When a lawyer represents a corporation or partnership with two unrelated owners, does that automatically make the owners the lawyer's clients, or vice versa?
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This page answers the general question as of 2005. Ezel answers yours: whether it's allowed on your facts, under the current Oregon Rules of Professional Conduct, with citations.
Plain-English summary
A corporation has two shareholders, A and B, who are not members of the same family. A partnership has two owners, C and D, who are also not family members. The opinion asks whether representing the corporation automatically means representing A and B, whether representing the partnership automatically means representing C and D, and whether representing one owner automatically means representing the entity. The opinion answers no to all four.
The opinion explains that identifying the client matters for whom the lawyer owes confidentiality (ORS 9.460(3), RPC 1.6) and for whether a current- or former-client conflict exists (RPC 1.7, 1.8, 1.9). Under Oregon RPC 1.13(a), a lawyer retained by an organization represents the organization acting through its authorized constituents, generally not its employees, shareholders, or owners. The modern test for whether a lawyer-client relationship exists is, in essence, the reasonable-expectations test.
The opinion contrasts two Oregon cases: In re Banks, where representing a corporation owned by a single person (or that person and family) constituted representing the person because the person "was the corporation," and In re Kinsey, where the normal entity theory applied because the shareholders were not family members. Both apply the reasonable-expectations test.
On these facts, the opinion concludes representing a corporation or partnership with two unrelated owners does not automatically constitute representing the owners; a contrary rule could require the lawyer to withdraw whenever the owners disagreed. The same is true in reverse: representing one of two unrelated owners is not, as a matter of law, representation of the entity. In either direction, however, a lawyer who reasonably leads the owners or the entity to believe they are clients will be held to have those additional clients. A footnote suggests a lawyer who wants to negate the Banks outcome send the owners a letter stating they are not the lawyer's clients.
In practice
The opinion holds that, under Oregon RPC 1.13(a) as it stood at the time of the opinion, the entity-only default governs entity representation: representing a corporation or partnership with unrelated co-owners does not automatically create attorney-client relationships with the owners, nor does representing an owner automatically create one with the entity. The analysis turns on the reasonable-expectations test, so a lawyer's statements or conduct that lead an owner or entity to reasonably believe they are a client can add clients. Verify the current text of Oregon RPC 1.13 before relying on any specific point.
Common questions
Q: I represent a company with two unrelated owners. Are the owners my clients too?
A: Not automatically. The opinion concludes representing the entity does not by itself make the owners clients, under the entity-only rule of RPC 1.13(a) and the reasonable-expectations test.
Q: If I represent one shareholder, am I now also representing the corporation?
A: Not as a matter of law. The opinion concludes there is no reverse imputation; representing one of two unrelated owners does not by itself make the entity a client.
Q: How could the owners end up being my clients anyway?
A: If you tell them they are individual clients or otherwise reasonably lead them to believe they are. Per the opinion, the lawyer who does so will be held to have those additional clients; a clarifying letter stating they are not clients can negate that.
Background and rules framework
The opinion interprets Oregon RPC 1.13(a) (organization as client) alongside RPC 1.6 (confidentiality) and RPC 1.7 (conflicts), corresponding to Model Rules 1.13, 1.6, and 1.7. It applies the reasonable-expectations test from Oregon case law to decide when entity representation extends to the entity's owners and when it does not.
Citations and references
Rules of Professional Conduct:
- Oregon RPC 1.13(a) / Model Rule 1.13 (organization as client)
- Oregon RPC 1.6 / Model Rule 1.6 (confidentiality)
- Oregon RPC 1.7 / Model Rule 1.7 (conflicts of interest)
Cases:
- In re Banks, 283 Or 459, 584 P2d 284 (1978)
- In re Kinsey, 294 Or 544, 660 P2d 660 (1983)
- In re Weidner, 310 Or 757, 801 P2d 828 (1990)
Other opinions cited:
- OSB Formal Ethics Op. No. 2005-46 (identifying the client)
See also
- OSB Ethics Op. 2005-46: Who Is the Client in a Group Legal Plan
- OSB Ethics Op. 2005-82: Representing Multiple Criminal Defendants
Source
- Landing page: https://www.osbar.org/ethics/toc.html
- Original PDF: https://www.osbar.org/_docs/ethics/2005-85.pdf
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