Beyond First Impressions

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A lawyer doesn’t necessarily face a conflict of interest when performing work for one client that affects the interests of another client.

The ABA Standing Committee on Ethics and Professional Re­sponsibility reached that conclusion in Formal Opinion 05-434, which considers the conflict issue as it might arise for a lawyer who represents several members of one family in estate planning and other matters.

Such an arrangement is not uncommon. Armed with knowledge of a particular family’s affairs and idiosyncrasies, a single lawyer or law firm often is able to provide more effective and efficient representation to various family members.

But suppose the lawyer has drafted a will for the wealthy grandfather in a family–a longtime, valued client. Meanwhile, the lawyer represents the patriarch’s ne’er-do-well grandson on charges of driving under the influence. Initially, the will left the entire estate to the grandson, but in a complete turnabout, the grandfather has decided to disinherit him.

Can the lawyer ethically change the will to eliminate the bequest to the grandson while still representing him in the DUI? What if it was the lawyer who urged the grandfather to cut his grandson out of the will?

Rule 1.7 of the ABA Model Rules of Professional Conduct states that a lawyer may not represent a client if the representation involves a concurrent conflict of interest. Under Rule 1.7 (Conflict of Interest: Current Clients), a concurrent conflict of interest occurs when the representation of one client is “directly adverse” to the other cli­ent or there is a significant risk that the representation of one client will be “materially limited” by the lawyer’s responsibilities to another client.

(The Model Rules serve as the basis for most state ethics codes for lawyers.)

The ethics committee’s opinion explains that “direct adversity” requires more than conflicting economic interests. There must be a conflict between the legal rights and duties of the clients. In the case of estate matters, the opinion observes that potential beneficiaries have only an expectancy, not a legal right, to a bequest. Unless limited by contractual obligations or state law, a testator generally is free to dispose of an estate as he or she pleases. Accordingly, the lawyer’s representation of the testator is not directly adverse to the legal interests of beneficiaries.

But even if there is no direct adversity, the opinion says a concurrent conflict of interest exists if there is a significant risk that the lawyer’s representation of one client will “materially limit” the lawyer’s responsibilities to the other client.

“The lawyer’s representation of a testator does not, of itself, create responsibilities owed by the lawyer to prospective beneficiaries (even one who is the lawyer’s client as to an unrelated matter),” states the opinion, “other than the duty to effect the testator’s intent as expressed explicitly or implicitly” in the estate planning instrument.

When to Say No

The analysis changes, however, if the testator asks for the lawyer’s advice or if the lawyer initiates such advice.

“By advising the testator whether, rather than how, to disinherit the beneficiary, the lawyer has raised the level of the engagement from the purely ministerial to a situation in which the lawyer must exercise judgment and discretion on behalf of the testator,” the opinion states. That circumstance increases the possibility that the lawyer’s advice to one party is materially limited by the lawyer’s responsibilities to the other party.

Also, if carrying out the testator’s directions “violates previously agreed upon family estate planning objectives,” states the opinion, “the lawyer must consider her responsibilities to other family members who have been her clients for family estate planning.”

Eileen Libby is associate ethics counsel for the ABA Center for Professional Responsibility.

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