Can a public agency hire a lawyer whose spouse works at a law firm that represents a business the agency regulates?

Plain-English summary

The Public Service Commission asked whether the Code of Professional Responsibility would prevent it from hiring a staff attorney (the wife) whose husband worked at a firm representing a utility the Commission regulated. The husband did not practice utility law, and the wife, if hired, would not work on cases involving that utility, though she would advise the Commission on policy. The Commission asked whether hiring her was permissible, whether the answer changed given her policy-advisory role, and whether it changed given the Commission's high visibility. The Committee answered: No (qualified); Yes (qualified, the answer is the same); and that high visibility did not change the ethical answer, though political appearance concerns were outside the Committee's role.

The opinion framed the analysis as three patterns: spouse versus spouse, spouse versus the other spouse's associate, and associate versus associate. It first noted that the public client (the Commission, representing the public) could not consent to a conflict, citing ABA Formal Opinion 142. On spouse versus spouse, the opinion concluded it would be ethically improper for husband and wife to personally represent opposite sides of the same controversy, given the marital relationship and Rule 5-101(A), reinforced by the appearance concern in Rule 9-101(C), though those facts were not presented here.

On associate versus associate (the situation the first question posed), the opinion concluded the better rule, supported by Blumenfeld v. Borenstein, was that associates of the husband could oppose co-employees of the wife, with no per se disqualification, so the answer was no, with the qualification that both spouses be careful. On the wife's policy-advisory role, the opinion concluded the answer did not change, because New Mexico's Rule 5-105(D) limited vicarious disqualification to conflicts created by Rule 5-105 (multiple clients) and did not reach personal-interest conflicts under Rule 5-101, confidentiality under Canon 4, or appearances under Canon 9. The Committee declined to assume spouses would put personal loyalty over fidelity to clients or share confidences, but noted the answer could change with special facts (for example, a contingent fee giving the wife a financial interest, or a highly confidential, lengthy policy process), and suggested screening devices on both sides. It also discussed two statutes (Section 62-6-3 and the Conflict of Interest Act) bearing on the question.

Currency note

This opinion was issued in 1983, when New Mexico lawyers were governed by the former New Mexico Code of Professional Responsibility, which the State Bar later replaced with the Rules of Professional Conduct; it also predates the State Bar of New Mexico's November 3, 2008 revisions to those Rules (the New Mexico adoption of the ABA Ethics 2000 changes). The Canons and Disciplinary Rules it cites are no longer in force. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a public agency hire a lawyer whose spouse's firm represented a regulated business?

A: The opinion concluded the Code did not prevent it, with qualifications, where only associates of each spouse were on opposite sides. The better rule, it said, rejected per se disqualification, so long as both spouses were careful.

Q: Could the two spouses personally represent opposite sides of the same matter?

A: No. The opinion concluded it would be ethically improper for husband and wife to personally represent opposite sides of the same controversy, given the marital relationship and Rule 5-101(A), reinforced by the appearance-of-impropriety concern in Rule 9-101(C).

Q: Did the public client's inability to consent change the result?

A: The opinion noted that the public client could not waive a conflict by consent, citing ABA Formal Opinion 142, but concluded that no disqualifying conflict existed in the associate-versus-associate pattern presented.

Q: Could the answer change on different facts?

A: Yes. The opinion concluded the answer could change with special factors, such as a contingent fee giving the wife a financial interest in the firm's matter, or a highly confidential and lengthy policy process, and it suggested screening devices on both sides.

Background and rules framework

The opinion interpreted the former New Mexico Code of Professional Responsibility: Rule 5-101(A) (personal-interest conflicts), Rule 5-105(D) (vicarious disqualification, read narrowly to reach only Rule 5-105 conflicts), Rule 9-101(C) and Canon 9 (appearance of impropriety), Canon 4 (confidences), and Canon 5 (independent judgment). It also addressed NMSA 1978, Section 62-6-3 and the Conflict of Interest Act (Sections 10-16-1 through 10-16-15), and drew on ABA Formal Opinions 142, 340, and 342 and out-of-state authority.

Citations and references

Rules of Professional Conduct (former Code):

• Model Code DR 5-101(A) / NM Code Rule 5-101(A) (personal-interest conflicts)
• Model Code DR 5-105(D) / NM Code Rule 5-105(D) (vicarious disqualification)
• Model Code DR 9-101(C) / NM Code Rule 9-101(C) and Canon 9 (appearance of impropriety)
• Model Code Canon 4 (confidences and secrets)

Statutes:

• NMSA 1978, Section 62-6-3 (Commission employees and regulated utilities).
• Conflict of Interest Act, NMSA 1978, Sections 10-16-1 through 10-16-15.

Cases:

• Blumenfeld v. Borenstein, 247 Ga. 406, 276 S.E.2d 607 (1981), no per se disqualification for spouses at firms on opposite sides.

Other opinions cited:

• ABA Formal Opinion 142 (1935); ABA Formal Opinion 340 (1975); ABA Formal Opinion 342 (1975).

See also

• NM Ethics Op. 1983-5: Representation Adverse to a Current or Former Client

Source

• Landing page: https://www.sbnm.org/Leadership/Committees/Ethics-Advisory-Committee/Ethics-Advisory-Opinions
• Original PDF: https://www.sbnm.org/Portals/NMBAR/AboutUs/committees/Ethics/1983/1983-6.pdf

Original opinion text

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

Advisory Opinion 1983-6
The following situation and questions have been presented to the committee:
The Public Service Commission has a staff attorney position available. One of the applicants for the position (wife) is married to an attorney (husband). Husband is employed by a law firm which represents a utility regulated by the Commission. Husband does not practice utility law. Wife, if hired, would not be involved in cases concerning the utility represented by husband's firm.
However, wife's position as a staff attorney would include advising the Commission on policy matters, although the ultimate policy decisions are made by the Commissioners.
The Commission asks:

1. Would the Code of Professional Responsibility prevent the Commission from hiring wife?
2. Is the answer the same considering wife's potential role as advisor on matters of policy?
3. Is the answer the same considering the facts that the Commission is highly visible and that its decisions affect most of the individuals in the state?
   The committee is of the opinion that the answers to these questions are:
4. No, qualified.
5. Yes, qualified.
6. Yes, the answer is the same as a matter of attorneys' professional ethics. However, as a political matter, the appearance of impropriety may cause the Commission to hesitate before hiring wife. It is not the function of this committee to give opinions on such political matters.
   For purposes of analysis, it is helpful to consider four situations where spousal conflict might arise. First, husband and wife might personally represent opposing sides of the same controversy. Second, an associate of husband in a private firm may represent an opponent of a public entity who is personally represented by wife. Third, husband, a private attorney, may represent an opponent of a public entity, who is represented by a co-employee of wife. For purposes of this opinion, the committee considers the second and third situations to be sufficiently comparable to be considered as one. Although there is authority that private firms are treated differently than public employment for conflict of interest purposes, see ABA Committee on Ethics and Professional Responsibility, Formal Opinion No. 342 (1975), this opinion will analyze the propriety of representation by (1) spouse versus spouse, (2) spouse versus associate of other spouse, and (3) spouse's associate versus associate of other spouse.
   GENERAL CONSIDERATIONS:
   In formulating this opinion, the committee is mindful of two facts of life. The first fact is that lawyers are subject to the same human frailties as any other human being. The marital relationship being what it is, the situation of spousal representation of opposing sides of a controversy is fraught with a potential for conflict of interest. The second is that with the increasing number of women enrolling in law school, more lawyers are married to other lawyers. The committee is sensitive to the difficulties encountered by spouses in finding employment in the same community were we to adopt a per se rule of disqualification in all of the four situations given above. See "Note, Legal Ethics-Representation of Differing Interests by Husband and wife: Appearances of Impropriety and Unavoidable Conflicts of Interest?," 52 Denv. L.J. 735 (1975); "Comment, Ethical Concerns of Lawyers Who Are Related by Kinship or Marriage," 60 Ore. L. Rev. 399 (1981); "Recent Developments, Ethical issues Facing Lawyer-Spouses and Their Employers," 34 Vand. L. Rev. 1435 (1981).
   Although there is no specific canon or disciplinary rule covering the subject of a lawyer declining employment when a spouse or other close relative represents the opposing party, a number of canons and rules are pertinent. Canon 4 requires a lawyer to preserve the confidences and secrets of his client; canon 5 requires a lawyer to exercise independent professional judgment on behalf of a client; and canon 9 cautions that a lawyer should avoid even the appearance of professional impropriety. In particular, NMSA 1978, Code of Professional Responsibility R. 5-101(A) (Repl. Pamp. 1982), states:
   Except with the consent of his client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of his client will be or reasonably may be affected by his own financial, business, property or personal interests.
   The committee first wishes to note that there can be no consent here by wife's client. The wife's client is the Public Service Commission which represents the public of the State of New Mexico. Where the public is concerned, there can be no waiver of a conflict of interest by consent. ABA Committee on Professional Ethics and Grievances, Formal Opinion No. 142 (1935).
   SPOUSE VERSUS SPOUSE:
   Notwithstanding the sensitivity of the committee to the difficulties encountered by husband and wife lawyers, the committee believes it would be ethically improper for husband and wife to personally represent opposite sides of the same controversy. Considering the normal incidents of the marital relationship, we believe it is inconceivable for husband and wife to be capable of complying with Rule 5-101(A) in the context of directly antagonistic representation.
   Moreover, we believe that the appearances of impropriety in such a situation looms large. NMSA 1978, Code of Professional Responsibility R. 9-101(C) (Repl. Pamp. 1982) states, "A lawyer shall not state or imply that he is able to influence improperly or upon irrelevant grounds any tribunal, legislative body or public official." We believe the implication of such improper influence would be present in this case were husband to represent the utility in Commission proceedings in which wife participates. We are supported in this view by the following advisory opinions from other jurisdictions: Oregon, opinions of the Committee on Legal Ethics, Opinion No. 281; Oregon, opinions of the Committee on Legal Ethics, Opinion No. 424; Oregon, opinions of the Committee on Legal Ethics, Opinion No. 423; N.Y. State, No. 409 (1975); Colorado Revised opinion No. 52 (1975); Arizona Ethics Committee Opinion No. 73-6. See Florida Bar Professional Ethics Committee Advisory opinion No. 74-49. However, because the facts related by the Public Service Commission do not contemplate this scenario, it will not be discussed further.
   ASSOCIATE VERSUS ASSOCIATE:
   Question 1 posed by the Commission appears to contemplate the fourth analytical situation presented above, i.e., the associate of the husband opposing the co-employee of the wife. While the authorities on this are divided, compare the opinions cited above and ABA Committee on Ethics and Professional Responsibility, Formal Opinion No. 340 (1975); Philadelphia Bar Ass'n Committee on Professional Guidance, opinion No. 61-3; with New Jersey Advisory Committee on Professional Ethics, opinion No. 288, the committee is of the opinion that the better rule is that associates of the husband may represent opponents represented by co-employees of the wife. In light of the oath taken by attorneys, we see no reason to assume that husband and wife attorneys will violate disciplinary rules. Moreover, the appearances of impropriety in this situation is attenuated on both sides of the representation. Of course, both husband and wife in this situation must be particularly careful to observe the suggestions and requirements of Ethical Considerations 4-1, 4-5, 5-1, 5-2, 5-3, 5-7, 5-21, and Disciplinary Rules 4-101, 5-101, and 9-101. we are further reinforced in this opinion by what appears to be the only case addressing this issue. Blumenfeld v. Borenstein, 247 Ga. 406, 276 S.E.2d 607 (1981), held that there is no per se rule of disqualification simply because spouses work at firms representing opposing sides of a controversy. Thus, the committee's answer to question 1 is no, with the qualification that both spouses must be careful.
   SPOUSE VERSUS ASSOCIATE:
   The second question posed by the Commission appears to be a variant of the second and third analytical situations presented above. Here, the wife is taking an active part in representing her client in counseling the Commission on policy matters. Although there may be a question whether advice on policy matters is tantamount to legal representation, this opinion proceeds on the assumption that they are the same. The issue raised is whether there must be vicarious disqualification in this situation. NMSA 1978, Code of Professional Responsibility R. 5-105(D) (Cum. Supp. 1983), provides, "If a lawyer is required to decline employment or to withdraw from employment under R. 5-105, no partner or associate of his or her firm may accept or continue such employment."
   We believe it noteworthy that our Supreme Court has not seen fit to amend D.R. 5-105(D), as it has been amended by the ABA. The amended ABA rule requires a lawyer to decline employment or withdraw from employment if any disciplinary rule requires any lawyer affiliated with him to withdraw. our disciplinary rule limits vicarious disqualification to the very specific conflicts covered by Rule 5-105, i.e., conflicts created by other clients or multiple representation. It does not encompass conflicts created by Rule 5-101, i.e., due to personal interest. Nor does it encompass canon 4 on confidentiality or canon 9 on the appearance of impropriety.
   Although the courts in our State have not read D.R. 5-105(D) in the limited fashion we do, see State v. Hernandez, 22 S.B.B. 951 (Ct. App. 1983), cert. granted, 22 S.S.B. 939; State v. Chambers, 86 N.M. 383, 524 P.2d 999 (Ct. App. 1974), we believe these decisions to be distinguishable from the situation here presented. Both Hernandez and Chambers dealt with actual conflicts of interest due to a lawyer's previous representation of a different client in the same controversy. Here, none of the lawyers actually represent or ever actually represented the opposing client. We do not believe that the mere existence of a spousal relationship would disqualify the wife from giving advice to the Commissioners. This is particularly true inasmuch as it is the Commissioners who make the ultimate decision.
   The basis for our decision is our reluctance to indulge in any assumptions that a spouse will place personal loyalties to his spouse over fidelity to one's client and upholding the standards and integrity of the profession. Further, we will not indulge in the assumption that spouses will relate confidential information to one another. Of course, if there are special factors present in a given case, those would take precedence over our general reluctance to engage in assumptions.
   For example, if husband were a partner in the law firm and if the firm's fee were contingent on the result achieved before the Commission, a different situation would be presented. In such a case, wife would have a financial interest in the matter which would prevent her from giving undivided loyalty to her client. Similarly, if the Commission's decision-making process on policy matters is highly confidential and extends over a long period of time, our willingness to engage in the assumption that wife would not discuss what she does at work with husband would be harder to support. In such a case, it may well be that the Commission could not ethically hire wife.
   In this connection, two statutes should be noted. NMSA 1978, § 62-6-3, precludes Commission employees from making contracts or performing services for regulated utilities. This statute does not seem to apply here. More troublesome is the Conflict of Interest Act, NMSA 1978, §§ 10-16-1 through 10-16-15 (Repl. Pamp. 1983). Section 10-16-4 requires disqualification of a state employee from participating in an official act directly affecting a business in which he has a financial interest. Financial interest, according to § 10-16-2(F), includes an ownership interest or employment by a spouse in a business. In light of the fact that decisions are made by Commissioners, it is doubtful that Commission staff attorneys perform official acts. Even if they do, whether wife is disqualified depends on the effect of the act on the business of the law firm. As stated previously, the nature of the fee agreement or retainer appears to be the paramount concern.
   Thus, the committee's answer to the second question is that the answer does not change because wife has a role in advising the Commission on matters which may affect a client of another attorney in husband's firm. The answer may change, however, depending on the specific facts regarding the client's agreement with the firm. The committee suggests that one way to minimize the chances of vicarious disqualification is to utilize "Chinese Wall" screening devices on both sides of the representation. See "Recent Developments," 34 Vand. L. Rev. 1435, supra.