Can a law firm that represents a public board on general matters also represent landowners opposing a zoning variance sought by an agency the board funds and supports?

Plain-English summary

A law firm held a one-year, as-needed contract to provide legal services to a community mental health board. The board funds, monitors, and evaluates an agency that was seeking a land-use variance for a domestic-violence shelter. The same firm also represented a group of landowners opposing the variance. The board had not asked the firm for advice on the variance. The Board analyzed whether the firm could continue to represent the landowners under Prof.Cond.R. 1.7.

On direct adversity, the opinion concludes there is no conflict under Prof.Cond.R. 1.7(a)(1): the landowners are directly opposed to the agency, but the agency is not the firm's client. The board, which is the firm's client, supports the variance but is not a real party in interest because it is not the entity seeking the variance, so its interest cannot reasonably be viewed as directly adverse to the landowners.

On material limitation, the opinion concludes a conflict does exist under Prof.Cond.R. 1.7(a)(2). Although the two representations are separate and unrelated, the board's overall interest in supporting the agency's variance, combined with the firm's duty of loyalty to the board and its financial interest in maintaining the standing client relationship, creates a substantial risk that the firm's ability to pursue an appropriate course of action for the landowners will be materially limited.

Because a material limitation conflict is present, Prof.Cond.R. 1.7(b) permits continued representation only if the firm can provide competent and diligent representation, both clients give informed consent confirmed in writing, and the representation is not otherwise prohibited and does not involve one client asserting a claim against another in the same proceeding. The opinion concludes the representation is not prohibited by law here, so informed written consent from both clients would allow the firm to continue; absent that consent, the firm must withdraw from one client. Screening is not an available solution because each lawyer's conflict is imputed to the entire firm under Prof.Cond.R. 1.10(a).

In practice

Under this opinion, a firm holding a general-services relationship with a public funder and simultaneously representing parties adverse to a project the funder backs must run the full Prof.Cond.R. 1.7 analysis, not just the direct-adversity test. The opinion holds that the firm's loyalty to, and financial interest in, the standing client can itself be the source of a material limitation conflict even when the matters are unrelated and the standing client is not a party. On the facts presented, the conflict is consentable: the firm may continue only with informed written consent from both clients, and absent that consent must withdraw from one. Per the opinion, imputation under Prof.Cond.R. 1.10(a) means an internal screen cannot cure the conflict.

Common questions

Q: Is it a direct adversity conflict to represent clients opposing a project your other client funds and supports?

A: Not on these facts. The opinion concludes there is no direct adversity under Prof.Cond.R. 1.7(a)(1) because the funder (the board) is not a party seeking the variance; the directly adverse party is the agency, which is not the firm's client.

Q: Why does a material limitation conflict still arise?

A: The opinion concludes the board's interest in the variance, plus the firm's duty of loyalty and financial interest in keeping the board as a client, create a substantial risk under Prof.Cond.R. 1.7(a)(2) that the firm's representation of the landowners will be materially limited.

Q: Can the firm cure the conflict and keep both clients?

A: The opinion concludes the conflict is consentable here: the firm may continue if both clients give informed consent confirmed in writing under Prof.Cond.R. 1.7(b). Absent consent, the firm must withdraw from one client.

Q: Can the firm screen separate lawyers instead of getting consent?

A: No. The opinion concludes screening is not permissible because the conflict of each assigned lawyer is imputed to the rest of the firm under Prof.Cond.R. 1.10(a).

Background and rules framework

The opinion interprets Ohio Prof.Cond.R. 1.7 (concurrent conflicts of interest; Model Rule 1.7), distinguishing the direct adversity branch (1.7(a)(1)) from the material limitation branch (1.7(a)(2)) and applying the informed-written-consent conditions of 1.7(b). It also applies Prof.Cond.R. 1.10(a) (imputation of conflicts within a firm; Model Rule 1.10). The opinion withdraws Adv. Op. 88-021.

Citations and references

Rules of Professional Conduct:

• Ohio Prof.Cond.R. 1.7(a)(1)-(2), (b) and cmts. [1], [11], [14] (Model Rule 1.7)
• Ohio Prof.Cond.R. 1.10(a) (Model Rule 1.10)

Statutes:

• Ohio Rev. Code § 340 et seq. (community mental health boards)

Other opinions cited:

• Ohio BPC Adv. Op. 2019-1: adverse-party representation and concurrent conflicts
• Ohio BPC Adv. Op. 88-021 (withdrawn by this opinion)

See also

• Ohio BPC Op. 2020-010: Concurrent Representation of Adverse Clients in the Same Transaction
• Ohio BPC Op. 2019-001: Representation of an Adverse Party in Unrelated Matters
• CA Bar Op. 1989-113: Representing a Third Party Adverse to a Wholly-Owned Subsidiary of a Corporate Client
• LA County Bar Op. 459: County Counsel Conflict of Interest in a Juvenile Dependency Proceeding

Source

• Landing page: https://ohioadvop.org/advisory-opinion-index/
• Original PDF: https://www.ohioadvop.org/wp-content/uploads/2020/06/Adv-Op-2020-04-Final.pdf

Original opinion text

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

OPINION 2020-04
Issued June 12, 2020
Withdraws Adv. Op. 88-021

Concurrent Representation of Clients With Disparate Interests Involving the Same Matter

SYLLABUS: A law firm must withdraw from the concurrent representation of multiple clients or seek their informed, written consent when the clients’ disparate interests as to the outcome of the same matter materially interferes with the firm’s lawyers’ independent professional judgment in representing either client.

This nonbinding advisory opinion is issued by the Ohio Board of Professional Conduct in response to a prospective or hypothetical question regarding the application of ethics rules applicable to Ohio judges and lawyers. The Ohio Board of Professional Conduct is solely responsible for the content of this advisory opinion, and the advice contained in this opinion does not reflect and should not be construed as reflecting the opinion of the Supreme Court of Ohio. Questions regarding this advisory opinion should be directed to the staff of the Ohio Board of Professional Conduct. 65 SOUTH FRONT STREET, 5TH FLOOR, COLUMBUS, OH 43215-3431 Telephone: 614.387.9370 Fax: 614.387.9379 www.bpc.ohio.gov

HON. JOHN W. WISE
RICHARD A. DOVE
CHAIR
DIRECTOR
PATRICIA A. WISE
D. ALLAN ASBURY
VICE- CHAIR
SENIOR COUNSEL
KRISTI R. MCANAUL
COUNSEL

OPINION 2020-04
Issued June 12, 2020
Withdraws Adv. Op. 88-021

Concurrent Representation of Clients With Disparate Interests Involving the Same Matter

SYLLABUS: A law firm must withdraw from the concurrent representation of multiple clients or seek their informed, written consent when the clients’ disparate interests as to the outcome of the same matter materially interferes with the firm’s lawyers’ independent professional judgment in representing either client.

QUESTION PRESENTED: Whether a law firm that is contracted to a public entity to provide general legal services on an as needed basis may represent a group of landowners opposed to a zoning variance sought by an independent entity that the public entity finances, monitors, and evaluates pursuant to state law.

APPLICABLE RULES: Prof.Cond.R. 1.7, 1.10

OPINION: The requesting law firm has a one-year contract with a community mental health board (“board”) to provide legal services on an as needed basis. The board contracts with an agency to provide services and facilities for domestic violence victims in the area. The agency is seeking a land use variance for a shelter for domestic violence victims. The law firm also represents a group of landowners that is opposed to the agency’s plans to locate a shelter in their neighborhood. The board supports the agency's efforts to locate the shelter in the neighborhood and seek appropriate zoning variances. It finances, monitors and evaluates the agency's activities pursuant to Oh. Rev. Code §340 et.seq. Based on the facts presented, it is assumed for purposes of this opinion that the
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board has not requested legal advice or services from the law firm concerning the zoning variance request by the agency.

A law firm’s decision to engage in a concurrent representation of two clients in unrelated matters will result in a conflict of interest if the representation of one client will be directly adverse to another current client or if there is a substantial risk that the firm’s representation of the client will be materially limited by other interests. Prof.Cond.R. 1.7(a)(1)-(2). In a concurrent representation, the principles of loyalty and independent professional judgment remain fundamental to the client-lawyer relationship and the interests of other clients or the lawyer’s own interests cannot be permitted to dilute a lawyer’s loyalty to either client. Prof.Cond.R. 1.7, cmt. [1]. Adv. Op. 2019-1. Based on the concurrent representation presented, the law firm must first analyze whether there exists a direct adversity or material limitation conflict of interest before continuing to engage in the representation of the landowners.

Direct adversity conflict

A direct adversity conflict exists when the law firm or lawyer assists one client in asserting a claim against another client of the firm in the same litigation or transaction. Prof.Cond.R. 1.7(a)(1), cmt. [11]. In addition, a law firm may not advocate for one entity in one matter against an entity the law firm represents in another matter, even when the matters are unrelated. Id. In the question presented, the client landowners are directly opposed to the agency due to its zoning variance request. However, the board, not the agency, is the firm’s client. While the board is supportive of the agency’s zoning variance request it is not a real party in interest to the matter because it is not seeking the zoning variance. Consequently, the board’s interest in the outcome of the matter cannot be reasonably viewed as directly adverse to the client landowners under Prof.Cond.R. 1.7(a)(1).

Material limitation conflict

Absent direct adversity, the law firm must next determine if a conflict may arise due to a substantial risk that its lawyers’ ability to consider, recommend, or carry out an appropriate course of action for a client will be materially limited by the firm’s responsibilities to another client, a former client, a third person, or by the firm’s own interests. Prof.Cond.R. 1.7(a)(2). A material limitation conflict arises when there are disparate interests between two current clients that will materially interfere with the
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lawyer’s independent professional judgment in representing either client. Prof.Cond.R. 1.7, cmt.[14].

Based on the facts presented, a material limitation conflict is not immediately apparent since the law firm’s provision of legal services to the board and its representation of the landowners are wholly separate and unrelated. In addition, the law firm represents the board on an as needed basis under a one-year contract, but has not been asked to advise the board on the agency’s variance request.
Upon closer examination, however, it would be reasonable to conclude that the board’s overall interest in supporting the agency’s zoning variance may compromise the firm’s representation of the landowners opposing the variance. More specifically, the law firm’s ability to carry out the appropriate course of action or pursue other legal alternatives on behalf of the landowners may be materially limited by the overall interests of the board concerning the matter and the firm’s duty of loyalty to, and its inherent financial interest in maintaining its standing client-lawyer relationship with, the board. Based on these factors, the Board concludes that there exists a substantial risk that the representation of the landowners will be materially limited by the disparate interests of the two current clients and the law firm’s duty of loyalty to the board. Consequently, Prof.Cond.R. 1.7(a)(2) requires the law firm to withdraw from the representation of one of the clients or pursue a waiver of conflict of interest from both clients to continue the representation.

Amelioration of conflict of interest

When a material limitation conflict exits under Prof.Cond.R. 1.7(a)(2), Prof.Cond.R. 1.7(b) permits the continued representation of both clients under certain conditions. The assigned lawyers in the law firm may continue representation if (1) the lawyers are able to provide competent and diligent representation to the client, (2) the clients give informed consent, confirmed in writing, and (3) the representation is not otherwise prohibited by law and does not involve the assertion of a claim by one client against another in the same proceeding. Prof. Cond. R. 1.7(b)(1)-(3). Under the facts presented, the Board concludes that concurrent representation is not prohibited by law, but that informed written consent from both clients would be required in order for the law firm to advocate on behalf of the landowners against the zoning variance requested by the agency. Absent the required waiver from both clients, the law firm must withdraw from the representation of one client. Additionally, screening of the lawyers assigned to each client as a method to continue the concurrent representation is not permissible as
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the conflicts arising from the representation by each lawyer are imputed to the rest of the law firm. Prof.Cond.R. 1.10(a).

CONCLUSION: A law firm’s representation of multiple clients in separate and unrelated matters must be analyzed to determine if a potential conflict of interest exists. In some situations, the overall interests of each client in the outcome of the same matter, and firm’s duty of loyalty and financial interest in maintaining a client-lawyer relationship with the board, create a substantial risk that the firm’s representation of the one client may be compromised by interfering with the firm’s lawyers’ independent professional judgment. The conflict may be ameliorated if the law firm is able to obtain informed written consent from both clients to the representation. Absent consent, the law firm must withdraw from representation of one client.