Ethics Opinon 1974-13

July 23, 1974

SUBJECT: LEGAL ETHICS, UNLAWFUL PRACTICE, ATTORNEY FOR CORPORATION VS. FORMER CLIENT INCORPORATER

I
QUESTION PRESENTED

May an attorney who represented "A" and "B" solely for the purpose of forming their corporation continue to represent the corporation in a dispute the corporation has against "B" after "B" has disassociated himself from the corporation? For further clarification, the attorney indicated to both "A" and "B" at the outset that in the event of a dispute, he would continue to represent the corporation and this was orally agreed to by both "A" and "B". "B" now does not wish the attorney to represent the Corporation against him.

II
SUMMARY

No. The attorney may not represent the corporation in the dispute the corporation has with his former client where consent is no longer given.

III
STATUTES AND CANONS

Rule 5 of the Rules of Professional Conduct of the State Bar of California, and Canons 6 and 37 of the Canons of Professional Ethics of the American Bar Association preclude an attorney from accepting employment adversely affecting any interest of the present or former client with respect to which confidence has been reposed, unless express consent is given after a full disclosure of the facts.

IV
INFORMAL OPINIONS

The Committee's Informal Opinion No. 297 states that it may well be the case that information acquired by a lawyer who is representing both parties is so important and personal as to make it unwise and in bad taste for him to subsequently represent one of them against the other, even with the latter's consent.

Informal Opinion No. 885 states that an attorney should not accept litigation against a former client if such action would result in a conflict of interests or disclaimer of confidences of the former client. The attorney should avoid representation of a party in a suit against a former client where there may be the appearance of a conflict of interests or a possible violation of confidences, even though such may not in fact exist. Opinion 885 points out that disclosure of confidential communications is not the sole test in considering the propriety of acceptance of litigation against a former client. Too, aside from the possible acquiescence of the former client and the apparent lack of conflict and disclosure of client confidences, the possibility that other adverse matters might nonetheless develop has been held to be a sufficient basis to require the attorney to decline such employment.

The Committee on Legal Ethics of the Los Angeles County Bar observed in Opinion Number 192 that:

"the language of the Rule in the Canons did not forbid a lawyer's accepting employment adverse to a former client in every instance; the emphasis is upon use or disclosure of confidential information."

V
ANALYSIS

Informal Opinion No. 885 indicates that an attorney should decline the employment where there is the possibility that other matters might develop which could foreseeably involve a conflict of interest. It is the writer's opinion that it would be unethical for the attorney to represent the Corporation against "B".

This opinion is advisory only. It is not binding upon the State Bar, the Board of Governors, its agents or employees.

EDITOR'S NOTE: The Opinion was reviewed July 23, 1976 and the conclusion was found to be valid. Rule 5 has been superseded by Rule 4-101 which now requires that consent be informed and written. There has been a contrary Florida Bar Opinion, 69-32, but it may be distinguishable on the facts. (A further discussion is available at the offices of the San Diego County Bar Association's Legal Ethic's Committee.)

 

Disclaimer: This opinion was issued by the Legal Ethics Committee of the San Diego County Bar Association. It is advisory only and is not binding upon any member of the SDCBA, any other member of the State Bar of California, the State Bar of California or its Board of Governors, or any persons or tribunals charged with regulatory responsibilities. The SDCBA, its officers, directors, agents, and the Legal Ethics Committee members assume no responsibility or liability in rendering this opinion.