Can a firm drop one client to take on a long-term client in a matter directly adverse to the dropped client?

Plain-English summary

A law firm had represented Client A for over 18 months in a matter before a state agency while also long representing Client B (about ten years) in a non-competing part of the same field. Acting for B, the firm questioned proposed state action favoring Entity C and learned C was operated by A', a subsidiary of A's corporate group; it then wrote the state on B's behalf opposing the action. After the A Group objected to the firm being adverse to A', the firm withdrew from both representations, and now wanted to resume representing B on all ramifications of the proposed state action, asserting it held no confidences of A and the matters were unrelated.

The committee applied the simultaneous-representation standard of DR 5-105, treating the parent and subsidiaries as one client under McCourt Co. v. FPC Properties. It held that concurrent representation for and against a client, even on unrelated matters, is an actual conflict, quoting Justice Wilkins that undivided loyalty forbids a lawyer from acting for a client in one matter and against that client in another without consent. Because there was no consent, DR 5-105(C) did not save the representation, and the committee did not need to reach its "obviousness" prong. It rejected the argument that withdrawing from A converted the matter into a more lenient successive-representation case, relying on the Jelco rule (adopted in Opinion 84-4) that a conflict is judged when it arises and cannot be cured by dropping or finishing one client's work, and distinguished Masiello v. Perini because there an actual conflict was absent and the lawyer withdrew at the initial-inquiry stage.

The committee concluded that the firm's initial decision to withdraw from B in the state matter, once it discovered A's adverse interest, was the appropriate response, and that taking on that same representation now would violate DR 5-105. It acknowledged the practical difficulty this poses for firms protecting long-term clients against the effect of a one-shot new representation, noted that some firms use advance-consent clauses to address it, and declined to opine on the permissibility of such clauses because none was involved.

Currency note

This opinion was issued in 1992, before Massachusetts's adoption of the 2015 revisions to the Rules of Professional Conduct. 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.

Common questions

Q: Is suing a current client on an unrelated matter a conflict even with no shared confidences?

A: Yes. The committee held that concurrent representation for and against a client, even on unrelated matters and without any confidences problem, is an actual conflict under DR 5-105 because of the duty of undivided loyalty.

Q: Can a firm fix the conflict by withdrawing from the client it wants to oppose?

A: No. Following the Jelco rule, the committee said a conflict is judged as of when it arises and cannot be cured by withdrawing from one client, especially over that client's objection.

Q: Did advance-consent clauses resolve the problem here?

A: The committee noted that some firms use advance-consent clauses for this situation but declined to opine on whether they are permissible, because no such clause was involved in the inquiry.

Background and rules framework

The opinion applied DR 5-105 (declining or discontinuing employment that involves representing differing interests, absent consent and obvious adequacy), corresponding to Model Rule 1.7, together with the limits on withdrawal as a conflict cure reflected in Model Rule 1.16. It treated affiliated corporate entities as a single client under McCourt.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.7 / DR 5-105 (concurrent conflicts; differing interests)
• Model Rule 1.16 / DR 2-110 (withdrawal does not cure a concurrent conflict)

Cases:

• McCourt Co., Inc. v. FPC Properties, Inc., 386 Mass. 145 (1982) (undivided loyalty; affiliated entities as one client)
• Unified Sewerage Authority v. Jelco, Inc., 646 F.2d 1339 (9th Cir. 1981) (conflict judged when it arises)
• Masiello v. Perini Corp., 394 Mass. 842 (1985) (distinguished; no actual simultaneous conflict)

Other opinions cited:

• MBA Opinion 84-4 (adopting the Jelco rule)

See also

• MA Bar Ethics Op. 02-2: Representing rival developers at a zoning board
• MA Bar Ethics Op. 94-2: Town counsel suing an agency she also represents

Source

• Landing page: https://www.massbar.org/publications/ethics-opinions/ethics-opinion-article/ethics-opinions-1992-opinion-no-92-3/opinion-no-92-3