When two of a firm's current clients sue each other, can the firm drop one and represent the other in the dispute?

Plain-English summary

Opinion E-83-9 addressed a firm (X) that represented client T in a tax matter and client P in a patent application and corporate formation. An employment contract dispute then developed between P and T, with each threatening suit. The question was whether firm X may withdraw from representing T and represent P in the P-versus-T dispute, assuming T had disclosed no confidential information usable to T's disadvantage or P's advantage.

The committee adopted the analysis of ABA Informal Opinion 1495 (1982). It emphasized loyalty as an indispensable element of the lawyer-client relationship (SCR 20.23(1)) and the rule requiring a lawyer to decline employment where independent professional judgment for a client will likely be adversely affected (SCR 20.28(1)), subject to the exception where it is obvious the lawyer can adequately represent each client and each consents after full disclosure (SCR 20.28(3)). The committee read these provisions as clearly prohibiting a lawyer from representing one client in litigation against a simultaneously represented client without, at least, both clients' consent after full and frank disclosure, and even then only where it is "obvious" the lawyer can adequately represent each. These requirements apply even though the matters are unrelated, because the duty of loyalty means the client need not worry about what the lawyer may learn or be subconsciously influenced by. The committee quoted IBM Corp. v. Levin on the adverse effect of adversity toward a client in another matter (citing also Cinema 5 and Grievance Committee v. Rottner). It concluded firm X is prohibited from representing either P or T in the employment dispute unless the clients consent, and is obligated to complete its representation of both in the original, entirely unrelated matters.

Currency note

This opinion was issued in 1983, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update), and it applies the former Code (SCR 20.23, 20.28). Concurrent conflicts of interest are now governed by SCR 20:1.7 / Model Rule 1.7. 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 Treat this page as historical context, not current guidance.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: Could the firm drop one current client to sue them on behalf of another?

A: No, not without consent. The committee held a firm may not represent one current client against another simultaneously represented client without both clients' consent after full and frank disclosure.

Q: Did it matter that the two original matters were unrelated to the dispute?

A: No. The committee said the requirements apply even though the matters are unrelated, because the duty of loyalty is owed across the whole relationship.

Q: What happened to the original matters?

A: The committee held the firm remained obligated to complete its representation of both clients in the original, unrelated matters for which it was retained.

Background and rules framework

The opinion interpreted the former Code's loyalty and conflict provisions: SCR 20.23(1) (loyalty), SCR 20.28(1) (declining employment likely to adversely affect independent judgment), and SCR 20.28(3) (consent exception). Concurrent conflicts are now governed by SCR 20:1.7 / Model Rule 1.7.

Citations and references

Rules of Professional Conduct:

• Wis. SCR 20.23(1), 20.28(1), 20.28(3) / Model Rule 1.7 (loyalty; declining adverse representation; consent) (former Code provisions)

Cases:

• IBM Corp. v. Levin, 579 F.2d 271 (3d Cir. 1978), adverse effect of suing a current client
• Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976), adversity to a current client
• Grievance Committee v. Rottner, 152 Conn. 59, 203 A.2d 82 (1964), suing a current client

Other opinions cited:

• ABA Informal Opinion 1495 (1982): adversity between two current clients

See also

• WI Ethics Op. E-85-3: Multiple Representation in Medical Malpractice Actions
• WI Ethics Op. E-92-1: Representing a Plaintiff and a Subrogated Insurer
• WI Ethics Op. E-84-19: Representing Insurer and Insured With a Punitive Damages Claim

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-83-9.pdf