrangement under which a corporation agreed to defend and indemnify a former employee against lawsuits for conduct during employment (subject to willful-misconduct exclusion). A lawsuit was brought against both, alleging intentional wrongdoing by the employee. The corporation's law firm offered to jointly defend the employee, conditioned on the employee's agreement that, if the corporation disputed indemnity or sued the employee in connection with the same events, the firm could withdraw from the employee and continue representing the corporation in the lawsuit and any related dispute.

The committee identified Rule 3-310(C) as requiring informed written consent for representation of more than one client where the clients' interests potentially conflict and again where they actually conflict. The committee identified that joint representations frequently raise potential conflicts (potential for conflicting instructions; potential for the clients to assert claims against each other).

The committee identified the purpose of the consent rules as allowing client choice of counsel and avoiding economic hardships from inflexible application. Nonetheless, potential and actual conflicts cannot be waived when the lawyer cannot competently represent both parties. The committee identified Rule 3-110(A)-(B) as requiring competent performance and undivided loyalty (Commercial Standard Title Co. v. Superior Court; LACBA Formal Opinion 435).

The committee identified that California courts have routinely held lawyers may not concurrently represent conflicting interests where adverse impact on one client is necessary to advance the other's interests (Klemm v. Superior Court; Hammett v. McIntyre; Pennix v. Winton).

The committee identified that, provided the firm can adequately perform its duties to both, there is no reason it could not seek their informed written consent to continued representation of the corporation after withdrawing from the employee. The committee identified State Bar Formal Opinion 1989-115 as agreeing (conditioning employment on advance waiver is not per se unethical if informed); the State Bar relied in part on Maxwell v. Superior Court (advance waiver in fee agreement granting attorneys exploitation rights to client's life story not per se invalid; trial court may still disqualify when actual conflict materializes producing deficient performance).

The committee identified Grove v. Grove Valve & Regulator Co. and Cornish v. Superior Court as recognizing that joint representation may be premised on the lawyer's ability to represent one client against the other if a conflict materializes.

On informed consent (Rule 3-310(A)), the committee identified six categories of required disclosure: (1) conflicts and the law firm's role; (2) confidentiality, including Evidence Code section 962 (no privilege between jointly represented clients), with explanation of whether information will flow freely; (3) loyalty and independent judgment, including the firm's existing corporate relationship and its potential effect on representation of the employee; (4) effect of withdrawal, including the employee's need to retain unfamiliar new counsel and the court's right under Code of Civil Procedure section 128(a)(5) to disqualify the firm despite the agreement (Elliott v. McFarlane Unified School District); (5) advice about conflicting claims (the better course is for the firm to refrain from advising either client about claims against the other; recommend separate counsel); and (6) availability of separate counsel and employer rights, particularly any right of the employee to separate paid counsel under employment and indemnity law.

The committee identified Rule 3-310(F) as separately applicable because the corporation is paying for the employee's representation, requiring informed written consent and no interference with independent professional judgment. The committee identified Rule 3-310(E) as requiring the employee's consent to the firm's adverse use of information obtained during representation if the firm later represents the corporation against the employee.

Common questions

Q: Can a California firm jointly representing a corporation and employee seek the employee's advance consent to later representing only the corporation against the employee?

A: Per the opinion, yes, provided the firm can jointly represent both competently and both clients give informed written consent.

Q: Are there limits on what conflict an advance waiver can cover?

A: Per the opinion, the lawyer cannot waive a conflict where the lawyer cannot represent the client competently. Where joint representation requires necessarily adverse positions, courts have routinely disqualified such representation.

Q: Can the lawyer advise both clients about claims they may have against each other?

A: Per the opinion, the better course is to refrain from advising either client on conflicting claims. The committee identified that doing so inherently creates an unwaivable conflict; the firm should recommend separate counsel for those issues.

Q: Can the court disqualify the firm despite the advance waiver?

A: Per the opinion, yes. The committee identified Code of Civil Procedure section 128(a)(5) (Elliott v. McFarlane) as preserving the court's right to disqualify when enforcing the agreement would compromise judicial integrity or fairness.

Q: What about confidentiality between the jointly represented clients?

A: Per the opinion, Evidence Code section 962 establishes no privilege between jointly represented clients regarding communications during the joint representation. The firm must disclose this to both clients and clarify whether information will flow freely.

Q: What if the employee may be entitled to separate paid counsel under indemnity or employment law?

A: Per the opinion, the availability of such counsel is a "relevant circumstance" that must be disclosed for informed consent.

Background and rules framework

The opinion interprets former California Rules of Professional Conduct 3-110 (competence), 3-310 (conflicts and disclosure), 3-400 (limitation of liability), and 3-700 (withdrawal), with Evidence Code section 962 (no privilege among joint clients), Business and Professions Code section 6068(e) (confidentiality) and 6068(m) (communication), and Code of Civil Procedure section 128(a)(5) (court's disqualification authority). The committee anchored its advance-consent analysis in State Bar Formal Opinion 1989-115, Maxwell v. Superior Court, and Cornish v. Superior Court.

Citations and references

Rules of Professional Conduct (former):

• California Rule 3-110 (competence)
• California Rule 3-310 (conflicts; informed consent)
• California Rule 3-400 (limiting liability)
• California Rule 3-700 (withdrawal)

Statutes:

• California Code of Civil Procedure section 128(a)(5)
• California Evidence Code section 962

Cases:

• City and County of San Francisco v. Superior Court, 37 Cal.2d 227 (Cal. 1951)
• Commercial Standard Title Co. v. Superior Court, 92 Cal.App.3d 934 (1979)
• Cornish v. Superior Court, 209 Cal.App.3d 467 (1989)
• Elliott v. McFarlane Unified School District, 165 Cal.App.3d 562 (1985)
• Grove v. Grove Valve & Regulator Co., 213 Cal.App.2d 646 (1963)
• Hammett v. McIntyre, 114 Cal.App.2d 148 (1952)
• Klemm v. Superior Court, 75 Cal.App.3d 97 (1977)
• Maxwell v. Superior Court, 30 Cal.3d 606 (Cal. 1982), advance waiver not per se invalid
• Pennix v. Winton, 61 Cal.App.2d 761 (1943)
• Wortham & Van Liew v. Superior Court, 183 Cal.App.3d 927 (1987)

Other opinions cited:

• State Bar of California Formal Opinion 1989-115
• LACBA Formal Opinions 435 (1985), 463 (1991)

See also

• LACBA Opinion 501: Conflicts Traveling With Lateral Move
• LACBA Opinion 477: Dual Profession; Lawyer Referring Clients to Own Clinic
• LACBA Opinion 489: Retainer Provisions Limiting Malpractice Damages

Source

• Landing page: https://lacba.org/?pg=ethics-opinions
• Original PDF: https://lacba.org/docDownload/2010972