Can a lawyer narrow the scope of a representation to carve out the part that would conflict with another current or former client?

Plain-English summary

As firm client rosters grew, the Committee was asked whether a lawyer can avoid a conflict that arises mid-engagement by narrowing the scope of the representation. The opinion gives two recurring examples: a firm defending a corporate client when an amended complaint adds the firm's accounting-firm client as a co-defendant and cross-claims emerge; and a firm representing a company in an auction when another firm client surfaces as a bidder. Absent consent or a way to limit the engagement, DR 5-105(B) would force withdrawal.

The opinion concludes a representation may be limited to eliminate the adverse portion, so long as the limitation does not render the remaining counsel inadequate and the affected client consents after disclosure of the limitation, the excluded matters, and the foreseeable consequences (including the possible need for, and cost of, separate counsel). It grounds this in the consensual nature of the attorney-client relationship, Section 121 of the Restatement (which expressly approves scope limits to avoid conflicts), Model Rule 1.2(c), and case law including Interstate Properties v. Pyramid Co. and Sumitomo Corp. v. J.P. Morgan & Co.

The opinion then stresses the limits of the technique. The lawyer must adhere scrupulously to the carve-out and may not act adversely to the other client "behind the scenes." It details constraints on dealing with separate counsel: the firm may share generally relevant materials in bulk and coordinate routinely, but may not selectively segregate or flag documents "particularly relevant" to claims against the other client, nor share legal strategy applicable to those claims. The firm may fully adduce facts that help its own client, since facts are "inherently neutral," but may not develop evidence for the purpose of harming the other client. Where adversity is too direct (for example, deposing the other client), separate counsel must handle that piece. Some limitations are simply doomed, where the carve-out leaves the representation valueless or advancing one client necessarily harms the other.

In practice

Under the New York Code as it stood at the time, the opinion holds that a mid-matter conflict can sometimes be cured by limiting the engagement rather than withdrawing, if the affected client gives informed consent and the residual representation remains adequate and zealous. It directs the lawyer to memorialize the limited engagement in writing, regulate communications with separate counsel to stay neutral toward the other client, and refrain from any action whose purpose is to injure the other client. It treats the technique as fact-specific and recognizes that some conflicts cannot be cured this way.

This opinion applies the former New York Code (DR/EC numbering). New York replaced the Code with the Rules of Professional Conduct effective April 1, 2009; DR 5-105 now corresponds to Rule 1.7, the former-client rule DR 5-108 to Rule 1.9, and limited-scope representation is addressed by Rule 1.2(c). Verify the current rule text before relying on any specific requirement.

Common questions

Q: Can a lawyer avoid a conflict by limiting what the representation covers?

A: Yes. The opinion concludes a representation may be limited to carve out the adverse aspect, if the affected client consents after full disclosure and the remaining representation stays adequate.

Q: What must the lawyer disclose to get consent?

A: The opinion says the lawyer must disclose the limitation, the excluded matters, and the foreseeable consequences, including that separate counsel may be needed, which could add expense and delay.

Q: Can the firm help the separate counsel litigate against its other client?

A: No. The opinion concludes the firm must stay neutral toward the other client; it may share generally relevant materials in bulk but may not selectively flag documents particularly relevant to claims against the other client or share applicable legal strategy.

Q: Can the lawyer develop facts that end up hurting the other client?

A: Yes, if done solely to help its own client. The opinion explains facts are inherently neutral, but the lawyer may not adduce evidence for the purpose of harming the other client or block the other side's access to witnesses.

Background and rules framework

The opinion interprets the former New York Code's concurrent-conflict rule DR 5-105 (including DR 5-105(B)) and the former-client rule DR 5-108(A), informed by Model Rule 1.2(c) on limiting the scope of representation and Section 121 of the Restatement (Third) of the Law Governing Lawyers. The corresponding Model Rules are MR 1.7, MR 1.2, and MR 1.9.

Citations and references

Rules of Professional Conduct:

• MR 1.7 (concurrent conflicts) / NY DR 5-105
• MR 1.2 (scope of representation) / Model Rule 1.2(c)
• MR 1.9 (duties to former clients) / NY DR 5-108(A)

Cases:

• Sumitomo Corp. v. J.P. Morgan & Co., No. 99 Civ. 8780, 2000 WL 145747 (S.D.N.Y. Feb. 8, 2000), limited-scope representation avoided disqualification
• Interstate Properties v. Pyramid Co. of Utica, 547 F. Supp. 178 (S.D.N.Y. 1982), circumscribed relationship removed the conflict
• Funds of Funds Ltd. v. Arthur Andersen & Co., 567 F.2d 225 (2d Cir. 1977), limits on acting adversely "behind the scenes"

Other opinions cited:

• N.Y. City 2001-2 (transactional conflicts and client sophistication); ABA Formal Op. 92-367

See also

• NYC Bar Ethics Op. 2001-2: Conflicts in Corporate and Transactional Matters
• NYC Bar Ethics Op. 2004-02: Representing a Corporation and Its Constituents
• ABA Formal Op. 497: Conflicts Involving Materially Adverse Interests

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-2001-3-limiting-the-scope-of-an-attorneys-representation-to-avoid-client-conflicts/