Could Vermont lawyers admit a law firm client into their separate real estate development partnership?
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This page answers the general question as of 1990. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
Lawyers in a firm also owned a real estate development partnership. A law firm client proposed joining that partnership. The lawyers said they had discussed conflicts with the client and that the client would have independent legal counsel for entry into the partnership and later business dealings with it.
The committee said DR 5-104(A) did not apply on the stated facts because the partners did not appear to have differing interests. If interests later differed, the lawyers would need to make clear that they were not representing or protecting the client in partnership matters. The opinion said the lawyers could continue representing the client in unrelated legal matters if they did not represent the client on matters affecting the partnership.
The committee also discussed EC 5-3’s concern about lawyer influence over a client’s investment decision and about a client mistaking business votes for legal advice. It viewed the proposal as ethically appropriate, especially because the client had independent counsel, while noting that courts closely scrutinized lawyer-client transactions.
Currency note
This opinion was issued in 1990 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history says the Rules of Professional Conduct replaced the Code and applied to lawyer conduct after September 1, 1999; the court later made comprehensive amendments in 2009. 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 Treat this page as historical context, not current guidance.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.
Common questions
Q: Did the committee bar the client from joining the lawyers’ partnership?
A: No. It found the proposed arrangement ethically appropriate on the stated facts, including no differing interests and independent counsel for the client.
Q: Could the lawyers represent the client in partnership matters?
A: The opinion said they should make clear they were not representing the client in partnership matters and could continue unrelated legal representation if those matters did not affect the partnership.
Q: Why did independent counsel matter?
A: The committee singled out independent counsel for the client’s business transactions as a favorable feature of the proposal.
Background and rules framework
The committee discussed former Code DR 5-104(A) on business dealings with clients and EC 5-3 on a lawyer’s property interests and influence over client investments.
Citations and references
Vermont Code of Professional Responsibility:
- DR 5-104(A), EC 5-3
Cases:
- Spilker v. Hankin, 188 F.2d 35 (D.C. Cir. 1951), scrutiny of lawyer-client dealings
- In re James, 452 A.2d 163 (D.C. 1982), lawyer-client dealings
- Radin v. Opperman, 64 A.D.2d 820, 407 N.Y.S. 303 (1978), lawyer-client dealings
- In re Brown, 262 Or. 180, 497 P.2d 668 (1971), lawyer-client dealings
See also
Source
- Landing page: VBA conflict of interest opinions
- Original PDF: Vermont Advisory Opinion 90-05
- Rules history: Vermont Rules of Professional Conduct, “These rules apply to lawyer conduct after September 1, 1999.”
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