Ethics Opinon 1996-1

I. Questions Presented.

A. When attorneys who do not work in the same firm or share an office together regularly discuss cases and clients, are these attorneys acting in an "of counsel" status?

B. What must such an attorney do if he or she recognizes that representation of a potential client is adverse to a person or situation which another attorney discussed with him or her?

C. Finally, can one of these attorneys refer cases to the other when the referring attorney has a conflict of interest?

II. Statement of Facts.

Two attorneys practice as sole practitioners in the same building. They do not share space. They regularly discuss with each other cases they are handling, clients they interview and most other aspects of their respective practices. The question concludes, and for purposes of this opinion we assume, that the need to protect client confidentiality has adequately been addressed by omitting the names of clients.

For purposes of question B, above, the attorney seeking a consultation as to a given matter shall be referred to Initiating Attorney, the subject of the consultation being his or her client, "Initial Client." The attorney consulted shall be referred to as "Consulted Attorney," the adverse potential client whose later representation is at issue being "Adverse Client."


III. Summary.

The attorneys in the above-mentioned scenario are not acting in an "of counsel" status, as it does not appear that their relationship is "close, personal, continuous, and regular." It follows that no such status may be disclosed or otherwise suggested. On recognition that a potential client is adverse to a person or matter which was the subject of an informal consultation with another attorney (here, "Initiating Attorney"), the consulted attorney (here "Consulted Attorney") cannot represent that potential client. Clients and matters which have not been the subject of such a consultation may otherwise be referred between the attorneys, even where the impetus of the nonengagement and consequent referral was the disqualifying conflict of interest of the referring attorney.

IV. Discussion.

A. Mere Informal Discussions are Insufficient to Establish "Of Counsel" Status.

An attorney or firm is acting in an "of counsel" capacity only when its relationship to the other attorney or firm is sufficiently "close, personal, continuous, and regular," so as to justify the representation that such a relationship exists. State Bar Opinion No. 1993-129; See also, Rule 1-400(E)(8), California Rules of Professional Conduct. By characterizing an attorney as "of counsel" to a law firm, the law firm is representing to the public and its clients that the attorney's services are regularly available to the firm as co-counsel or consultant, as needed. Bar Association of San Francisco Formal Opinion No. 1985-1; San Diego County Bar Association Opinion 1974-23; Los Angeles County Bar Association Opinion No. 421.

Under the facts above, the attorneys are merely exchanging ideas, strategies and possibly theories. There is no suggestion that either attorney is "regularly available" to the other as co-counsel or consultant; the facts merely suggest this to be an informal, albeit regular occurrence. The facts in no way suggest that the attorney with whom the matter is discussed is associated in any manner whatsoever, much less one which is close, personal, continuous or regular. Therefore, the attorneys are not acting in an "of counsel" relationship with regard to the matters discussed, and disclosure of the relationship is inappropriate.

In addition, the adoption of Rule 1-400 of the California Rules of Professional Conduct rendered communicating the "of counsel" status of an attorney or firm presumptively violative of that Rule unless the "of counsel" attorney or law firm is truly acting in that capacity. In particular, an attorney has presumptively violated Rule 1-400(D) by communicating to the public that an "of counsel" relationship exists unless the relationship is "close, personal, continuous, and regular." Rule 1-400(E) (8), California Rules of Professional Conduct; 1

Therefore, not only could it be burdensome for an attorney in the position defined above to list all attorneys with whom he/she informally "consults" as being "of counsel," it may subject that attorney to discipline by the State Bar for violating Rule 1-400.

B. An Informal Exchange of Information May Result Conflicts of Interest.

An apparent paradox is presented by the facts at issue in the fact that, while the attorneys are "addressing" Initial Client's confidences, enough information was disclosed to permit Consulted Attorney to enable him or her to recognize the adverse interest of Later Client. Notwithstanding the assumption of confidentiality with which we are presented, we elaborate upon this communication to assist in development of our conclusion.

(1) Confidences in the Context of this Informal Exchange.

The duty to preserve the confidences and secrets of one's client is a fundamental obligation in the attorney-client relationship. State Bar Opinion No. 1979-50. Subtleties in communicative content and circumstances, however, are something that California law is not readily equipped to address. Rather, the sweep of the State Bar Act is vast to say the least; Cal. Bus. & Prof. Code §6068(e) provides that it is the duty of an attorney "[t]o maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client." 2

On its face, §6068(e) would seem to prevent disclosure to anyone without the consent of the client. However, notwithstanding the dearth of supporting authority, we believe there is a class of disclosure which is impliedly authorized even in the absence of express client consent, that being disclosure necessary to carry out the representation. 3 That view is somewhat substantiated by the fact that, for purposes of applying the attorney-client privilege, a confidential communication does not lose its status as such when disclosure is reasonably necessary for the accomplishment of the purposes of the confidential consultation. Cal. Evid. Code §912(d).

In their treatise, Professors Geoffrey Hazard and William Hodes have condoned this type of anonymous consultation as an impliedly authorized disclosure. Hazard & Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct, §1.6:205 (2d ed. 1996). 4 Their rationale is that permitting such a consultation ],will probably improve the quality of the representation provided to the lay client, and may later help establish at least that the lawyer acted with care and good faith, should the representation go badly." Ibid. They further observe that "the consulting lawyer must be free of disabling conflicts of interest, and must independently discharge his duty of confidentiality to both the lawyer hiring him and that lawyer's client." Ibid.

Their treatment of informal consultations is particularly useful to our analysis:

The analysis does not change merely because the consultation is an informal one. The [consulted attorney] needs to be given some client information in order to be able to respond properly, and the [consulted attorney] must also abide by normal confidentiality and conflict of interest rules. The consultation and attendant disclosures are authorized, but out of an abundance of caution, [the disclosing attorney] should reveal only such details as are necessary to a full understanding of the legal issues involved. The identity of the client should not be revealed unless it is germane.
Ibid.

(2) No Adverse Representation By Consulted Attorney.

Whether one accepts the fact that the informal exchange between the subject attorneys was in fact, consistent with Initiating Attorney's duty of confidentiality on the one hand, or an acceptable exception to confidentiality as proposed, our conclusion is not affected. To the extent facts are transmitted informally as to Initial Client enabling the Consulted Attorney to discern adversity in the representation of Later Client, we conclude that such information is at least a "secret:" information gathered in the professional relationship which would be embarrassing or would likely be a detriment to the client. See note 2, supra.

The impact of this is that Consulted Attorney finds himself or herself possessing secrets of someone who is his or her client for limited purposes, 5 whether that client be deemed Initiating Attorney, or the client of the initiating Attorney, Initial Client. 6 It follows that representation of the later, adverse client is precluded absent informed written consent, pursuant to Rule 3-310(c)(3), as an interest adverse to the client, or Rule 3310(e), as an interest implicating confidential information of a client or former client material to the representation.

It follows that while informal consultations may aid attorneys in the services, which they provide to their clients, they should be handled with great care. Consulted Attorney must understand that, not only is a benefit being bestowed upon Initiating Attorney, but a burden is being assumed as well, that being the possible preclusion from adverse employment. Indeed, absent conflict evaluation in advance of such consultation, one might envision a conflict of interest with an existing, rather than a prospective client, which may thrust Consulted Attorney in the position of being foreclosed from further employment on either side of the dispute.

C. Conflicts Are Not Otherwise Shared.

The Committee's conclusion, that Consulted Attorney's future representation of Later Client is burdened by conflicting interests, is isolated. Aside from the client and/or matter which is the subject of the consultation, the facts of this question do not suggest any other grounds in our view which would give rise to general disqualification of Consulted Attorney based upon the conflicts of interests of Initiating Attorney in unrelated matters. 7

Rather, except for the matter and client which are the subject of the consultation, the attorneys at issue are simply attorneys practicing in the same locale, and aside from the clients and matters upon which the two have consulted, are free to refer clients to each other, whether or not that referral was prompted by the conflicting interest of the originating attorney or otherwise. Of course, this must be done otherwise in compliance with the California Rules of Professional Conduct as well as the State Bar Act.

V. Conclusion.

In isolation, the fact that two attorneys exchange anonymous consultations to augment their respective practices is not in and of itself sufficient to arise to an "of counsel" relationship, in that it is not "close, personal, continuous, and regular" with regard to the actual representation and client so as to arise to such. Nevertheless, the disclosure of confidences and secrets, even if unknowing or inadvertent, will effectively prevent the consulted attorney from representing the adverse party in the subject of the consultation. This is a conflict associated with the consultation alone, however, and not the relationship between the attorneys generally. Aside from those which are the subject of consultation, the two attorneys are not foreclosed from representing clients and cases referred by the other, even if referral is prompted by the existence of a disqualifying conflict of interest preventing representation by the referring attorney.

This opinion is issued by the San Diego Ethics Committee. It is advisory only. It is not binding upon the courts, the State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.

 

  1. Rule 1-400(E)(8), adopted by the Board of Governors of the State Bar, effective May 27, 1989, defines the following forms of "communication" defined in rule 1-400(A) to be presumptively violative of rule 1-400:
    (8) A "communication" which states or implies that a member or law firm is "of counsel" to another lawyer or a law firm unless the former has relationship with the latter (other than as a partner or associate, or officer or shareholder pursuant to Business and Professions Code sections 6160-6172) which is close, personal, continuous, and regular.
  2. California has adopted the definitions of "confidence" and "secret" as set forth in ABA Model Code of Professional Responsibility DR 4-101(A)(1980). State Bar Formal Opinion No. 1976-37. (While DR 4-101(A) has been superseded by ABA Model Rule of Professional Conduct 1.6, which dispensed with these concepts, this state's interpretation of Cal. Bus. & Prof. Code §6068(e) has not. Los Angeles County Bar Association Opinion No. 456.) Thus, "confidence" refers to information protected by the attorney-client privilege under applicable law. "Secret" refers to other information gathered in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would likely be a detriment to the client.
  3. ABA Model Rule of Professional Conduct 1.6 expressly allows such disclosure. Notwithstanding the breadth of Cal. Bus. & Prof. Code 6068(e), we resort to Model Rule 1.6 pursuant to Rule 1-100(A of the California Rules of Professional Conduct, which permits consideration of other jurisdictional authority when analytically required.)
  4. Professors Hazard and Hodes use two illustrations. The first relates to disclosure where an attorney has formally retained another lawyer to provide himself legal advice about a problem that has arisen in connection with a client's case. The second addresses an informal consultation with the attorney's former law professor.
  5. This concept of representing a client for limited purposes is well -recognized, differing obligations being imposed upon a lawyer dependent upon the objective scope of his or her employment.
  6. One could analytically characterize the consulted attorney as having been associated by the initiating attorney, which the attorney of record has authority to do. Wells Farcro & Co. v. City and County of San Francisco (1944) 25 C.2d 37, 42-43, 152 P.2d 625. There is no express authority requiring the client to consent to association of counsel. On the other hand, the consulted attorney might be viewed as co-counsel, to the extent he or she is directly answerable to the client.
  7. Traditional grounds for such vicarious disqualification are not present under these facts. As discussed previously, there is no "of counsel" relationship capable of shifting conflicting interests. State Bar Opinion No. 1993-129. Nor is there a shared space relationship which would prompt such concerns. San Diego County Bar Association Opinion No. 1972-15. As to both points, see also Bar Association of San Francisco Formal Opinion No. 1985-1 ("Thus, the duty to disclose a conflict can arise either from the use of `of counsel,' whether or not an actual relationship exists, or from the sharing of office space and employees, whether or not the term 'of counsel' is applied to the relationship. In either case, the attorney should be considered a member of the firm in determining whether a potential conflict exists."

 

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.