Can a South Carolina lawyer represent a homeowners association when the lawyer's spouse has a contract to manage that association?

Plain-English summary

A lawyer represented a non-profit homeowners association. The lawyer's husband owned the property management company under contract to manage that same association. The marital relationship had been disclosed to and known by the board when the association first retained the lawyer's prior firm, and again when the board moved its work to the lawyer's new firm. Several homeowners questioned whether this created a conflict of interest.

The committee noted at the outset that the lawyer appeared to represent only the corporate client, the association, and not the individual homeowners. It applied Rule 1.7(b), under which a lawyer may not represent a client if the representation may be materially limited by the lawyer's own interests, unless the lawyer reasonably believes the representation will not be adversely affected and the client consents after consultation.

The committee concluded that although conflicts might later arise, none yet existed, so the lawyer could reasonably believe the marriage would not adversely affect the representation. Assuming full disclosure of the marriage and any potential problems was made to the board and the board consented, the representation appeared proper. The committee added that consent should preferably be obtained in writing, and that if an actual conflict later arose or consent were withdrawn, withdrawal might be required.

Currency note

This opinion was issued in 1996, before the South Carolina Bar's adoption of the 2005 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer represent an organization that the lawyer's spouse is paid to manage?

A: The committee concluded it appeared proper where no actual conflict yet existed, the lawyer could reasonably believe the representation would not be adversely affected, and the client's board consented after full disclosure.

Q: Did consent need to be in writing?

A: The committee said consent should preferably be obtained in writing from the client.

Q: What happens if a real conflict develops later?

A: The committee stated that if an actual conflict later arose, or if consent were withdrawn, the lawyer's withdrawal might be necessitated.

Background and rules framework

The opinion applied Rule 1.7(b), the South Carolina counterpart to Model Rule 1.7, which addresses representation that may be materially limited by the lawyer's responsibilities to a third person or by the lawyer's own interests, permitting it only where the lawyer reasonably believes the representation will not be adversely affected and the client consents after consultation.

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 1.7(b) / Model Rule 1.7: conflicts that may materially limit a representation.

See also

• SC Bar Ethics Op. 96-21: Conservator as Lawyer
• SC Bar Ethics Op. 96-15: Legal Services Referral and Conflicts

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-96-02/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 96-02

Lawyer L represents a non-profit corporation that is a homeowner's association. L's husband owns a property management company that has contracted to manage the association. The Board of Directors retained Lawyer L's prior firm to represent the Association. Lawyer L was then an associate with the law firm and performed all of the legal work for the Association. L's marriage to the owner of the management company was known to the Board at the time. L has now become a shareholder in a new law firm, and the Board of Directors has elected to use L's new firm as counsel for the Association. The retainer was entered into after disclosure of the marital relationship to the Board and with Board approval. Several homeowners have raised questions about a potential conflict of interest.

Question:
May a lawyer represent a corporate homeowner's association if the spouse of the lawyer is under contract to manage the client?

Summary:
Although a conflict between the personal interests of the lawyer and the client could later arise, there is no existing actual conflict, and it appears reasonable for the lawyer to believe that the representation will not be affected adversely by the lawyer's own interests. Thus, the representation appears proper, provided that the client has been adequately informed of any potential conflict and has consented to the representation.

Opinion:
We note at the outset that the lawyer appears to represent only the corporate client and not the individual homeowners. Rule 1.7(b) provides that a lawyer may not represent a client if the representation "may be materially limited...by the lawyer's own interests, unless the lawyer "reasonably believes the representation will not be adversely affected" and the client consents after consultation. Although the situation described is one in which conflicts might arise that could materially affect the representation, no such conflict yet exists. Under these circumstances, the lawyer could reasonably believe that the representation will not be adversely affected by her marriage to the owner of the management association. Assuming that full disclosure of the marriage and of any potential problems stemming from that relationship was made to the Board of the client and the Board consented, the representation then appears proper. We note that the consent should preferably be obtained in writing from the client. If an actual conflict were later to arise or if the consent were withdrawn, then the lawyer's withdrawal may be necessitated.