My firm is the Town Solicitor and also counsel to a municipal agency. Is representing both a conflict of interest?

Plain-English summary

The inquiring attorney's law firm was recently appointed Town Solicitor for a municipality and is also legal counsel to a management agency with regulatory functions. As part of those functions, the Agency reviews and makes consistency determinations for certain development projects. At a Town Council meeting, the Council approved a resolution opposing the type of development project the Agency reviews; the inquiring attorney and an associate both recused. The resolution did not mention the Agency and was not forwarded to it.

The panel concluded there is no conflict of interest because the Agency and the Town do not have adverse interests on these facts. Applying Rule 1.7, the panel noted the firm has a lawyer-client relationship with the Town and so may not represent clients adverse to the municipality. But it found the Agency's interest not adverse to the Town or its Council; the Council simply took a position on the type of project the Agency is tasked with reviewing, and in the absence of competing interests there is no concurrent conflict.

The panel emphasized, as it has before, that whether a conflict exists is determined case by case. While it saw no conflict on the facts presented, it cautioned the inquiring attorney to stay mindful of the possibility of a conflict arising in the future.

In practice

Under this opinion, a firm representing two municipal clients does not have a Rule 1.7 concurrent conflict merely because one client (the Town Council) has taken a policy position touching the subject matter the other client (the Agency) regulates, where the two clients' interests are not actually adverse. The panel grounded the result in the absence of competing interests and stressed that the analysis is fact-specific and revisited case by case, so a future development in which the Town and the Agency take opposing positions could change it.

Common questions

Q: Can one firm serve as both Town Solicitor and counsel to a municipal agency?

A: On these facts, yes. The panel concluded there was no concurrent conflict under Rule 1.7 because the Town and the Agency did not have adverse interests.

Q: Did the Town Council's resolution opposing the project create a conflict with the Agency?

A: No. The panel found the Council simply took a position on the type of project the Agency reviews; that did not make the Agency's interest adverse to the Town, so no concurrent conflict existed.

Q: Is this conclusion permanent?

A: No. The panel emphasized that whether a conflict exists is decided case by case, and cautioned the attorney to remain mindful that a conflict could arise in the future.

Background and rules framework

The opinion applies Rule 1.7 (Model Rule 1.7, conflict of interest: current clients). Paragraph (a) provides that a concurrent conflict exists if the representation of one client will be directly adverse to another, or if there is a significant risk that the representation will be materially limited by the lawyer's responsibilities to another client or a third person. The panel grounded the loyalty principle in Markham Concepts, Inc. v. Hasbro, Inc. and Comment [6], and resolved the inquiry on the threshold question of whether the two clients' interests were adverse.

Citations and references

Rules of Professional Conduct:

• MR 1.7 (conflict of interest: current clients; 1.7(a), 1.7(b); Comment [6])
• RI RPC 1.7

Statutes:

• None cited.

Cases:

• Markham Concepts, Inc. v. Hasbro, Inc., 196 F. Supp. 3d 345 (D.R.I. 2016), Rule 1.7 grounded in the duty of loyalty.

Other opinions cited:

• None cited.

See also

• RI EAP Op. 2023-1: Of-Counsel Town Solicitor and Firm Appearances
• RI EAP Op. 2023-3: Firm May Represent Agency Against an OMA Complaint by a Board Member
• RI EAP Op. 2016-03: Municipal Judge's Firm May Represent the Judge's Son Against the City

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP-2023-4.pdf

Original opinion text

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

Rhode Island Supreme Court
Ethics Advisory Panel Op. 2023-4
Issued July 17, 2023

FACTS

The inquiring attorney's law firm was recently appointed as the Town Solicitor for a municipality ("Town"). The law firm is also legal counsel to a management agency with regulatory functions ("Agency"). As part of its regulatory functions, the Agency reviews and makes consistency determinations for certain development projects. It has recently conducted one such review and anticipates it will be conducting another such review in the future.

At a recent Town Council meeting, the Town Council approved a resolution in opposition to the certain type of development project that the Agency is tasked with reviewing. The inquiring attorney was present at this meeting, along with an associate from his/her law firm and both submitted a recusal form to the clerk and recused from the matter. The inquiring attorney advises that the resolution did not mention the Agency and was not forwarded to the Agency. Rather, it was forwarded to other municipalities and certain elected officials.

ISSUE PRESENTED

The inquiring attorney asks whether his/her law firm's simultaneous representation of the Town and the Agency presents a conflict of interest.

OPINION

It is the Panel's opinion that there is no conflict of interest because, on the facts presented, the Agency and Town do not have adverse interests.

REASONING

Rule 1.7 of the Rules of Professional Conduct entitled "Conflict of Interest: Current Clients" applies. It states:

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:
(1) the representation of one client will be directly adverse to another client; or
(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in writing.

"Rule 1.7 is grounded primarily upon the attorney's duty of loyalty to his or her client." See Markham Concepts, Inc. v. Hasbro, Inc., 196 F. Supp. 3d 345, 349 (D.R.I. 2016) (interpreting Rhode Island Rule of Professional Conduct 1.7). That "[l]oyalty to a current client prohibits undertaking representation directly adverse to that client without that client's informed consent." Rule 1.7 Comment [6].

The inquiring attorney's law firm has a lawyer-client relationship with the Town. Therefore, under Rule 1.7, he/she may not represent clients with interests adverse to the municipality. However, based on the facts described by the inquiring attorney, it is the Panel's opinion that the Agency's interest is not adverse to the Town or its Town Council. The Town Council simply took a position on the type of development project that the Agency is tasked with reviewing. In the absence of competing interests, there is no concurrent conflict of interest.

The Panel emphasizes, as it has done in the past, that whether a conflict of interest exists is determined on a case by case basis. While the Panel sees no conflict of interest based on the facts presented, it does caution the inquiring attorney to be mindful of the possibility of such a conflict arising in the future.