Formal Opinion 1999-06: Duty of loyalty

TOPIC: Duty of loyalty

DIGEST: Firm may represent clients in matters directly adverse to the State of New York, including litigation against it, while concurrently acting as special counsel to the Manhattan District Attorney’s Office on a pro bono basis.

CODE: DR 5-105(a); DR 5-105(c)

QUESTION

Whether a law firm may continue to represent clients in matters directly adverse to the State of New York, including litigation against it, while an attorney at the firm concurrently provides pro bono representation as special counsel to the Manhattan District Attorney’s Office.

OPINION

The applicable sections of the Disciplinary Rules of the Code of Professional Responsibility as enacted in New York are:

DR 5-105(a):

A lawyer shall decline proffered employment if the exercise of independent professional judgment on behalf of the client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it is likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (c) of this section.

DR 5-105(c):

In the situations covered by DR 5-105(A) and (B), a lawyer may represent multiple clients if a disinterested lawyer would believe that the lawyer can competently represent the interest of each and if each consents to the representation after full disclosure of the implications of the simultaneous representation and the advantages and risks involved.

Under these rules, absent informed consent, a lawyer seeking to accept an engagement adverse to a current client must meet a heavy burden: “Where the [attorney-client] relationship is a continuing one, adverse representation is prima facie improper, and the attorney must be prepared to show, at the very least, that there will be no actual or apparent conflict in loyalties or diminution in the vigor of his representation.” Cinema 5 Ltd. Cinerama, 528 F.2d 1384, 1387 (2d Cir. 1976).

In New York, therefore, absent informed consent, a lawyer is ordinarily precluded from representing either a plaintiff or a defendant in a lawsuit where the adverse party is a current client, even where the matters are wholly unrelated. Nevertheless, we believe that the law firm may continue to represent clients directly adverse to New York State while concurrently acting as Special Counsel to the Manhattan District Attorney’s Office. In reaching this conclusion, we rely on the Committee’s prior opinion in N.Y. City 1990-4 in which we addressed the ethical considerations surrounding the creation of a pro bono assistance program for the New York City Commission on Human Rights, including concerns that service as a mediator or administrative law judge or representation of complainants by an attorney might create a conflict with concurrent representation of other City agencies by other attorneys in the same firm. N.Y. City 1990-4 at *5. We determined that:

If the City is a litigant, it is important to determine which agency of the City is involved. Where a governmental body is organized into a number of different departments or agencies, each department or agency should be treated as a distinct person for purposes of the rule which forbids the concurrent representation of one client against another.

Id.; accord N.Y. City 894 (Ethical Guidelines for Pro Bono Legal Services to City) (1978); N.Y. State 447 (1976). This principle was reaffirmed in N.Y. City 1996-4, in which we opined that it was not improper for a law firm to simultaneously participate in two different pro bono programs in which the firm would represent the State (through the District Attorney’s Office) and criminal defendants (through the Legal Aid Society) in criminal appeals. As this opinion makes clear, while there is no per se bar on concurrent representation of agencies of the City and interests adverse to City agencies, the lawyer undertaking the concurrent representation must still assure herself that her firm can adequately represent the interests of all clients concerned. See also N.Y. City 894 (1978) (Ethical Guidelines for Pro Bono Legal Services to New York City). Such an inquiry would necessarily require that she ensure each client’s confidences are protected in the concurrent representations.

We note that treating different governmental departments or agencies as separate clients for the application of conflicts rules is in keeping with recent opinions treating separate corporate entities in the private sector as distinct clients for conflicts purposes. See N.Y. County 684 (1991) and N.Y. State 580 (1987). This outcome is also consistent with the Appellate Division, Third Department’s holding in Aerojet Properties, inc. v. State of New York, 138 A.D.2d 39, 530 N.Y.S.2d 624 (3d Dep’t 1988). To be sure, Aerojet does not strictly apply to the issue presented here, as it involved the legal question of disqualifying counsel. Nevertheless, we believe that the holding fortifies our conclusion, especially given the similarity of the issues involved. In Aerojet, the court allowed a firm simultaneously to represent a plaintiff in an action against a department of New York State for unpaid rent while acting as defense counsel for New York State in numerous personal injury actions. In Aerojet the Appellate Division held that a lawyer could oppose the state while concurrently representing it so long as there is no substantial nexus between the lawsuits, no likelihood of disclosure of client confidences or any appearance of impropriety. There, the law firm satisfied this burden and was not disqualified.

As the inquiry makes clear, the dual representations at issue involve entirely separate agencies of New York State. Accordingly, the pro bono representation as special counsel to the Manhattan District Attorney’s Office would not conflict with the representation of other clients of the firm simultaneously litigating against other New York State agencies.

CONCLUSION

It is our opinion that simultaneous representation as special counsel to the Manhattan District Attorney’s Office in criminal matters and representation of interests directly adverse to the State of New York in unrelated litigation and other matters is permissible under the ethical rules provided that the lawyer undertaking the concurrent representation assures herself that her firm can adequately represent the interests of all clients concerned and that each client’s confidences would be protected.