May a lawyer represent buyers or sellers referred by her attorney-spouse who is the broker, and must she disclose the relationship?

Plain-English summary

Lawyer A and Lawyer B were husband and wife with separate law practices in the same building. Lawyer A was also a shareholder in and broker for a real estate corporation, and from time to time referred prospective buyers or sellers to Lawyer B for representation in transactions where he was involved as broker or lawyer. Lawyer B asked whether she was barred from representing the buyer or seller, whether she had to disclose her relationship to Lawyer A, and whether the answer would change if A and B formed a partnership.

The Commission relied on two earlier Grievance Commission opinions, which it treated as precedent. Opinion No. 3 had addressed married lawyers on opposite sides of a matter: it concluded they must disclose their relationship under Rule 3.4(a), that the "preferred practice" is to obtain written consent under Rule 3.4(f) because the relationship is likely to affect independent judgment, and that even with disclosure and consent the representation might be barred under Rule 3.4(b), so representation of differing interests by married lawyers "should probably be avoided in most instances." Opinion No. 12 had concluded that one lawyer's representation of both buyer and seller would likely violate Rule 3.4(b), and that the Rule 3.4(d) exception (where it is "obvious" the lawyer can adequately represent each) would not likely cure it, because adequate representation means representation in which independent judgment for one client is not adversely affected by another.

Applying these principles, the Commission concluded that if Lawyers A and B are partners, they may not represent both buyer and seller in a transaction (per Opinion No. 12). If they are not partners, representing both is not necessarily prohibited in every case simply because they are married, provided their interests are disclosed and the clients consent, though the practice is cautioned against. It added that, depending on the facts, Lawyer B's interest in seeing a transaction completed may itself be a conflict under Rule 3.4(b), and it may not be "obvious" under Rule 3.4(d) that she can adequately represent a client her husband referred. The Commission noted it made no difference whether Lawyer A acted only as a real estate agent, because Lawyer B's implicated interests arise from the marital relationship, and that Lawyer A, even as a broker, must disclose his relationship with Lawyer B when recommending her. Each transaction must be evaluated on its facts.

Currency note

This opinion was issued in 1990, before Maine's replacement of the former Maine Bar Rules with the Maine Rules of Professional Conduct (effective August 1, 2009). 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: Can married lawyers who are partners represent both the buyer and seller of a property?

A: The opinion concluded no. If the spouses are law partners, they may not represent both buyer and seller in a real estate transaction.

Q: Can married lawyers in separate practices be on opposite sides of the same deal?

A: The opinion concluded it is not necessarily prohibited, provided their relationship is disclosed and the clients consent, but the practice is cautioned against and each case turns on its facts.

Q: Must the lawyer disclose that the referring broker is her spouse?

A: The opinion concluded yes. The relationship must be disclosed under Rule 3.4(a), and Lawyer A, even acting only as a broker, must disclose his relationship with Lawyer B when recommending her.

Q: Could the lawyer's interest in closing the deal itself be a conflict?

A: The opinion concluded it could be, under Rule 3.4(b), depending on the facts, so that it may not be "obvious" under Rule 3.4(d) that she can adequately represent a client referred by her husband.

Background and rules framework

The opinion interprets Maine Bar Rule 3.4(a) (disclosure to prospective clients), Rule 3.4(b) (no representation of differing interests), Rule 3.4(d) (the "obvious" adequacy and consent exception), and Rule 3.4(f) (personal-interest conflicts), as applied to lawyers who are married to each other. These correspond to ABA Model Rule 1.7 (concurrent conflicts of interest, including personal-interest conflicts) and Model Rule 1.8 (specific conflicts, including the related-lawyers provision of Model Rule 1.8(i)).

Citations and references

Rules of Professional Conduct:

• Model Rule 1.7 (concurrent conflicts); Model Rule 1.8 (specific conflicts; related lawyers)
• Maine Bar Rule 3.4(a), 3.4(b), 3.4(d), 3.4(f)

Other opinions cited:

• Maine Grievance Commission Formal Op. 3 (1979) (married lawyers on opposite sides)
• Maine Grievance Commission Formal Op. 12 (lawyer representing both buyer and seller); Formal Op. 5

See also

• Maine Ethics Op. 106: Firm as "Escrow Agent" Drafting for Both Sides
• Maine Ethics Op. 105: Disclosing That the Lawyer Drafted the Broker's Form

Source

• Landing page: https://mebaroverseers.org/attorney_services/opinion.html?id=91502

Original opinion text

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

Issued by the Professional Ethics Commission

Date Issued: January 17, 1990

Facts

Lawyer A and Lawyer B are husband and wife and have separate law practices but are located in the same building. Lawyer A is also a shareholder in and a broker for a real estate corporation. From time to time, Lawyer A refers prospective buyers or sellers of real estate to Lawyer B for legal representation in transactions in which he is involved either as a broker or as a lawyer.

Questions Presented

Lawyer B wishes to know whether she is prohibited from representing the buyer or seller in these circumstances, and if not, whether she has any obligation to disclose to the buyer or seller her relationship to Lawyer A. Lawyer B also asks whether the result would be any different if Lawyer A and Lawyer B were to form a partnership.

Opinion

The questions presented by this Request are substantially addressed by two Opinions of the Grievance Commission of the Overseers of the Bar.[1] In Opinion No. 3, the Grievance Commission discussed the problem of the application of the Maine Bar Rules to situations in which two married lawyers were on opposite sides of a matter. In Opinion No. 12, the Grievance Commission addressed, inter alia, the question of the ethical propriety of one lawyer representing both the buyer and seller in a real estate transaction.

In Opinion No. 3, the Grievance Commission concluded that before married spouses could oppose each other in a particular matter, they are required by Rule 3.4(a) to disclose their relationship to their respective clients. Next, the Commission advised that since the independent exercise of professional judgment by each lawyer is very likely to be affected by their relationship, "the preferred practice" would be for each lawyer to obtain the written consent, pursuant to Rule 3.4(f), of his or her client before accepting employment. Finally, the Commission advised that even if full disclosure is given and written consent may be obtained, it may very well be, depending on the facts of the case, that both lawyers could not accept employment on the opposite sides of a matter because the nature of their relationship would inevitably result in a conflict of interest within the meaning of Rule 3.4(b). Thus, the Commission concluded that "[a]lthough not necessarily prohibited by the Maine Bar Rules, the representation of differing interests by lawyers who are husband and wife . . . should probably be avoided in most instances." Grievance Comm'n of Bd. of Bar Overseers, Formal Opinion No. 3 at 4 (1979).

In Opinion No. 12, the Grievance Commission was faced with a series of questions concerning the ethical propriety of a lawyer representing both a buyer of real estate and a bank which is financing the transaction. In the course of its extensive discussion of the issues raised by this situation, the Commission observed the following concerning the propriety of a lawyer representing both the buyer and seller in the transaction, for example, by preparing the deed on behalf of both:

It is, however, doubtful that the seller could be added to the roster of clients in such circumstances. Representation of the seller introduces responsibilities that go beyond preparation of a deed and harbors the distinct possibility of conflict of interest in connection with the title examination. Grievance Comm'n of Bd. of Bar Overseers, Formal Opinion 12 at 6-7.(footnote omitted).

Thus, representation of a buyer and seller by the same lawyer in a real estate transaction would in all likelihood violate Rule 3.4(b). Moreover, the violation is not likely to be cured by reference to Rule 3.4(d), which authorizes multiple employment when it is "obvious" that lawyer can "adequately represent" the interest of each party. As the Commission observed:

The adequate representation that must be obvious is not merely capable representation. It is representation in which the lawyer's independent professional judgment in behalf of one client is not adversely affected by representation of another client. Formal Opinion 12, supra at 5.

Applying these principles to the questions presented, the Professional Ethics Commission is of the view, first, that if Lawyers A and B are partners, they may not represent both the buyer and seller in a real estate transaction. See Opinion No. 12. If they are not partners, consistent with Opinion No. 3, it is not necessarily prohibited in every case for them to represent both the buyer and seller in a transaction because they are married, provided that the interests of the two lawyers are disclosed and the clients consent, although Opinion No. 3 cautions against such practice.[2] Moreover, it may be that, depending on the facts of an individual case, the interest of Lawyer B in seeing a transaction completed may be strong enough to constitute a conflict of interest within the meaning of Rule 3.4(b) and that it may not be "obvious" within the meaning of Rule 3.4(d) whether the nature of the transaction is such that Lawyer B can adequately represent a client referred to her by her husband. As the Grievance Commission repeatedly emphasized, each transaction would have to be evaluated on its facts, and the Ethics Commission can do no more in these circumstances than alert the lawyers in question to the dangers presented by the rules.

Footnotes

[1] At the time of the promulgation of the Maine Bar Rules, November 1, 1978, the Grievance Commission was entrusted with the responsibility both of resolving disputes as to past behavior of lawyers and of rendering advice as to their future conduct. On February 15, 1985, this latter function was transferred to the newly-established Professional Ethics Commission. The determinations of the Grievance Commission prior to 1985 are therefore precedent for Ethics Commission Advisory Opinions.

[2] It makes no difference whether Lawyer A is functioning only as a real estate agent in referring clients to Lawyer B. The "interests" of Lawyer B which are the subject of Rules 3.4(a), 3.4(b), 3.4(d) and 3.4(f) are implicated in these circumstances by the fact of the marital relation and not by the fact that Lawyer A happens to be a lawyer. In addition, even when functioning as a real estate broker, Lawyer A remains subject to the Maine Bar Rules and must disclose his relationship with Lawyer B when recommending her to clients. See, generally, Grievance Comm'n of Bd. of Bar Overseers, Formal Opinion No. 5.