Alabama Rules of Professional Conduct
Client-Lawyer Relationship
Rule 1.7.
Conflict of Interest: General Rule.
(a) A lawyer shall not represent a client if the representation of that client will be
directly adverse to another client, unless:
(1) The lawyer reasonably believes the representation will not adversely
affect the relationship with the other client; and
(2) Each client consents after consultation.
(b) A lawyer shall not represent a client if the representation of that client may be
materially limited by the lawyer's responsibilities to another client or a third person, or by
the lawyer's own interests, unless:
(1) The lawyer reasonably believes the representation will not be
adversely affected; and
(2) The client consents after consultation. When representation of multiple
clients in a single matter is undertaken, the consultation shall include explanation
of the implications of the common representation and the advantages and risks
involved.
Comment
Loyalty to a Client
Loyalty is an essential element in the lawyer's relationship to a client. An
impermissible conflict of interest may exist before representation is undertaken, in
which event the representation should be declined. The lawyer should adopt
reasonable procedures appropriate for the size and type of firm and practice, to
determine in both litigation and non-litigation matters the parties and issues involved
and to determine whether there are actual or potential conflicts of interest.
If such a conflict arises after representation has been undertaken, the lawyer
should withdraw from the representation. See Rule 1.16. Where more than one
client is involved and the lawyer withdraws because a conflict arises after
representation, whether the lawyer may continue to represent any of the clients is
determined by Rule 1.9. See also Rule 2.2(c). As to whether a client-lawyer
relationship exists or, having once been established, is continuing, see Comment to
Rule 1.3 and Scope.
As a general proposition, loyalty to a client prohibits undertaking
representation directly adverse to that client without that client's consent. Paragraph
(a) expresses that general rule. Thus, a lawyer ordinarily may not act as advocate
against a person the lawyer represents in some other matter, even if it is wholly
unrelated. On the other hand, simultaneous representation in unrelated matters of
clients whose interests are only generally adverse, such as competing economic
enterprises, does not require consent of the respective clients. Paragraph (a) applies
only when the representation of one client would be directly adverse to the other.
Loyalty to a client is also impaired when a lawyer cannot consider,
recommend or carry out an appropriate course of action for the client because of the
lawyer's other responsibilities or interests. The conflict in effect forecloses
alternatives that would otherwise be available to the client. Paragraph (b) addresses
such situations. A possible conflict does not itself preclude the representation. The
critical questions are the likelihood that a conflict will eventuate and, if it does,
whether it will materially interfere with the lawyer's independent professional
judgment in considering alternatives or foreclose courses of action that reasonably
should be pursued on behalf of the client. Consideration should be given to whether
the client wishes to accommodate the other interest involved.
Consultation and Consent
A client may consent to representation notwithstanding a conflict. However,
as indicated in paragraph (a)(1) with respect to representation directly adverse to a
client, and paragraph (b)(1) with respect to material limitations on representation of a
client, when a disinterested lawyer would conclude that the client should not agree to
the representation under the circumstances, the lawyer involved cannot properly ask
for such agreement or provide representation on the basis of the client's consent.
When more than one client is involved, the question of conflict must be resolved as
to each client. Moreover, there may be circumstances where it is impossible to make
the disclosure necessary to obtain consent. For example, when the lawyer
represents different clients in related matters and one of the clients refuses to
consent to the disclosure necessary to permit the other client to make an informed
decision, the lawyer cannot properly ask the latter to consent.
Lawyer's Interests
The lawyer's own interests should not be permitted to have adverse effect on
representation of a client. For example, a lawyer's need for income should not lead
the lawyer to undertake matters that cannot be handled competently and at a
reasonable fee. See Rules 1.1 and 1.5. If the probity of a lawyer's own conduct in a
transaction is in serious question, it may be difficult or impossible for the lawyer to
give a client detached advice. A lawyer may not allow related business interests to
affect representation, for example, by referring clients to an enterprise in which the
lawyer has an undisclosed interest.
Conflicts in Litigation
Paragraph (a) prohibits representation of opposing parties in litigation.
Simultaneous representation of parties whose interests in litigation may conflict,
such as coplaintiffs or codefendants, is governed by paragraph (b). An impermissible
conflict may exist by reason of substantial discrepancy in the parties' testimony,
incompatibility in positions in relation to an opposing party, or the fact that there are
substantially different possibilities of settlement of the claims or liabilities in question.
Such conflicts can arise in criminal cases as well as civil. The potential for conflict of
interest in representing multiple defendants in a criminal case is so grave that
ordinarily a lawyer should decline to represent more than one codefendant. On the
other hand, common representation of persons having similar interests is proper if
the risk of adverse effect is minimal and the requirements of paragraph (b) are met.
Compare Rule 2.2 involving intermediation between clients.
Ordinarily, a lawyer may not act as advocate against a client the lawyer
represents in some other matter, even if the other matter is wholly unrelated.
However, there are circumstances in which a lawyer may act as advocate against a
client. For example, a lawyer representing an enterprise with diverse operations may
accept employment as an advocate against the enterprise in an unrelated matter if
doing so will not adversely affect the lawyer's relationship with the enterprise or
conduct of the suit and if both clients consent upon consultation. By the same token,
government lawyers in some circumstances may represent government employees
in proceedings in which a government agency is the opposing party. The propriety of
concurrent representation can depend on the nature of the litigation. For example, a
suit charging fraud entails conflict to a degree not involved in a suit for a declaratory
judgment concerning statutory interpretation.
A lawyer may represent parties having antagonistic positions on a legal
question that has arisen in different cases, unless representation of either client
would be adversely affected. Thus, it is ordinarily not improper to assert such
positions in cases pending in different trial courts, but it may be improper to do so in
cases pending at the same time in an appellate court.
Interest of Person Paying for a Lawyer's Service
A lawyer may be paid from a source other than the client, if the client is
informed of that fact and consents and the arrangement does not compromise the
lawyer's duty of loyalty to the client. See Rule 1.8(f). For example, when an insurer
and its insured have conflicting interests in a matter arising from a liability insurance
agreement, and the insurer provides special counsel for the insured, the
arrangement should assure the special counsel's professional independence. So
also, when a corporation and its directors or employees are involved in a
controversy in which they have conflicting interests, the corporation may provide
funds for separate legal representation of the directors or employees, if the clients
consent after consultation and the arrangement ensures the lawyer's professional
independence.
Other Conflict Situations
Conflicts of interest in contexts other than litigation sometimes may be difficult
to assess. Relevant factors in determining whether there is potential for adverse
effect include the duration and intimacy of the lawyer's relationship with the client or
clients involved, the functions being performed by the lawyer, the likelihood that
actual conflict will arise and the likely prejudice to the client from the conflict if it does
arise. The question is often one of proximity and degree.
For example, a lawyer may not represent multiple parties to a negotiation
whose interests are fundamentally antagonistic to each other, but common
representation is permissible where the clients are generally aligned in interest, even
though there is some difference of interest among them.
Conflict questions may also arise in estate planning and estate administration.
A lawyer may be called upon to prepare wills for several family members, such as
husband and wife, and, depending upon the circumstances, a conflict of interest may
arise. In estate administration the identity of the client may be unclear under the law
of a particular jurisdiction. Under one view, the client is the fiduciary; under another
view, the client is the estate or trust, including its beneficiaries. The lawyer should
make clear the relationship to the parties involved.
A lawyer for a corporation or other organization who is also a member of its
board of directors should determine whether the responsibilities of the two roles may
conflict. The lawyer may be called on to advise the corporation in matters involving
actions of the directors. Consideration should be given to the frequency with which
such situations may arise, the potential intensity of the conflict, the effect of the
lawyer's resignation from the board, and the possibility of the corporation's obtaining
legal advice from another lawyer in such situations. If there is material risk that the
dual role will compromise the lawyer's independence of professional judgment, the
lawyer should not serve as a director.
Conflict Charged by an Opposing Party
Resolving questions of conflict of interest is primarily the responsibility of the
lawyer undertaking the representation. In litigation, a court may raise the question
when there is reason to infer that the lawyer has neglected the responsibility. In a
criminal case, inquiry by the court is generally required when a lawyer represents
multiple defendants. Where the conflict is such as clearly to call in question the fair
or efficient administration of justice, opposing counsel may properly raise the
question. Such an objection should be viewed with caution, however, for it can be
misused as a technique of harassment. See Scope.
Comparison with Former Alabama Code of Professional Responsibility
DR 5-101(A) provided that “[e]xcept with the consent of his client after full
disclosure, a lawyer shall not accept employment if the exercise of his professional
judgment on behalf of his client will be or reasonably may be affected by his own
financial, business, property, or personal interests.” DR 5-105(A) provided that a
lawyer “shall decline proffered employment if the exercise of his independent
professional judgment in behalf of a client will be or is likely to be adversely affected
by the acceptance of the proffered employment, or if it would be likely to involve him
in representing differing interests, except to the extent permitted under DR 5-
105(C).” DR 5-105(C) provided that “a lawyer may represent multiple clients if it was
obvious that he can adequately represent the interest of each and if each consents
to the representation after full disclosure of the possible effect of such representation
on the exercise of his independent professional judgment on behalf of each.” DR 5-
107(B) provided that a lawyer “shall not permit a person who recommends, employs,
or pays him to render legal services for another to direct or regulate his professional
judgment in rendering such services.”
Rule 1.7 clarifies DR 5-105(A) by requiring that, when the lawyer's other
interests are involved, not only must the client consent after consultation, but also,
independent of such consent, the representation reasonably appear not to be
adversely affected by the lawyer's other interests. This requirement was implicit in
EC 5-2, which stated that a lawyer “should not accept proffered employment if his
personal interests or desires will, or there is a reasonable probability that they will,
affect adversely the advice to be given or services to be rendered the prospective
client.”
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