Can a New York law firm ask a client to sign an advance waiver agreeing not to object if the firm later represents another client against it?

Plain-English summary

The opinion addresses when a law firm may ask a client to waive, in advance, objection to the firm's later representation of another client adversely to the first. It grounds the answer in DR 5-105(C), which permits multiple representation only if (a) a disinterested lawyer would believe the firm can competently represent each affected client and (b) each client consents after full disclosure of the implications, advantages, and risks.

Applying that two-part test to advance waivers, the opinion concludes that such waivers are permissible. It explains the market reason for them: since Cinema 5, Ltd. v. Cinerama, Inc. treated adverse representation of a current client as presumptively improper even in unrelated matters, and since clients increasingly retain many firms across jurisdictions, firms and clients use advance waivers to set the "rules of the road" at the start of a relationship. The opinion aligns its conclusion with NYCLA Op. 724, ABA Formal Op. 05-436, and the Restatement.

The opinion holds that the "disinterested lawyer" test is applied twice: when the waiver is given (looking at the type of future representation anticipated) and again when the adverse matter actually arises (looking at the real client and real adversity). If the actual conflict is materially different from what the waiver envisioned, or is nonconsentable, the waiver fails. On disclosure, the opinion concludes that a sophisticated client (one who readily appreciates the implications of conflicts, including clients with inside counsel or who regularly retain outside counsel) needs less detailed disclosure, so blanket or open-ended waivers can be enforceable for such clients.

For waivers that reach substantially related matters, the opinion adds conditions drawn from ABCNY Formal Op. 2001-2: the client must be sophisticated; the waiver may not apply to opposite sides of the same litigation or a starkly disputed transaction; the firm must be able to keep each client's confidences protected (including by screening); the conflict must be consentable under DR 5-105(C); and the firm must weigh the Opinion 2001-2 factors. The opinion provides three model waiver forms and stresses that a waiver is more enforceable the more specifically it names the foreseeable conflict.

In practice

Under the New York Code as it stood at the time, the opinion holds that advance conflict waivers are ethically permissible when they satisfy DR 5-105(C)'s disinterested-lawyer and informed-consent tests, with broader (blanket or open-ended) waivers reserved for sophisticated clients and waivers covering substantially related matters carrying the additional ABCNY Op. 2001-2 conditions. A waiver does not have to be in writing, but the opinion observes that written confirmation is salutary, and that the disinterested-lawyer test is reapplied when the actual adverse matter arises.

This opinion applies the former New York Code of Professional Responsibility (DR/EC numbering). New York replaced the Code with the Rules of Professional Conduct effective April 1, 2009; the concurrent-conflict and consent provisions of DR 5-105(C) now map to Rule 1.7, and "informed consent" is defined in Rule 1.0(j). Verify the current rule text, and Rule 1.7's Comment on advance waivers, before relying on any specific requirement.

Common questions

Q: Can a law firm get a client to waive future conflicts in advance?

A: Yes. The opinion concludes that a firm may request an advance waiver, including consent to later sue the client for another client, if it makes adequate disclosure for informed consent and a disinterested lawyer would believe the firm can competently represent all affected clients under DR 5-105(C).

Q: Are blanket or open-ended advance waivers allowed?

A: Yes, but the opinion limits them to sophisticated clients, reasoning that such clients need less detailed disclosure because their consent turns on their understanding of the material risk rather than on exhaustive disclosure by the firm.

Q: Can an advance waiver cover substantially related matters?

A: Yes, under conditions: the client is sophisticated; the waiver does not reach opposite sides of the same litigation or a starkly disputed transaction; the firm can protect each client's confidences (including by screening); the conflict is consentable; and the firm weighs the ABCNY Op. 2001-2 factors.

Q: Does an advance waiver have to be in writing?

A: No. The opinion states a waiver need not be in writing if informed consent can be found from the circumstances, but a written confirmation is advisable to avoid later disputes over the waiver's scope.

Q: Is the waiver tested again when the conflict actually arises?

A: Yes. The opinion holds the disinterested-lawyer test applies both when the waiver is given and again when the adverse matter arises; if the actual conflict is materially different from what was waived, or is nonconsentable, the waiver is ineffective.

Background and rules framework

The opinion interprets DR 5-105 (the New York analog of Model Rule 1.7 on concurrent conflicts), with DR 5-105(C) supplying the disinterested-lawyer and informed-consent conditions for consentable conflicts, and DR 4-101 (confidentiality, Model Rule 1.6) governing the protection of confidences where a waiver reaches substantially related matters. The analysis builds on the firm's prior Opinion 2001-2 (multiple representation in a single transaction) and Opinion 2004-02 (advance waivers in the corporate-investigation context).

Citations and references

Rules of Professional Conduct:

• MR 1.7 (concurrent conflicts; client consent) / NY DR 5-105
• MR 1.0(e), 1.0(j) (informed consent defined)
• MR 1.6 (confidentiality) / NY DR 4-101

Cases:

• Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976), adverse representation of a current client presumptively improper
• Levine v. Levine, 56 N.Y.2d 42 (1982), parties may retain the same lawyer after full disclosure
• St. Barnabas Hosp. v. NYC Health & Hosps. Corp., 775 N.Y.S.2d 9 (App. Div. 2004), enforcing an advance waiver naming the future adverse party

Other opinions cited:

• ABCNY Formal Op. 2001-2: multiple representation with differing interests in a transaction
• ABCNY Formal Op. 2004-02: advance waivers in corporate governmental investigations
• NYCLA Op. 724; ABA Formal Op. 05-436: advance waivers approved

See also

• NYC Bar Ethics Op. 2005-05: Unforeseeable Concurrent Client Conflicts
• NYC Bar Ethics Op. 2008-02: Corporate Legal Departments and Conflicts
• NYC Bar Ethics Op. 2013-01: Duties to Prospective Clients After Beauty Contests
• NY State Bar Op. 629: Lawyer Conflicts Among Governmental Entities

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-2006-1-multiple-representations-informed-consent-waiver-of-conflicts/
• Original PDF: https://www.nycbar.org/wp-content/uploads/2023/05/20061165-Formal_Opinion_2006-1_Advance_Waivers_of_Future_Conflicts.pdf