Is it ethical for a North Dakota lawyer to practice collaborative law, where the lawyer agrees to withdraw if the parties cannot settle and litigation becomes necessary?

Plain-English summary

The committee was asked whether it is ethical to practice collaborative law in North Dakota. In a collaborative law process, each lawyer advises the client about the advantages and disadvantages of a limited-scope representation, and the client gives informed consent before the lawyer agrees with opposing counsel not to use formal discovery and not to represent the client in adversarial litigation. If the process fails, the collaborative lawyer must withdraw and the parties retain new counsel for trial.

The committee adopted the reasoning of ABA Formal Opinion 07-447, which treats collaborative law and its four-way agreement as a permissible limited-scope representation under Rule 1.2(c). Rule 1.2(c) lets a lawyer limit the scope of a representation if the limitation is reasonable and the client gives informed consent. The committee noted that nothing in Rule 1.2 or its comments makes limiting a representation to a collaborative settlement effort per se unreasonable, and that informed consent under Rule 1.0(e) and Rule 1.4(b) requires the lawyer to explain the process, its risks and alternatives, and the consequence that the lawyer must withdraw if the collaboration does not produce a settlement.

On the conflict question, the committee followed ABA Opinion 07-447 in rejecting the argument that collaborative law creates a non-waivable conflict under Rule 1.7(a)(2). It reasoned that when a client has given informed consent to a representation limited to collaborative negotiation, the lawyer's agreement to withdraw if the collaboration fails does not materially limit the representation; it is consistent with the client's limited goals, so no conflict arises between lawyer and client. The committee expressly found the contrary Colorado Formal Ethics Opinion 115, which held the disqualification agreement an impermissible conflict under that state's Rule 1.7(b), less persuasive, and adopted the ABA's position permitting collaborative law subject to the limitations stated in Opinion 07-447.

In practice

This opinion, approved July 31, 2012, applies North Dakota Rules of Professional Conduct 1.2(c) and 1.7 as they stood at that time. The committee held that collaborative law is ethically permissible in North Dakota as a limited-scope representation under Rule 1.2(c), provided the client gives informed consent after the lawyer explains the process, its advantages and disadvantages, the available alternatives, and the requirement that the lawyer withdraw if settlement fails and litigation is needed. The committee held that, because the representation is limited by the client's informed consent, the lawyer's agreement to withdraw does not materially limit the representation and so does not create a non-waivable conflict under Rule 1.7(a)(2). The committee adopted ABA Formal Opinion 07-447 and declined to follow Colorado Formal Opinion 115.

Common questions

Q: Is collaborative law allowed in North Dakota?

A: Yes. The committee concluded collaborative law is ethically permissible as a limited-scope representation under Rule 1.2(c), subject to the limitations described in ABA Formal Opinion 07-447.

Q: Does the lawyer's agreement to withdraw if the case doesn't settle create a conflict of interest?

A: No, the committee held. Because the client has given informed consent to a representation limited to collaborative settlement, the agreement to withdraw is consistent with the client's limited goals and does not materially limit the representation under Rule 1.7(a)(2).

Q: What does the lawyer have to tell the client to get informed consent?

A: Under Rules 1.0(e) and 1.4(b), the lawyer must explain the rules or contractual terms of the collaborative process, its advantages and disadvantages, the reasonably available alternatives, and that the lawyer must withdraw and the client must retain new counsel if the collaboration does not produce a settlement.

Q: Did North Dakota follow Colorado's view that collaborative law is an impermissible conflict?

A: No. The committee found Colorado Formal Ethics Opinion 115 less persuasive and instead adopted ABA Formal Opinion 07-447, which permits collaborative law as a limited-scope representation.

Background and rules framework

The opinion interprets North Dakota Rule of Professional Conduct 1.2(c) (Model Rule 1.2, limiting the scope of representation), Rule 1.7(a)(2) and (b) (Model Rule 1.7, conflicts created by a lawyer's responsibilities to a third person or personal interest, and the conditions for waiver), Rule 1.0(e) (informed consent), and Rule 1.4(b) (communication sufficient for informed decisions). It notes that other states have evaluated collaborative law under Rules 1.2, 1.16, and 5.6 and found it acceptable.

The opinion is issued under North Dakota Rule for Lawyer Discipline 1.2(B), the safe-harbor provision protecting good-faith reliance on a written ethics-committee opinion.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.2 / N.D.R. Prof. Conduct 1.2(c) (limited-scope representation)
• Model Rule 1.7 / N.D.R. Prof. Conduct 1.7 (conflicts of interest; current clients)
• Model Rule 1.0 / N.D.R. Prof. Conduct 1.0(e) (informed consent)
• Model Rule 1.4 / N.D.R. Prof. Conduct 1.4(b) (communication)
• Model Rule 5.6 (restrictions on the right to practice), referenced as a rule other states applied
• N.D.R. Lawyer Discipline 1.2(B) (safe harbor for reliance on a committee opinion)

Other opinions cited:

• ABA Formal Op. 07-447 (2007): collaborative law as a permissible limited-scope representation (adopted)
• Colorado Formal Ethics Op. 115: collaborative law disqualification agreement as an impermissible conflict (found less persuasive)

See also

• ABA Formal Op. 07-447: Collaborative Law Practice
• CBA Formal Op. 115: Collaborative and Cooperative Law
• Maine Ethics Op. 208: Collaborative Family Law

Source

• Landing page: https://www.sband.org/page/ethics_opinions
• Original PDF: https://cdn.ymaws.com/www.sband.org/resource/resmgr/docs/for_lawyers/opinion_12-01.pdf

Original opinion text

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

STATE BAR ASSOCIATION OF NORTH DAKOTA
ETHICS COMMITTEE

Opinion No 12-01

The SBAND Ethics Committee has been asked if it is ethical to engage in the practice of
collaborative law in the state of North Dakota. Collaborative law is a process in which
the collaborative lawyers adequately advise their respective clients of the advantages and
disadvantages of limited scope of representation underlying the collaborative law
process, and to which each client must give informed consent before their lawyer agrees
with opposing counsel to not utilize the formal discovery process and not represent their
clients in adversarial litigation.

Supporting the permissibility of the collaborative law process is ABA Opinion 07-447,
which says the “collaborative law process and the provisions of the four-way agreement
represent a permissible limited scope representation under model Rule 1.2, with the
concomitant duties of competence, diligence, and communication”.

Rule 1.2(c) permits a lawyer to limit the scope of a representation so long as the
limitation is reasonable under the circumstances and the client gives informed
consent. Nothing in the Rule or its Comment suggest that limiting a representation to
a collaborative effort to reach a settlement is per se unreasonable. On the contrary,
Comment [6] provides that “[a] limited representation may be appropriate because
the client has limited objectives for the representation. In addition, the terms upon
which representation is undertaken may exclude specific means that might otherwise
be used to accomplish the client’s objectives.” Obtaining the client’s informed
consent requires that the lawyer communicate adequate information and explanation
about the material risks of and reasonably available alternatives to the limited
representation. Rule 1.0(e). The lawyer must provide adequate information about the
rules or contractual terms governing the collaborative process, its advantages and
disadvantages, and the alternatives. The lawyer also must assure that the client
understands that, if the collaborative law procedure does not result in settlement of
the dispute and litigation is the only recourse, the collaborative lawyer must withdraw
and the parties must retain new lawyers to prepare the matter for trial. See also Rule
1.4(b), which requires that a lawyer “explain a matter to the extent reasonably
necessary to permit the client to make informed decisions regarding the
representation.”

ABA Opinion 07-447 rejects “the suggestion that the collaborative law practice sets up a
non-waivable conflict under Rule 1.7(a)(2)”.

A conflict exists between a lawyer and her own client under Rule 1.7(a)(2) “if there is

a significant risk that the representation [of the client] will be materially limited by the

lawyer’s responsibilities to ... a third person or by a personal interest of the lawyer.”
A self-interest conflict can be resolved if the client gives informed consent,
confirmed in writing, but a lawyer may not seek the client’s informed consent unless
the lawyer “reasonably believes that [she] will be able to provide competent and
diligent representation” to the client. Rule 1.7(b)(1) & Rule 1.7(b)(4). According to
Comment [1] to Rule 1.7, “[l]oyalty and independent judgment are essential elements
in the lawyer’s relationship to a client.” As explained more fully in Comment [8] to
that Rule, “a conflict exists if there is a significant risk that a lawyer’s ability to
consider, recommend or carry out an appropriate course of action for the client will
be materially limited by the lawyer’s other responsibilities or interests... The
conflict in effect forecloses alternatives that would otherwise be available to the
client.”

On the issue of consentability, Rule 1.7 Comment [15] is instructive. It
provides that “[c]onsentability is typically determined by considering whether the
interests of the clients will be adequately protected if the clients are permitted to give
their informed consent to representation burdened by a conflict of interest. Thus,
under paragraph (b)(1), representation is prohibited in the circumstances the lawyer
cannot reasonably conclude that the lawyer will be able to provide competent and
diligent representation.” Responsibilities to third parties constitute conflicts with
one’s own client only if there is a significant risk that those responsibilities will
materially limit the lawyer’s representation of the client. It has been suggested that a
lawyer’s agreement to withdraw is essentially an agreement by the lawyer to impair
her ability to represent the client. We disagree, because we view participation in the
collaborative process as a limited scope representation. When a client has given
informed consent to a representation limited to collaborative negotiation toward
settlement, the lawyer’s agreement to withdraw if the collaboration fails is not an
agreement that impairs her ability to represent the client, but rather is consistent with
the client’s limited goals for the representation. A client’s agreement to a limited
scope representation does not exempt the lawyer from the duties of competence and
diligence, notwithstanding that the contours of the requisite competence and
diligence are limited in accordance with the overall scope of the representation. Thus,
there is no basis to conclude that the lawyer’s representation of the client will be
materially limited by the lawyer’s obligation to withdraw if settlement cannot be
accomplished. In the absence of a significant risk of such a material limitation, no
conflict arises between the lawyer and her client under Rule 1.7(a)(2). Stated
differently, there is no foreclosing of alternatives, i.e., consideration and pursuit of
litigation, otherwise available to the client because the client has specifically limited
the scope of the lawyer’s representation to the collaborative negotiation of a
settlement.

Contrary authority of Colorado Formal Ethics Opinion 115 holds that the collaborative
law agreement between the parties and their attorneys violates that state’s Professional
Rule of Conduct 1.7(b), which bars a lawyer from representing a client if the
representation is “materially limited by the lawyer’s responsibilities to a third person.”
The Colorado opinion says the agreement creates an impermissible conflict by impairing
the lawyer’s independent judgment about the need for litigation if the parties fail to
resolve their dispute. The opinion states “a potential conflict under Rule 1.7 is not
ethically reconciled simply because another lawyer can represent the client if the conflict
materializes. . . . The disqualification agreement invariably interferes with such

independent professional judgment in considering alternatives and forecloses courses of
action for the client and the collaborative law practitioner... .”

The ABA expressly rejected this position, stating the “responsibility to a third party”
created by the collaborative agreement, namely opposing counsel, does not create a
conflict of interest, and the client’s informed consent can ethically be obtained. Other
states have evaluated the collaborative law process under Rule 1.2, Rule 1.16, and Rule
5.6 and found collaborative law to be ethically acceptable. Some states have specific
rules for the practice of collaborative law and treat collaborative law as limited scope
representation. Colorado itself now has a Collaborative Law Task Force.

While concerned about the collaborative law process’s potential for abuse and the
additional legal fees it may require a client to incur in matters concluded through
litigation; the Ethics Committee of the State Bar Association of North Dakota finds the
reasoning of Colorado Formal Ethics Opinion 115 less persuasive, and adopts the
position of the American Bar Association Opinion 07-447 permitting the practice of
collaborative law subject to the limitations stated in the reasoning of ABA Opinion 07-447.

This opinion is provided pursuant to rule 1.2(b), North Dakota Rules for Lawyer
Discipline, which provides that a lawyer who acts in good faith and in reasonable reliance
upon a written opinion or advisory letter of the ethics committee of the association is not
subject to sanction for violation of the North Dakota Rules of Professional Conduct as to
the conduct that is the subject of the opinion or advisory letter.

This opinion was drafted by Robin Gordon and approved by the Ethics
Committee on July 31, 2012.

Dann E. Greenwood, Chair