May an attorney who is "of counsel" to a partnership comprised of two partners, represent a former client of the partnership in litigation against the two partners arising out of a commercial venture between the client and the two partners?
Lawyer A and Lawyer B are partners. Lawyer A has represented the client on a number of matters. Lawyers A and B are also partners with the client in a commercial venture. Lawyers A and B recommend that the client employ Lawyer C to represent the client in certain litigation not related to the commercial venture and Lawyer C becomes "of counsel," to Lawyers A and B. The "of counsel" designation appears on the legal stationery of Lawyers A and B.
The client and Lawyers A and B have a dispute with regard to their commercial partnership which results in the client filing a suit against Lawyers A and B and their other partners, claiming that the client had been wrongfully ejected from the commercial partnership. Upon filing of that suit by the client, Lawyer A withdrew from all legal representation of the client.
The client desires that Lawyer C (who is still "of counsel" to Lawyers A and B) continue representing the client in the pending litigation, including (a) suits to which Lawyers A and B are not a party and have no personal interest, and (b) the suit against Lawyers A and B and their other partners over the ejectment of the client from their commercial partnership.
Two issues are presented by the inquiry. The first issue, which relates to Lawyer C continuing to represent the client in the pending litigation in which Lawyers A and B are not parties, poses no serious ethical problem if the client is fully informed as to and understands Lawyer C's "of counsel" relationship with Lawyers A and B. This assumes, of course, that Lawyers A, B and C have no interest in that litigation that is adverse to the interest of the client.
The second issue, as to whether Lawyer C may represent the client in the litigation in which Lawyers A and B are parties, is entirely different and involves several considerations.
Lawyer C should decline employment in the suit against Lawyers A and B if the exercise of his independent professional judgment in behalf of the client will be or is likely to be affected by the acceptance of such employment. DR 5-105(A). Although DR 5-105(C) allows a lawyer to represent multiple clients if it is obvious that he can adequately represent the interest of each and if each client consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each, it does not, in our opinion, allow Lawyer C to represent the client in the suit against Lawyers A and B even if Lawyers A and B are characterized as "clients" of Lawyer C.
Clearly, Lawyer C could not represent the client in a suit against Lawyers A and B if
Lawyer C was their partner. The "of counsel" relationship is defined in
Opinion 402 (1982). In the minds of the public, Lawyer C would undoubtedly be thought of as a member of the law firm of Lawyers A and B. Public confidence in law and lawyers may be eroded by Lawyer C representing the client in the suit against Lawyers A and B, see CC92.
In our opinion, Lawyer C is a lawyer in or an associate of the firm with Lawyers A and B, within the meaning of the Disciplinary Rules. Lawyer A is clearly disqualified to represent the client in the suit against Lawyers A and B. As a lawyer in or an associate of the firm, Lawyer C is disqualified. DR 5-105(D). Additionally, Lawyer C should not accept employment because DR 5-101(B) provides that a lawyer shall not accept employment in contemplated or pending litigation if he knows or it is obvious that he or a lawyer in his firm ought to be called as a witness. In the suit over the Lawyer A and B's ejectment of the client from their commercial partnership, Lawyers A and B are likely to be called as witnesses.
It would be unethical for an attorney who is "of counsel" to a law partnership, and who is publicly identified as such, to accept employment by a former client in a suit against the partners in that law firm.