Rule 1.7. CONFLICT-OF-INTEREST: CURRENT CLIENTS

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 would be directly adverse to

another client, even if representation would not occur in the

same matter or in substantially related matters; or

(2)

there is a significant risk that the representation of one or

more clients would 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 would be able

to provide competent and diligent representation to each

affected client; and

(2)

each affected client gives informed consent, confirmed in

writing.

(c)

Under no circumstances may a lawyer represent a client if:

(1)

the representation is prohibited by law;

(2)

the representation involves 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.

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 1.8. For former client conflicts of

interest, see Rule 1.9. For conflicts of interest involving prospective clients,

see Rule 1.18. For definitions of “informed consent” and “confirmed in

writing,” see Rule 1.0(e) and (b).

es 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 1.8. For former client conflicts of

interest, see Rule 1.9. For conflicts of interest involving prospective clients,

see Rule 1.18. For definitions of “informed consent” and “confirmed in

writing,” see Rule 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 5.1. Subject to the

exception set forth in Comment [24] with respect to “issue conflicts,”

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

1.3 and Scope.

the

persons and issues involved. See also Comment to Rule 5.1. Subject to the

exception set forth in Comment [24] with respect to “issue conflicts,”

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

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

determines the conflict is consentable and has obtained the informed consent

of the client under the conditions of paragraph (b). See Rule 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 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 1.16. The lawyer must continue to protect the confidences of the client

from whose representation the lawyer has withdrawn. See Rule 1.9(c).

tter. 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 1.16. The lawyer must continue to protect the confidences of the client

from whose representation the lawyer has withdrawn. See Rule 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 a determination by the lawyer that the conflict is consentable and the

grant of consent by the client, 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.

timony 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 determining that the conflict may be waived by

consent and the grant of informed consent by 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.

ere

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 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 1.8 for specific Rules

pertaining to a number of personal interest conflicts, including business

transactions with clients. See also Rule 1.10 (personal interest conflicts under

Rule 1.7 ordinarily are not imputed to other lawyers in a law firm).

s to affect

representation, for example, by referring clients to an enterprise in which the

lawyer has an undisclosed financial interest. See Rule 1.8 for specific Rules

pertaining to a number of personal interest conflicts, including business

transactions with clients. See also Rule 1.10 (personal interest conflicts under

Rule 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. Thus, a lawyer related to

another lawyer, e.g., as parent, child, sibling or spouse, 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 1.10. See also Rule

1.8(l).

[12] Maine has not adopted the ABA Model Rules’ categorical

prohibition on an attorney forming a sexual relationship with an existing

client because such a rule seems unnecessary to address true disciplinary

problems and it threatens to make disciplinary issues out of conduct that we

do not believe should be a matter of attorney discipline. However, the lack of a

categorical prohibition should not be construed as an implicit approval of

such relationships. Attorneys have been disciplined under the former Maine

Code of Professional Responsibility for entering into sexual relations with

clients, and they may be disciplined for similar conduct under these rules

nduct that we

do not believe should be a matter of attorney discipline. However, the lack of a

categorical prohibition should not be construed as an implicit approval of

such relationships. Attorneys have been disciplined under the former Maine

Code of Professional Responsibility for entering into sexual relations with

clients, and they may be disciplined for similar conduct under these rules. The

relationship between lawyer and client is a fiduciary one in which the lawyer

occupies the highest position of trust and confidence. In certain types of

representations such as family or juvenile matters, the relationship is almost

always unequal; thus, a sexual relationship between lawyer and client in such

circumstance may involve unfair exploitation of the lawyer’s fiduciary role, in

violation of the lawyer’s basic ethical obligation not to use the trust of the

client to the client’s disadvantage. In addition, such a relationship presents a

significant danger that, because of the lawyer’s emotional involvement, the

lawyer will be unable to represent the client without impairment of the

exercise of independent professional judgment. Moreover, a blurred line

between the professional and personal relationships may make it difficult to

predict to what extent client confidences will be protected by the attorney-

client evidentiary privilege, since client confidences are protected by privilege

only when they are imparted in the context of the client-lawyer relationship.

Before proceeding with the representation in these circumstances, the lawyer

should consider whether the lawyer’s ability to represent the client will be

materially limited by the sexual relationship.

will be protected by the attorney-

client evidentiary privilege, since client confidences are protected by privilege

only when they are imparted in the context of the client-lawyer relationship.

Before proceeding with the representation in these circumstances, the lawyer

should consider whether the lawyer’s ability to represent the client will be

materially limited by the sexual relationship.

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 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.

Prohibited Representations

[14] In many instances, clients may consent to representation

notwithstanding a conflict. However, as indicated in paragraph (c), 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 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 the lawyer is representing more

than one client, the question of consentability must be resolved as to each

client.

s of the

client’s consent. 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 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 1.1

(competence) and Rule 1.3 (diligence).

[16] Paragraph (c)(1) describes conflicts that are nonconsentable

because the representation is prohibited by applicable law. For example, in

some states substantive law provides that the same lawyer may not represent

more than one defendant in a capital case, even with the consent of the clients,

and under federal criminal statutes certain representations by a former

government lawyer are prohibited, despite the informed consent of the

former client. In addition, decisional law in some states limits the ability of a

governmental client, such as a municipality, to consent to a conflict-of-

interest.

esent

more than one defendant in a capital case, even with the consent of the clients,

and under federal criminal statutes certain representations by a former

government lawyer are prohibited, despite the informed consent of the

former client. In addition, decisional law in some states limits the ability of a

governmental client, such as a municipality, to consent to a conflict-of-

interest.

[17] Paragraph (c)(2) 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. 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 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.

Whether a client has given informed consent to representation, when

required by this Rule or Rule 1.8, shall be determined in light of the mental

capacity of the client to give consent, the explanation of the advantages and

risks involved provided by the lawyer seeking consent, the circumstances

under which the explanation was provided and the consent obtained, the

experience of the client in legal matters generally, and any other

circumstances bearing on whether the client has made a reasoned and

deliberate choice. See Rule 1.0(e) (informed consent)

client to give consent, the explanation of the advantages and

risks involved provided by the lawyer seeking consent, the circumstances

under which the explanation was provided and the consent obtained, the

experience of the client in legal matters generally, and any other

circumstances bearing on whether the client has made a reasoned and

deliberate choice. See Rule 1.0(e) (informed consent). The lawyer must

reasonably believe that each client will be able to make adequately informed

decisions during the representation and, to that end, the lawyer must consult

with each client concerning the decisions to be made and the considerations

relevant in making them, so that each client can make adequately informed

decisions. See Rule 1.4. 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. 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.

er 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 1.0(b). See also Rule 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 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

nd

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. 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 client 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

ding. 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)(1) or paragraph (c).

Conflicts in Litigation

[23] Paragraph (c)(2) prohibits 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)

and paragraph (b). 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.

onflicts 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] 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. Under Maine law and practice, this Rule is violated only if an

attorney does not obtain informed consent to an issue conflict that rises to the

level of a conflict-of-interest described in Rule 1.7(a), and is actually known by

the lawyer. A lawyer does not violate this Rule merely by being ignorant of

the existence of an issue conflict

the representations or withdraw from one or both

matters. Under Maine law and practice, this Rule is violated only if an

attorney does not obtain informed consent to an issue conflict that rises to the

level of a conflict-of-interest described in Rule 1.7(a), and is actually known by

the lawyer. A lawyer does not violate this Rule merely by being ignorant of

the existence of an issue conflict. There are situations where, because of the

risk of material limitation of a client representation, that an issue conflict can

be a true (albeit consentable) conflict-of-interest. The intent of this Rule and

this paragraph is not to create a conflict-of-interest-screening requirement

that has not heretofore existed in Maine.

[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 (b) 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].

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 estate administration

the identity of the client may be unclear under the law of a particular

jurisdiction. 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.

istribution 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. 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.

rally, 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. But see M.R. Evid. 502(d)(5). 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 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

nt 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. 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 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 1.9 concerning the obligations to a former client. The client

also has the right to discharge the lawyer as stated in Rule 1.16.

esentation

should be fully explained to the clients at the outset of the representation. See

Rule 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 1.9 concerning the obligations to a former client. The client

also has the right to discharge the lawyer as stated in Rule 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 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.

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

e 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.