The District of Columbia Bar recently issued Ethics Opinion 391, providing insight as to ethical issues lawyers and law firms should bear in mind when considering agreements with government entities. While the Opinion specifically analyzes the DC Rules of Professional Conduct, versions of the same three rules raised are found in nearly every state. The opinion mainly focuses on ethics rules involving conflicts of interests, restrictions on the right to practice, and interference with professional independence.
Conflicts of interest for current or future matters adverse to the government
Under Rule 1.7, lawyers must avoid representing clients where their professional judgment may be adversely affected by responsibilities to or interests in a third party. Conflicts don’t always arise from direct adversity to other firm clients. They can also come from personal or financial interests. While “personal interest” conflicts are normally not imputed to other firm lawyers, if all of the other firm lawyers are affected by the personal conflict too, then the conflict must be imputed to those lawyers as well. Opinion 391 explains that a lawyer with a personal interest conflict must reasonably and objectively believe that she can provide competent and diligent representation to each client affected by the conflict. And if so, the lawyer still must inform the affected client of the existence and nature of the conflict and the potentially adverse consequences of the intended representation and obtain the client’s consent. Conflict with one government agency does not necessarily always equate to a conflict with all government agencies. However, DOJ has taken the position that a private lawyer’s adversity to any element of the federal government does constitute a conflict of interest with the executive branch.
A firm that enters into an agreement that limits or shapes the firm’s practice must be aware of when a current or future matter involves a client’s position directly adverse to a program or policy in which the government has a strong interest. In sum, firms can (1) seek conflict waivers upon a reasonable belief that the conflict won’t impair the representation of that client, (2) decline or withdraw or (3) remove the cause of the conflict. When law firms don’t know which actions may trigger adverse government action, the firm might not meet be able to give “full disclosure of the existence and nature of the possible conflict and the possible adverse consequences of such representation.” Accordingly, clients would be unable to provide the informed consent required to produce a valid conflict waiver. If the exact nature and breadth of the commitments made by a firm are uncertain or are subject to unilateral change, the firm cannot be assured of its ability to remove the cause of the conflict. Regardless, any lawyer or firm considering entering into an arrangement of this nature must analyze whether the arrangement would allow for a conflict-free representation to its existing and potential clients who are adverse to the relevant government.
Restricting the right to practice
Opinion 391 reminds lawyers that agreements limiting or shaping a lawyer’s right practice may also implicate Rule 5.6(b). This rule prohibits lawyers from entering into agreements that restrict their right to practice as part of the settlement of a controversy. This prohibition has been broadly interpreted. Agreements with such restrictions are also void as against public policy. Rule 5.6(b) applies to lawyers on both sides of the negotiation, not just the lawyer who agrees to limit their practice. Plus, lawyers who induce or assist in such violation could also be subject to discipline.
Professional Independence
Lawyers must take care not to allow third parties to direct or regulate their professional judgment in providing legal services per Rule 5.4(c). Opinion 391 references an Ohio ethics opinion, which asserts that this rule prohibits lawyers from acceding to a third party’s direction as to the legal services that will be provided and also from taking third-party direction as to whether to accept or turn away a potential client. The Opinion cautions that an advance agreement to provide legal services to unidentified clients with unknown legal needs constitutes an improper limitation on a lawyer’s independent professional judgment as to the clients they will accept and as to the specific legal services be rendered. Thus, this rule must be closely examined upon receiving a similar type of direction.
In sum
Lawyers often have competing interests. They have to balance ethical concerns, time restraints, zealous advocacy concerns, personal interests, financial interests and many other considerations when deciding to take on a new representation, decline a potential client, or withdraw from a case. These ethical rules should always be considered regardless of the context.