A former customer of my longtime business client called me a few times with general questions and I never billed him for it. Now that customer is disputing money with my client. Did those free calls create a conflict of interest under Rule 1.7?

Plain-English summary

The attorney had represented a local car dealership for a number of years. Several months before the inquiry, one of the dealership's independent salespeople left the dealership; the attorney says he was unaware of the surrounding circumstances until recently. After leaving, the salesperson called the attorney several times to ask general questions about the new car business and about certain franchises for a new type of motor vehicle, and the attorney briefly reviewed a draft franchise agreement with him. Because none of these contacts took much time, the attorney never billed the salesperson. The dealership later received a letter from the salesperson's attorney contesting the amount of money paid to the salesperson upon his termination, and the salesperson's attorney suggested that the earlier conversations created a conflict of interest barring the attorney's continued representation of the dealership in that dispute. The attorney, who states he never discussed the substance of the salesperson's termination with either the dealership or the salesperson, asked whether he could continue representing the dealership.

The panel concluded that the salesperson's consultations with the attorney created an attorney-client relationship, and that the fact the attorney did not charge a fee has no effect on the formation of that relationship, citing Michigan Ethics Opinion CI-1153 and Maine Ethics Opinion 62. Because an attorney-client relationship existed with both the dealership and the salesperson, the panel found that Rule 1.7, "Conflict of Interest: General Rule," was activated. Since the attorney had already indicated he did not believe his relationship with the salesperson would adversely affect his representation of the dealership, the panel took the position that the attorney may properly continue representing the dealership regarding the salesperson's claims if both the salesperson and a representative of the dealership consent after consultation.

Currency note

This opinion was issued in January 1990, after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rule 1.7 as originally adopted. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.

Common questions

Q: Can a free phone consultation create an attorney-client relationship even if I never send a bill?

A: Yes. The panel held that the salesperson's consultations with the attorney created an attorney-client relationship, and that the fact the attorney did not charge a fee has no effect on the formation of that relationship, citing Michigan Ethics Opinion CI-1153 and Maine Ethics Opinion 62.

Q: If a conflict like this arises, can I keep representing my original client?

A: Under this opinion, only with consent from both sides. The panel found the attorney may properly continue representing the dealership regarding the salesperson's claims if both the salesperson and a representative of the dealership consent after consultation.

Q: What rule governs a conflict between a longtime client and someone I gave brief unbilled advice to?

A: The opinion applies Rule 1.7, "Conflict of Interest: General Rule," which the panel found was activated because an attorney-client relationship existed with both the dealership and the salesperson.

Background and rules framework

The opinion applies Rule 1.7(a) of the Rhode Island Rules of Professional Conduct, as adopted effective November 15, 1988, which bars a lawyer from representing a client directly adverse to another client unless the lawyer reasonably believes the representation will not adversely affect the relationship with the other client and each client consents after consultation, to an inquiry about representing a longtime business client against a former informal consultation contact.

Citations and references

Rules of Professional Conduct:

• MR 1.7 (conflict of interest: general rule)
• RI RPC 1.7(a), as adopted November 15, 1988

Statutes:

• None cited.

Cases:

• None cited.

Other opinions cited:

• Michigan Ethics Opinion CI-1153 (10/1/86), cited for the proposition that a consultation forms an attorney-client relationship regardless of whether a fee is charged.
• Maine Ethics Opinion 62 (9/4/85), cited for the same proposition.

See also

• RI EAP Op. 89-07: Representing a Wife After a Paid Consultation on Her Husband's Behalf With His Out-of-State Counsel
• ABA Formal Op. 492: Obligations to Prospective Clients: Confidentiality, Conflicts and "Significantly Harmful" Information
• ABA Formal Op. 497: Conflicts Involving Materially Adverse Interests

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%2090-07.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

DIGEST OF ETHICS ADVISORY PANEL
OPINION #90-7, REQUEST #79
Issued January 18, 1990

An attorney seeks Panel advice as to whether he may represent a certain client under the circumstances he describes.

The attorney advises the Panel that he has represented a local car dealership for a number of years. He states that several months ago one of the dealership's independent salespeople left the dealership; the attorney adds that he was unaware of the circumstances until recently. After the salesperson left the dealership he called the attorney several times to ask general questions about the new car business and about certain franchises for a new type of motor vehicle. The attorney states that he briefly reviewed the draft of a franchise agreement with him, but that since none of these contacts took much of his time, he never billed him.

The attorney states that the client dealership recently received a letter from the salesperson's attorney contesting the amount of money paid to the salesperson upon his termination. The attorney states that to the best of his recollection he never discussed the substance of the salesperson's termination either with the client dealership or with the salesperson. The attorney states that the salesperson's attorney has now suggested that a conflict of interest arises from his continued representation of the car dealership in this matter in light of his conversations with the salesperson. The attorney asks whether he may continue to represent the dealership in the dispute with the salesperson.

The salesperson's consultations with the attorney created an attorney-client relationship; the fact that the attorney did not charge the salesperson a fee has no effect on the formation of the relationship. See, e.g. Michigan Ethics Opinion CI-1153 (10/1/86); Maine Ethics Opinion 62 (9/4/85). The fact that there was an attorney-client relationship with both the dealership and the salesperson activates the pertinent provisions of Rule 1.7.

Rule 1.7, entitled "Conflict of Interest: General Rule" provides, in pertinent part:

(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:

(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and

(2) each client consents after consultation.

The attorney has already indicated that he does not feel that his relationship with the salesperson would adversely impact on his representation of the dealership. The Panel takes the position, therefore, that the attorney may properly represent the dealership with regard to the salesperson's claims if both the salesperson and a representative of the dealership consent after consultation.

Ethics Advisory Panel advice is protective in nature. There is no requirement that an attorney abide by a Panel opinion, but if he or she does, he or she is fully protected from any charge of impropriety.