After a law firm dissolves, can one of its former partners represent the party adverse to a client the firm had represented under retainer?

Plain-English summary

In 1932, M retained the firm XYZ as his attorneys under a retainer, with the understanding that the firm would handle suits filed against him for an additional fee. Later, M and C came to the firm; C owed M money, M was advancing more, and Y, a member of the firm, drew an assignment of C's 1933 salary as security and told the parties no Oklahoma statute prohibited it. M then sued C for the debt and obtained a restraining order against delivery of C's salary warrant. The firm XYZ dissolved on February 1, 1933, and M retained the two remaining partners, X and Z, to represent him in the suit. C now wanted to retain Y, the third former partner, to represent him in getting his salary warrant and in a contemplated bankruptcy. Y asked whether he could represent C in either matter.

On the first question, the Board concluded it would not be proper for Y to represent C, citing Rule 8: the obligation to represent a client with undivided fidelity and not divulge confidences forbids later accepting employment from others in matters adversely affecting an interest of the client as to which confidence was reposed. On the second question, the Board concluded Y should not represent C in the bankruptcy either, because the validity of the assignment, or the right to claim the accrued salary as exempt, might be at issue, which would put Y in a position of contending against the former client's interest. The Board added that a lawyer should avoid creating a condition that might bring reproach on the profession and should avoid both impropriety and the appearance of impropriety, citing ABA Opinion No. 77.

Currency note

This opinion was issued in 1933, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. Duties to former clients, imputation of a firm's conflicts to its members, and the protection of client confidences are governed today by separate provisions of the current Oklahoma Rules of Professional Conduct. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific principle mentioned here.

Common questions

Q: Could the former partner represent the adverse party in the pending suit?

A: No. The Board concluded Rule 8 forbade it, because the firm had represented the opposing party under retainer and held confidences as to the matter.

Q: What about representing the adverse party in a related bankruptcy?

A: The Board concluded the partner should not, because the validity of the salary assignment or the exemption of the accrued salary could be at issue, again putting him against the former client's interest.

Q: Did it matter that the firm had dissolved before the new representation?

A: No. The Board treated the firm's prior retainer and confidences as continuing to bar the former partner from adverse employment on the same matter, and noted the duty to avoid the appearance of impropriety.

Background and rules framework

The opinion applied Rule 8 of the then-current Oklahoma Rules of Professional Conduct, patterned on the ABA Canons of Professional Ethics. Rule 8 provided that the obligation of undivided fidelity and the duty not to divulge a client's secrets forbid later accepting employment adverse to that client in matters as to which confidence was reposed, and that it is unprofessional to represent conflicting interests. The Board treated the firm's retainer from M as binding its former member Y even after dissolution. It also invoked ABA Opinion No. 77 on avoiding the appearance of impropriety. The opinion notes it was later cited with approval in Opinions 56 and 57.

Citations and references

Rules of Professional Conduct:

• Rule 8 (1929 Oklahoma Rules of Professional Conduct): undivided fidelity, protection of confidences, and the bar on representing conflicting interests.

Other opinions cited:

• ABA Committee on Professional Ethics and Grievances Opinion No. 77: avoiding the appearance of impropriety.

See also

• Okla. Bar Ethics Op. 33: Switching Sides Against a Former School-District Client
• Okla. Bar Ethics Op. 44: Representing Two Sets of Heirs With Conflicting Claims
• Okla. Bar Ethics Op. 28: Representing Both a Bankrupt and Creditors

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-54/

Original opinion text

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

May 26, 1933

1. Attorneys – Unprofessional Employment

Where a firm under retainer from one person represented the latter in reference to a claim against another person, held that it would constitute unprofessional conduct for a member of the firm, after its dissolution, to represent the adverse party either in resisting the claim, or in bankruptcy proceedings.

Opinion

The Board of Governors is in receipt of the following request for an opinion:

"During the year 1932, M. had the firm of XYZ retained as his attorneys, paying a certain amount as a retainer with the understanding that if he had any suits or any suits were filed against him he would make arrangements for an additional fee in the case that firm of XYZ represented him. It was understood against M.

About Nov. 20, 1932, M. and C. who was a that time a county officer of Seminole County, Oklahoma, and who had been elected to succeed himself in the same office, but of course could not qualify for his new term until the first Monday in January, 1933, came to the office of XYZ and stated that C owed M about $500.00 and that M. was advancing $150.00 more to C. on that date and asked Y. a member of the firm to draw an assignment of C's salary for the year 1933 as security for such indebtedness. One of the parties at that time asked the question of Y whether such an assignment would be valid and Y replied that there was no statute in Oklahoma that prohibited such a thing. The assignment was drawn, signed and delivered at that time.

Now M has brought suit for the $650.00 due him and has had a temporary restraining order issued prohibiting the County Commissioners from delivering C's warrant to him for his April salary. The firm of XYZ was dissolved February 1, 1933, and since that time Y has not been associated with said firm except in cases that were pending when the partnership was dissolved.

C desires to retain Y to represent him in the matter of getting possession of his warrant for his April salary. Since the dissolution of the partnership of XYZ, M who brought suit has retained X and Z, the other members of the firm, as his attorneys and they represent him in the case at bar.

The two questions Y desires to ask are:

"(1) Would it be proper for Y to represent C in the suit already filed against him as a defendant?

(2) Would it be proper for Y to represent C in a contemplated bankruptcy proceeding by C."

In response of Inquiry (1):

In the opinion of the Board it would not be proper for Y to represent C. See Rule 8 of the Rules of Professional Conduct, which provides:

"The obligation to represent the client with undivided fidelity and not divulge his secrets or confidence forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has be reposed."

In response to Inquiry (2):

It is the opinion of the Board that Y should not retain C in the contemplated bankruptcy case. It appears that the validity of the assignment from C to M may be involved in the bankruptcy proceeding or the right to have the accrued salary exempted as assets of the bankruptcy estate may be urged in that proceeding. See Rule 8 of the Rules of Professional Conduct, that the retainer was to keep said firm from taking cases which provides that it is unprofessional to represent conflicting interests, i.e. when, in behalf of one client, it becomes the duty of the attorney to contend for that which duty to another client requires him to oppose.

Generally speaking, a member of the bar should refrain from creating a condition, regardless of express prohibition, which might tend to bring reproach upon the profession. That the acceptance of employment from C by Y, under the situation presented, might so tend is obvious. A member of the bar should not only avoid all impropriety, but should likewise avoid the appearance of impropriety. See A. B. A. Opinion No. 77.

Note to Opinion 54. Cited with approval in Opinions 56, 57.