I represented a business owner in incorporating and a related lease. Can I now represent the broker suing that owner for a commission on the same business's sale?

Plain-English summary

The inquiring attorney sought advice on whether the attorney may continue to represent a client, A, a broker engaged to find a buyer for B's business. The attorney's law firm had, several years previously, represented B in the incorporation of B's business but had not maintained a continuing client relationship with B. After B engaged A as a broker, the attorney prepared a lease for B in connection with a potential sale of B's business that was not completed. A presented B an offer from another potential buyer, to which B declined to respond; A claims to have earned its broker's commission and wants the attorney to represent A in collecting that fee from B. The attorney asked whether the attorney may represent A against B.

The panel said Rule 1.9 ("Conflict of Interest: Former Client") governs. Under Rule 1.9, a lawyer who formerly represented a client shall not thereafter (a) represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the former client unless the former client consents after consultation, or (b) use information relating to the representation to the former client's disadvantage except as Rules 1.6 or 3.3 permit or when the information has become generally known. The panel noted that the attorney represented B, the seller, in incorporating the business that is the subject of the A-B agreement, and more recently provided legal services to B while simultaneously representing A in a matter that may be substantially related to A's commission claim.

The panel explained that, as the comments to Rule 1.9 indicate, whether matters are "substantially related" may depend on the facts of the particular transaction and may be a matter of degree. The panel could not conclude from the facts furnished that the matters covered by the attorney's former representation of B are not substantially related to the fee dispute, and stated that if the matters are substantially related, the attorney may not represent A without the consent of B after consultation.

In practice

Under this opinion, an attorney who represented a business seller in incorporating the business and preparing a related lease faces a Rule 1.9 question in later representing a broker seeking a commission from that seller. The opinion does not clear the representation: it holds that on the facts furnished the panel cannot say the matters are not substantially related, and that a substantial relationship would bar the representation absent the former client's consent after consultation.

Common questions

Q: Can I represent the broker against a seller I used to represent?

A: Per the opinion, only if the matters are not substantially related, or the former client consents after consultation; the panel could not conclude the matters are unrelated on the facts given.

Q: How is "substantially related" determined?

A: Per the opinion, and the comments to Rule 1.9, whether matters are substantially related may depend on the facts of the particular transaction and may be a matter of degree.

Q: What if the matters are substantially related?

A: Per the opinion, if the matters are substantially related, the attorney may not represent the broker without the seller's consent after consultation.

Background and rules framework

The opinion applies Rhode Island Rule 1.9 (conflict of interest: former client), corresponding to Model Rule 1.9. The panel read Rule 1.9(a)-(b) as barring adverse representation in a substantially related matter absent the former client's consent, applied the comment's fact-specific substantial-relationship test, and declined to find the matters unrelated on the facts furnished.

Citations and references

Rules of Professional Conduct:

• MR 1.9 (duties to former clients)
• RI RPC 1.9(a), 1.9(b); comments to Rule 1.9

Statutes:

• None cited.

Cases:

• None cited.

Other opinions cited:

• None cited.

See also

• RI EAP Op. 92-51: A Conflict Arising From a Contract the Lawyer Drafted
• RI EAP Op. 92-31: Former-Client Objection Turns on the Substantial-Relationship Test

Currency note

This opinion was issued in 1992 (Opinion 92-68), after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rule 1.9 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, which renumbered and amended Rule 1.9 (duties to former clients). 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.

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%2092-68.pdf

Original opinion text

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

ETHICS ADVISORY PANEL
Opinion 92-68, Request #295
Issued September 16, 1992

An attorney seeks Panel advice regarding the ethical propriety of continuing to represent a client in the following situation. The attorney's client, A, is a broker who has been engaged to find a buyer for B's business. The attorney's law firm had several years previously represented B in the incorporation of B's business but had not maintained a continuing client relationship with B. However, after B had engaged A as a broker, the attorney prepared a lease for B in connection with a potential sale of B's business that was not completed.

A has presented to B an offer from another potential buyer, to which B has declined to respond. A claims that A has earned its broker's commission and desires that the attorney represent A in collecting that fee from B. The attorney asks whether the attorney may represent A against B.

The Panel believes that Rule 1.9 "Conflict of Interest: Former Client" governs this inquiry. The Rule states that:

A lawyer who has formerly represented a client in a matter shall not thereafter:

(a) represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation; or

(b) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client or when the information has become generally known.

In this situation, the attorney represented B, the seller, in connection with the incorporation of the business which is the subject of the agreement between A and B. More recently, the attorney also provided legal services to B while simultaneously representing A in a matter that may be substantially related to A's claim for a commission.

As indicated by the Comments to Rule 1.9, whether these matters are "substantially related" may depend upon the facts of the particular transaction or situation and may be a matter of degree. The Panel cannot conclude from the facts furnished in the inquiry that the matters covered by the attorney's former representation of B are not "substantially related" to the fee dispute. If the matters are substantially related, the attorney may not represent A without the consent of B after consultation.