If a lawyer represents a partnership, can the lawyer sue a partner who was expelled from it?

Plain-English summary

The committee was asked whether a lawyer who represents a partnership may sue a partner who has been expelled from it without violating the former-client conflict rule, Rule 1.9. It answered yes.

The committee grounded the answer in Rule 1.13(a), which provides that a lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents. The committee noted the rule has been effective in Montana since July 1, 1985, and that its comments apply equally to unincorporated entities, treating partners as constituents of a non-corporate organizational client. The basic precept is that a lawyer who represents an entity does not thereby become the lawyer for any of its members, agents, officers, or other constituents.

The committee contrasted the entity approach with the competing "group theory," under which the lawyer would be seen as acting for a group of associated individuals. The ABA and the Montana Supreme Court rejected the group theory in favor of the entity concept because the entity has a separate legal personality and can enter legal relationships, including the lawyer-client relationship, in its own right; the individuals are agents of that legal personality. Under the entity approach, the interests of the other players are taken into account, but as the interests of nonclients. The committee concluded there is no conflict of loyalties, because the lawyer was on only one side from the start: the lawyer must stay loyal to the entity, which may require being "disloyal" to a particular individual, a result it described as legally correct and a consequence of the agency-law principles on which the entity theory rests.

Currency note

This opinion was issued in 1987, before the State Bar of Montana's adoption of the 2004 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 Treat this page as historical context, not current guidance.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: Who is the client when a lawyer represents a partnership?

A: The opinion states that under Rule 1.13(a) the client is the organization itself, acting through its authorized constituents; the lawyer does not thereby become the lawyer for any individual partner.

Q: Does suing an expelled partner trigger the former-client rule?

A: No. The opinion concludes that because the expelled partner was never the lawyer's individual client, suing that partner does not violate Rule 1.9's protection of former clients.

Q: Does the entity theory apply to unincorporated partnerships?

A: Yes. The opinion notes the comments to Rule 1.13 apply equally to unincorporated entities, treating partners as constituents of a non-corporate organizational client.

Background and rules framework

The opinion interprets Montana Rule of Professional Conduct 1.13 (Organization as Client; Model Rule 1.13), adopting the entity theory of representation, and Rule 1.9 (Duties to Former Clients; Model Rule 1.9). It refers to Ethical Consideration 5-18 of the former Code of Professional Responsibility as the traditional source of the entity view.

Citations and references

Rules of Professional Conduct:

• Mont. R. Prof. Cond. 1.13(a) (organization as client; entity theory) / Model Rule 1.13(a)
• Mont. R. Prof. Cond. 1.9 (duties to former clients) / Model Rule 1.9

Other authority cited:

• Ethical Consideration 5-18, Code of Professional Responsibility (entity representation)

See also

• State Bar of Montana Ethics Op. 850916: One Firm Cannot Sue Its Own Current Client
• ABA Formal Op. 95-390: Conflicts in the Corporate-Family Context
• ABA Formal Op. 06-443: Contact With an Organization's Inside Counsel

Source

• Landing page: https://www.montanabar.org/For-Attorneys/State-Bar-Resources/Ethics-Opinions
• Original PDF: https://www.montanabar.org/Portals/MONTANA/870513.pdf

Original opinion text

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

Ethics Opinion
QUESTION PRESENTED: If a lawyer represents a partnership, and one of the partnership members is expelled, can the lawyer sue the expelled partner without violating the conflict of interest former client Rule 1.9?

ANSWER: Yes.

ANALYSIS: The lawyer represents the partnership as a separate jural entity, not the expelled member individually. The applicable rule is Model Rule 1.13, in particular 1.13(a), which provides:

"A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents."

This rule has been adopted by the Montana Supreme Court and has been effective since July 1. 1985. The comments to the rule provide that the duties defined apply equally to unincorporated entities, and that constituents (here, partners) are persons acting for "organizational" clients that are not corporations.

The basic precept of Rule 1.13 is that a lawyer representing an entity client does not thereby become the lawyer for any of the entity's members, agents, officers, or other constituents as they are referred to in this rule. This has been the traditional view (see Ethical Consideration 5-18 of the Code of Professional Responsibility), but the Model Rules give this entity theory more prominence. In contrast with the competing "group theory" (that the lawyer would be regarded as acting on behalf of a group of individuals who are associated with each other), the ABA and the Montana Supreme Court -- in rejecting this group theory -- adopted the entity approach, which postulates that the lawyer has only one client -- the entity itself. Under the entity approach, the interest of the other players must still be taken into account, but they are the interests of nonclients. The reason for rejecting the group theory in favor of the entity concept is the separate jural personality of the entity. It can enter legal relationships in its own right, including the lawyer-client relationship. By the same token, the individuals involved are agents of the jural personality.

The lawyer has no conflict of loyalties under the entity approach taken by the Model Rules, for the lawyer was only on one side to begin with. The lawyer is required to stay loyal to the one client -- the entity; that, in turn, might very well require the lawyer to be "disloyal" to a particular individual. This policy is legally correct and a necessary consequence of the well established principles of agency law upon which the entity theory rests.

                         THIS OPINION IS ADVISORY ONLY