Can lawyers who sit on a business-incubator board represent tenants of the incubator, must they abstain from related votes, and can they hand out a directory of other lawyers?

Plain-English summary

Two attorneys were invited to serve on the board of directors of a local "business incubator," a facility set up by county government and a university branch to help small technology businesses form and grow. Tenants of the facility would not be required to use board members for professional services, and one of the attorneys was the only patent attorney in private practice in the area. The inquiry asked whether, with full disclosure and consent, the attorneys could represent tenants; whether they should abstain from voting on matters concerning their clients; and whether it would be appropriate for the patent attorney to give tenants a list of South Carolina patent attorneys.

The committee found the inquiry presented no ethical issue specifically addressed by the Rules beyond the general conflicts rule, Rule 1.7. It observed that many attorneys serve on boards and are then asked to represent people the organization serves, and concluded that, with full disclosure of potential conflicts and care not to compromise existing clients, the attorneys were not prohibited from representing incubator tenants merely because they sat on the board.

On abstention, the committee said it is a matter governed by board policy and bylaws, while noting that an attorney should notify the board when the attorney's decision may be affected by representation of a client. On the directory question, the committee said it knew of no circumstances where it would be inappropriate to supply potential clients with a directory of other attorneys who could represent them.

Currency note

This opinion was issued in 1998, 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 Treat this page as historical context, not current guidance.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 on an organization's board represent people the organization serves?

A: The committee concluded yes, with full disclosure of potential conflicts and care not to compromise existing clients; board membership alone does not bar representing incubator tenants under Rule 1.7.

Q: Must the lawyer-board members abstain from votes affecting their clients?

A: The committee said abstention is governed by board policy and bylaws, but the attorney should notify the board when a decision may be affected by the attorney's representation of a client.

Q: Can a lawyer give tenants a list of other attorneys?

A: The committee knew of no circumstances making it inappropriate to supply potential clients a directory of other attorneys who could represent them.

Background and rules framework

The opinion applied South Carolina RPC 1.7 (conflicts of interest), corresponding to Model Rule 1.7, to a lawyer's dual role as a director of an organization and as potential counsel to those the organization serves. It treated board voting and abstention as matters of board governance rather than the Rules of Professional Conduct.

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 1.7 / Model Rule 1.7: conflicts of interest; disclosure and consent.

See also

• SC Bar Ethics Op. 02-04: Lawyer at a Nonlawyer Nonprofit
• SC Bar Ethics Op. 00-07: Lawyer-Trustee Conflict

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-98-05/

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 98-05

Attorneys A and B have been invited to serve on the board of directors of a local "business incubator" facility that is being set up by the county government and the local branch of a university to create a positive environment for the formation and growth of small, technology-oriented businesses. Tenants of the facility would not be obliged to obtain professional services from board members. Attorney B is the only patent attorney in private practice in the county or adjacent counties.

QUESTIONS:

1. With full disclosure of potential conflicts of interest and consent of all involved, can Attorneys A and B represent clients who are incubator tenants?
2. Should Attorneys A and B abstain from voting on all matters that directly concern their clients?
3. Would it be appropriate for Attorney B to provide a list of South Carolina patent attorneys for use by incubator tenants?

SUMMARY:

1. Although the facts presented in the inquiry have not set forth all potential conflicts for this described situation, it does not appear to present any inherent conflicts that could not be waived by all parties.
2. Abstention should be governed by board policy and bylaws. The attorneys may need to abstain if their duties as board members will conflict with their duties as attorneys for the client.
3. The Committee knows of no circumstances where it would be inappropriate to supply potential clients with a directory of other attorneys who could represent them.

DISCUSSION:
This inquiry does not present any ethical issues specifically addressed by the Rules of Professional Conduct. An attorney should comply with Rule 1.7 regarding conflicts of interest.
Many attorneys serve as board members for a variety of organizations. As a consequence, they are often asked to represent people served by the organization. With full disclosure of potential conflicts and with care not to compromise representation of existing clients, Attorneys A and B are not prohibited from representing tenants of a business incubator just because those attorneys serve on the incubator's board of directors.
Abstention from voting is a matter governed by board policy and bylaws. Of course, an attorney should notify the board when the attorney's decision may be affected by his or her representation of a client.
The Committee knows of no circumstances where it would be inappropriate to supply potential clients with a directory of other attorneys who could represent them.