Can a New York lawyer or law firm represent two or more clients bidding against each other for the same asset?

Plain-English summary

The opinion analyzes whether a lawyer or law firm may represent two or more clients competing as bidders for the same asset, applying Rules 1.4, 1.6, 1.7, 1.9, and 1.10(a). Part I concludes that representing multiple competing bidders generally creates a conflict of interest, because the clients are directly adverse in seeking the same asset.

Part II addresses the narrower situation where a lawyer represents one bidder and learns that another existing client, represented in an unrelated matter, is also bidding. The opinion concludes this is unlikely to create a conflict unless the lawyer is asked to analyze or critique the other client's bid. Where it does create a conflict, the opinion treats it as a "thrust upon" conflict that was not reasonably foreseeable.

Part III concludes the conflict is often waivable. The most important factor is whether the lawyer practices alone or in a firm. In a firm, separate lawyers or teams may represent different bidders with informed consent, though a non-waivable conflict can still arise if one team is asked to argue against another team's client's bid, much like opposing sides of the same litigation handled within one firm. A single lawyer representing competing bidders is more likely to face a non-waivable conflict unless the lawyer's role is limited under Rule 1.2(c) to discrete issues (such as common due diligence, tax, or environmental analysis) where the answer is the same for all bidders and the lawyer holds no material bid-specific confidences.

Part IV addresses protective measures: erecting screens at the outset to protect each client's confidential information under Rule 1.6, and using advance conflict waivers with sophisticated clients. The opinion treats the template advance waiver from Opinion 2006-1 as still viable, while noting that a specific waiver should be used once the firm is actually asked to represent another bidder, and that informed consent must now be confirmed in writing.

In practice

Under this opinion, a firm that wants to represent competing bidders should separate the representations into distinct teams, establish information walls at the outset under Rule 1.6, and obtain informed consent confirmed in writing under Rule 1.7(b)(4). The opinion identifies the analyze-or-critique-the-other-bid scenario as the line that can turn a waivable conflict into a non-waivable one, and points to Rule 1.2(c) limited-scope engagements as the tool to carve that adversity out.

For an individual lawyer, the opinion holds the representation is workable only where the lawyer's role is genuinely limited to discrete issues common to all bidders and the lawyer does not receive bid-specific material confidential information. The opinion also treats advance waivers as effective primarily when they identify the specific type of conflict to a sophisticated client, and less reliable when open-ended.

Common questions

Q: Can my firm represent two clients bidding for the same company?

A: Generally yes, if structured carefully. The opinion concludes the representation creates a conflict but is usually waivable where separate teams handle each bidder, information walls protect each client's confidences, and each client gives informed written consent under Rule 1.7(b).

Q: What turns this into a non-waivable conflict?

A: Being asked to attack the other bidder's bid. The opinion says a non-waivable conflict can arise when one client asks the firm to analyze, critique, or argue against a competing client's bid, comparing it to one firm representing both sides of the same litigation; a Rule 1.2(c) scope limitation can avoid that adversity.

Q: Can a solo lawyer represent competing bidders?

A: Only in a limited role. The opinion concludes a single lawyer is much more likely to have a non-waivable conflict unless the engagement is limited under Rule 1.2(c) to discrete issues (such as common tax or environmental analysis) where the answer is the same for all bidders and the lawyer holds no material bid-specific confidences.

Q: What if I only represent one bidder but another client is also bidding?

A: The opinion concludes that situation is unlikely to be a conflict unless you are asked to analyze or critique the other client's bid. If a conflict does arise, it is generally a "thrust upon" conflict, and absent a waiver the lawyer would have to withdraw from one representation.

Q: Do advance conflict waivers work here?

A: The opinion treats advance waivers as viable with sophisticated clients, especially when they identify the specific type of conflict, citing the Opinion 2006-1 template; open-ended waivers that fail to identify the conflict may not be effective, and consent must be confirmed in writing.

Background and rules framework

The opinion interprets the New York Rules of Professional Conduct, which track the ABA Model Rules. The core provisions are Rule 1.7 (concurrent conflicts and the consentability test in 1.7(b)), Rule 1.10(a) (imputation within a firm), Rule 1.6 (confidentiality and screening), Rule 1.2(c) (limited-scope representation), Rule 1.4 (communication), Rule 1.9 (former-client duties), and Rule 1.0(e) and (f) (informed consent and "confirmed in writing"). The opinion relies on New York State Op. 973 (non-waivable conflict when critiquing a colleague's work), the Restatement (Third) of the Law Governing Lawyers section 122, and the prior advance-waiver template in Opinion 2006-1.

Citations and references

Rules of Professional Conduct:

• MR / NY RPC 1.7 (concurrent conflicts; consentability)
• MR / NY RPC 1.10(a) (imputation within a firm)
• MR / NY RPC 1.6 (confidentiality; screening)
• MR / NY RPC 1.2(c) (limited-scope representation)
• MR / NY RPC 1.9 (former-client duties)
• MR / NY RPC 1.0(e), (f) (informed consent; confirmed in writing)

Cases:

• In re Imerys Talc America, Inc., 2020 WL 6888278 (D. Del. Nov. 24, 2020), economic adversity alone is not a concurrent conflict

Other opinions cited:

• ABA Formal Op. 05-435 (2004): no automatic conflict for a lawyer suing an insured of a client-insurer
• New York City Op. 2006-1: advance conflict waivers; template waiver
• New York City Op. 2005-5: "thrust upon" conflicts
• New York State Op. 973: non-waivable conflict in critiquing a colleague
• D.C. Ethics Op. 356 (2010): thrust-upon conflict among competing industry clients

See also

• NYC Bar Ethics Op. 2006-1: Multiple representations and conflict waivers
• NYC Bar Ethics Op. 2005-5: Unforeseeable concurrent client conflicts
• ABA Ethics Op. 05-435: Lawyer against insured of client-insurer

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-2024-1-ethical-issues-arising-from-the-representation-of-two-or-more-bidders-competing-for-the-same-asset/
• Original PDF: https://www.nycbar.org/wp-content/uploads/2024/01/20221241_EthicsOpinionCompetingBidders.pdf