Can a part-time associate at a law firm represent the buyer through her own separate practice while the firm represents the seller in the same real estate deal, with both clients' consent?

Plain-English summary

A law firm employs a part-time associate who works there two days a week and otherwise runs her own separate solo practice, with her own clients, files, and trust account. A buyer approached the associate at her separate practice to handle a residential real estate purchase, and the seller separately approached a partner in the firm to handle the same transaction. The firm asked whether, with full disclosure and consent, it could represent the seller while its part-time associate, working out of her own practice, represented the buyer.

The committee first addresses whether the part-time lawyer is properly called an "associate." Distinguishing a per-diem lawyer paid only for specific matters (whom N.Y. City 1996-8 said could not be called an associate), the committee concludes a lawyer who is regularly available to consult with the firm and its clients on a variety of matters, even during limited hours, may be called an associate even if she does not work exclusively for that firm. A lawyer held out as an associate is "associated" with the firm under DR 5-105(D), which imputes conflicts among lawyers in a firm; the firm may not call her an associate and then deny that status for conflict purposes.

On the merits, the committee explains that buyer and seller in a real estate transaction ordinarily have differing interests (the deed, adjustments, title issues, choice of title company). Earlier opinions allowed a single lawyer to represent both only in "unusual and very limited circumstances" where there is little or no actual adversity and the parties jointly sought one lawyer, under the DR 5-105(C) consent standard. Through DR 5-105(D), those limits apply to a single firm as well. This case is different: the buyer and seller each decided at the outset to retain separate lawyers in different firms and to negotiate against each other, which reflects an actual adversity. The committee concludes a disinterested lawyer could not believe the two same-firm lawyers could competently represent each side's interests, so the conflict is not consentable under DR 5-105(C).

In practice

The opinion holds, under the former Code as it stood at the time, that a regularly-available part-time associate is "associated" with the firm for purposes of imputation under DR 5-105(D), and that where a buyer and seller of residential real estate have chosen separate lawyers to negotiate against each other, lawyers in the same firm may not represent both sides even with full disclosure and consent, because the direct adversity makes the conflict non-consentable under DR 5-105(C). The committee preserves the narrow exception, recognized in N.Y. State 38 and 611, allowing a single lawyer or firm to handle both sides only where the parties jointly seek one lawyer and there is little or no actual adversity.

Common questions

Q: Is a part-time associate treated as part of the firm for conflict purposes?

A: Yes. The committee concludes a part-time lawyer who is regularly available to the firm and its clients is "associated" with the firm under DR 5-105(D), and a firm cannot call a lawyer an associate while denying that status to avoid imputation.

Q: Can two lawyers in the same firm represent the buyer and the seller in a real estate deal?

A: Not where the parties chose separate counsel to negotiate against each other. The committee concludes that direct adversity makes the conflict non-consentable under DR 5-105(C), so consent cannot cure it even within nominally separate practices.

Q: Is there ever an exception for one lawyer or firm handling both sides?

A: Yes, a narrow one. The committee notes that under N.Y. State 38 and 611 a single lawyer or firm may represent both parties only in unusual and very limited circumstances, where the parties jointly seek one lawyer and there is little or no actual adversity, with informed consent.

Q: Does it matter that the associate works out of her own separate office?

A: No. The committee concludes that because she is held out as an associate and is regularly available to the firm, the imputation rule applies regardless of the separate location, files, or trust account.

Background and rules framework

The opinion interprets the former Code's conflict provisions, DR 5-105(C) (the consent standard for multiple representation, an analogue of ABA Model Rule 1.7) and DR 5-105(D) (imputation of conflicts among lawyers associated in a firm, an analogue of Model Rule 1.10). It builds on a line of New York real estate dual-representation opinions defining when, if ever, one lawyer may represent both sides.

Citations and references

Rules of Professional Conduct:

• MR 1.7 (concurrent conflicts of interest)
• MR 1.10 (imputation of conflicts within a firm)
• Former Code DR 5-105(C), (D); EC 5-15

Cases:

• Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976), a lawyer may be a partner in two firms

Other opinions cited:

• N.Y. State 38 (1966) and N.Y. State 611 (1990): single-lawyer dual representation in real estate only in unusual and very limited circumstances
• N.Y. State 715 (1999): when a "contract lawyer" is deemed associated with a firm
• N.Y. City 1996-8: a per-diem lawyer may not be called an "associate"
• N.Y. City 2001-2: direct adversity in dual representation may preclude even consented representation

See also

• NY State Bar Op. 1141: Co-counsel conflict imputation
• NY State Bar Op. 828: Imputation of a nonlawyer investigator's conduct
• NY State Bar Op. 817: Seller's concession and a grossed-up real estate price

Source

• Landing page: https://nysba.org/ethics-opinion-807/