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Ethics Opinions from the Bar Association of San Francisco

INFORMAL OPINION 1973-10

If an attorney represented both parties in preparing a buy-sell agreement and his fee was paid equally by each party, that attorney may represent one of the parties for breach of contract by the other without the consent of the other party only if he obtained no confidential information in the course of his original employment no confidential information in the course of his original employment by both of the parties which would adversely affect the interest of the former client.

QUESTION:
An attorney prepared an agreement concerning the sale and purchase of shares of stock of a corporation and in connection therewith drafted a promissory note which was executed by the buyer in favor of the seller.

The parties to the agreement came to the attorney independently and the fees for his services were paid equally by each. It is claimed that the buyer defaulted on the note and the seller has requested the attorney to undertake his representation in effecting collection.

The attorney seeks an advisory opinion as to whether he may perform the requested legal services.

OPINION:

The Code of Professional Responsibility of the American Bar Association states in Section EC 5-15:

"If a lawyer is requested to undertake or continue representation of multiple clients having potentially differing interests, he must weigh carefully the possibility that his judgment may be impaired or his loyalty divided if he accepts or continues the employment. He should resolve all doubts against the propriety of the representation.

11 . . . there are many instances in which a lawyer may properly serve multiple clients having potentially differing interests in matters not involving litigation.";

and in Section EC 5-16:

11 . . . before a lawyer may represent multiple clients, he should explain fully to each client the implications of the common representation and should accept or continue employment only if the clients consent."

The foregoing addresses itself only to the conduct of an attorney before the situation here presented occurs.

Rule 5 of the Rules of Professional Conduct adopted by the State Bar of California states:

"A member of the State Bar shall not accept employment adverse to a client or former client, without the consent of the client or former client, relating to a matter in reference to which he has obtained confidential information by reason of or in the course of his employment by such client or former client."

Rule 5 thus does not prohibit employment adverse to either a present or former client respecting matters unrelated to confidential information, with or without the consent of such client or former client. It is difficult to conceive in the situation here presented, however, that the attorney would be without confidential information relating to the client or former client's financial affairs and as such is the very subject of his proposed employment, he should either obtain the consent of the client or former client or decline the proffered employment.

All opinions of the Committee are subject to the following disclaimer:
Opinions rendered by the Ethics Committee are an uncompensated service of The Bar Association of San Francisco. Opinions are advisory only, and no liability whatsoever is assumed by the Committee or The Bar Association of San Francisco in rendering such opinions, and the opinions are relied upon at the risk of the user thereof. Opinions of the Committee are not binding in any manner upon the State Bar of California, the Board of Governors, any disciplinary committee, The Bar Association of San Francisco, or the individual members of the Ethics Committee.

In using these opinions you should be aware that subsequent judicial opinions and revised rules of professional conduct may have dealt with the areas covered by these ethics opinions.

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