Can one lawyer serve as a municipality's corporation counsel and also as general counsel to a regional fire and rescue organization that the municipality belongs to?

Plain-English summary

The Committee was asked whether one attorney may concurrently serve as corporation counsel for a municipality (the chief legal officer of a Walsh Act municipality) and as general counsel for a regional fire and rescue (RFR) organization that serves that municipality and several neighbors. The RFR is a shared-services consortium formed under the Uniform Shared Services and Consolidation Act, governed by a Management Committee of representatives from each constituent municipality, which allocates the costs of fire and rescue services among the members. The Committee concluded that holding both positions creates a per se conflict of interest.

The Committee analyzed the question under the three-tier framework from In re Opinion No. 697 (2006): an attorney who plenarily represents a municipal governing body is barred from representing private clients before that body and all its subsidiary agencies; an attorney who plenarily represents a subsidiary agency is barred only as to that agency; and a limited-scope attorney faces only case-by-case restrictions under RPC 1.7, 1.9, and 1.8(k). The appearance-of-impropriety doctrine was removed from the Rules in 2004, so older opinions resting on it carry little weight; the analysis turns instead on whether the "member of the municipal family" relationship creates a substantial risk that the lawyer's responsibilities to one public entity would limit independent, diligent representation of the other.

Here, corporation counsel owes a duty of loyalty to promote the individual interests of its single municipality, while RFR general counsel owes loyalty to the collective interests of the whole consortium. The Committee found these competing loyalties an inherent and unavoidable conflict. It offered a concrete example: a lawyer could not advise the RFR on which firehouses to close while simultaneously being bound, as corporation counsel, to advocate for keeping that municipality's firehouses open. Because the two clients' interests overlap and diverge with such regularity, individual recusals would be insufficient. The Committee, comparing the result to the county-counsel-and-mayor conflict in Opinion 722 and distinguishing the case-by-case approach allowed in Opinion 706, held the conflict per se, not remediable by recusal, and not waivable.

In practice

The opinion holds that a lawyer may not concurrently serve as plenary corporation counsel to a municipality and as general counsel to a regional fire and rescue consortium in which that municipality is a member. Per the opinion, the bar is a per se structural conflict under RPC 1.7(a)(2) and RPC 1.8(k) that cannot be cured by case-by-case recusal and cannot be waived, because the lawyer would owe simultaneous duties of loyalty to a single funding municipality and to the funded consortium whose resource-allocation decisions regularly disadvantage individual members.

Common questions

Q: Can a municipal corporation counsel also be general counsel to a regional fire/rescue agency the town belongs to?

A: No. The Committee found a per se conflict of interest because corporation counsel owes loyalty to one municipality while RFR general counsel owes loyalty to the entire consortium, and those interests conflict too often for the dual role to be permissible.

Q: Can the conflict be cured by recusing on specific matters?

A: No. The Committee concluded that the interests overlap and diverge with such regularity that case-by-case recusal would be insufficient; the conflict is structural and non-waivable.

Q: Why does the "appearance of impropriety" doctrine not control?

A: That doctrine was removed from the Rules of Professional Conduct in 2004. The Committee analyzed the conflict under the three-tier per se framework of Opinion 697 and RPC 1.7(a)(2) and 1.8(k) instead.

Q: How is this different from Opinion 706, which allowed a dual role?

A: In Opinion 706 an assistant county counsel could also serve on a municipal council because the structure allowed case-by-case recusal. Here, the regular and direct conflict between a single municipality's interests and the consortium's collective interests makes recusal inadequate, like the per se conflict found in Opinion 722.

Background and rules framework

The opinion applies RPC 1.7(a)(2) (significant risk that representation will be materially limited by responsibilities to another client; cf. Model Rule 1.7(a)(2)) and RPC 1.8(k) (a lawyer employed by a public entity may not undertake a representation presenting a substantial risk to independent, diligent, competent representation of that entity; New Jersey's public-lawyer provision), within the three-tier local-government framework of In re Opinion No. 697. It also references RPC 1.9 (duties to former clients; cf. Model Rule 1.9). The governing statutes are the Walsh Act (N.J.S.A. 40:70-1 et seq.) and the Uniform Shared Services and Consolidation Act (N.J.S.A. 40A:65-1 et seq.).

Citations and references

Rules of Professional Conduct:

• RPC 1.7(a)(2) (concurrent conflict; material limitation); cf. Model Rule 1.7(a)(2)
• RPC 1.8(k) (lawyer employed by a public entity); New Jersey provision
• RPC 1.9 (duties to former clients); cf. Model Rule 1.9

Statutes:

• N.J.S.A. 40:70-1 et seq. (Walsh Act form of municipal government)
• N.J.S.A. 40A:65-1 et seq. (Uniform Shared Services and Consolidation Act)

Cases:

• In re Supreme Court Advisory Committee on Professional Ethics Opinion No. 697, 188 N.J. 549 (2006), three-tier framework for local-government conflicts

Other opinions cited:

• ACPE Opinion 697: three-tier per se conflict framework
• ACPE Opinion 736 (June 25, 2019): extended Opinion 697 to representation of a subsidiary board itself
• ACPE Opinion 722 (June 27, 2011): per se conflict, county counsel and mayor of a Faulkner Act "strong mayor" municipality
• ACPE Opinion 706 (July 3, 2006): assistant county counsel could also serve on a municipal council, subject to case-by-case recusal

See also

• NJ ACPE Op. 722: County Counsel Serving as Mayor (Per Se Conflict)
• NJ ACPE Op. 736: Municipal Prosecutor and Planning Board Attorney
• NJ ACPE Op. 697: Municipal Agency Counsel and Private-Client Conflicts
• NJ ACPE Op. 706: Assistant County Counsel and Municipal Council Member

Source

• Landing page: https://www.njcourts.gov/notices/advisory-committee-professional-ethics-acpe-opinion-749-conflict-of-interest-corporation

Original opinion text

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

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the Supreme Court of New Jersey

OPINION 749

Conflict of Interest: Corporation Counsel for a Municipality Concurrently Serving as General Counsel for a Regional Fire and Rescue Organization that Serves that Municipality

Inquirer asks whether an attorney may concurrently serve as corporation counsel for a municipality and as general counsel for a regional fire and rescue (RFR) organization that serves that municipality and several neighboring municipalities. The Committee finds that a per se conflict of interest arises when an attorney concurrently serves as corporation counsel for a municipality and as general counsel for a RFR of which that municipality is a member.

Corporation counsel is retained by the municipality, which is organized under the Walsh Act form of government, run by a mayor and a Board of Commissioners, to act as its attorney of record. N.J.S.A. 40:70-1 et seq. The duties of corporation counsel are defined by local ordinance and include supervision of the execution, preparation and enforcement of all contracts, deeds, documents, statutes, ordinances, resolutions or legal correspondence for the municipality as well as the duty to prosecute and defend all legal matters for or against the municipality or any of its officials, departments, employees or personnel.

The RFR was formed pursuant to the Uniform Shared Services and Consolidation Act, which provides for agreement between local governmental units and other entities for the provision of shared services. N.J.S.A. 40A:65-1 et seq. The Act authorizes the governing bodies of two or more local units to contract for the formation of a regional service agency for the provision of public services, including police, fire, and rescue services. The Inquirer explained that the member municipalities share the cost of fire and rescue services in accordance with agreements signed by the member municipalities. The agreements detail how the annual costs and expenses of operating the RFR will be allocated between each participating municipality. The RFR is governed by a "Management Committee" comprised of representatives of each of the constituent municipalities, which oversees budgetary decisions, personnel matters, operational policies and strategic planning.

The question before the Committee is whether inherent aspects of the lawyer's anticipated dual role would create a per se structural conflict of interest that would pose a substantial risk that the lawyer could not provide independent advice or diligent representation to one or both entities. Absent per se conflict, the dual representation must comply with RPC 1.7(a)(2) and RPC 1.8(k).

The New Jersey Supreme Court, in In re Supreme Court Advisory Committee on Professional Ethics Opinion No. 697, 188 N.J. 549 (2006), held that an attorney who "plenarily represents a municipal governing body" is "barred from representing private clients before that governmental entity's governing body and all of its subsidiary boards and agencies, including its courts." Id. at 569. In contrast, an attorney who "plenarily represents an agency subsidiary to the governmental entity's governing body" is "barred from representing private clients before that subsidiary agency only." Ibid. Lastly, "if the scope of an attorney's engagement by a governmental entity is limited and not plenary," the attorney may not represent a private client before or against the governing body but may represent a private client before the boards, agencies, or municipal court of the municipality. Id. at 567-69. An attorney who represents a municipality in a limited, not plenary, way must still comply with the provisions of RPC 1.7, RPC 1.9, and RPC 1.8(k). Id. at 568.

While Opinion 697 addressed conflicts concerning the representation of private clients before a subsidiary board or agency, its holding was expanded to conflicts concerning representation of the board or agency itself by the Committee in Opinion 736 "Lawyer May Concurrently Serve as Municipal Prosecutor and Planning Board Attorney in Same Municipality; Superseding Opinions 452 and 366" (June 25, 2019). There, the Committee reviewed an inquiry asking whether a lawyer may concurrently serve as municipal prosecutor and planning board attorney in the same borough. The Committee determined that if the municipal prosecutor was permitted to represent private clients in matters before the subsidiary agency in question, it follows that the municipal prosecutor may also concurrently serve as attorney for a subsidiary board or agency itself.

When analyzing local governmental conflicts of interest, the Committee noted that the appearance of impropriety doctrine was removed from the Rules of Professional Conduct in 2004. Prior Committee Opinions resolved primarily by reference to that doctrine are of little continued relevance. Instead, the Committee noted that the conflict should be examined under the three tiers of per se conflicts identified by the Court in Opinion 697. If the lawyer is found to plenarily represent the municipality, the "member of the municipal family" doctrine is applied. If the lawyer is found to provide legal services to the municipality in a lesser role, they are no longer subject to broad, per se restrictions on their practice. Those lawyers are still subject to case-by-case restrictions and recusals under RPC 1.7(a)(2) and RPC 1.8(k).

In practice, where "membership" in the "municipal family" establishes a "substantial risk that the lawyer's responsibilities to the public entity would limit the lawyer's ability to provide independent advice or diligent and competent representation to either the public entity or the client," a per se conflict of interest will be inferred. Opinion 697, 188 N.J. at 566 (citing RPC 1.8(k)).

In Opinion 722, "Conflict of Interest: Concurrently Serving as County Counsel and Mayor of a Constituent Faulkner Act 'Strong Mayor' Entity" (June 27, 2011), the Committee concluded that the lawyer could not concurrently serve as both county counsel and mayor of a constituent municipality. The Committee noted that Faulkner Act "strong mayor" municipalities concentrate substantial power in the hands of the chief executive. Mayors in these municipalities prepare budgets, supervise all municipal property, negotiate contracts for the municipality, appoint the heads of administrative departments, along with other duties which include acting in the best interest of the municipality. County counsel is generally considered the "chief legal officer or advisor of the governing body of the county" and heads the county's legal department. The Committee found a per se conflict in holding both positions.

Unlike the assistant county counsel in Opinion 706 "Conflict of Interest: Concurrently Serving as Assistant County Counsel And Council Member in Municipality in Same County" (July 3, 2006), who the Committee concluded could concurrently serve as a member of the municipal council in a municipality in the same county, the structural organization of county counsel's office would not permit the same opportunity for case-by-case recusal for county counsel who sought to concurrently serve as mayor of a constituent municipality.

Here, corporation counsel is the chief legal officer for the municipality and thus owes a duty of loyalty to promote the individual interests of that municipality above other competing interests. General counsel for the RFR, however, would serve as chief legal counsel for a consortium that serves all constituent municipalities, and its general counsel would owe a duty of loyalty to promote the collective interests of the consortium as a whole and not only that one constituent member. The Committee concludes that these competing loyalties present an inherent and unavoidable conflict of interests that would preclude a lawyer from serving in both roles concurrently.

In some ways the RFR is analogous to a subsidiary agency to each constituent municipality. On the other hand, it is also possible to conceptualize each municipality as a subsidiary to the RFR, in that any decision made by the consortium is necessarily a collective decision with ramifications for each funding entity. But unlike typical subsidiary agencies that are subjected to the control of the municipal governing body, each participating municipality is an autonomous and independent entity not subject to the ultimate authority of the RFR except to the extent it has contractually agreed to abide by collective decisions. It nevertheless still exercises its independent authority by participating in the governance through its role in the RFR Management Committee.

In order to achieve the efficiencies of shared services, each municipality has agreed to abide by the compromise resource allocation decisions made by the Management Committee of the RFR, even if those decisions do not maximize the interests of one of the constituent municipalities. In advising either the RFR or the municipality on how to exercise its authority to allocate resources in any particular situation, a lawyer attempting to act as counsel for both entities would regularly confront the reality that their interests not only are not coterminous but often will conflict.

For example, how could the lawyer advise the RFR on which firehouses may be closed when he or she is also tasked as corporation counsel to the municipality with a duty to advocate for keeping the firehouses within its borders open? The Committee finds that a lawyer cannot serve as corporation counsel to a single funding entity while concurrently serving as general counsel to the entity being funded without creating a per se structural conflict of interest, not remediable by case-by-case recusal, that cannot be waived.

We recognize that per se conflicts of interest have become disfavored since the Pollock Commission report recommended, and the Supreme Court enacted, the abolition of the appearance of impropriety rule. Nevertheless, we think this is one of the relatively rare situations in which individual recusals would be insufficient to permit a lawyer to provide competent representation to two entities whose interests would actually overlap with such regularity. We therefore answer the inquiry in the negative and conclude that a lawyer may not concurrently represent plenarily both a municipality and a RFR in which that municipality is a constituent member.