Can a lawyer who formed and represented a closely held corporation or partnership take a matter adverse to its owner or in a partnership dissolution?

Plain-English summary

The committee addressed two related situations where a lawyer who formed and represented a business entity later wants to act against an insider.

In the first, an attorney had formed and had ongoing representation of a professional services corporation. The committee concluded the attorney cannot represent other clients in a dispute with the owner of that corporation, even though the owner has now retained separate counsel. The committee tied this to the facts as presented: the corporation actually had only one shareholder, so that shareholder could conclude there was an attorney-client relationship between him and the lawyer, rather than only with a separate corporate entity.

In the second, the committee concluded that a lawyer who has formed and represented a partnership may not represent the remaining partners in a dissolution dispute with a withdrawing partner. It said such conduct would violate RPC 1.6, 1.7, 1.9, and 3.7.

Currency note

This opinion was issued in 1986, before the 2006 revisions to the Washington 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 Treat this page as historical context, not current guidance.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 the lawyer who set up a one-owner corporation later sue that owner for someone else?

A: No. The committee concluded the lawyer cannot represent others in a dispute with the owner, because with a single shareholder the owner could conclude an attorney-client relationship existed with him personally, not just with the corporate entity.

Q: Does it matter that the owner has hired separate counsel for the dispute?

A: No. The committee said the lawyer still cannot take the adverse representation even though the owner has now retained other counsel.

Q: Can the lawyer who represented a partnership take the remaining partners' side against a departing partner?

A: No. The committee concluded a lawyer who formed and represented a partnership may not represent the remaining partners in a dissolution dispute with a withdrawing partner, because it would violate RPC 1.6, 1.7, 1.9, and 3.7.

Background and rules framework

The opinion applies Washington RPC 1.6 (confidentiality), RPC 1.7 (current-client conflicts), RPC 1.9 (duties to former clients), and RPC 3.7 (lawyer as witness), which correspond to Model Rules 1.6, 1.7, 1.9, and 3.7. The analysis turns on identifying the client where a lawyer forms a closely held entity: the committee treated the sole shareholder as someone who could reasonably understand himself to be the client, and it treated the lawyer's role in forming and representing a partnership as foreclosing representation of one faction against another in a dissolution.

Citations and references

Rules of Professional Conduct:

• Washington RPC 1.6 (confidentiality of information), corresponding to Model Rule 1.6.
• Washington RPC 1.7 (current-client conflict of interest), corresponding to Model Rule 1.7.
• Washington RPC 1.9 (duties to former clients), corresponding to Model Rule 1.9.
• Washington RPC 3.7 (lawyer as witness), corresponding to Model Rule 3.7.

See also

• ABA Formal Op. 91-361: representation of a partnership
• ABA Formal Op. 95-390: conflicts in the corporate family context
• WSBA Ethics Op. 950: representation adverse to a former client in unrelated litigation

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=68

Original opinion text

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

Advisory Opinion: 957
Year Issued: 1986
RPC(s): RPC 1.6; 1.7; 1.9; 3.7
Subject: Conflict of interest; representation adverse to professional services corporation or partnership where lawyer formed corporation or partnership

The Committee was of the opinion that an attorney who has formed and who has had ongoing representation of a professional services corporation cannot represent other clients in a dispute with the owner of the professional services corporation, even though the owner has now retained other counsel to represent him in the dispute. The Committee based this opinion upon the facts as you presented them, which indicated that the professional services corporation actually only had one shareholder, and therefore the shareholder could conclude that there was an attorney-client relationship between him and the lawyer, rather than with a separate corporate entity. The Committee was further of the opinion that a lawyer who has formed and has represented a partnership may not represent remaining partners in a dissolution dispute with a withdrawing partner, because such conduct would violate RPC 1.6, 1.7, 1.9, and 3.7.