Rule 32:1.7. CONFLICT OF INTEREST: CURRENT CLIENTS

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the

representation involves a concurrent conflict of interest. A concurrent conflict of interest exists

if:

(1) the representation of one client will be directly adverse to another client; or

(2) there is a significant risk that the representation of one or more clients will be materially

limited by the lawyer’s responsibilities to another client, a former client, or a third person or

by a personal interest of the lawyer.

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a

lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and

diligent representation to each affected client;

(2) the representation is not prohibited by law;

(3) the representation does not involve the assertion of a claim by one client against another

client represented by the lawyer in the same litigation or other proceeding before a tribunal;

and

(4) each affected client gives informed consent, confirmed in writing.

(c) In no event shall a lawyer represent both parties in dissolution of marriage proceedings.

Comment

General Principles

[1] Loyalty and independent judgment are essential elements in the lawyer’s relationship to a

client. Concurrent conflicts of interest can arise from the lawyer’s responsibilities to another client,

a former client or a third person, or from the lawyer’s own interests. For specific rules regarding

certain concurrent conflicts of interest, see rule 32:1.8. For former client conflicts of interest, see

rule 32:1.9. For conflicts of interest involving prospective clients, see rule 32:1.18. For definitions

of “informed consent” and “confirmed in writing,” see rule 32:1.0(e) and (b)

another client,

a former client or a third person, or from the lawyer’s own interests. For specific rules regarding

certain concurrent conflicts of interest, see rule 32:1.8. For former client conflicts of interest, see

rule 32:1.9. For conflicts of interest involving prospective clients, see rule 32:1.18. For definitions

of “informed consent” and “confirmed in writing,” see rule 32:1.0(e) and (b).

[2] Resolution of a conflict of interest problem under this rule requires the lawyer to: 1) clearly

identify the client or clients; 2) determine whether a conflict of interest exists; 3) decide whether

the representation may be undertaken despite the existence of a conflict, i.e., whether the conflict

is consentable; and 4) if so, consult with the clients affected under paragraph (a) and obtain their

informed consent, confirmed in writing. The clients affected under paragraph (a) include both of

the clients referred to in paragraph (a)(1) and the one or more clients whose representation might be

materially limited under paragraph (a)(2).

[3] A conflict of interest may exist before representation is undertaken, in which event the

representation must be declined, unless the lawyer obtains the informed consent of each client under

the conditions of paragraph (b). To determine whether a conflict of interest exists, a 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 persons and issues involved. See also comment to rule

32:5.1. Ignorance caused by a failure to institute such procedures will not excuse a lawyer’s violation

of this rule. As to whether a client-lawyer relationship exists or, having once been established, is

continuing, see comment to rule 32:1.3 and Scope.

[4] If a conflict arises after representation has been undertaken, the lawyer ordinarily must

withdraw from the representation, unless the lawyer has obtained the informed consent of the client

under the conditions of paragraph (b)

awyer’s violation

of this rule. As to whether a client-lawyer relationship exists or, having once been established, is

continuing, see comment to rule 32:1.3 and Scope.

[4] If a conflict arises after representation has been undertaken, the lawyer ordinarily must

withdraw from the representation, unless the lawyer has obtained the informed consent of the client

under the conditions of paragraph (b). See rule 32:1.16. Where more than one client is involved,

whether the lawyer may continue to represent any of the clients is determined both by the lawyer’s

ability to comply with duties owed to the former client and by the lawyer’s ability to represent

adequately the remaining client or clients, given the lawyer’s duties to the former client. See rule

32:1.9. See also comments [5] and [29].

[5] Unforeseeable developments, such as changes in corporate and other organizational affiliations

or the addition or realignment of parties in litigation, might create conflicts in the midst of a

representation, as when a company sued by the lawyer on behalf of one client is bought by another

client represented by the lawyer in an unrelated matter. Depending on the circumstances, the lawyer

may have the option to withdraw from one of the representations in order to avoid the conflict. The

lawyer must seek court approval where necessary and take steps to minimize harm to the clients.

See rule 32:1.16. The lawyer must continue to protect the confidences of the client from whose

representation the lawyer has withdrawn. See rule 32:1.9(c).

Identifying Conflicts of Interest: Directly Adverse

[6] Loyalty to a current client prohibits undertaking representation directly adverse to that client

without that client’s informed consent. Thus, absent consent, a lawyer may not act as an advocate

in one matter against a person the lawyer represents in some other matter, even when the matters

are wholly unrelated

withdrawn. See rule 32:1.9(c).

Identifying Conflicts of Interest: Directly Adverse

[6] Loyalty to a current client prohibits undertaking representation directly adverse to that client

without that client’s informed consent. Thus, absent consent, a lawyer may not act as an advocate

in one matter against a person the lawyer represents in some other matter, even when the matters

are wholly unrelated.

The client as to whom the representation is directly adverse is likely to

feel betrayed, and the resulting damage to the client-lawyer relationship is likely to impair the

lawyer’s ability to represent the client effectively. In addition, the client on whose behalf the adverse

representation is undertaken reasonably may fear that the lawyer will pursue that client’s case less

effectively out of deference to the other client, i.e., that the representation may be materially limited

by the lawyer’s interest in retaining the current client. Similarly, a directly adverse conflict may

arise when a lawyer is required to cross-examine a client who appears as a witness in a lawsuit

involving another client, as when the testimony will be damaging to the client who is represented in

the lawsuit. On the other hand, simultaneous representation in unrelated matters of clients whose

interests are only economically adverse, such as representation of competing economic enterprises

in unrelated litigation, does not ordinarily constitute a conflict of interest and thus may not require

consent of the respective clients.

[7] Directly adverse conflicts can also arise in transactional matters. For example, if a lawyer is

asked to represent the seller of a business in negotiations with a buyer represented by the lawyer,

not in the same transaction but in another, unrelated matter, the lawyer could not undertake the

representation without the informed consent of each client

t require

consent of the respective clients.

[7] Directly adverse conflicts can also arise in transactional matters. For example, if a lawyer is

asked to represent the seller of a business in negotiations with a buyer represented by the lawyer,

not in the same transaction but in another, unrelated matter, the lawyer could not undertake the

representation without the informed consent of each client.

Identifying Conflicts of Interest: Material Limitation

[8] Even where there is no direct adverseness, a conflict of interest exists if there is a significant

risk that a lawyer’s ability to consider, recommend, or carry out an appropriate course of action for

the client will be materially limited as a result of the lawyer’s other responsibilities or interests. For

example, a lawyer asked to represent several individuals seeking to form a joint venture is likely to

be materially limited in the lawyer’s ability to recommend or advocate all possible positions that

each might take because of the lawyer’s duty of loyalty to the others. The conflict in effect forecloses

alternatives that would otherwise be available to the client. The mere possibility of subsequent

harm does not itself require disclosure and consent. The critical questions are the likelihood that

a difference in interests 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.

Lawyer’s Responsibilities to Former Clients and Other Third Persons

[9] In addition to conflicts with other current clients, a lawyer’s duties of loyalty and independence

may be materially limited by responsibilities to former clients under rule 32:1.9 or by the lawyer’s

responsibilities to other persons, such as fiduciary duties arising from a lawyer’s service as a trustee,

executor, or corporate director

Responsibilities to Former Clients and Other Third Persons

[9] In addition to conflicts with other current clients, a lawyer’s duties of loyalty and independence

may be materially limited by responsibilities to former clients under rule 32:1.9 or by the lawyer’s

responsibilities to other persons, such as fiduciary duties arising from a lawyer’s service as a trustee,

executor, or corporate director.

Personal Interest Conflicts

[10] The lawyer’s own interests should not be permitted to have an adverse effect on representation

of a client. For example, 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. Similarly,

when a lawyer has discussions concerning possible employment with an opponent of the lawyer’s

client, or with a law firm representing the opponent, such discussions could materially limit the

lawyer’s representation of the client. In addition, 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 financial interest. See rule 32:1.8 for specific rules pertaining to a number of personal

interest conflicts, including business transactions with clients.

See also rule 32:1.10 (personal

interest conflicts under rule 32:1.7 ordinarily are not imputed to other lawyers in a law firm).

[11] When lawyers representing different clients in the same matter or in substantially related

matters are closely related by blood or marriage, there may be a significant risk that client confidences

will be revealed and that the lawyer’s family relationship will interfere with both loyalty and

independent professional judgment. As a result, each client is entitled to know of the existence

and implications of the relationship between the lawyers before the lawyer agrees to undertake

the representation

closely related by blood or marriage, there may be a significant risk that client confidences

will be revealed and that the lawyer’s family relationship will interfere with both loyalty and

independent professional judgment. As a result, each client is entitled to know of the existence

and implications of the relationship between the lawyers before the lawyer agrees to undertake

the representation. Thus, a lawyer related to another lawyer, e.g., a parent, child, sibling, spouse,

cohabiting partner, or lawyer related in any other familial or romantic capacity, ordinarily may not

represent a client in a matter where that lawyer is representing another party, unless each client

gives informed consent. The disqualification arising from a close family relationship is personal

and ordinarily is not imputed to members of firms with whom the lawyers are associated. See rule

32:1.10.

[12] A lawyer is prohibited from engaging in sexual relationships with a client unless the sexual

relationship predates the formation of the client-lawyer relationship. See rule 32:1.8(j).

Interest of Person Paying for a Lawyer’s Service

[13] A lawyer may be paid from a source other than the client, including a co-client, if the client

is informed of that fact and consents and the arrangement does not compromise the lawyer’s duty

of loyalty or independent judgment to the client. See rule 32:1.8(f). If acceptance of the payment

from any other source presents a significant risk that the lawyer’s representation of the client will be

materially limited by the lawyer’s own interest in accommodating the person paying the lawyer’s fee

or by the lawyer’s responsibilities to a payer who is also a co-client, then the lawyer must comply

with the requirements of paragraph (b) before accepting the representation, including determining

whether the conflict is consentable and, if so, that the client has adequate information about the

material risks of the representation

s own interest in accommodating the person paying the lawyer’s fee

or by the lawyer’s responsibilities to a payer who is also a co-client, then the lawyer must comply

with the requirements of paragraph (b) before accepting the representation, including determining

whether the conflict is consentable and, if so, that the client has adequate information about the

material risks of the representation.

[13a] Where a lawyer has been retained by an insurer to represent the insured pursuant to the

insurer’s obligations under a liability insurance policy, the lawyer may comply with reasonable

cost-containment litigation guidelines proposed by the insurer if such guidelines do not materially

interfere with the lawyer’s duty to exercise independent professional judgment to protect the

reasonable interests of the insured, do not regulate the details of the lawyer’s performance, and do

not materially limit the professional discretion and control of the lawyer. The lawyer may provide

the insurer with a description of the services rendered and time spent, but the lawyer may not agree

to provide detailed information that would undermine the protection of confidential client-lawyer

information, if the insurer will share such information with a third party. If the lawyer believes that

guidelines proposed by the insurer prevent the lawyer from exercising independent professional

judgment or from protecting confidential client information, the lawyer shall identify and explain

the conflict of interest to the insurer and insured and also advise the insured of the right to seek

independent legal counsel. If the conflict is not eliminated but the insured wants the lawyer to

continue the representation, the lawyer may proceed if the lawyer reasonably believes that the lawyer

will be able to provide competent and diligent representation and the insured’s informed consent is

obtained pursuant to paragraph (b)(4).

Prohibited Representations

[14] Ordinarily, clients may consent to representation notwithstanding a conflict

not eliminated but the insured wants the lawyer to

continue the representation, the lawyer may proceed if the lawyer reasonably believes that the lawyer

will be able to provide competent and diligent representation and the insured’s informed consent is

obtained pursuant to paragraph (b)(4).

Prohibited Representations

[14] Ordinarily, clients may consent to representation notwithstanding a conflict. However, as

indicated in paragraph (b), some conflicts are nonconsentable, meaning that the lawyer involved

cannot properly ask for such agreement or provide representation on the basis of the client’s consent.

When the lawyer is representing more than one client, the question of consentability must be

resolved as to each client.

[15] Consentability is typically determined by considering whether the interests of the clients will

be adequately protected if the clients are permitted to give their informed consent to representation

burdened by a conflict of interest. Thus, under paragraph (b)(1), representation is prohibited if in

the circumstances the lawyer cannot reasonably conclude that the lawyer will be able to provide

competent and diligent representation. See rule 32:1.1 (competence) and rule 32:1.3 (diligence).

[16] Paragraph (b)(2) describes conflicts that are nonconsentable because the representation is

prohibited by applicable law.

[17] Paragraph (b)(3) describes conflicts that are nonconsentable because of the institutional

interest in vigorous development of each client’s position when the clients are aligned directly against

each other in the same litigation or other proceeding before a tribunal. Whether clients are aligned

directly against each other within the meaning of this paragraph requires examination of the context

of the proceeding. Paragraph (c) provides a specific example of such a nonconsentable conflict, that

is, where a lawyer is asked to represent both parties in a marriage dissolution proceeding

gainst

each other in the same litigation or other proceeding before a tribunal. Whether clients are aligned

directly against each other within the meaning of this paragraph requires examination of the context

of the proceeding. Paragraph (c) provides a specific example of such a nonconsentable conflict, that

is, where a lawyer is asked to represent both parties in a marriage dissolution proceeding. Although

this paragraph does not preclude a lawyer’s multiple representation of adverse parties to a mediation

(because mediation is not a proceeding before a “tribunal” under rule 32:1.0(m)), such representation

may be precluded by paragraph (b)(1).

Informed Consent

[18] Informed consent requires that each affected client be aware of the relevant circumstances

and of the material and reasonably foreseeable ways that the conflict could have adverse effects

on the interests of that client. See rule 32:1.0(e) (informed consent). The information required

depends on the nature of the conflict and the nature of the risks involved. When representation of

multiple clients in a single matter is undertaken, the information must include the implications of the

common representation, including possible effects on loyalty, confidentiality, and the attorney-client

privilege and the advantages and risks involved. See comments [30] and [31] (effect of common

representation on confidentiality).

[19] Under some circumstances it may be 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. In some cases the alternative to

common representation can be that each party may have to obtain separate representation with the

possibility of incurring additional costs

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. In some cases the alternative to

common representation can be that each party may have to obtain separate representation with the

possibility of incurring additional costs. These costs, along with the benefits of securing separate

representation, are factors that may be considered by the affected client in determining whether

common representation is in the client’s interests.

Consent Confirmed in Writing

[20] Paragraph (b) requires the lawyer to obtain the informed consent of the client, confirmed in

writing. Such a writing may consist of a document executed by the client or one that the lawyer

promptly records and transmits to the client following an oral consent. See rule 32:1.0(b). See also

rule 32:1.0(n) (writing includes electronic transmission). If it is not feasible to obtain or transmit the

writing at the time the client gives informed consent, then the lawyer must obtain or transmit it within

a reasonable time thereafter. See rule 32:1.0(b). The requirement of a writing does not supplant the

need in most cases for the lawyer to talk with the client, to explain the risks and advantages, if any, of

representation burdened with a conflict of interest, as well as reasonably available alternatives, and to

afford the client a reasonable opportunity to consider the risks and alternatives and to raise questions

and concerns. Rather, the writing is required in order to impress upon clients the seriousness of the

decision the client is being asked to make and to avoid disputes or ambiguities that might later occur

in the absence of a writing.

Revoking Consent

[21] A client who has given consent to a conflict may revoke the consent and, like any other client,

may terminate the lawyer’s representation at any time

oncerns. Rather, the writing is required in order to impress upon clients the seriousness of the

decision the client is being asked to make and to avoid disputes or ambiguities that might later occur

in the absence of a writing.

Revoking Consent

[21] A client who has given consent to a conflict may revoke the consent and, like any other client,

may terminate the lawyer’s representation at any time. Whether revoking consent to the client’s

own representation precludes the lawyer from continuing to represent other clients depends on the

circumstances, including the nature of the conflict, whether the client revoked consent because of

a material change in circumstances, the reasonable expectations of the other clients, and whether

material detriment to the other clients or the lawyer would result.

Consent to Future Conflict

[22] Whether a lawyer may properly request a client to waive conflicts that might arise in the future

is subject to the test of paragraph (b). The effectiveness of such waivers is generally determined by

the extent to which the client reasonably understands the material risks that the waiver entails. The

more comprehensive the explanation of the types of future representations that might arise and the

actual and reasonably foreseeable adverse consequences of those representations, the greater the

likelihood that the client will have the requisite understanding. Thus, if the client agrees to consent

to a particular type of conflict with which the client is already familiar, then the consent ordinarily

will be effective with regard to that type of conflict. If the consent is general and open-ended, then

the consent ordinarily will be ineffective, because it is not reasonably likely that the client will have

understood the material risks involved

rstanding. Thus, if the client agrees to consent

to a particular type of conflict with which the client is already familiar, then the consent ordinarily

will be effective with regard to that type of conflict. If the consent is general and open-ended, then

the consent ordinarily will be ineffective, because it is not reasonably likely that the client will have

understood the material risks involved. On the other hand, if the client is an experienced user of the

legal services involved and is reasonably informed regarding the risk that a conflict may arise, such

consent is more likely to be effective, particularly if, e.g., the client is independently represented by

other counsel in giving consent and the consent is limited to future conflicts unrelated to the subject

of the representation. In any case, advance consent cannot be effective if the circumstances that

materialize in the future are such as would make the conflict nonconsentable under paragraph (b).

Conflicts in Litigation

[23] Paragraphs (b)(3) and (c) prohibit representation of opposing parties in the same litigation,

regardless of the clients’ consent.

On the other hand, simultaneous representation of parties

whose interests in litigation may conflict, such as coplaintiffs or codefendants, is governed by

paragraph (a)(2). A 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

in civil litigation is proper if the requirements of paragraph (b) are met

. 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

in civil litigation is proper if the requirements of paragraph (b) are met.

[24] Ordinarily a lawyer may take inconsistent legal positions in different tribunals at different

times on behalf of different clients. The mere fact that advocating a legal position on behalf of

one client might create precedent adverse to the interests of a client represented by the lawyer in

an unrelated matter does not create a conflict of interest. A conflict of interest exists, however,

if there is a significant risk that a lawyer’s action on behalf of one client will materially limit the

lawyer’s effectiveness in representing another client in a different case; for example, when a decision

favoring one client will create a precedent likely to seriously weaken the position taken on behalf of

the other client. Factors relevant in determining whether the clients need to be advised of the risk

include: where the cases are pending, whether the issue is substantive or procedural, the temporal

relationship between the matters, the significance of the issue to the immediate and long-term

interests of the clients involved, and the clients’ reasonable expectations in retaining the lawyer. If

there is significant risk of material limitation, then absent informed consent of the affected clients,

the lawyer must refuse one of the representations or withdraw from one or both matters.

[25] When a lawyer represents or seeks to represent a class of plaintiffs or defendants in a

class-action lawsuit, unnamed members of the class are ordinarily not considered to be clients of the

lawyer for purposes of applying paragraph (a)(1) of this rule

, then absent informed consent of the affected clients,

the lawyer must refuse one of the representations or withdraw from one or both matters.

[25] When a lawyer represents or seeks to represent a class of plaintiffs or defendants in a

class-action lawsuit, unnamed members of the class are ordinarily not considered to be clients of the

lawyer for purposes of applying paragraph (a)(1) of this rule. Thus, the lawyer does not typically

need to get the consent of such a person before representing a client suing the person in an unrelated

matter. Similarly, a lawyer seeking to represent an opponent in a class action does not typically need

the consent of an unnamed member of the class whom the lawyer represents in an unrelated matter.

Nonlitigation Conflicts

[26] Conflicts of interest under paragraphs (a)(1) and (a)(2) arise in contexts other than litigation.

For a discussion of directly adverse conflicts in transactional matters, see comment [7]. Relevant

factors in determining whether there is significant potential for material limitation 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 disagreements will arise, and the likely prejudice

to the client from the conflict. The question is often one of proximity and degree. See comment [8].

[27] For example, conflict questions may 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 be present. In order to comply

with conflict of interest rules, the lawyer should make clear the lawyer’s relationship to the parties

involved.

[28] Whether a conflict is consentable depends on the circumstances

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 be present. In order to comply

with conflict of interest rules, the lawyer should make clear the lawyer’s relationship to the parties

involved.

[28] Whether a conflict is consentable depends on the circumstances. 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 in interest among them. Thus, a lawyer may seek to establish or

adjust a relationship between clients on an amicable and mutually advantageous basis; for example,

in helping to organize a business in which two or more clients are entrepreneurs, working out the

financial reorganization of an enterprise in which two or more clients have an interest, or arranging

a property distribution in settlement of an estate. The lawyer seeks to resolve potentially adverse

interests by developing the parties’ mutual interests. Otherwise, each party might have to obtain

separate representation, with the possibility of incurring additional cost, complication, or even

litigation. Given these and other relevant factors, the clients may prefer that the lawyer act for all of

them.

Special Considerations in Common Representation

[29] In considering whether to represent multiple clients in the same matter, a lawyer should be

mindful that if the common representation fails because the potentially adverse interests cannot

be reconciled, the result can be additional cost, embarrassment, and recrimination. Ordinarily, the

lawyer will be forced to withdraw from representing all of the clients if the common representation

fails.

In some situations, the risk of failure is so great that multiple representation is plainly

impossible

l that if the common representation fails because the potentially adverse interests cannot

be reconciled, the result can be additional cost, embarrassment, and recrimination. Ordinarily, the

lawyer will be forced to withdraw from representing all of the clients if the common representation

fails.

In some situations, the risk of failure is so great that multiple representation is plainly

impossible.

For example, a lawyer cannot undertake common representation of clients where

contentious litigation or negotiations between them are imminent or contemplated.

Moreover,

because the lawyer is required to be impartial between commonly represented clients, representation

of multiple clients is improper when it is unlikely that impartiality can be maintained. Generally, if

the relationship between the parties has already assumed antagonism, the possibility that the clients’

interests can be adequately served by common representation is not very good.

Other relevant

factors are whether the lawyer subsequently will represent both parties on a continuing basis and

whether the situation involves creating or terminating a relationship between the parties.

[30] A particularly important factor in determining the appropriateness of common representation

is the effect on client-lawyer confidentiality and the attorney-client privilege. With regard to the

attorney-client privilege, the prevailing rule is that, as between commonly represented clients, the

privilege does not attach. Hence, it must be assumed that if litigation eventuates between the clients,

the privilege will not protect any such communications, and the clients should be so advised.

[31] As to the duty of confidentiality, continued common representation will almost certainly be

inadequate if one client asks the lawyer not to disclose to the other client information relevant to the

common representation

tach. Hence, it must be assumed that if litigation eventuates between the clients,

the privilege will not protect any such communications, and the clients should be so advised.

[31] As to the duty of confidentiality, continued common representation will almost certainly be

inadequate if one client asks the lawyer not to disclose to the other client information relevant to the

common representation. This is so because the lawyer has an equal duty of loyalty to each client, and

each client has the right to be informed of anything bearing on the representation that might affect

that client’s interests and the right to expect that the lawyer will use that information to that client’s

benefit. See rule 32:1.4. The lawyer should, at the outset of the common representation and as part

of the process of obtaining each client’s informed consent, advise each client that information will

be shared and that the lawyer will have to withdraw if one client decides that some matter material

to the representation should be kept from the other. In limited circumstances, it may be appropriate

for the lawyer to proceed with the representation when the clients have agreed, after being properly

informed, that the lawyer will keep certain information confidential. For example, the lawyer may

reasonably conclude that failure to disclose one client’s trade secrets to another client will not

adversely affect representation involving a joint venture between the clients and agree to keep that

information confidential with the informed consent of both clients.

[32] When seeking to establish or adjust a relationship between clients, the lawyer should make

clear that the lawyer’s role is not that of partisanship normally expected in other circumstances and,

thus, that the clients may be required to assume greater responsibility for decisions than when each

client is separately represented

information confidential with the informed consent of both clients.

[32] When seeking to establish or adjust a relationship between clients, the lawyer should make

clear that the lawyer’s role is not that of partisanship normally expected in other circumstances and,

thus, that the clients may be required to assume greater responsibility for decisions than when each

client is separately represented. Any limitations on the scope of the representation made necessary

as a result of the common representation should be fully explained to the clients at the outset of the

representation. See rule 32:1.2(c).

[33] Subject to the above limitations, each client in the common representation has the right to

loyal and diligent representation and the protection of rule 32:1.9 concerning the obligations to a

former client. The client also has the right to discharge the lawyer as stated in rule 32:1.16.

Organizational Clients

[34] A lawyer who represents a corporation or other organization does not, by virtue of that

representation, necessarily represent any constituent or affiliated organization, such as a parent or

subsidiary. See rule 32:1.13(a). Thus, the lawyer for an organization is not barred from accepting

representation adverse to an affiliate in an unrelated matter, unless the circumstances are such that

the affiliate should also be considered a client of the lawyer, there is an understanding between the

lawyer and the organizational client that the lawyer will avoid representation adverse to the client’s

affiliates, or the lawyer’s obligations to either the organizational client or the new client are likely to

limit materially the lawyer’s representation of the other client.

[35] 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

he organizational client or the new client are likely to

limit materially the lawyer’s representation of the other client.

[35] 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 or should cease to act as the corporation’s lawyer when conflicts of interest

arise. The lawyer should advise the other members of the board that in some circumstances matters

discussed at board meetings while the lawyer is present in the capacity of director might not be

protected by the attorney-client privilege and that conflict of interest considerations might require

the lawyer’s recusal as a director or might require the lawyer and the lawyer’s firm to decline

representation of the corporation in a matter.