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Taking on Matters Adverse to Former Clients

By Gina Hendryx, OBA Ethics Counsel

Over the next three issues, this column will delve into the ethical considerations faced when the lawyer takes on a matter that is adverse to a former client. The lawyer’s duty to protect information relating to the representation of a client does not end with the termination of the attorney/client relationship. However, former clients are not automatically “off limits” just by the mere fact that they once were represented by the lawyer. Oklahoma Rule of Professional Conduct (ORPC) 1.9 sets out the duty owed to a former client and when an adverse representation will constitute a conflict of interest: “(a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.”

Section (a) states two instances when a representation adverse to a former client will result in a conflict of interest. The new representation may not be in the same matter nor may it be in a substantially related matter in which your current client’s interests are adverse to your former client.

Representing a new client against a former client in the same matter is prohibited. This is a fairly easy concept to grasp. Comment [1] to Rule 1.9 gives the following illustrations to define the “same” matter: “Under this rule, for example, a lawyer could not properly seek to rescind on behalf of a new client a contract drafted on behalf of the former client. So also a lawyer who has prosecuted an accused person could not properly represent the accused in a subsequent civil action against the government concerning the same transaction. Nor could a lawyer who has represented multiple clients in a matter represent one of the clients against the others in the same or a substantially related matter after a dispute arose among the clients in that matter, unless all affected clients give informed consent.”

The lawyer’s obligations of loyalty and confidentiality to the former client continue even though the representation may have ended satisfactorily or as a result of termination by the client. Lawyers are not free to “switch sides” and must continue to maintain loyalty to the first client regardless of the circumstances surrounding the outcome of the prior representation.

Whether the two matters are “substantially related” is a more difficult concept to grasp when determining if a conflict exists. Comment [3] to ORPC 1.9 states that matters are “substantially related” for purposes of this rule if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter. The substantial relationship test comes from caselaw on disqualification. In T.C. Theatre Corp. v. Warner Bros. Pictures, 113 F.Supp. 265 (S.D.N.Y. 1953), the court stated that the former client need show no more than that the matters embraced within the pending suit wherein his former attorney appears on behalf of his adversary are substantially related to the matters or cause of action wherein the attorney previously represented him. Lawyers should evaluate the commonality of issues between the present and former matter to determine if there is a substantial risk that confidential factual information obtained in the prior representation would be detrimental to the former client in the subsequent matter. Comment [3] suggests evaluating “the nature of the services the lawyer provided the former client and information that would in ordinary practice be learned by a lawyer providing such services.”

If the subsequent representation does not involve the same matter or a substantially related matter, a lawyer may take on a matter adverse to a former client. Where these conditions are met, courts have held no conflict exists even when the representation is extremely antagonistic and detrimental to the former client. Examples include rulings that a lawyer may:

  • Negotiate on the other side of the table from a former client. Crystal Homes Inc. v. Radetsky, 895 P.2d 1179 (Colo 1995).
  • Side against a former client in civil litigation. In re Cap Rock Electric Cooperative Inc., 35 S.W.3d 222 (Tex. Ct. App. 2000).
  • Prosecute a defendant that the lawyer previously represented in a wholly unrelated criminal case. State v. Camacho, 406 S.E.2d 868 (N.C. 1991).
  • Defend an accused murderer on the theory that a former client from an unrelated case committed the crime. Daniels v. State, 17 P.3d 75 (Alaska Ct. App. 2001).

Source: ABA/BNA Lawyers’ Manual on Professional Conduct.

If the subsequent representation does involve the same matter or a substantially related matter, the attorney should undertake the representation unless the former client has consented to same in writing. The informed consent should explain in clear terms the potential conflict and the probable use of confidential information. The lawyer should encourage the former client to seek legal counsel before giving consent to the adverse representation.

In parts two and three of this series, the conflicts with former clients that arise when lawyers move between firms and motions to disqualify counsel will be discussed.

Have an ethics question? It’s a member benefit, and all inquiries are confidential. Contact Ms. Hendryx at ginah@okbar.org or (405) 416-7083; (800) 522-8065.

Originally published in the Oklahoma Bar Journal -- Sep.13, 2008 -- Vol. 79; No. 23.