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Ohio Legal Ethics Narrative
I. CLIENT-LAWYER RELATIONSHIP
Ohio Rule 1.7 differs significantly from the Model Rule.
The introductory language of division (a) has been rewritten; the Model Rule's "concurrent conflict" language has not been adopted. The new introductory sentence states as follows: "A lawyer's acceptance or continuation of representation of a client creates a conflict of interest if either of the following applies:"
subdivision(a)(1), the word "that" replaces "one"
In subdivision(a)(2), "significant" has been replaced by "substantial"; the phrase "representation of one or more clients" has been deleted, and in its place the words "lawyer's ability to consider, recommend, or carry out an appropriate course of action for that client" have been substituted. Also, "a personal interest of the lawyer" has been deleted; it has been replaced by "the lawyer's own personal interests."
The introductory sentence of division (b) has been deleted and a new sentence, as follows, has been substituted:
"A lawyer shall not accept or continue the representation of a client if a conflict of interest would be created pursuant to division (a) of this rule, unless all of the following apply:"
In subdivision (b)(1), the words "the lawyer reasonably believes that" have been deleted.
Subsections (b)(2) and (b)(3) of the Model Rule have been deleted. What was MR 1.7(b)(4) is now Ohio Rule 1.7(b)(2).
Subdivision (b)(3) (referencing division (c) nonconsentable conflicts) has been added.
Division (c) (nonconsentable conflicts) has been added.
The following sections of the Ohio Code of Professional Responsibility are listed in the Correlation Table (Appendix A to the Rules) as related to Ohio Rule 1.7: DR 5-101(A)(1), DR 5-105(A), (B), & (C).
- Primary Ohio References: Ohio Rule 1.7
- Background References: ABA Model Rule 1.7
- Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 5.3, 5.101-5.105, 9.5-9.7
- Commentary:ABA/BNA § 51:101; ALI-LGL §§ 121-124; Wolfram §§ 7.1-7.6
The provisions of Ohio Rule 1.7: Before proceeding to the general conflict-of-interest principles set forth in sections 1.7:210-:280, we summarize the basic provisions of the current-client conflict rule, Ohio Rule 1.7:
Pursuant to Rule 1.7(a), a conflict is present with respect to acceptance or continuation of representation if
(1) the representation of that client will be directly adverse to another current client; [or]
(2) there is a substantial risk that the lawyer's ability to consider, recommend or carry out an appropriate course of action for that client will be materially limited by the lawyer's responsibilities to another client, a former client, or a third person or by the lawyer's own personal interests.
These two types of conflict (direct adversity and material limitation) can be overcome only if all of the factors set forth in division (b) are present:
(1) the lawyer will be able to provide competent and diligent representation to each affected client;
(2) each affected client gives informed consent, confirmed in writing; [and]
(3) the representation is not precluded by division (c) of this rule.
Division (c) sets forth those conflict situations in which acceptance or continuance of the representation is prohibited, irrespective of the consent of affected clients:
(1) the representation is prohibited by law; [or]
(2) the representation would involve the assertion of a claim by one client against another client represented by the lawyer in the same proceeding.
As stated in the Ohio Code Comparison to Rule 1.7, "[n]o change in the substance of the referenced Ohio rules on conflicts and conflict waivers [OH DR 5-101(A)(1) and 5-105(A), (B), & (C)] is intended, except the requirement that conflict waivers be confirmed in writing." (Note, however, that the same paragraph makes the point that, "unlike DR 5-101(A)(1)," the Rule 1.7 analysis must be applied when the lawyer's personal interests create a conflict.) Despite this statement of intent, there are a few instances (in addition to the 5-101(A)(1) reference) in which the result under the Rule will be different from that which obtained under the former disciplinary rules. Where these differences occur, we will attempt to point them out.
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 5.3 (1996).
The duty of loyalty owed by a lawyer to the client is central to the lawyer-client relationship. The lawyer must put the interests of the client above all else, whether the competing interest is personal to the lawyer or the interest of another. Ohio Rule 1.7 cmt. .
The duty of loyalty requires the lawyer to exercise professional judgment solely for the benefit of the client, with two important limitations. First, the lawyer's duty of loyalty is limited to conduct that is within the bounds of the law. Second, while the lawyer is to exercise professional judgment solely for the benefit of the client, the lawyer still remains responsible for the judgment or decision itself. Other provisions of the Rules specifically address how the duty of loyalty should be exercised in particular instances.
Conflicts are regulated primarily through disciplinary actions, malpractice complaints, ineffective assistance of counsel claims, and disqualification motions. See discussion at section 1.7:260.
To avoid conflicts, a lawyer should adopt "reasonable procedures, appropriate for the size and type of firm and practice," to identify those conflicts. Ohio Rule 1.7 cmt. . Ignorance occasioned by failure to institute such procedures will not excuse a conflicts violation. Id.
A finding of conflict of interest is predicated on there being a sufficient likelihood that the potential conflict could have a material adverse effect on the representation. See Ohio Rule 1.7(a)(1) (representation of client that will be directly adverse to another current client) and (a)(2) (substantial risk of material limitation of lawyer's representation). As stated in 2 Restatement (Third) of the Law Governing Lawyers § 121, at 244-45 (2000): "A conflict of interest is involved if there is a substantial risk that the lawyer's representation would be materially and adversely affected by the lawyer's own interests or by the lawyer's duties to another current client, a former client, or a third person." (Emphasis added.)
If the lawyer's judgment or representation is not affected "adversely," there is no conflict. 2 Restatement (Third) of the Law Governing Lawyers § 121 cmt. c(i) (2000). The cases under former OH DR 5-105 in which a lawyer's independent judgment could have been adversely affected typically involved conflicting multiple-client situations (see, e.g., Cuyahoga County Bar Ass'n v. Schmelzer, 84 Ohio St.3d 382, 704 N.E.2d 243 (1999)), or circumstances in which the lawyer had a personal financial interest in the matter (see, e.g., Columbus Bar Ass'n v. Schlosser, 74 Ohio St.3d 174, 657 N.E.2d 500 (1995)), or both (see, e.g., Columbus Bar Ass'n v. Ewing, 75 Ohio St.3d 244, 661 N.E.2d 1109 (1996)).
There was little or no development under the former OHRPC of the "materiality" test, since it was not explicitly incorporated into the state's ethics rules. One can surmise, however, even under the Code, that the existence of adversity having no bearing or impact on the lawyer's judgment or representation (e.g., the lawyer was an Indians fan; the client couldn't stand the Indians) would not have raised conflict-of-interest concerns, in Ohio or anywhere else. At the other end of the spectrum, the Ohio Supreme Court, in finding a lawyer's professional judgment and his clients' interests likely to be adversely affected in violation of former OH DR 5-105(B), stressed that the lawyer himself was on record as acknowledging that the interests of the two clients he represented in state court litigation involved "some very clear and distinct differences" in that litigation. Office of Disciplinary Counsel v. Mazer, 86 Ohio St.3d 185, 186, 712 N.E.2d 1246, 1247 (1999) (emphasis by the Court) (six-month suspension). See also Columbus Bar Ass'n v. Ewing, 75 Ohio St.3d 244, 251, 661 N.E.2d 1109, 1114 (1996) (indefinite suspension based on violations of, inter alia, former OH DR 5-105(A) and (B) in accepting and continuing employment in which lawyer's own interest and that of multiple clients adversely affected lawyer's ability to exercise independent judgment; Court characterized respondent's conduct as a "power play" that violated the trust of two of his clients (husband and wife); Court "appalled" by respondent's "coercive tactics").
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 9.5-9.7 (1996).
Appearance of impropriety - In general: The "appearance-of-impropriety" standard has been "discarded" by the Model Rules (see ABA, Annotated Model Rules of Professional Conduct 199 (5th ed. 2003)); and by 2 Restatement (Third) of the Law Governing Lawyers § 121 (2000). As Restatement comment c(iv) and the reporter's note thereto state:
The perspective for determining conflict of interest. This Section employs an objective standard by which to assess the adverseness, materiality, and substantially of the risk of the effect on representation. The standard of this Section is not the "appearance of impropriety" standard formerly used by some courts to define the scope of impermissible conflicts. That standard could prohibit not only conflicts as defined in the Section, but also situations that might appear improper to an uninformed observer or even an interested party.
2 Restatement (Third) of the Law Governing Lawyers § 121 cmt. c(iv).
Defining the appropriate standard by which to give an objective content to an appearance-of-impropriety standard has proved problematical.
Id. at reporter's note to cmt. c(iv). And see Charles W. Wolfram, Modern Legal Ethics § 7.1.4 (1986) (strongly criticizing the appearance-of-impropriety standard).
Pre-Rule, Ohio employed a low threshold to trigger conflict-of-interest protections. If the conduct raised even the appearance of impropriety, it was arguably improper. The extent to which the appearance-of-impropriety standard survives under the Rules is not entirely clear. Like the Model Rule, Ohio Rule 1.7 has abandoned any reference to appearance of impropriety. The complication arises from Kala v. Aluminum Smelting & Refining, Inc., 81 Ohio St.3d 1, 688 N.E.2d 258 (1998), a disqualification case, in which appearance of impropriety was heavily relied by the Court in reaching its decision, which is purportedly "codified" in Ohio Rules 1.9 and 1.10. See further discussion of this aspect of Kala in this section infra.
Under the former OHRPC, the Ohio Supreme Court invoked the "appearance of impropriety" in disciplinary actions only on rare occasion -- usually, although not exclusively, as an additional concern for conduct otherwise violative of the disciplinary rules. See, e.g., Miami County Bar Ass'n v. Thompson, 78 Ohio St.3d 103, 104-05, 676 N.E.2d 879, 881 (1997) (one-year suspension for failure to "avoid even the appearance of impropriety and the implication that his professional judgment on behalf of a client could be affected by the lawyer's own interests"). The "appearance of impropriety" concern also was raised on occasion to justify disqualification of counsel, where the current representation bore a "substantial relationship" to a former representation. See Kala (discussed below). (See section 1.9:210 for discussion of substantial relationship test.) Most cases questioned its use as an independent factor requiring disqualification. E.g., Kitts v. U.S. Health Corp., 97 Ohio App.3d 271, 277, 646 N.E.2d 555, 559 (Scioto 1994) ("The appearance of impropriety, with nothing more, is, as a matter of law, insufficient to warrant disqualification."); State v. Murphy, No. 9-87-35, 1988 Ohio App. LEXIS 4673 (Marion Nov. 17, 1988) (denying request for disqualification of prosecutor's office in criminal case predicated on appearance of impropriety), aff'd on other grounds, 49 Ohio St.3d 293, 551 N.E.2d 1292 (1990); Hatfield v. Seville Centrifugal Bronze, 106 Ohio Misc.2d 10, 16, 732 N.E.2d 1077, 1081 (C.P. Medina 2000) ("This court can find no Ohio cases where disqualification of an attorney or a law firm was based merely on an appearance of impropriety."). But cf. Roger J. Au & Son, Inc. v. Aetna Ins. Co. (In re Roger J. Au & Son, Inc.), 64 B.R. 600 (N.D. Ohio 1986) (simultaneous representation of corporation and its officers, coupled with admonition to "avoid even the appearance of impropriety," led court to conclude that it need not find evidence of ethical violation before disqualifying counsel). More often, the broad concern for the avoidance of even the appearance of impropriety was invoked in advisory opinions assessing proposed lawyer conduct; they are reviewed below at "Appearance of impropriety-Improper conduct."
As noted above, the Supreme Court opinion in Kala v. Aluminum Smelting & Refining, Inc., 81 Ohio St.3d 1, 688 N.E.2d 258 (1998), indicated that the "appearance of impropriety" standard was alive and well under the Code in the conflict-of-interest/disqualification context despite its condemnation by the commentators. No less than nine references to the appearance of impropriety appear in the course of the Court's fourteen-page majority opinion. See 81 Ohio St.3d at 5, 9, 11, 14, 688 N.E.2d at 262, 265, 266, 268. Detailed discussion of the Kala decision, a "classic" side-switching case, can be found at sections 1.9:200, 1.9:400, and 1.10:300. Accord, on the appearance-of-impropriety point, Perin v. Spurney, 2005 Ohio 6811, 2005 Ohio App. LEXIS 6112 (Franklin); the Perin court rejected plaintiff's contention that disqualification could not be based on appearance of impropriety and reasoned as follows:
[H]ere, as in Kala, Kelm and Dawson's [plaintiff's lawyers] disqualification is warranted through the underlying appearance of impropriety stemming from concerns that Kelm and Dawson had access to Honda's confidences and secrets by representing and communicating with Doug Perin [plaintiff appellant's husband and a Honda in-house counsel]. . . .
* * * *
. . . Kelm and Dawson's representation of both Doug Perin and appellant created on appearance of impropriety that Doug Perin aligned with appellant's attorneys and abandoned Honda. . . . As an example, Doug Perin reviewed appellant's complaint, and Doug Perin even testified that he believed that Honda retaliated against appellant, noting that "she was terminated shortly after presenting information to the company relating to these [hazardous material transportation] issues."
Id. at ¶¶ 24, 26 (final bracketed material by the court). And see Winblad v. Deskins, 150 Ohio App.3d 527, 2002 Ohio 7092, 782 N.E.2d 160 (Montgomery), affirming disqualification based primarily on appearance of impropriety grounds with respect to preservation of client confidences. "'These confidences are imputed to the entire firm [office-sharing arrangement, actually] and in the interest of avoiding the appearance of impropriety each attorney associated with the firm must be disqualified from the case.'" Id. at ¶ 13 (quoting trial court; bracketed material added). Kala was cited in support. Winblad is further discussed at sections 1.7:260, 1.9:200, and 1.10:103.
Because of Kala and its "codification" as noted above, conclusions regarding the viability of the appearance-of-impropriety standard will have to await interpretation under the Rules. In the interim, some pre-Rule ethics opinions are offered here by way of background.
Appearance of impropriety - Improper conduct: In numerous situations involving potential conflicts of interest, advisory opinions under the former OHRPC cautioned lawyers that their proposed conduct raised appearance-of-impropriety concerns.
For example, the Board of Commissioners on Grievances and Discipline relied on this general proposition to support its advice concerning the propriety of appearing before a particular judge where the attorney and judge potentially were compromised by familial or work ties. See, e.g., Bd. of Comm'rs on Grievances & Discipline Op. 88-013, 1988 Ohio Griev. Discip. LEXIS 23 (June 17, 1988).
The Board applied the standard in other types of factual situations as well:
Bd. of Comm'rs on Grievances & Discipline Op. 2001-4, 2001 Ohio Griev. Discip. LEXIS 10 (Aug. 10, 2001) (selling annuities on commission basis to estate-planning clients);
Bd. of Comm'rs on Grievances & Discipline Op. 96-6, 1996 Ohio Griev. Discip. LEXIS 4 (Aug. 9, 1996) (city-counsel member could not represent criminal defendants in city's municipal court or clients in civil litigation adverse to city);
Bd. of Comm'rs on Grievances & Discipline Op. 93-7, 1993 Ohio Griev. Discip. LEXIS 5 (Aug. 13, 1993) (spouses opposing one another in criminal matter); Bd. of Comm'rs on Grievances & Discipline Op. 91-22, 1991 Ohio Griev. Discip. LEXIS 7 (Oct. 18, 1991) (siblings opposing one another in criminal matter).
Bd. of Comm'rs on Grievances & Discipline Op. 90-09, 1990 Ohio Griev. Discip. LEXIS 16, at *5 (June 15, 1990) (lawyer for representative of estate could not act as realtor in selling estate property);
Bd. of Comm'rs on Grievances & Discipline Op. 89-005, 1989 Ohio Griev. Discip. LEXIS 12, at *4 (Feb. 17, 1989) (office-sharing lawyers on opposing sides of contested divorce).
The Ohio State Bar Association and various local bar associations also employed a broad standard when deciding whether attorney conduct risked the appearance of impropriety. Sometimes the concern arose from lawyers acting in both legal and nonlegal capacities: E.g.,
Ohio State Bar Ass'n Informal Op. 88-2 (Jan. 29, 1988), (dual role of lawyer and nonlawyer freelance investigator of financial transactions);
Ohio State Bar Ass'n Informal Op. 81-4 (Apr. 8, 1981) (county commissioner serving as defense counsel in same county);
Toledo Bar Ass'n Op. 90-8 (Apr. 18, 1990) (voting as city counsel member on matters coming before counsel involving clients of council member's firm).
At other times, appearance-of-impropriety concerns were triggered by the representation of multiple clients on related matters, whether sequentially or concurrently. E.g., Ohio State Bar Ass'n Informal Op. 89-1 (Nov. 15, 1989); Cleveland Bar Ass'n Op. 102 (Nov. 12, 1973).
Other instances in which the appearance of impropriety was invoked included Ohio State Bar Ass'n Informal Op. 86-7 (July 28, 1986) (joining firm that is suing client of lawyer's former partner); Cleveland Bar Ass'n Op. 80 (n.d.) (lawyer who learned confidential information about client of lawyer with whom he shared office space should withdraw). Compare Bd. of Comm'rs on Grievances & Discipline Op. 92-13, 1992 Ohio Griev. Discip. LEXIS 8 (June 19, 1992) (assistant county prosecutor in part-time private practice may share office space with attorney whose practice includes criminal defense work so long as appearance of impropriety is diminished by office procedures that maintain separateness of the two practices).
Appearance of impropriety - Approved conduct: Taken to the extreme, the duty to avoid even the appearance of impropriety could be read as a mandate to avoid any behavior that a reasonable person might find questionable. While perhaps wise counsel, as a standard this is simply too restrictive. While not susceptible of precise definition, some guidance as to where the line should be drawn can be found by contrasting the opinions just discussed with those that expressly found the conduct in question did not raise appearance-of-impropriety concerns:
With respect to an attorney representing criminal defendants in private practice and serving as a court-appointed special county prosecutor in another county on an occasional basis, the BCGD commented that, given their limited nature, such appointments "[do] not create an appearance of impropriety that would outweigh the public's interest in ensuring that offenses are prosecuted swiftly," which the appointment of special prosecutors helps secure. Bd. of Comm'rs on Grievances & Discipline Op. 94-6, 1994 Ohio Griev. Discip. LEXIS 9, at *8-9 (Apr. 15, 1994). Op. 94-6 was later modified to permit this practice "in the same county (and even in the same court) in which the attorney represents criminal defendants . . . ." Bd. of Comm'rs on Grievances & Discipline Op. 2003-7, 2003 Ohio Griev. Discip. LEXIS 7, at *1 (Dec. 5, 2003) (syllabus).
Attorneys who are salaried employees of an insurance company may pursue subrogation claims against tortfeasors and collect the deductibles incurred by the insureds without creating an appearance of impropriety. Bd. of Comm'rs on Grievances & Discipline Op. 95-14, 1995 Ohio Griev. Discip. LEXIS 1 (Dec. 1, 1995). See also section 1.7:410 (discussing how to resolve the potential conflict-of-interests problems in such an arrangement).
A prosecuting attorney can circulate a form letter to members of the bar soliciting contributions for a charitable organization without creating an appearance of impropriety, but the donor should make the contributions directly to the charity's offices rather than through the prosecuting attorney. Cleveland Bar Ass'n Op. 109 (Nov. 20, 1973).
An attorney did not create an appearance of impropriety by recommending a treating physician to a personal injury client upon the client's request, where the client did not have a physician or the client's physician refused to extend services to the client. Cleveland Bar Ass'n Op. 92 (Sept. 5, 1973).
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 5.101-5.105 (1996).
Client consent - In general: Ohio Rule 1.7 reflects the reality that, in some situations, conflict-of-interest problems may be more theoretical than real. In those situations, the parties' right to counsel of choice takes precedence over conflict-of-interest concerns, and the client is allowed to waive the protections that the conflict rules provide. For the waiver to be effective, three conditions must be met: (1) the lawyer must be able to provide the requisite professional representation to each client; (2) all clients must give informed consent, in writing, to the multiple representation; and (3) the representation must not be precluded by division (c). Ohio Rule 1.7(b).
Client consent - Adequate representation: While Rule 1.7(b) allows a conflict to be waived in limited instances, it retains substantial protection for client interests. The first protection is that client consent is effective only when "the lawyer will be able to provide competent and diligent representation to each affected client." Rule 1.7(b)(1). Comment  stresses that the lawyer has a duty to evaluate whether the prospect of multiple representation may impair his ability to competently and diligently represent all affected clients. Ohio Rule 1.7 cmt. . If this test is not met, representation is improper, at least where current-client conflicts are concerned. Coaker v. Geon Co., 890 F. Supp. 693 (N.D. Ohio 1995) (applying former OHRPC in disqualifying counsel from representing either co-defendant in age discrimination case, despite their knowing consent to the representation, where it was not obvious that lawyer could adequately represent interests of each, due to a conflict over whether one client, formerly a subsidiary of the other but now an independent entity, was subject to successor liability for the alleged discrimination); Toledo Bar Ass'n Op. 91-18 (n.d.) (not obvious under former OH DR 5-105(C) that lawyer could adequately represent two clients in two unrelated medical claims against same doctor; conflict not curable by client consent).
Client consent - Adequate disclosure: If the lawyer will be able to provide competent and diligent representation to each client, she also must consult with the affected clients and obtain the informed consent of each, confirmed in writing. Ohio Rule 1.7(b)(2) & cmt. . A prerequisite to "informed consent" is that "the lawyer has communicated adequate information and explanation about the material risks and reasonably available alternatives to the proposed course of conduct." Ohio Rule 1.0(f). See Rule 1.0 cmt.  for further details regarding the lawyer's disclosure obligations in this context.
As the obligation is put in Ohio Rule 1.7 cmt. :
Informed consent requires that each affected client be aware of the relevant circumstances and of the material and reasonably foreseeable ways that a conflict could have adverse effects on the interests of that client. . . . 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 advantages and risks of the common representation, including possible effects on loyalty, confidentiality, and the attorney-client privilege.
Moreover, there may be instances in which sufficient disclosure to obtain consent is impossible because of confidentiality obligations. "For example, when a lawyer represents different clients in related matters and one of the clients refuses to consent to the disclosure necessary to make an informed decision, the lawyer cannot properly ask the latter to consent." Rule 1.7 cmt. .
"Full disclosure" under the former OHRPC included discussing "any potentially adverse effects which might cause [the attorney] to support for one client what his professional duty for the other required him to oppose." Bar Ass'n of Greater Cleveland v. Shillman, 61 Ohio St.2d 364, 367, 402 N.E.2d 514, 517 (1980); accord Cincinnati Bar Ass'n v. Schwartz, 74 Ohio St.3d 489, 491, 660 N.E.2d 422, 423 (1996) (quoting Shillman language with approval). Full disclosure also included discussion of the fact that communications made to the lawyer by one client may have to be shared with the other clients involved. Cleveland Bar Ass'n Op. 94-2 (Sept. 8, 1994).
Quoting a federal district court case, the Board of Commissioners in a 1988 opinion defined full disclosure in the following terms:
"Full disclosure means just that — affirmative revelation by the attorney of all the facts, legal implication[s], possible effects, and other circumstances relating to the proposed representation. A client's mere knowledge of the existence of his attorney's other representation does not alone constitute full disclosure."
Bd. of Comm'rs on Grievances & Discipline Op. 88-021, 1988 Ohio Griev. Discip. LEXIS 4, at *5 (Aug. 12, 1988) (quoting Fin. Gen. Bankshares, Inc. v. Metzger, 523 F. Supp. 744, 771 (D.D.C. 1981); bracketed material added to conform to Metzger quote). See also Burton v. Selker, 36 F. Supp.2d 984, 988 (N.D. Ohio 1999) (rejecting plaintiff's argument that he was "uninformed" about nature of defendant-lawyer's business relationship, when plaintiff had signed a detailed waiver-of-conflict letter sent to him by defendant; summary judgment for defendant granted), aff'd, 30 Fed. Appx. 456 (6th Cir. 2002). Again, see Rule 1.0 cmt.  for discussion of these disclosure obligations under the Rules.
Instead of simply articulating abstract standards for full disclosure, a few bar opinions under the OHRPC discussed how the full disclosure requirement should be implemented in particular factual settings.
For example, the Ohio State Bar Association addressed whether a lawyer trustee of the Ohio State Legal Services Association (OSLSA) could represent a client in a matter in which the OSLSA represented the opposing party. Assuming that it was obvious that the trustee and the Association could adequately represent the interests of their respective clients, the bar association concluded that the representation may be permitted upon full disclosure and consent. Full disclosure would involve disclosing the existence of each relationship, the nature of the interests, the duties and responsibilities owed to each client, and the potential impact, if any, these might have on the lawyer's exercise of independent judgment on behalf of each client. Ohio State Bar Ass'n Informal Op. 78-8 (Oct. 30, 1978).
In a 1992 opinion, the Toledo Bar Association addressed the issue whether a lawyer who was general counsel to an insurance company could also provide estate-planning representation to the insurance company's clients, where the estate-planning advice might involve recommending the insurance company's products. While questioning whether this situation could ever be one where it was "obvious" that the lawyer could exercise independent judgment for all concerned, the bar association nonetheless proceeded to discuss the full disclosure requirement. The attorney would have to tell the insurance company that he would not unduly promote the insurance company's products and tell the estate-planning clients that, because of his relationship with the insurance company, the lawyer might be influenced to promote the insurance company's product in lieu of an equal, better, or less expensive product of a competitor. Toledo Bar Ass'n Op. 92-8 (n.d.).
Client consent - Informed consent confirmed in writing: The second half of the informed consent requirement is that, after being adequately informed, the client must consent and the consent must be confirmed in writing. Ohio Rule 1.7(b)(2). "Such a writing may consist of a document signed by the client or one that the lawyer promptly records and transmits to the client following an oral consent. . . . 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." Ohio Rule 1.7 cmt. .
Although the Rules do not expressly so state, it can safely be presumed that the the burden of providing disclosure and obtaining consent rests with the lawyer, as it did under the former OHRPC. Bd. of Comm'rs on Grievances & Discipline, Op. 88-021, 1988 Ohio Griev. Discip. LEXIS 4 (Aug. 12, 1988). Thus, any doubts about the adequacy of disclosure or the actual existence of client consent would be construed against the lawyer. See White Motor Corp. v. White Consol. Indus., Inc., No. 39295, 1980 Ohio App. LEXIS 13705 (Cuyahoga Jan. 10, 1980) (requiring that any waiver of conflict be a "'clear and unequivocal waiver,' not merely a waiver by implication," id. at *21; the White Motor case is further discussed this section infra at "Client consent - Consent to future conflicts"). But when the evidence of full disclosure and consent is clear, waiver of the conflict will be enforced. E.g., Conforte v. LaSalla, 2002 Ohio 6052, 2002 Ohio App. LEXIS 5872 (Cuyahoga):
Here, there is no dispute that Conforte was informed about any possible conflict, that Conforte was represented by legal counsel of his own choice, that Conforte understood the terms of the waiver, and that Conforte signed the written waiver of conflict. Thus, the trial court did not err in granting summary judgment in favor of defendants.
Id. at ¶ 24.
Particularly in the disqualification context, parties sometimes argue that delay in moving for a disqualification may be evidence of an implied consent to waive the conflict. Here as well, courts under the former OHRPC were reluctant to find implied consent. See, e.g., Sarbey v. Nat'l City Bank, 66 Ohio App.3d 18, 583 N.E.2d 392 (Summit 1990); White Motor v. White Consolidated supra. This was especially true where, on the facts, the lawyer opposing disqualification had failed to follow steps outlined in OH DR 5-105(C). Sarbey, 66 Ohio App.3d 18, 583 N.E.2d 392 (implied consent is equitable argument that can be raised only by one with clean hands, a prerequisite not met by a lawyer who fails to follow OH DR 5-105(C)). As the Ninth District Court of Appeals stated:
Where dual representation is involved, the court should apply the implied consent or waiver remedy with caution. A motion to disqualify counsel for conflict of interest stemming from dual representation of adverse clients should be denied on the basis of implied consent or waiver only where there is substantial proof that the movant's delay has resulted in serious prejudice to the opposing party, . . . or where it is clear that the moving party knowingly delayed the filing of the motion in order to cause such hardship or prejudice.
Id. at 29-30, 583 N.E.2d at 400. As to consent inferred by conduct under the OHRPC, see Rule 1.0 cmt. , which states that "a lawyer may not assume consent from a client's . . . silence. Consent may be inferred, however, from the conduct of a client . . . who has reasonably adequate information about the matter."
In two Ohio federal cases decided under the Code, the courts held that the consent provision of OH DR 5-105(C) came into play only if OH DR 5-105(B) [or, presumably, OH DR 5-105(A) as well] is violated. "[T]he analysis must start with whether there is a violation of OH DR 5-105(B) because if there is no violation, there is no need for consent." SST Castings, Inc. v. Amana Appliances, Inc., 250 F. Supp.2d 863, 870 (S.D. Ohio 2002); Pioneer-Standard Elecs., Inc. v. Cap Gemini America, Inc., No. 1:01 CV2185, 2002 U.S. Dist. LEXIS 7120, at *10 (N.D. Ohio Mar. 11, 2002). A similar result would follow under the Rules if there were no violation of the provision analogous to 5-105(A) & (B) -- Ohio Rule 1.7(a)(2). But if there is direct adversity under Rule 1.7(a)(1), there is a violation unless all of the requisites of 1.7(b), including informed consent, confirmed in writing, are satisfied.
(For an interesting decision under the Code involving a waiver of direct adversity as to which there was no written evidence, see In re Estate of Knowlton, 2006 Ohio 4905, 2006 Ohio App. LEXIS 4835 (Hamilton), discussed in section 1.7:330 infra at "Conflicts among current clients – Direct adversity.")
Client consent - Consent and former client conflicts: See section 1.9:200, at "Former-client conflicts and consent."
Client consent – Consent to future conflicts: The issue of consent to future conflicts is covered in Comment . The key is the client's understanding of the material risk that such a waiver entails. The more complete the explanation of representations that might arise and of the actual and reasonably foreseeable adverse consequences of such representations, the more likely it is that the client will have the necessary understanding. Consents limited to a particular type of conflict with which the client is already familiar ordinarily will be effective as to that type of conflict. However,
[i]f the consent is general and open-ended, then the consent ordinarily will be ineffective, except when it is reasonably likely that the client will have understood the material risks involved. Such exceptional circumstances might be presented if the client is an experienced user of the legal services involved and is reasonably informed regarding the risk that a conflict may arise, particularly if 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.
Rule 1.7 cmt. .
The comment begins and ends with references to division (b) of Rule 1.7 – first, by noting that whether a lawyer can properly request such a waiver is subject to "the test of division (b)"; last, by stating that advance consent cannot be effective "if the circumstances that materialize in the future are such as would make a waiver prohibited under division (b)." Id. The language of Comment  is identical to MR 1.7 cmt. , except for the substitution of "division" for "paragraph." But MR 1.7 has only paragraphs (a) and (b), while Ohio Rule 1.7 has divisions (a), (b), and (c), the last of which enumerates representations that cannot be accepted or continued even with informed client consent – i.e., the circumstances making "a waiver prohibited" referred to in the final sentence of Comment . Division (c) also seems the better fit at the outset of the comment – one would think a mere request to consent would be improper only if the consent is irrelevant in any event, as it is under division (c). See 1 Restatement (Third) of the Law Governing Lawyers § 122 cmt. d (2000) ("If the new conflict is not consentable . . ., the lawyer may not proceed.") We therefore suspect that the Model Rule reference was used without noticing the difference between MR 1.7 and Ohio Rule 1.7 and that the references should be to Ohio Rule 1.7(c), not 1.7(b).
The Ohio cases on consent to future conflicts are few and far between. In White Motor Corp. v. White Consol. Indus. Inc., No. 39295, 1980 Ohio App. LEXIS 13705 (Cuyahoga Jan. 10, 1980), Consolidated argued that Motor's prior consent to matters related to the (unsuccessful) merger of the two parties "necessarily included all potential conflicts arising therefrom, including the possibility of future litigation," id. at *20-21. Even though Motor was a sophisticated corporate party, the court rejected the argument and granted Motor's motion for disqualification of Consolidated's counsel in the damage action arising out of the failed merger. Compare ABA Formal Op. 05-436 (May 11, 2005), approving consent to future conflicts if based on informed written consent in "appropriate circumstances" and withdrawing ABA Formal Op. 93-372 (Apr. 16, 1993). Pursuant to Opinion 05-436,
[g]eneral and open-ended consent is more likely to be effective when given by a client that is an experienced user of legal services, particularly if, for example, 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.
Id. at 1. Opinion 05-436 notes that MR 1.7 cmt.  expressly addresses this subject in terms consistent with the conclusions reached in the opinion. MR 1.7 cmt.  is replicated, with little or no substantive change, in Ohio Rule 1.7 cmt. .
See also City of Cleveland v. Cleveland Elec. Illuminating Co., 440 F. Supp. 193 (N.D. Ohio 1976), aff'd, 573 F.2d 1310 (6th Cir. 1977) (table), cited in Restatement § 122, reptr's note to cmt. d, as an example of the rule approving and enforcing informed consent that reasonably contemplates later conflicted representation. The CEI case is discussed this section infra at "Nonconsentable conflicts - Governmental clients."
Nonconsentable conflicts - In general: The third requirement under Rule 1.7(b) is that the representation not be precluded under 1.7(c), which sets forth representations barred irrespective of consent. Thus, a lawyer shall not accept or continue a representation "[e]ven if each affected client consents," where the representation is prohibited by law or the lawyer is asserting a claim on behalf of one client against another client in the same proceeding. Ohio Rule 1.7(c). See generally 2 Restatement (Third) of the Law Governing Lawyers § 122(2) (2000).
(Restatement § 122 cmt. g(ii) adds another category — conflicts involving governmental clients — as to which the conflict is nonconsentable in a minority of states, including Ohio under the former OHRPC, at least in the criminal context. See this section infra.)
Nonconsentable conflicts - Representation prohibited by law: Ohio Rule 1.7(c)(1). Examples include representation of both husband and wife in the preparation of a separation agreement and, pursuant to federal criminal statutes, certain representations by former government lawyers irrespective of the consent of the former client. Ohio Rule 1.7 cmt. . ORC 102.03(A)(1)prohibits a current or former public official from representing a client during his public employment or for a year thereafter on any matter in which he participated personally as a public official or employee in a decision-making capacity or in which he rendered advice, investigated, or engaged in other substantial exercise of administrative discretion. Accord ORC 102.03(A)(2) (twenty-four month prohibition on representation of public utility, by former commissioner or attorney examiner of the PUC). And see ORC 120.39(A) (neither counsel appointed by the court to represent or assist in the representation of indigent criminal defendants nor any public defender or a member of any public defender's office shall be a partner or employee of any prosecuting attorney, city law director, or similar chief legal officer).
Other instances in which a conflict is nonconsentable by virtue of the representation being prohibited by law (in these instances, by disciplinary rule) include:
The naming of the lawyer or any of various persons related or associated with the lawyer as a beneficiary in an instrument drafted by the lawyer. Under Ohio Rule 1.8(c), client gifts of this sort (unless the client is a family member) are prohibited and are not subject to client consent. See discussion at section 1.8:400.
Supplying the client with living and/or medical expenses. Ohio Rule 1.8(e). See discussion at section 1.8:620.
Agreeing with a client prior to the conclusion of the representation to acquire literary or media rights concerning information relating to the representation. Ohio Rule 1.8(d). See discussion at section 1.8:500.
Soliciting or engaging in sexual activity with a client, unless there was a preexisting consensual relationship. Ohio Rule 1.8(j) & cmt. . See discussion this section infra at "Sexual relations with clients" and in section 1.8:210.
Nonconsentable conflicts - Asserting claim of one client against another client in same proceeding: Under Ohio Rule 1.7(c)(2) the conflict that arises from representing multiple clients in the same proceeding where one client is asserting a claim against the other is nonconsentable. Comment  to the Rule notes that the term "proceeding" includes not only actions before a tribunal but also "in negotiations or mediation of a claim pending before a tribunal." The term "tribunal," in turn, has a broad meaning under the Rules. As stated in Rule 1.0(o), the term "tribunal" denotes "a court, an arbitrator in a binding arbitration proceeding, or a legislative body, administrative agency, or other body acting in an adjudicative capacity."
Interestingly, the Board of Commissioners, in addressing the import of Rule 1.7(c)(2), defined the term "proceeding" without reference to either cmt.  or Rule 1.0(o). According to the Board, "a proceeding includes acts and events before a tribunal, as well as acts and events before mediators, arbitrators, or other administrative bodies." Bd. of Comm'rs on Grievances & Discipline Op. 2007-4, Ohio Griev. Discip. LEXIS 4, at *1 (June 8, 2007) (syllabus). At least on its face, this interpretation seems broader than that articulated in the Rules themselves. It could be read to include under the 1.7(c)(2) prohibition activities that occur outside a tribunal or related negotiations and mediations.
Another Board opinion that appears to stretch the meaning of Rule 1.7(c)(2) is Bd. of Comm'rs on Grievances & Discipline Op. 2008-2, 2008 Ohio Griev. Discip. LEXIS 2 (June 6, 2008). The question raised in Opinion 2008-2 was whether the law firm of a lawyer-board member, who is not counsel to the corporation, could represent a client in a lawsuit against the corporation. The Board opined that the firm and its other lawyers could not, because the material limitation conflict of the board member would be imputed to the firm under Rule 1.10(a). For further discussion of this aspect of the opinion, and whether the affected client could waive the imputation pursuant to Rule 1.10(e), see section 1.10:500.
As noted by the Board, analysis of the question raised starts with whether the lawyer director himself could undertake the representation; if not, then the question becomes whether the conflict is imputed to his firm. Rule 1.7(c)(2) was central to the Board's opinion regarding the first aspect. Stressing the director's legal and fiduciary duties to the corporation, the Board found that the question presented posed a material limitation conflict under 1.7(a)(2). Citing to Rule 1.7 cmt. , the Board explained that "[a] lawyer's fiduciary duties as a corporate director may create a material limitation conflict on the lawyer's professional duties to a client in the legal representation." Op. 2008-2, at *9. The Board concluded that such a conflict existed here:
It is a conflict of interest under Rule 1.7(A) [sic] (2) for a lawyer who sits as a corporate director and not as corporate counsel to represent a client suing the corporation because the lawyer's fiduciary duties to the corporation and the lawyer's personal interest in serving as a corporate director would be a material limitation upon the lawyer's ability to represent the client. A significant risk would exist that the lawyer's duties of loyalty and independence on behalf of the client would be materially limited by the lawyer's fiduciary duties to the corporation and the lawyer's own personal interest in serving as corporate director.
Id. at *11-12. So far so good.
The Board then turns to Rule 1.7(b) and (c). According to the Board and without any analysis in addition to that set forth here, "[p]ursuant to Rule 1.7(c)" this conflict of interest "cannot be waived under Rule 1.7(b) because the client and the corporation are directly adverse in the same proceeding. The corporation is not technically a client of a lawyer director who is not corporate counsel, but a lawyer director cannot isolate the fiduciary duties owed to the corporation from his professional duties as a lawyer." Id. at *12.
But under the express terms of Rule 1.7(c)(2), the directly-adverse-in-the-same-proceeding test posits the assertion of a claim "by one client against another client." How then does 1.7(c)(2) control when, by the Board's own admission, the corporation is "not technically a client"? The Board does not say, other than that the director cannot isolate his fiduciary duties to the corporation from his professional duties as a lawyer, which doesn't quite seem to close the gap. (The result under 1.10 is the same, because Rule 1.10(e) permits waiver under the conditions stated in Rule 1.7, and the Board has already opined that 1.7(c)(2) precludes waiver under 1.7(b).) The nonwaiver conclusion is also is at odds with ethics opinions from other states cited by the Board in support of its conclusion that the conflict is imputed. Thus, Virginia State Bar Ass'n LEO 1821 and Illinois State Bar Ass'n Op. 02-01, while supporting the imputation result, both expressly state that this is so "absent disclosure and consent" and that it "may be cured" by consent. In the words of the Illinois opinion, "the conflict is waivable by consent following disclosure," a result which the Illinois opinion characterizes as the "majority rule," citing ethics opinions from Oregon, Vermont, and California. The Ohio Board recognizes in its own opinion the consent caveat contained in the Illinois and Virginia opinions, but this for some reason had no effect on its conclusion to the contrary that the conflict was nonwaivable. Overall, a problematic opinion.
Nonconsentable conflicts - Governmental clients: Ethics opinions in some states, including Ohio under the OHRPC, have stated that, at least in the criminal context, the government lawyer's client is the public, and the public cannot consent to a conflict. See, e.g., Bd. of Comm'rs on Grievances & Discipline Op. 92-13, 1992 Ohio Griev. Discip. LEXIS 8 (June 19, 1992); Ohio State Bar Ass'n Informal Op. 87-5 (June 29, 1987). But see Bd. of Comm'rs on Grievances & Discipline Op. 93-7, 1993 Ohio Griev. Discip. LEXIS 5 (Aug. 13, 1993) (assistant county prosecutor's conflict in criminal context consentable; for further discussion of this opinion, see section 1.8:1000). Also contrary to the government-client-nonconsent rule is a civil antitrust case in which the Northern District of Ohio found that the plaintiff city could and did knowingly consent to an alleged conflict of interest; the city had previously requested the law firm to take on representation as special bond counsel, knowing full well that the firm had been and was general counsel in all litigation matters for the antitrust defendant and that the firm had represented the defendant against the city's interests numerous times in the past. City of Cleveland v. Cleveland Elec. Illuminating Co., 440 F. Supp. 193 (N.D. Ohio 1976) (disqualification motion denied), aff'd, 573 F.2d 1310 (6th Cir. 1977) (table). The government-client category is not listed in Rule 1.7(c) as nonconsentable; it seems doubtful that it survives under the new Rules. The government-nonconsent doctrine is not mentioned by the Board in Opinion 2007-4, which deals with concurrent conflicts of a city law director.
Nonconsentable conflicts - Other circumstances involving lawyer conduct that was not curable by client consent under the OHRPC:
Representation of multiple criminal defendants in cases arising out of the same transaction, where the trial judge, in his or her discretion, concludes that the potential for conflict exists, see State v. Dillman, 70 Ohio App.3d 616, 591 N.E.2d 849 (Huron 1990) (per curiam) (upholding lower court's disqualification of public defender and all members of his office from representing defendant, despite defendant's consent, where another public defender in same office was representing second defendant, who was willing to testify against first defendant). The Dillman court relied on the analysis in Wheat v. United States, 486 U.S. 153, 163-64 (1988), where the U.S. Supreme Court similarly concluded that the trial court had the discretion to disqualify counsel, even though there was client consent, "where a potential for conflict exists which may or may not burgeon into an actual conflict as the trial progresses." Id. at 163. As for how likely the development of an actual conflict must be, the Court shed some light on this in subsequent discussion, where it stated that the presumption in favor of defendant's counsel of choice "may be overcome not only by a demonstration of actual conflict but by a showing of a serious potential for conflict." Id. at 164 (emphasis added). See also section 1.7:320.
Representation of creditor of both respondent’s husband and husband's ex-wife in collection suit against ex-wife. See Office of Disciplinary Counsel v. Miller, 97 Ohio St.3d 500, 2002 Ohio 6729, 780 N.E.2d 586 ("The panel further found that while respondent disclosed to Suzuki [the creditor] that she was married to Ronald, 'the level of Respondent's personal interest in the matter of [the Suzuki case] was so significant as to, in effect, make the provisions of DR 5-101(A)(1) non-waivable under the circumstances involved here.'" Id. at para. 13 (first bracketed material added).
Sexual relations with clients. See Office of Disciplinary Counsel v. Booher, 75 Ohio St.3d 509, 664 N.E.2d 522 (1996) (court-appointed lawyer having sex with client in jail; Court notes that it makes no difference whether the sexual activity is initiated or consented to by the client). For two other cases in which lawyers were disciplined as a result of having consensual sex with the client ("consenting, romantic relationship"), see Office of Disciplinary Counsel v. Moore, 101 Ohio St.3d 261, 2004 Ohio 734, 804 N.E.2d 423 (two counts of sexual misconduct, one of which was consensual; violation of OH DR 5-101(A)(1) (as well as OH DR 1-102(A)(6)) as to both counts); Office of Disciplinary Counsel v. DePietro, 71 Ohio St.3d 391, 643 N.E.2d 1145 (1994) (lawyer conceded that personal relationship adversely impacted attorney-client relationship and that his conduct violated OH DR 5-101(A)). There are courts that have taken the view that "the professional relationship renders it impossible for the vulnerable layperson to be considered 'consenting'" with respect to sexual relations with her attorney. Iowa Sup. Ct. Bd. of Prof'l Ethics & Conduct v. Hill, 540 N.W.2d 43, 44 (Iowa 1995). In Ohio, the Supreme Court has stated that even if such a "vulnerable layperson" does consent, the dominance of the attorney in the attorney-client relationship requires that the attorney be subjected to discipline for such conduct. Booher, 75 Ohio St.3d 509, 664 N.E.2d 552. Ohio Rule 1.7 cmt.  and Rule 1.8(j) are in accord; as Rule 1.8 cmt.  states, "because the client's own emotional involvement renders it unlikely that the client could give adequate informed consent, this rule prohibits the lawyer from having sexual relations with a client regardless of whether the relationship is consensual and regardless of the absence of prejudice to the client, unless the sexual relationship predates the client-lawyer relationship." See section 1.8:210.
For other circumstances in which ethics opinions reached the same result with respect to nonconsentability, see, e.g.,
Bd. of Comm'rs on Grievances & Discipline Op. 2001-4, 2001 Ohio Griev. Discip. LEXIS 10, at *4 (Aug. 10, 2001) (although former OH DR 5-104(A) made provision for informed consent, "when the lawyer is legal counsel, estate planner, and seller of insurance products to fund the estate, the Board questions whether full disclosure and meaningful consent ever could be achieved").
Bd. of Comm'rs on Grievances & Discipline Op. 93-10, 1993 Ohio Griev. Discip. LEXIS 2 (Dec. 3, 1993) (under former OH DR 9-101(B), if former public employee had "substantial responsibility" for a matter while in public service, he or she may not engage in subsequent private employment on that matter; the conflict cannot be waived by consent of those affected); accord Ohio State Bar Ass'n Informal Op. 94-1 (June 10, 1994); Ohio State Bar Ass'n Formal Op. 32 (n.d.).
Cincinnati Bar Ass'n Op. 95-96-01 (n.d.) (irrespective of disclosure and consent, single public defender cannot represent both husband and wife at any stage of criminal proceedings arising out of domestic violence leading to the arrest of the couple; separate attorneys in the public defender's office may do so independently).
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 5.3 (1996).
If not addressed in proper fashion by the lawyer, conflicts of interest can result in disciplinary violations, malpractice verdicts, ineffective-assistance-of-counsel findings, and/or disqualification, among other adverse consequences. See generally 2 Restatement (Third) of the Law Governing Lawyers § 121 cmt. f & reporter's note thereto (2000). Every lawyer needs to have a conflicts-checking system in place in order to avoid these potential problems. Ohio Rule 1.7 cmt. . See, e.g., under the former OHRPC, Bd. of Comm'rs on Grievances & Discipline Op. 92-10, 1992 Ohio Griev. Discip. LEXIS 11 (Apr. 10, 1992) (discussing need for extensive record keeping to avoid conflicts arising from providing legal advice over the phone through a dial-a-lawyer 900 service). See generally 1 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice §§ 2:6-2:8 (2008 ed.) (providing extensive guidance on implementing a conflicts-checking system and related procedural safeguards).
Sanctions and remedies for conflicts of interest - Disciplinary proceedings: It goes without saying that violation of the conflict-of-interest provisions of Ohio Rule 1.7 will give rise to disciplinary proceedings in which sanctions are imposed on the offending lawyer, just as they were under former OH DR 5-105(A) and (B). See, e.g., Akron Bar Ass'n v. Holder, 112 Ohio St.3d 90, 2006 Ohio 6506, 858 N.E.2d 356 (disbarment; numerous violations, including DR 5-105(A), coupled with extensive prior disciplinary record); Office of Disciplinary Counsel v. Mazer, 86 Ohio St.3d 185, 712 N.E.2d 1246 (1999) (six-month suspension).
Sanctions and remedies for conflicts of interest - Disqualification: As the Ohio Supreme Court explained in Morgan v. North Coast Cable Co., 63 Ohio St.3d 156, 160, 586 N.E.2d 88, 91 (1992): "We believe that an attorney's obligations and responsibilities to a party, including the attorney's financial, business or personal interests can, in appropriate circumstances, be a basis for disqualification." In determining whether disqualification of counsel is proper on conflict-of-interest grounds, courts often looked to the former OHRPC for guidance, see, e.g., Kala v. Aluminum Smelting & Ref. Co., 81 Ohio St.3d 1, 688 N.E.2d 258 (1998) (primary and imputed disqualification); Baker v. Bridgestone/Firestone, Inc., 893 F. Supp. 1349 (N.D. Ohio 1995), and will no doubt do likewise with the respect the Rules.
A trial court should keep several factors in mind in ruling on a disqualification motion. First, "[a]s a general rule, a stranger to an attorney-client relationship lacks standing to complain of a conflict of interest in that relationship." Morgan, 63 Ohio St.3d at 156, 586 N.E.2d at 89 (syllabus). Accord Witchey v. Medina County Bd. of Comm'rs, 169 Ohio App.3d 214, 2006 Ohio 5135, 862 N.E.2d 535 (Medina) (rejecting appellant's argument that representation by county prosecutor's office both of township, opposing annexation to city, and of county commissioners, the deciding body, was conflict of interest, because appellant had no standing absent attorney-client relation with any of prosecutors involved in matter, citing Morgan); Legal Aid Society v. W & D Partners I, L.L.C., 162 Ohio App.3d 682, 2005 Ohio 4130, 834 N.E.2d 850 (member of limited-liability company did not have standing to bring motion to disqualify attorney for officer of company because no attorney-client relationship existed between party seeking disqualification and attorney sought to be disqualified); Dawn G. v. Michael L., 2004 Ohio 4920, 2004 Ohio App. LEXIS 4463 (Huron) (disqualification reversed; opposing party who had no attorney-client relationship with lawyer lacked standing to seek lawyer's disqualification); City of Youngstown v. Joenub, Inc., No. 01 CA 01, 2001 Ohio App. LEXIS 4438 (Mahoning Sept. 28, 2001) (disqualification reversed; as nonclient, appellee had no standing to raise conflict-of-interest issues); Kitts v. U.S. Health Corp., 97 Ohio App.3d 271, 277, 646 N.E.2d 555, 559 (Scioto 1994) (attorney-client relationship with one co-defendant, who had been dismissed from litigation, did not give another co-defendant standing to raise dismissed defendant's conflict-of-interest concern). See also Sayyah v. Cutrell, 143 Ohio App.3d 102, 757 N.E.2d 779 (Brown 2001) (members of incorporated association sought, in legal malpractice action against association's attorney, to disqualify attorney on conflict-of-interest grounds from representing water and sewer district in case brought against the district by association members; although rubric of lack of standing not used, trial court denial of disqualification affirmed on ground that there was no attorney-client relationship between association members and association's counsel). [While the appellate court does not comment on the fact, this case may be one of a kind, in that the attempt by plaintiffs (acting pro se) to disqualify the attorney from representing the water and sewer district in the members' suit against the district was made, not in the water and sewer district suit, but in the legal malpractice action against the lawyer, which in turn was based on his alleged conflict of interest in the water and sewer suit.]
There is an exception to the no-standing rule. As the Supreme Court acknowledged in Morgan, there are cases holding that even if the complaining party did not have an attorney-client relationship with the attorney in question, that party may still seek disqualification if the lawyer in question was "privy to information, confidential or otherwise that, if revealed, would have been adverse or detrimental to the complaining party's cause." Morgan, 63 Ohio St.3d at 160, 586 N.E.2d at 91. The Morgan exception was applied in Perin v. Spurney, 2005 Ohio 6811, 2005 Ohio App. LEXIS 6112 (Franklin). Perin was a wrongful-termination case against Honda and various members of Honda management. The plaintiff-employee's husband was an in-house counsel at Honda. After plaintiff included her husband on her witness list, Honda noticed him for deposition. At the deposition, plaintiff's counsel stated that he was representing the husband for purposes of the deposition. Husband had also met with plaintiff's counsel a number of times in connection with his wife's claims. He had also reviewed her complaint. On the other side of the fence, husband was a member of Honda's ethics committee and had provided Honda with legal advice concerning transport of hazardous materials, the issue about which plaintiff claimed she was terminated for her conduct. Finally, the husband testified at deposition that he had information supportive of his wife's termination claim. Not surprisingly, Honda's counsel moved to disqualify, and the motion was granted. The court of appeals affirmed. On the standing point, it stated as follows:
Here, appellees have asserted that, by communicating with and representing Doug Perin [the husband], Kelm and Dawson [plaintiff's lawyers] obtained, to appellee's detriment, improper access to Honda's confidential information. In this regard, appellees have standing to seek Kelm and Dawson's disqualification.
Id. at ¶ 16. Relying on Kala v. Aluminum Smelting & Refining Co., 81 Ohio St.3d 1, 688 N.E.2d 258 (1998), the appellate court affirmed the disqualification on appearance of impropriety grounds. See further discussion of Perin on this point at section 1.7:230.
Second, the party moving for disqualification has the burden of proof and must show at least some "reasonable possibility that some specifically identifiable impropriety actually occurred"; a mere allegation of an ethical violation is not enough. Centimark Corp. v. Brown Sprinkler Serv., Inc., 85 Ohio App.3d 485, 489, 620 N.E.2d 134 (Ashtabula 1993) (adopting this guideline from Kitchen v. Aristech Chem., 769 F. Supp. 254 (S.D. Ohio 1991)). Even then, the trial court has substantial discretion when trying to balance the need to protect the trial process from unethical attorney behavior with the need to protect the client's right to counsel of choice. See, e.g., Centimark, 85 Ohio App.3d at 487, 620 N.E.2d at 136 (emphasizing trial court's "wide discretion in the consideration of motions to disqualify counsel"). Courts often use such phrases as "significant risk of trial taint," Spivey v. Bender, 77 Ohio App.3d 17, 22, 601 N.E.2d 56, 59 (Lucas 1991), or "truly egregious misconduct," Grubb v. Hollingsworth, 69 Ohio App.3d 804, 806, 591 N.E.2d 1297, 1299 (Preble 1990), to describe the severity of misconduct necessary to warrant disqualification. "In fact, a violation of the Code of Professional Responsibility alone should not result in a disqualification, unless disqualification is found to be absolutely necessary." Centimark, 85 Ohio App.3d at 488-89, 620 N.E.2d at 137; accord Kitts v. U.S. Health Corp., 97 Ohio App.3d 271, 646 N.E.2d 555 (Scioto 1994). See Gould, Inc. v. Mitsui Mining & Smelting Co., 738 F. Supp. 1121, 1125-27 (N.D. Ohio 1990) (refusing to disqualify law firm representing plaintiff in unfair competition action for former OH DR 5-105(C) violation (failure to obtain consent), where conflict not created by firm, but rather by defendant's business acquisition of one of firm's existing clients, which it represented in various matters totally unrelated to present lawsuit). The Gould case is further discussed at section 1.7:310. But see Winblad v. Deskins, 150 Ohio App.3d 527, 2002 Ohio 7092, 782 N.E.2d 160 (Montgomery) (disqualification of office-sharing attorney affirmed, based on perception of party moving for disqualification that his confidences may not have been preserved; "[a]ny doubts as to the existence of an asserted conflict of interest must be resolved in favor of disqualification in order to dispel any appearance of impropriety," id. at para. 14, citing Kala).
Pioneer-Standard Electronics, Inc. v. Cap Gemini America, Inc., No. 1:01 CV2185, 2002 U.S. Dist. LEXIS 7120 (N.D. Ohio Mar. 11, 2002), is an important federal case in which the court denied a motion for disqualification based on an alleged violation of former OH DR 5-105. In Pioneer-Standard, Shearman & Sterling represented the defendant, Cap Gemini, in litigation pending in the Northern District. It also, by virtue of merger with a German law firm that had been representing Pioneer, inherited Pioneer as a client in an unrelated regulatory matter pending before the European Commission. (After Pioneer refused to waive the conflict, Shearman & Sterling withdrew from the European representation of Pioneer, but Judge Gaughan rejected the unilateral termination by the firm and for purposes of the disqualification motion treated both Pioneer and Cap-Gemini as current clients. See further discussion of this aspect of the case in section 1.7:300 infra.) Citing the Gould/Mitsui decision for the propositions that the trial court has broad discretion in ruling on motions to disqualify and that disqualification is a drastic measure to be used only when absolutely necessary, Judge Gaughan analyzed the issue pursuant to OH DR 5-105(B) (multiple employment cannot be continued if independent professional judgment adversely affected). The court agreed with Pioneer that the substantial relationship test applicable to former-client conflicts did not apply; instead, the court applied a rebuttable presumption against concurrent adverse representation. (The court expressly rejected Pioneer's assertion that there is a per se rule against concurrent adverse representation.) The presumption is rebutted if the firm can show that it can represent each client with equal vigor and without using confidential information to the detriment of either client. Since there was no evidence that Shearman & Sterling, by virtue of its narrow representation of Pioneer on the wholly unrelated matter before the European Commission, had gained any information that could be used against Pioneer in defending Cap Gemini, and since its representation of Cap Gemini would not prevent Shearman & Sterling from pursuing the European Commission matter to the fullest, the presumption was rebutted, there was no violation of OH DR 5-105(B), and the motion to disqualify was denied.
Relying heavily on Pioneer-Standard, a decision from the Southern District of Ohio likewise found that the presumption against concurrent representation had been rebutted in SST Castings, Inc. v. Amana Appliances, Inc., 250 F. Supp.2d 863 (S.D. Ohio 2002). In SST, Dinsmore & Shohl represented SST in contract litigation. Thompson Hine represented the defendant. Thompson Hine had represented SST for many years, until a Thompson Hine partner left for Dinsmore & Shohl, taking substantially all of the SST legal work with her. One of the few cases retained by Thompson (as an accommodation to SST) was a small tax-refund claim being handled on a co-counsel basis by a Thompson partner in its Washington office and by the lawyer who had migrated to Dinsmore. The Thompson Washington partner "spent at most six hours for SST filling out forms for the tax refund complaint," id. at 865. SST argued that Thompson should be disqualified under OH DR 5-105 and OH DR 4-101 from representing the defendant when it was concurrently representing SST in the tax-refund case. Defendant argued that the refund representation was "very limited," did not violate Thompson's duty of loyalty to either client, and urged the court to adopt Judge Gaughan's approach in Pioneer-Standard. Id. at 869. Judge Spiegel did so. Quoting extensively from Pioneer-Standard, Judge Spiegel agreed with the defendant that the tax-refund case was a discrete matter, completely unrelated to the case at bar, and that it was therefore impossible for any confidential information theoretically possessed by Thompson to be used to the detriment of SST in the present litigation. The court concluded that
the Thompson Hine attorneys can represent SST and Maytag [Amana] with equal vigor, without conflict of loyalties, and without using confidential information to the detriment of either client. Thompson Hine has therefore rebutted the presumption against concurrent representation.
Id. at 872. SST further argued that Thompson Hine's representation was improper under OH DR 5-105(C) because it did not consent to Thompson's representation. Again following and quoting Pioneer, the court concluded that the consent requirement came into play only if there was a violation of OH DR 5-105(B) and that there was no 5-105(B) violation where the lawyer's independent professional judgment was not or was not likely to be adversely affected.
Two other factors, present in both Pioneer and SST, are worthy of note. First, both courts, while finding the substantial-relationship test inapplicable in a case involving concurrent clients, did in fact make the point that the two matters in each case were "completely" or "wholly" unrelated. SST at 870; Pioneer at *4. Second, both cases, in rejecting the no-consent argument, found that it was based on a "misreading" of OH DR 5-105 grounded on the decision in Picker Int'l, Inc., v. Varian Assocs., Inc. 670 F. Supp. 1363 (N.D. Ohio 1987), aff'd, 869 F.2d 578 (Fed. Cir. 1989) (prohibiting concurrent representation without consent). Both SST and Pioneer determined that the Picker court had relied on language in OH DR 5-105(B) that was no longer present; they concluded that the phrase "or if it would be likely to involve him in representing different interests" "has been removed from DR 5-105," and thus Picker was decided under an "outdated" version of OH DR 5-105. SST at 870-71; Pioneer at *3 n.2 (emphasis added by quoting courts). Although the district court in Picker expressly stated that any specific reference to the ethics rules "is to the Code of Professional Responsibility, which the Ohio Supreme Court adopted on October 5, 1970," 670 F. Supp. at 1365 n.2, it was actually quoting language from ABA Model Code DR 5-105(B). Neither SST nor Pioneer caught the fact that the supposedly "removed" phrase never was a part of DR 5-105(B) as adopted in Ohio. Indeed, SST and Pioneer had it just backward when they stated that Picker was grounded on a "different, earlier version of the rule." 250 F. Supp.2d at 870; see 2002 U.S. Dist. LEXIS 7120, at *10 n.2. In fact, the version utilized by Picker was a later (and then current) version of the ABA Code Rule as amended in 1974. When Ohio adopted 5-105 in 1970, the phrase was not present, and Ohio never picked up on the 1974 amendment. (See further discussion of the Pioneer and SST cases, in the context of disqualification and the OHRPC, at section 1.7:310.)
Where the conflict of interest arises from a concern about compromised confidentiality, at least one court has held that the motion to disqualify may be made at any time; delay will not result in waiver. Kitts v. U.S. Health Corp., 97 Ohio App.3d, 271, 277, 646 N.E.2d 555, 559 (Scioto 1994) (arguing in response to a delayed motion to disqualify for conflict of interest that "[c]onfidentiality is a paramount principle of the law, almost as basic as jurisdiction, and like jurisdiction, it ought to be a matter that can be raised at any time and one in which the doctrine of waiver is used sparingly"). Nevertheless, delay "goes to the weight of the claim" and should be considered by the court in evaluating the validity of the claim itself. Id. Compare Perin v. Spurney, 2005 Ohio 6811, 2005 Ohio App. LEXIS 6112 (Franklin) (rejecting argument that complaining party waived disqualification issue by waiting two months to file; issue must be raised in "timely" fashion, i.e., within a reasonable time; time frame found not unreasonable here).
Finally, it should be remembered that disqualification issues premised on conflict of interest can also raise the threat of imputed disqualification of lawyers in the firm of the attorney personally disqualified. E.g., Kala v. Aluminum Smelting & Ref. Co., 81 Ohio St.3d 1, 688 N.E.2d 258 (1998). See Ohio Rule 1.10 and discussion at sections 1.10:200-:300.
Sanctions and remedies for conflicts of interest - Malpractice actions: While violation of the conflict-of-interest disciplinary rules is not per se evidence of malpractice, Northwestern Life Ins. Co. v. Rogers, 61 Ohio App.3d 506, 573 N.E.2d 159 (Franklin 1989), the courts do look to the disciplinary rules for guidance. See, e.g., David v. Schwarzwald, Robiner, Wolf & Rock Co., L.P.A., 79 Ohio App.3d 786, 802, 607 N.E.2d 1173, 1183 (Cuyahoga 1992).
As is true in malpractice actions generally (see section 1.1:310), in such cases premised on conflict of interest it is not enough to show a breach of duty owing by the lawyer to the client flowing from a conflict of interest; the plaintiff must also show that breach was the proximate cause of damage to the client. E.g., Northwestern Life v. Rogers, 61 Ohio App.3d at 511, 573 N.E.2d at 163 (summary judgment for defendant attorney affirmed); Burton v. Selker, 36 F. Supp.2d 984 (N.D. Ohio 1999) (applying Ohio law, court granted defendant's motion for summary judgment; no evidence that plaintiff client was damaged by lawyer's alleged breach of duty), aff'd, 30 Fed. Appx. 456 (6th Cir. 2002). It is equally clear that proof of the lawyer's breach of duty will, as a general rule, require expert testimony, see, e.g., Murphy v. Redeker, No. 70868, 1997 Ohio App. LEXIS 115 (Ohio App. Cuyahoga Jan. 16, 1997) (per curiam) (see section 1.1:335), and that the conflict of interest can, in appropriate circumstances, be waived. See, e.g., Burton v. Selker, 36 F. Supp.2d at 988-91 (waiver letter to, and signed by, client cured any conflict of interest where attorney also represented other proposed joint purchaser of venture, and where his law firm owned an interest in the co-buyer's business, all of which was disclosed in waiver letter).
Other Ohio malpractice cases raising conflict-of-interest concerns are:
Riley v. Clark, No. 98 CA2629, 1999 Ohio App. LEXIS 5436 (Scioto Nov. 10, 1999) (summary judgment for defendant lawyers reversed where lawyer solicited clients to purchase at inflated price failing business that he represented and in which he had significant ownership interest, without informing clients of these facts; breach of duty and causation issues were, on such facts, within jury's experience and understanding and did not necessitate expert testimony).
Master v. Chalko, No. 70527, 1997 Ohio App. LEXIS 2420 (Cuyahoga June 5, 1997) (judgment against lawyer on jury verdict reversed; no evidence that lawyer's representation of conflicting interests proximately caused any injury to plaintiff).
Dicus v. Laipply, No. 3-92-36, 1992 Ohio App. LEXIS 6305 (Crawford Dec. 15, 1992) (summary judgment for lawyer reversed where lawyer, who, in defending both insurer and malpractice plaintiff/insured in automobile personal injury action, had failed to protect interest of insured once it became likely (as in fact happened) that verdict might be returned in excess of policy limits against malpractice plaintiff/insured. Despite attorney's conflict of interest in representing both insured and insurer in the circumstances, lawyer did not advise insured of facts pertinent to causation and damages and failed to advise insured that he should retain independent counsel).
David v. Schwarzwald, Robiner, Wolf & Rock Co., L.P.A., 79 Ohio App.3d 786, 607 N.E.2d 1173 (Cuyahoga 1992) (affirming jury verdict against defendant attorney where attorney consulted with plaintiff's wife regarding facts relating to divorce action, agreed to assist her subsequently-engaged counsel regarding asset valuation, but then represented husband in divorce action).
Sanctions and remedies for conflicts of interest - Ineffective assistance of counsel: On the criminal side, if lawyer conflicts of interest result in violation of the defendant's constitutional right to effective assistance of counsel, any conviction must be overturned. See State v. Gillard, 64 Ohio St.3d 304, 595 N.E.2d 878 (1992). Conflicts in criminal cases typically (but not exclusively) arise in cases in which one lawyer is attempting to represent more than one defendant. See discussion at section 1.7:320.
Sanctions and remedies for conflicts of interest - Fee forfeiture: Generally, the law recognizes conflict of interest as a basis for fee forfeiture, see 2 Restatement (Third) of the Law Governing Lawyers § 121 cmt. f & reporter's note thereto (2000). As Judge Learned Hand stated in Silbiger v. Prudence Bonds Corp., 180 F.2d 917 (2d Cir. 1950):
Certainly by the beginning of the Seventeenth Century it had become a common-place that an attorney must not represent opposed interests; and the usual consequence has been that he is debarred from receiving any fee from either, no matter how successful his labors.
Id. at 920 (footnotes omitted) (finding complete forfeiture unnecessary in corporate reorganization context; ordering that fee be reduced by not less than one-third).
The only conflict-of-interest case found in Ohio involving fee forfeiture is Baker v. Bridgestone/Firestone, Inc., 893 F. Supp. 1349 (N.D. Ohio 1995) (two lawyers, one of whom was a former staff attorney for defendant and not officially involved in the case at bar, and the other a co-counsel of record for plaintiffs in the case, were found to have "conjoined" in violating numerous Ohio disciplinary rules, including former OH DR 4-101(B), 5-105(A), and 2-107(A); co-counsel of record not only disqualified, but also precluded from recovering any of his fees or costs and ordered to reimburse plaintiffs for any additional costs incurred by them as a result of the disqualification proceedings). The Baker opinion, authored by Judge Bell, offers a penetrating and exhaustive analysis of the problems presented by this case, where the chief culprit, whose "Svengalian machinations" (893 F. Supp. at 1365) were eagerly received by the disqualified co-counsel, emerged unscathed (in the case, at least) -- solely because he was acting in the wings, not as counsel for the plaintiffs, and thus could not be subjected to sanctions in the case at bar. (Subsequently, however, both the co-counsel of record in Baker (John Hash) and the other, a former Firestone lawyer (Joseph Downs), were named as defendants in a disciplinary complaint filed by the North Carolina State Bar arising out of their conduct in, inter alia, the Baker case. Two months before the disciplinary hearing, held in early July 1997, Downs died. North Carolina State Bar v. Hash, No. 96 DHC 16, slip op. at 1 (Aug. 13, 1997). As a result of the hearing, Hash was disbarred. Id. at 7.). The Baker case is equally unusual in that its grounding of sanctions was based primarily on the two attorneys' misconduct occurring in a prior, substantially related case that had been pending before the same court before it settled. Baker is well worth reading in situations in which a former employee/lawyer is implicated in conflict-of-interest concerns. See also American Motors, Inc. v. Huffstulter, 61 Ohio St.3d 343, 575 N.E.2d 116 (1991), discussed below.
Sanctions and remedies for conflicts of interest - Injunction: See American Motors, Inc. v. Huffstutler, 61 Ohio St.3d 343, 575 N.E.2d 116 (1991) (lawyer/former employee permanently enjoined from utilizing former employer's confidential information in testifying as witness, expert or otherwise, against former employer, and from utilizing former employer's confidential information in assisting opposing counsel in product liability suits against former employer). See also Maritrans GP Inc., v. Pepper, Hamilton & Scheetz, 602 A.2d 1277 (Pa. 1992).
Sanctions and remedies for conflict of interest - Mandatory withdrawal: Under Ohio Rule 1.16(a)(1), a lawyer must withdraw from representation if "the representation will result in violation of the Ohio Rules of Professional Conduct or other law." Applying the comparable language from former OH DR 2-110(B)(2) in the conflicts-of-interest context, the Ohio Supreme Court found that a lawyer's continuing to represent a client, after announcing an intent to withdraw in the face of an acknowledged conflict of interest, violated the former rule. Office of Disciplinary Counsel v. Mazer, 76 Ohio St.3d 481, 668 N.E.2d 478 (1996).
Sanctions and remedies for conflicts of interest - Criminal sanctions: See ORC 102.99(B) (violation of ORC 102.03 (restrictions on representation by present or former government official or employee) constitutes first-degree misdemeanor, for which the penalty is imprisonment of not more than six months and fine of not more than one thousand dollars, ORC 2929.21(B)(1), (C)(1)). Comparable federal provisions (18 USC §§ 207(a), 208(a)) can likewise implicate Ohio lawyers. See United States v. Gorman, 807 F.2d 1299 (6th Cir. 1986) (sentence of one-year imprisonment upheld for violation of conflict-of-interest provisions of 18 USC § 208(a)).
A "positional" or "issue" conflict is one in which a lawyer takes a legal position for one client that is contrary to that taken on behalf of another client "in a completely unrelated matter." John S. Dzienkowski, Positional Conflicts of Interest, 71 Tex. L. Rev. 457, 460 (1993) (emphasis in original).
Ohio Rule 1.7 cmt.  advises that a lawyer can ordinarily represent clients on different sides of a legal question in unrelated cases unless there is a "substantial risk" that advocacy for one client will "materially limit the lawyer's effectiveness in concurrently representing another client in a different case." This language (other than the substitution of "substantial" for "significant") is taken from MR 1.7 cmt. .
Ohio Comment  elaborates on "material limitation conflicts" as follows:
[T]here is a material limitation conflict if a decision for which the lawyer must advocate on behalf of one client in one case will create a precedent likely to seriously weaken the position taken on behalf of another client in another case. Factors relevant in determining whether there is a material limitation of which the clients must be advised and for which consent must be obtained include: (1) where the cases are pending; (2) whether the issue is substantive or procedural; (3) the temporal relationship between the matters; (4) the significance of the issue to the immediate and long-term interests of the clients involved; and (5) the clients' reasonable expectations in retaining the lawyer.
Ohio Rule 1.7 cmt. . The most significant variations between the Ohio and Model Rule language are the addition in Ohio of an express obligation to advise the clients and obtain their consent if the relevant factors show that a material limitation conflict exists; the Model Rule merely refers to these factors as being "relevant to determining whether the clients need to be advised of the risk." On the other hand, the Ohio comment does not include the further MR cmt.  language that if such a risk exists, "then absent informed consent of the affected parties, the lawyer must refuse one of the representations or withdraw from one or both matters." Despite this difference in language, both the Model Rule and the Ohio Rule would seem to call for the same result.
See generally 2 Restatement (Third) of the Law Governing Lawyers § 128 cmt. f (2000). See also Charles W. Wolfram, Modern Legal Ethics § 7.3.3 (1986).
ABA Formal Op. 93-377 (Oct. 16, 1993) examined the trial/appellate distinction (asserting antagonistic positions in different trial courts o.k., but may be improper to do so at appellate level) drawn in former MR 1.7 cmt.  and found it wanting; instead, it opined that the issue should be whether the circumstances would cause the lawyer in either case to "soft-pedal" arguments for one client so as not to damage the position of the other client. The opinion concludes that where a lawyer is litigating directly contrary legal positions on behalf of different clients in different and unrelated cases in the same jurisdiction, the lawyer, absent consent by both clients after full disclosure, should refuse the second case if there is a substantial risk that the position taken on behalf of one client will create a precedent likely to undercut materially the other client's position. Accord Ohio Rule 1.7 cmt.  (material limitation conflict if decision advocated on behalf of one client "will create a precedent likely to seriously weaken" position of another client in another case). If the two cases are in different jurisdictions and there is no substantial risk that either representation will adversely affect the other, the lawyer can proceed with both. Op. 93-377, at 1.
While the positional conflicts issue is typically addressed in situations involving current clients, it can arise in the former-client context as well. See, e.g., the T.C. Theatre case, discussed this section infra. In general, in the absence of a substantial relationship between the former and current matters, under the former-client conflict rule
a lawyer who recurrently handled a type of problem for a former client is not precluded from later representing another client in a factually distinct problem of that type even though the subject representation involves a position adverse to the prior client.
Ohio Rule 1.9 cmt. . Accord 1 Geoffrey C. Hazard, Jr. & W. William Hodes, The Law of Lawyering § 13.3, at 13-35 to 36 n.5; illus. 13-4, at 13-22 to 13-23 (3d ed. Supp. 2005-1). See further discussion of this Comment  language at section 1.9:210 infra.
It is important to note (as is explicit in Ohio Rule 1.7 cmt. , MR 1.7 cmt. , and ABA Formal Op. 93-377, but is not in Restatement § 128 cmt. f) that the "different" cases must also be unrelated in order to present a pure positional-conflict issue. As will be seen below, most, if not all, of the decisions cited as positional-conflict cases also involve some significant relationship or adversity existing between the contested matters, thereby triggering application of more traditional conflicts analysis. (Our research indicates that positional conflicts have not been discussed in Ohio case law or ethics opinions.)
The universe of cases regularly cited when positional or issue conflicts are discussed consists of Fiandaca v. Cunningham, 827 F.2d 825 (1st Cir. 1987); Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir. 1978); Federal Defenders v. U.S. Sentencing Comm'n, 680 F. Supp. 26 (D.D.C. 1988) (issue-conflict argument made but court not persuaded, id. at 29-30 & n.3); Estates Theaters, Inc. v. Columbia Pictures Indus., Inc. 345 F. Supp. 93 (S.D.N.Y. 1972); and T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265 (S.D.N.Y. 1953).
Of these five cases, virtually every one involves something more than a "pure" positional or issue conflict. Thus, it is not surprising that the commentary on positional conflicts is long on hypotheticals and short on actual cases. See, e.g., 1 Geoffrey C. Hazard, Jr. & W. William Hodes, The Law of Lawyering § 10.10 (3d ed. Supp. 2004) (citing, at 10-48 Illustration 10-2 n.2, only one case, the Delaware decision in Williams v. State, discussed infra in this section).
Fiandaca is cited by 2 Restatement (Third) of the Law Governing Lawyers § 128, reporter's note to cmt. f (2000), in connection with its discussion of positional conflicts, but surely the conflict in Fiandaca ended up being more than positional. In Fiandaca, counsel for the plaintiff female-prisoner class in case A sought improved facilities on equal-protection grounds. The same counsel represented in case B a class of mentally retarded residents at a state school. In case A, the state made plaintiffs an offer of settlement "on highly favorable terms," 827 F.2d at 829, that included housing female inmates at a building at the state school. As the First Circuit noted, the class in case B "[q]uite understandably, vehemently opposes the idea of establishing a correctional facility for female inmates anywhere on the grounds of [the state school]." Id. The lawyers for the class in case A rejected the settlement because "'plaintiffs do not want to agree to an offer which is against the stated interests of the plaintiffs in [case B].'" Id. at 827. The court of appeals, in holding that the district court abused its discretion in denying the state's motion to disqualify the plaintiffs' lawyers in case A, analyzed the issue pursuant to pre-2002 amendment MR 1.7(b) — material limitation conflict — but it seems that pre-2002 amendment MR 1.7(a) — "directly adverse" representation — could have been used as well. See ABA, Annotated Model Rules of Professional Conduct 97 (4th ed. 1999) (commentary) ("Simultaneous representation of clients involved in different lawsuits that involve a related matter can also give rise to the direct, impermissible conflict proscribed by Rule 1.7(a)."). The First Circuit's conflict holding in Fiandaca is criticized in Peter Margulies, Multiple Communities or Monolithic Clients: Positional Conflicts of Interests and the Mission of the Legal Services Lawyer, 67 Fordham L. Rev. 2339, 2362 (1999).
Even Estates Theaters, the decision referred to by Wolfram as the "classic case on issue conflicts" in Charles W. Wolfram, Modern Legal Ethics § 7.3.3, at 355 (1986), involved related matters. Thus, the lawyer representing the plaintiff in two antitrust suits was arguing in case A, on behalf of the owner of the Utopia Theatre, that his theatre-chain client in case B (United Artists, not named as a defendant in case A, but identified as a co-conspirator) was, with the named defendants, discriminating in favor of the Roosevelt Theatre, owned by United Artists, over the Utopia. Whereas in case B, the argument was that the defendants were favoring the Utopia at the expense of the Roosevelt. In disqualifying the lawyer from continued representation of the plaintiff in case A, Judge Weinfeld stated that "[t]he attorney cannot at one and the same time be prosecutor of plaintiff's claim on behalf of Utopia and the defender of the target, [United Artists], as the owner of the Roosevelt." 345 F. Supp. at 99.
The Westinghouse and T.C. Theatre cases likewise go beyond an abstract legal-issue conflict. See Westinghouse, 580 F.2d at 1312 (law firm was simultaneously representing, first (in lobbying context), oil companies that had provided confidential information concerning their involvement in the uranium industry, from which firm prepared report concluding that energy industries, including uranium, were competitive, and, second, uranium supplier as plaintiff in related antitrust suit charging uranium producers, including oil companies, with illegal conspiracy in restraint of trade in uranium industry; uranium supplier given option of dismissing oil companies as defendants or discharging law firm as its attorney in case); T.C. Theatre, 113 F. Supp. at 266-67 (disqualification, in private treble-damage action arising out of government antitrust suit, of plaintiff's lawyers who, in prior government antitrust litigation, had represented one of present defendants on appeal).
The law-review commentary on positional conflicts is considerably more voluminous than the case law. Dzienkowski's article (John S. Dzienkowski, Positional Conflicts of Interest, 71 Tex. L. Rev. 457 (1993)) is an exhaustive look at the issue, as well as a zealous brief for taking positional conflicts more seriously and treating them more comprehensively than did the Model Rules. (A portion of his criticism was absolved by ABA Formal Op. 93-377 (Oct. 16, 1993) and by the 2002 amendments to MR 1.7, including the addition of MR 1.7 cmt. .) For a more recent analysis of the issue and some of the cases, see Douglas R. Richmond, Choosing Sides: Issue or Positional Conflicts of Interest, 51 Fla. L. Rev. 383 (1999) (noting the paucity of cases and recognizing that each of the four cases analyzed there (Estates Theaters, Fiandaca, Westinghouse, and Maritrans GP Inc. v. Pepper, Hamilton & Scheetz, 602 A.2d 1277 (Pa. 1992)) arguably contains elements that go beyond a pure positional conflict. 51 Fla. L. Rev. 383, 398-409). See also Norman W. Spaulding, Note, The Prophet and the Bureaucrat: Positional Conflicts in Service Pro Bono Publico, 50 Stan. L. Rev. 1395 (1998) (also recognizing the scarcity of case law).
Dzienkowski's February 1993 article has been cited in a judicial opinion only once. That lone citation is significant, however, because it does appear to be a true positional conflict case, unlike the cases typically cited on this issue. In Williams v. State, 805 A.2d 880 (Del. 2002), Bernard O'Donnell, the public defender representing a capital murder defendant, filed a motion to withdraw. He premised his motion on the facts that he was also representing a capital murder defendant in another, unrelated, case pending before the Delaware Supreme Court, that in the other case he had argued that the lower court erred in failing to give great weight to the jury's 2-10 vote against imposing the death penalty, and that in the case at bar defendant has an arguable issue that the lower court erred when it concluded that it was required to give great weight to the jury's 10-2 vote recommending the death penalty for Williams. The Supreme Court justice ruling on the motion agreed:
[W]e find that O'Donnell has identified and demonstrated the existence of a disqualifying positional conflict. It would be a violation of the Delaware Rules of Professional Conduct for O'Donnell to advocate conflicting legal positions in two capital murder appeals that are pending simultaneously in this Court. Both the United States Constitution and the Delaware Constitution guarantee each of O'Donnell's clients a right to the effective assistance of counsel in a direct appeal following a capital murder conviction. Given his clients' disparate legal arguments, O'Donnell's independent obligations to his clients may compromise the effectiveness of his assistance as appellate counsel for one or both clients, unless his motion to withdraw is granted.
Id. at 881.
Finally, it should be noted that while commentary on this issue is a fairly recent development, the positional conflict itself has been around for a while: A young lawyer named Abraham Lincoln, so the story goes, argued two cases involving the same issue of law the same day before the same judge. Lincoln represented the defendant in one case, the plaintiff in the other. After Lincoln won the morning case, the judge inquired during the afternoon case what had caused him to change his mind. "Your honor," Lincoln said, "I may have been wrong this morning, but I know I am right this afternoon." Nellie Revell, Right off the Chest 81-82 (1923).
Conflict-of-interest issues are addressed in other portions of this presentation as well:
Section 1.6:390 (confidentiality and conflict of interest; see Ohio Rule 1.6)
Sections 1.8:200-:1200 (conflict of interest: current clients: specific rules; see Ohio Rule 1.8)
Sections 1.9:200-:400 (conflicts involving former clients; see Ohio Rule 1.9)
Sections 1.10:200-:500 (imputed disqualification; see Ohio Rule 1.10)
Sections 1.11:200-:500 (successive government and private employment; see Ohio Rule 1.11)
Sections 1.12:200-:500 (former judge or arbitrator; see Ohio Rule 1.12)
Sections 1.13:400-:500 (organization as client; see Ohio Rule 1.13(d) & (e))
Sections 1.16:230 (terminating representation; see Ohio Rule 1.16(a)(1))
Section 1.17:200-:300 (sale of law practice; see Ohio Rule 1.17)
Sections 2.3:200-:400 (evaluation for use by third persons; see Ohio Rule 2.3)
Sections 3.7:200-:300 (lawyer as witness; see Ohio Rule 3.7)
Section 5.4:200-:500 (professional independence of lawyer; see Ohio Rule 5.4)
Section 5.7:200 (applicability of ethics rules to ancillary business activities; see Ohio Rule 5.7)
- Primary State References: Ohio Rule 1.7
- Background References: ABA Model Rule 1.7
- Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 5.86, 5.89-5.90, 5.92-5.93, 5.95-5.97, 5.119-5.123
- Commentary: ABA/BNA §§ 51:101, 51:301; ALI-LGL §§ 128-131; Wolfram §§ 7.1-7.3
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 5.86 (1996).
Conflicting interests between clients - Overview: Prior to dealing with specific current-client conflict situations in the succeeding sections, it may be helpful to state underlying principles at the outset.
In a world of multiple clients, client interests can differ. Such differences implicate two important duties the lawyer owes each client, the duty of loyalty and the duty of confidentiality.
If the conscientious pursuit of one client's interests undercuts the lawyer's ability to serve the other, the resulting conflict of interest may require the lawyer to decline prospective representation or to withdraw from an existing representation. Here the duty of loyalty is involved. The question is whether the lawyer's obligations to one client prevent the lawyer from exercising independent professional judgment for the best interests of another client.
Confidentiality concerns arise where a lawyer has confidential client information obtained from or regarding one client, which information that client wishes to remain confidential, but which the lawyer, if he were not subject to restraint, would use or disclose for the benefit of another client. The confidentiality concern arises out of conflicting interests between clients and often is discussed in tandem with the loyalty concern. See section 1.6:240.
The clash of interests between clients can differ in levels of severity and the likelihood of occurrence. The more serious the conflict and the more likely it is to occur, the more pressing is the need to decline or withdraw from representation.
Where there is a conflict of interest that would otherwise require the lawyer to decline representation or to withdraw from existing representation, the conflict can sometimes be waived by the clients involved by giving informed consent, confirmed in writing. Ohio Rule 1.7(b)(2). See section 1.7:240. This course is available, however, only if "the lawyer will be able to provide competent and diligent representation to each affected client." Rule 1.7(b)(1). If there is doubt on this score, the lawyer probably ought not undertake the representation. In practice, however, particularly where fully informed client consent is obtained, a lawyer may be afforded a bit more leeway. See, e.g., Gould, Inc. v. Mitsui Mining & Smelting Co., 738 F. Supp 1121 (N.D. Ohio 1990), discussed at sections 1.7:260 supra and 1.7:310 infra.
Conflict-of-interest problems (other than those resulting from the lawyer's own interests, as to which see sections 1.7:500 and 1.8:200) can arise in two settings. Sometimes the issues arise from potential or existing multiple representation of current clients. Sometimes the issues arise because a present representation creates a conflict with a former client. While the basic duties of loyalty and confidentiality are present in both situations, the duties owed a former client are thought to be less than those owed a current client. With respect to conflicts involving former clients, see sections 1.9:100-:400.
Because greater restrictions apply to conflicts arising from the representation of current clients than to conflicts arising from the representation of a current client and a former client, a lawyer faced with a current-client conflict may be tempted to drop one of the clients against the client's will, transforming that client into a former client, while retaining the other. See Rule 1.7 cmt. , which appears to indicate that the lawyer may be able to continue to represent one or more of the clients, if he can satisfy his duties both to the former client and adequately represent the remaining clients, together with obtaining client consent. Ohio courts, however, at least under the former OHRPC, have not been sympathetic to such maneuvering — they believe that it poses too severe a threat to present-client conflict-of-interest rules. Sarbey v. Nat'l City Bank, 66 Ohio App.3d 18, 583 N.E.2d 392 (Summit 1990). Accord Henry Filters, Inc. v. Peabody Barnes, Inc., 82 Ohio App.3d 255, 261, 611 N.E.2d 873 (Wood 1992) ("An attorney who is simultaneously representing two clients with differing interests cannot conform to the rules of ethics by merely discontinuing representation of one client after improperly initiating a lawsuit against the client.") See also Picker Int'l, Inc. v. Varian Assocs., Inc., 869 F.2d 578 (Fed. Cir. 1989) (applying former OH DR 5-105 to reject this practice where conflict arose out of merger of two law firms).
Another Ohio federal case reaching the same conclusion on this issue is Pioneer-Standard Electronics, Inc. v. Cap Gemini America, Inc., No. 1:01 CV2185, 2002 U.S. Dist. LEXIS 7120 (N.D. Ohio Mar. 11, 2002). In Pioneer, a law firm inherited via merger representation of Pioneer in a regulatory matter before the European Commission. It was then asked to defend Cap Gemini, a regular client of some years' standing, in a Northern District of Ohio suit brought by Pioneer. When Pioneer refused to waive the conflict, the law firm notified Pioneer that it was withdrawing from the European representation and then filed its appearance pro hac vice for Cap Gemini in the Northern District case. Pioneer sought to disqualify the law firm for violation of former OH DR 5-105, based on the firm's concurrent adverse representation. The law firm argued that OH DR 5-105 was inapplicable because Pioneer was a "former" client; the court rejected the argument:
[F]or purposes of determining the status of an attorney-client relationship within the context of adverse representation, courts will not honor an attorney's unilateral termination of the relationship. . . . This principle has been coined the "hot potato" doctrine [citing the district court opinion in Picker, 670 F. Supp. 1363, 1366 (N.D. Ohio 1987), aff'd, 869 F.2d 578 (Fed. Cir. 1989)]. Pursuant to this doctrine, [law firm's] termination of its relationship with Pioneer is ineffective because [law firm] terminated its attorney-client relationship with Pioneer only after it was asked to represent Cap Gemini in this litigation and Pioneer refused to waive the conflict.
Id. at *6-7. (Nevertheless, the court ultimately concluded there was no violation of OH DR 5-105 and denied the motion to disqualify. See further discussion at sections 1.7:260 and 1.7:310.)
An exception to the "hot potato" rule has been made where the law firm did not create the conflict, but "[r]ather, the conflict was created by an acquisition of the client for legitimate business reasons." Gould, Inc. v. Mitsui Mining & Smelting Co., 738 F. Supp 1121, 1127 (N.D. Ohio 1990) (endorsing "hot potato" rule, but finding facts justified exception; law firm therefore permitted to choose which client it would continue to represent).
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 5.93, 5.95, 5.97, 5.122 (1996).
Conflicts can arise in any sort of civil action. Some illustrative areas where conflicts questions are likely to arise are discussed below.
Conflict among current clients – Direct adversity: As stated in Rule 1.7 cmt. , the "concurrent representation of clients whose interests are directly adverse always creates a conflict of interest" under Ohio Rule 1.7(a)(1). "Further, absent consent, a lawyer may not act as an advocate in one proceeding against a person the lawyer represents in some other matter, even when the matters are wholly unrelated." Ohio Rule 1.7 cmt. . (Needless to say, a lawyer cannot both assert a claim on behalf of a current client and defend against that claim on behalf of another current client in the same proceeding, irrespective of consent by all concerned. Ohio Rule 1.7(c)(2). As this absolute prohibition is put in Comment , "[a] lawyer may not represent, in the same proceeding, clients who are directly adverse." And note that Bd. of Comm'rs on Grievances & Discipline Op. 2008-2, 2008 Ohio Griev. Discip. LEXIS 2 (June 6, 2008), invokes Rule 1.7(c)(2) even though one of the litigants was "not technically a client." See discussion in section 1.7:240, at "Nonconsentable conflicts - In general."
While there are many permutations in which Rule 1.7(a)(1) is applicable, perhaps the classic, and most common, in modern legal practice is that in which Firm, on behalf of one of its long-standing clients, A, asserts a claim against, or defends against a claim brought by, B, who happens also to be a client of Firm (almost always a minor player as Firm's clients go). There is no doubt that, absent consent under Rule 1.7(b)(2), Ohio Rule 1.7(a)(1) would be violated on such facts, and, in the first judicial opinion of which we are aware decided under the Ohio Rules, the federal district court so held in Cliffs Sales Co. v. Am. S.S. Co., 2007 U.S. Dist. LEXIS 74342 (N.D. Ohio Oct. 4, 2007) (defending client A against suit by wholly-owned subsidiary of client B while simultaneously representing B in unrelated matter; no consent; court rejects per se conflict test in such circumstances but rather looks to facts of each case to determine if representation is actually adverse to parent; so found here). Likewise under the former OHRPC, lack of consent was usually fatal in the disciplinary context. E.g., Toledo Bar Ass'n v. Godbey, 94 Ohio St.3d 416, 763 N.E.2d 1156 (2002) (violation of OH DR 5-105(B); new client not informed of existing violation of 5-105(B) conflicting representation); Toledo Bar Ass'n v. Tolliver, 62 Ohio St.3d 462, 584 N.E.2d 670 (1992) (violation of 5-105(B); inadequate disclosure insufficient to provide informed consent under 5-105(C)); see Bd. of Comm'rs on Grievances & Discipline Op. 88-021, 1988 Ohio Griev. Discip. LEXIS 4 (Aug. 12, 1988).
This is not to say that Firm must be disqualified in such circumstances. There is substantial authority both in Ohio and elsewhere, to the effect that a violation of ethics conflicts rules does not translate into a per se rule of disqualification. Again, the Cliffs case so holds under the Rules. 2007 U.S. Dist. LEXIS 74342, at *17. For cases decided under the Code, see, e.g., Centimark Corp. v. Brown Sprinkler Serv., Inc., 85 Ohio App.3d 485, 488-89, 620 N.E.2d 134, 137 (Ashtabula 1993); Gould, Inc. v. Mitsui Mining & Smelting Co., 738 F.Supp. 1121, 1124, 1126 (N.D. Ohio 1990); SST Castings, Inc. v. Amana Appliances, Inc., 250 F. Supp.2d 863, 865 (S.D. Ohio 2002) (dictum); cf. Kitchen v. Aristech Chem., 769 F. Supp. 254, 258 (S.D. Ohio 1991) (ethics violation not involving conflicts; disqualification motion denied). But see Henry Filters, Inc. v. Peabody Barnes, Inc., 82 Ohio App.3d 873 (Wood 1992) (no abuse of discretion in granting disqualification because "trial court has the authority and the duty to prevent a violation of the [OHRPC] involving conflicts of interest," id. at 262, 611 N.E.2d at 877).
The Gould decision is instructive on this issue. Actually, it is two decisions in one, because as to one current-client direct-adversity conflict, the firm obtained the informed consent of one of the adverse clients, Pechinay, and the court held that OH DR 5-105(C) was thereby satisfied. As to the other directly adverse representation of current clients, there was no consent, and the court found 5-101(C) violated (without stopping to determine whether there had been a violation of 5-105(B), as the Pioneer and SST courts, see below, did). Nevertheless, inasmuch as disqualification is "a drastic measure" to be taken only when "absolutely necessary," 738 F. Supp. at 1126, the court concluded that the motion to disqualify should be denied. High on the court's list of reasons, in addition to lack of any relation between the representations and absence of demonstration of prejudice and/or violation of confidential information, id. at 1126, was the fact that this was a "thrust-upon" conflict: rather than through any affirmative act of the law firm, the second client had become adverse only by virtue of its acquisition by Pechinay. Rather than disqualification, the court ordered the firm to withdraw from its representation of Gould or IGT, the client acquired by Pechinay. See also discussion of Gould in the second paragraph below and at section 1.7:300.
Where do Pioneer-Standard Electronics, Inc. v. Cap-Gemini America, Inc., No. 1.01 CV2185, 2002 U.S. Dist. LEXIS 7120 (N.D. Ohio Mar. 11, 2002) and SST Castings, Inc. v. Amana Appliances, Inc., 250 F. Supp.2d 863 (S.D. Ohio 2002) (discussed above in section 1.7:260 at "Sanctions and remedies for conflicts of interest - Disqualification"), fit into this scheme of things? There is no doubt that they were correctly decided under the Code; there was no violation of OH DR 5-105(B). We think the same result -- denial of the disqualification motion -- would have followed under the Rules, even though there would have been an ethics violation of Rule 1.7(a)(1). Much of the courts' analysis is consistent with a denial of the motion, despite the violation. Thus, both courts emphasized: that disqualification is a matter of discretion for the court; that disqualification is an extreme step, to be taken only if absolutely necessary; that the matters were totally unrelated; and that there was no breach or risk of breach of confidentiality. Moreover, both cases involved large firms and sophisticated clients. For these reasons, we think it plausible that Judges Gaughan and Spiegel would have denied the disqualification motion, even if Rule 1.7 had been applicable, as did Judge Nugent for similar reasons in a case where Rule 1.7 was applicable and found to have been violated, Cliffs Sales Co. v. Am. S.S. Co., 2007 U.S. Dist. LEXIS 74342 (N.D. Ohio Oct. 4, 2007) (also emphasizing Pioneer-Standard analysis that law firm could represent both clients with equal vigor and without conflict of loyalties, id. at *14-15).
If, unlike the facts presented in both Pioneer and SST (no client consent), there has been informed consent in a directly adverse representation involving wholly unrelated matters and the lawyer or firm can provide vigorous representation to both clients, then the conditions of Rule 1.7(b) will have been satisfied, irrespective of Rule 1.7(a)(1). See, e.g., under the Code, Gould, Inc. v. Mitsui Mining & Smelting Co., 738 F.Supp. 1121, 1125 (N.D. Ohio 1990) (finding no ethical violation under OHRPC in bringing unfair competition action against party that firm represented on unrelated patent matters where informed consent and proper screening devices were in place).
Where the conflict is indirect, the lawyer is given comparatively more latitude. In Grubb v. Hollingsworth, 69 Ohio App.3d 804, 591 N.E.2d 1297 (Preble 1990), decided under the Code, a trial court was reversed for disqualifying defense counsel based on conflict of interest in a wrongful death action. The only alleged conflict involved the fact that another lawyer in defense counsel's firm represented, in an unrelated federal criminal matter, a potential witness for the plaintiff in the wrongful death action.
Even indirect relationships could lead to impermissible conflicts under the OHRPC, however. In a 1991 opinion, the Toledo Bar Association advised that a lawyer could not represent a party on a felony charge where the lawyer had reason to believe that the party might be concealing information on an unrelated hit-and-run accident in which the lawyer represented the victim. This belief might cloud the lawyer's exercise of independent judgment. Toledo Bar Ass'n Op. 91-19A (n.d.) (relying on OH EC 5-14 and 5-15).
A lawyer who represented two clients in unrelated medical claims against the same doctor and discovered that the doctor's insurance and assets might be insufficient to cover both claims, had a conflict of interest that could not be cured by consent; it was not obvious that the lawyer could proceed without conflict, because the lawyer might be influenced in settlement positions or in moving the pace of litigation along to favor one client over the other. Toledo Bar Ass'n Op. 91-18 (n.d).
As the possibility of conflict becomes more remote, the permissibility of representation becomes clearer. If a lawyer's practice concentrates on representation in a particular industry, for example, the lawyer often may represent competitors. The mere fact that the entities compete raises the possibility of potentially differing interests, but it is not improper to represent the competitors. See Rule 1.7 cmt. : "Simultaneous representation, in unrelated matters, of clients whose business or personal interests are only generally adverse, such as competing enterprises, does not present a material limitation conflict." But cf. Maritrans GP Inc. v. Pepper, Hamilton & Scheetz, 602 A.2d 1277 (Pa. 1992) (injunction grounded on breach of fiduciary duty arising from representing competitors, which duty is independent of the ethics rules). With respect to representing clients having "positional" or "issue" conflicts, see section 1.7:270.
Conflicts among current clients - Common representation: Ohio Rule 1.7 cmts. - deal with special considerations a lawyer needs to take into account in representation of multiple clients on the same side of a matter. As Comment  points out, the hazards can be so significant in terms of potentially adverse interests that such representation cannot be undertaken:
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 [as when the relationship between the parties is antagonistic].
Ohio Rule 1.7 cmt. . Comment  stresses the importance of the attorney-client privilege in assessing the appropriateness of common representation. Since the privilege does not attach between commonly represented clients, those clients should be advised that the privilege will not protect communications made on the subject of the joint representation. Ohio Rule 1.7 cmt. . With respect to confidentiality, common representation will be inadequate if one client asks the lawyer not to disclose to the other jointly represented client(s) information relevant to the common representation. Ohio Rule 1.7 cmt. . Given the duty of loyalty to each client, each "has the right to be informed of anything bearing on the representation that might affect the client's interests and the right to expect that the lawyer will use that information to that client's benefit." Id. As a result, the lawyer should, in obtaining each client's informed consent, advise each client that the information will be shared and that the lawyer will have to withdraw if one client insists that information material to the representation must be kept from another common client. Finally, any limitations on the scope of the representation must be fully explained, preferably in writing, to all clients at the outset of the representation, in accordance with Rule 1.2(c). Ohio Rule 1.7 cmt. .
Conflicts among current clients – Multiple plaintiffs suing defendant of limited means: One common problem area for an attorney representing more than one party in a civil action involves joint representation of claimants where the defendant has limited funds and apportionment of damages is likely to be disputed. Under these circumstances, divided loyalty seems inevitable, and joint representation is therefore improper. See, e.g., Toledo Bar Ass'n v. Wallace, 42 Ohio St.3d 3, 535 N.E.2d 655 (1989) (lawyer sanctioned for representing multiple parties in automobile accident, without full disclosure and consent, where clients had potentially conflicting interests due to limited funds available to be apportioned among them). For a discussion of the conflicts that may arise with aggregate settlements, see section 1.8:800. Nevertheless, the practice may be permitted where the parties can agree on an apportionment process and have consented to the representation after full disclosure of the possible conflict. Toledo Bar Ass'n Op. 92-10 (n.d.). If that agreement breaks down during the course of the litigation, withdrawal, at least as to the dissenting client(s), is required. Id. In the factual situation presented in Toledo Opinion 92-10, a lawyer represented the driver and five passengers injured in an automobile accident. A conflict arose when one of the clients subsequently had a falling out with the nonclient who it had been agreed would determine the manner of distribution; as a result, the dissenting client was no longer willing to have the nonclient make that determination. The bar association concluded that the lawyer could withdraw from the representation of the dissenting client and retain the rest, unless client-confidence problems arose that would provide an advantage against the former client in division of any recovery.
Conflict among current clients – Multiple plaintiffs with claims against each other: Where the attorney represents both the driver and passengers involved in an automobile accident, another common problem — separate and apart from limited funds and disputed apportionment of damages — arises. Particularly where the driver and passengers are related, the desire for common representation is strong, and the locus of blame usually is directed at the driver of the other vehicle in the accident. The passenger, however, often has a separate right of recovery to pursue against the driver of the vehicle in which the passenger was riding. This creates a conflict that often makes such joint representation improper. Toledo Bar Ass'n v. Gabriel, 57 Ohio St.3d 18, 565 N.E.2d 570 (1991) (lawyer disciplined for conflict arising from representation of both driver and passenger in automobile accident).
As stated in Comment , the nature of a conflict can change during the representation, as in joint representation of the driver and her passenger against another driver. If investigation shows that the passenger may have a claim against the driver, then their interests are directly adverse in the same action; the joint representation cannot be continued. Rule 1.7 cmt. .
The Ohio State Bar Association addressed this problem under the Code in Informal Opinion 88-6. There, an insurance company hired a lawyer to defend its insureds, a husband and wife, against a claim arising out of a traffic accident. During the representation the lawyer informed the wife, the passenger, that she might have a cross-claim against her husband. Under those circumstances, the lawyer could not represent the husband in defending against the wife's claim, even if it would be paid within the policy limits, due to conflict of interest. Even if the lawyer ceased to represent the wife, representation still would be improper because, as a former client, she still would deserve protection. Ohio State Bar Ass'n Informal Op. 88-6 (Oct. 27, 1988). See also Cleveland Bar Ass'n v. Fox, 74 Ohio St.3d 585, 660 N.E.2d 1140 (1996) (lawyer who represented driver and passenger in personal injury action arising out of traffic accident was sanctioned for attempting to withdraw from representation of driver to file cross-claim against driver on behalf of passenger); Ohio State Bar Ass'n Informal Op. 77-13 (Sept. 2, 1997) (recognizing conflict of interest in lawyer representing minor driver in juvenile court for traffic offense and representing vehicle passengers in subsequent suit against minor for personal injuries).
A comparable situation was presented in Mahoning County Bar Ass'n v. Reid, 102 Ohio St.3d 402, 2004 Ohio 3121, 811 N.E.2d 542. In Reid, respondent's firm assigned him to pursue personal injury claims on behalf of two motorcyclists against the driver of a car that turned in front of their cycles. Subsequently, cyclist number two told respondent that he thought he had been struck by cyclist number one as well as by the car. Despite the obvious conflict, respondent continued to represent both cyclists, thereby violating OH DR 5-105(B). Because there were mitigating factors and no clear and convincing evidence that the conduct harmed the clients, a public reprimand was found appropriate.
Conflicts among current clients - Divorce, dissolution, and related matters: Representing multiple parties in marital matters creates many conflict-of-interest possibilities. Most often the problem arises in the joint representation of a husband and wife in a divorce or dissolution proceeding. As a general rule, a lawyer may not represent both parties in a divorce or dissolution action because of the inherent conflict of interest of the parties. This is true even if the parties attest to common interests in resolution of the matter. This position was adopted in Ohio State Bar Ass'n Formal Op. 30 (May 1975). The opinion addressed whether one attorney could represent both the husband and wife in a dissolution of marriage proceeding. Unlike a divorce, a dissolution is less adversarial and requires mutual assent to the final separation agreement. Further, former OH EC 5-15 and 5-17 allowed joint representation where the client's interests vary "only slightly," and OH DR 5-105(C) allowed it where it was obvious that the lawyer could adequately represent both and the lawyer obtains consent of the parties after full disclosure to them. The bar association concluded, however, that this is never the case in the termination of a marriage. Important societal interests are at stake and emotions often run high, even if below the surface. In a shared-counsel situation, the lawyer would not be able to explore these issues sufficiently to assure adequate representation. Hence, joint representation was improper:
The marriage relationship creates duties, rights and responsibilities. It can be and more often than not is an enriching and ennobling status. It also can and frequently does spawn displays of emotion, frustrations, personality traits, and interpersonal and intrapersonal psychological and psychiatric experiences which may plunge a spouse to depths of despair and, ofttimes, degradation. Fear and intimidation are then its hand-maidens.
Where a lawyer is asked to undertake the representation of both spouses in a dissolution of their marriage, the existence of fear and intimidation most often would be masked and not readily ascertainable. Revelation of the real problems and reasons prompting the action would not likely be made to the lawyer nor would a spouse readily repose in him confidences or secrets. Therefore, the professional obligation of the lawyer to obtain full knowledge of his client's cause could not be adequately performed. In effect, the lawyer representing both spouses would be materially shackled in any effort to obtain the information essential to a truly professional performance. Present the factors of custody, child support, visitation rights, alimony, and property division, or any one of them, and the differing interests are apparent.
It is recognized that EC 5-15, 16, would permit a lawyer to make a judgment as to whether differing interests "vary only slightly," and that DR 5-105(C) would permit a lawyer to represent multiple clients if it is "obvious that he can adequately represent the interest of each and if each 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." But there is the rub. In a marriage dissolution situation pragmatics make it impossible for him to make a proper judgment as to the degree of variances in differing interests.
Ohio State Bar Ass'n Formal Op. 30, at 5-6 (May 1975). This would appear to be true as well under the Ohio Rules and relevant case law. See Columbus Bar Ass'n v. Grelle, 14 Ohio St.2d 208, 237 N.E.2d 298 (1968), and Rule 1.7 cmt.  (treating representation of both husband and wife in preparing separation agreement as nonconsentable conflict prohibited by law under Rule 1.7(c)(1); citing Grelle). (Inasmuch as the question put in Opinion 30 was "may an attorney represent both spouses in drafting a separation agreement," it seems strange that the opinion did not even cite Grelle, even though Grelle was decided before the Code went into effect in Ohio.)
Nevertheless, the bar association advised in the same opinion that a lawyer for one side could draft the separation agreement that the other spouse ultimately signs, as long as (1) the lawyer makes sure that the other spouse knows the lawyer does not represent him or her, (2) the other spouse has full opportunity to assess the need for personal counsel, and (3) each spouse agrees in writing to the arrangement. Ohio State Bar Ass'n Formal Op. 30. Further, a lawyer who served as a mediator in the divorce context could subsequently represent the parties in the presentation of the mediated agreement to the court, if certain conditions were met. See Ohio State Bar Ass'n Informal Op. 82-2 (Aug. 3, 1982).
Where minor children are involved, a divorce or dissolution may affect the children's interests in terms of the allocation of parental rights and responsibilities. Attempting to represent both a parent and a child in this setting may constitute a conflict of interest. Cf. Scholler v. Scholler, 10 Ohio St.3d 98, 462 N.E.2d 158 (1984) (attorney who represented spouse in negotiation of separation agreement did not automatically represent interests of minor child as well; it cannot be said that interests of the client spouse to achieve a fair division of marital assets are concurrent with interests of child to receive support).
Conflict of interest in the joint representation of parties in a divorce or dissolution also has been cited as part of the totality of the circumstances relied upon to find fraud on the court sufficient to reopen portions of the resulting property settlement under OH Civ R 60(B)(5). Coulson v. Coulson, 5 Ohio St.3d 12, 448 N.E.2d 809 (1983); Longstreet v. Longstreet, 57 Ohio App.3d 55, 566 N.E.2d 708 (Cuyahoga 1989); Payne v. Payne, No. CA-3594, 1991 Ohio App. LEXIS 2175 (Licking May 3, 1991) (interpreting Longstreet).
As in any area, past-client conflicts in the divorce context may also arise to make present representation improper. Geauga County Bar Ass'n v. Psenicka, 62 Ohio St.3d 35, 577 N.E.2d 1074 (1991) (conflict arising from representing husband in divorce after having been discharged as counsel for wife previously in the divorce action). See Ohio Rule 1.9(a) and section 1.9:200. By engaging in such successive representation of the parties in a divorce action, the lawyer risks malpractice exposure as well. David v. Schwarzwald, Robiner, Wolf & Rock Co., L.P.A., 79 Ohio App.3d 786, 607 N.E.2d 1173 (Cuyahoga 1992). See section 1.1:300.
Representation in a divorce action, once completed, also creates a former-client relationship that will limit subsequent representations. To the extent the termination of the marriage creates ongoing obligations flowing from one spouse to the other, such as spousal support, enforcement problems may later arise. Switching sides, by representing one spouse against the other spouse who is a former client, is, absent informed written consent, a prohibited former-client conflict. Ohio Rule 1.9(a). See, e.g., under the former OHRPC, Morford v. Morford, 85 Ohio App.3d 50, 619 N.E.2d 71 (Lawrence 1993) (conflict resulted from representing husband in divorce and wife in action to enforce child-support order).
Representation in class actions: Comment  speaks to class-action conflicts. Pursuant thereto, unnamed members of the class are not considered to be clients for purposes of applying division (a)(1):
Thus, the lawyer does not typically need to get the consent of an unnamed class member 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.
Part-time government attorney's representation of private civil clients: While most opinions concerning conflicts of interest and part-time government attorneys address the representation of criminal defendants by a part-time government lawyer (see section 1.7:320), similar concerns may arise in the civil context as well. Sometimes the conflict is fairly direct. For example, a lawyer who serves as a hearing officer at parole-revocation or parole-release hearings cannot represent victims of crime in actions against the state under the Crime Victims Reparation Act, ORC 2743.51-.72. To do so would be to represent an interest adverse to the lawyer's employer in violation of former OH DR 5-101(A). Ohio State Bar Ass'n Informal Op. 95-2 (Feb. 21, 1995). However, conflicts that are far less direct also are sufficient to render representation improper. A legal advisor to a city and its departments, for example, could not represent a party opposing a rezoning application pending before the city planning commission and city-council. Even though the interests were only potentially different, the chance that they could become more oppositional was sufficient to require that the representation be declined. Ohio State Bar Ass'n Informal Op. 81-11 (Nov. 17, 1981). Similarly, because of the potential conflict of interest involved, a lawyer/county commissioner should not represent a private client before a regional-planning agency in a matter that ultimately must be approved by the county commissioners. Ohio State Bar Ass'n Informal Op. 81-4 (Apr. 8, 1981). And a lawyer/city council member should not accept private employment on matters adverse to the municipality, or to its officials or employees. Bd. of Comm'rs on Grievances & Discipline Op. 96-6, 1996 Ohio Griev. Discip. LEXIS 4 (Aug. 9, 1996).
Other: An unusual case presenting issues regarding representation of those having conflicting interests in civil litigation is Perin v. Spurney, 2005 Ohio 6811, 2005 Ohio App. LEXIS 6112 (Franklin). The circumstances in Perin were that plaintiff's lawyer's in a wrongful termination case against Honda somehow thought it appropriate to represent plaintiff's husband at a deposition of the husband by Honda (as well as generally consulting with the husband about the plaintiff's claim; the husband even reviewed the complaint). All of this would be much ado about very little, except for the fact that husband was an in-house counsel for Honda, was on its ethics committee, and as a committee member had confidential information about the matter that allegedly resulted in plaintiff/wife's termination. On such facts, it is hard to decide whose judgment was poorer - that of plaintiff's attorney, for consulting with husband and representing him in deposition, or Honda lawyer/husband, who by his conduct was rather obviously breaching his duty of loyalty to Honda and who had confidential information that was at risk in his interaction with his wife and her lawyers. Even though the situation is difficult to pigeonhole in terms of just where it would fit under Rule 1.7, it seems indisputable that Honda had good reason to ask that plaintiff's lawyers be disqualified. Perhaps this is an instance in which use of the much-maligned appearance-of-impropriety rule (which the court of appeals relied on in affirming the disqualification) was justified.
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 5.92, 5.119-5.121, 5.123 (1996).
An area where conflict of interest is likely to arise is the representation of co-defendants in a criminal matter. Differing alibis for each client, the potential to shift the blame from one defendant to the other, the likelihood that the clients' interests will be split by different plea bargains offered by the government, and other developments, make the lawyer's task a difficult one. So "grave" is the potential for conflict of interest in this area that Comment  advises that "ordinarily a lawyer should decline to represent more than one co-defendant" in a criminal case. Ohio Rule 1.7 cmt.  (going on to note that common representation of parties with similar interests in civil litigation is proper if requisites of division (b) are met).
A disciplinary case under the Code that explores one aspect of this problem is Disciplinary Counsel v. Rafidi, 114 Ohio St.3d 336, 2007 Ohio 3674, 872 N.E.2d 265, where the respondent had been retained by the Glenns in a bankruptcy matter. A cousin staying with the Glenns was arrested on a drug change, based on a search of their house. The DEA agents thereafter interviewed Mr. Glenn, who was left with the impression that he too was a suspect. Believing that he should consult counsel and knowing of no attorney other than respondent, the Glenns engaged respondent for a modest fee on the potential criminal matter. In his discussion with the Glenns, respondent learned about the cousin's predicament and asked whether the cousin had a lawyer. After a telephone call to the cousin's wife, respondent visited the cousin in jail and offered to defend him. The cousin retained respondent for a fee of $20,000. Respondent did not advise the cousin that he was already representing Mr. Glenn in the same matter. On these facts, respondent was charged with and found to have violated, among other disciplinary rules, DR 5-105(A), requiring a lawyer to disclose potential conflicts before accepting employment likely to compromise the lawyer's independent judgment. As stated by the Court:
Glenn's and North's (the cousin) status as suspects in the same DEA investigation was likely to adversely affect respondent's professional judgment, since it posed an obvious conflict of interest because one suspect might implicate the other. Respondent had an obligation under DR 5-105(A) to fully disclose to Glenn and to North his dual representation and to obtain the consent of both clients before accepting employment.
Id. at para. 20. The Court rejected the stayed six-month suspension recommended by the panel and the Board and imposed a six-month suspension without stay.
While such conflicts raise obvious ethical concerns, and can be the source of disciplinary action as in Rafidi, the problem is more often addressed in terms of whether the conflict undercuts a defendant's Sixth Amendment right to effective assistance of counsel. The Sixth Amendment protection against ineffective assistance includes a right to counsel untainted by conflict of interest. This right was first recognized in Glasser v. United States, 315 U.S. 60 (1942). Accord In re Burson, 152 Ohio St. 375, 89 N.E.2d 651 (1949) (following Glasser). In resolving this question, Ohio courts sometimes turned to the OHRPC to help assess the situation. See, e.g., State v. Keenan, No. 57565, 1990 Ohio App. LEXIS 5791 (Cuyahoga Dec. 27, 1990).
In reviewing ineffective-assistance-of-counsel claims based on conflict of interest in multiple criminal-defense representation, an appellate court first must determine whether the trial court had a duty to investigate the potential conflict of interest. Trial courts in Ohio often investigate multiple representations regardless of whether there is a duty to do so. Even where not constitutionally required, the Ohio Supreme Court has recommended that trial courts explore joint representation issues concerning criminal co-defendants so represented. State v. Manross, 40 Ohio St.3d 180, 532 N.E.2d 735 (1988). An affirmative duty to investigate arises, however, when the trial court knows or reasonably should know of a lawyer's potential conflict of interest in representing multiple criminal defendants. Manross (following Cuyler v. Sullivan, 446 U.S. 335 (1980)). For example, if any party raises an objection to joint representation, that gives the trial court sufficient notice to trigger its duty to inquire into the potential of a conflict of interest. In fact, defense counsel may have an ethical duty to advise the court when a conflict of interest arises during trial. Cuyler v. Sullivan, 446 U.S. 335 (1980) (finding such duty in part in DR 5-105 and in EC 5-15). A party's objection is not required, however; if the possibility of a conflict is sufficiently apparent, the court's duty attaches. State v. Gillard, 64 Ohio St.3d 304, 595 N.E.2d 878 (1992).
If the trial court has an affirmative duty to investigate but fails to do so, a 1978 U.S. Supreme Court opinion suggests that reversal is required, regardless of whether an actual conflict existed. Holloway v. Arkansas, 435 U.S. 475 (1978). Accord Harris v. Carter, 337 F.3d 758 (6th Cir. 2003). While citing this standard with approval, the Ohio Supreme Court, relying on a different U.S. Supreme Court opinion (Wood v. Georgia, 450 U.S. 261 (1981)), held that in these circumstances the case must be remanded to the trial court for an examination of whether an actual conflict of interest existed, and if so, the conviction must be overturned. Gillard, 64 Ohio St.3d 304, 595 N.E.2d 878. If an actual conflict is present, prejudice will be presumed.
In undertaking an investigation of the possible conflict of interest, the trial court must allow counsel to withdraw if the defendant objects to continued joint representation and shows that potential conflicts may affect his or her right to a fair trial. In Holloway, the U.S. Supreme Court stated that the judge must "ascertain whether the risk was too remote to warrant separate counsel." Holloway v. Arkansas, 435 U.S. at 484. In Cuyler v. Sullivan, 446 U.S. 335, 348 (1980), the Court rephrased the issue, stating that the defendant "must have the opportunity to show that potential conflicts impermissibly imperil his right to a fair trial." Even if the defendant is willing to waive the conflict, the trial court, in its discretion and in the interest of justice, still may disqualify defense counsel if it finds that a "serious potential for conflict" is present. Wheat v. United States, 486 U.S. 153, 164 (1988). See, e.g., State v. Dillman, 70 Ohio App.3d 616, 591 N.E.2d 849 (Huron 1990) (citing Wheat).
If the trial court did not inquire about a potential conflict of interest, and had no duty to do so, an appellate court responding to a claim of ineffective assistance of counsel based on a conflict must determine whether an actual conflict of interest existed and whether it adversely affected the lawyer's representation of his client. State v. Manross, 40 Ohio St.3d 180, 532 N.E.2d 735 (1988) (following Cuyler v. Sullivan). See also Burger v. Kemp, 483 U.S. 776 (1987) (applying this standard). If it did, the conviction cannot stand. The mere possibility that a conflict of interest existed, however, is insufficient to require that the conviction be overturned. Manross.
Not every conflict of interest in criminal-defense representation involves multiple representation of co-defendants. In the disciplinary case of Cincinnati Bar Ass'n v. Lukey, 110 Ohio St.3d 128, 2006 3822, 851 N.E.2d 493, for example, respondent violated former OH DR 5-105(B) when he, while representing the grandparents with respect to an anticipated custody/dependency proceeding involving their thirteen-year old grandson, represented the grandson in connection with juvenile court proceedings against the grandson. (He represented himself as counsel to the prosecutor and proceeded to negotiate a guilty plea to a second-degree felony (aggravated arson) on behalf of his client.) Since the grandparents didn't want their grandson to return to their home, pleading guilty to such a serious charge certainly worked to their advantage, although hardly to respondent's other "client." In addition, although the Court does not comment directly on its credibility, respondent's testimony seems dubious at best. Thus, "[r]espondent explained to the magistrate that he did not consider his advice to the grandson to be representation because the boy had already admitted guilt [in fact, a public defender had entered denials to the charges on the grandson's behalf and respondent had not previously spoken to the boy before entering the guilty plea]. At the panel hearing, respondent asserted that he had taken on the grandson's case to help his clients, without realizing the conflicting interests." Id. at para. 11. With all due respect, that excuse is a hard one to swallow, particularly coming from a practioner of 40 years' experience. As the Court stated in determining a sanction,
[r]espondent completely disregarded the grandson's right to competent independent counsel and impeded the magistrates' efforts to safeguard that right. That a lawyer would pose as counsel for an adverse party in any case is egregious, but such practice is unthinkable when a child's interests are at stake.
Id. at ¶ 22. Despite the lofty words and the fact that his misconduct violated four other disciplinary rules as well, respondent received only a two-year suspension with eighteen months stayed.
And in State v. Pryor, Nos. 9-88-21, 9-88-22, 1990 Ohio App. LEXIS 2141 (Marion May 30, 1990), the appellant alleged that his attorney rendered ineffective assistance because he simultaneously represented, in a divorce case, the father of one of the appellant's alleged victims. Though the court admitted that certain elements of conflict of interest were inherent in the dual representation, it held that any conflict must be accompanied by some prejudicial impact on the conduct of the defense by counsel, and no such negative influence was present in the case. See also State v. New, No. 93- L-160, 1994 Ohio App. LEXIS 5905 (Lake Dec. 23, 1994), a former client/witness case, discussed at section 1.9:210.
State v. Lentz, 70 Ohio St.3d 527, 639 N.E.2d 784 (1994), recognized that a lawyer's inherent personal conflict -- being in the position of having to argue on appeal the lawyer's own incompetence in support of a claim of ineffective assistance of counsel -- would be imputed to the lawyer's firm. See section 1.10:200.
With respect to conflict of interest, the most recent U.S. Supreme Court entry into the ineffective-assistance-of-counsel lists is Mickens v. Taylor, 535 U.S. 162 (2002). In a 5-4 decision that perhaps puts a somewhat different gloss on the Court's prior ineffective-assistance/conflict cases, Justice Scalia held for the Court that where the trial judge failed to inquire into a potential conflict of interest about which it knew or reasonably should have known, the conflict arising from the defense attorney's having formerly represented the victim (who was murdered by the lawyer's client) did not provide grounds for habeas relief, in the absence of a showing by the defendant that the conflict adversely affected the lawyer's performance. In Mickens, the Court reaffirmed that a defendant alleging ineffective assistance of counsel must, as a general rule, demonstrate that, but for counsel's errors, the result would have been different. Strickland v. Washington, 466 U.S. 668 (1984). The Court found that none of the exceptions to this general rule (such as Holloway v. Arkansas, 435 U.S. 425 (1978) (automatic reversal where counsel forced to represent concurrent multiple defendants having conflicting interests)) was applicable in the case at bar. The Court also rejected petitioner's argument that the remand instruction in Wood v. Georgia, 450 U.S. 261 (1981), directing the trial court to grant a new hearing if it determined that "an actual conflict of interest existed," established that a petitioner need show only that the lawyer was subject to a conflict of interest to obtain relief. According to Justice Scalia, the remand language in Wood was merely "shorthand" for the statement in Cuyler v. Sullivan, 446 U.S. 335 (1980), that "'a defendant who shows that a conflict of interest actually affected the adequacy of his representation need not demonstrate prejudice in order to obtain relief.'" 535 U.S. at 171 (emphasis by the Mickens Court).
An interesting disciplinary case raising criminal multiple-representation (but not ineffective-assistance) issues is Columbus Bar Ass'n v. Ross, 107 Ohio St.3d 354, 2006 Ohio 5, 839 N.E.2d 918. Respondent Ross represented defendant Brown in a federal drug-trafficking case. Ross also represented defendant Hollins in an unrelated state-court drug charge. The U.S. attorney in the Brown case, however, had evidence that Hollins was Brown's supplier. Both Brown and Hollins denied this when confronted by respondent, and respondent continued to represent both -- in Brown's case in the hope of obtaining a reduced sentence for his client in return for cooperation with the government. Respondent ultimately withdrew after it became clear that there would be no deal with the government unless Brown named Hollins as his supplier. On these facts, the Board found that there was not the necessary clear and convincing evidence that respondent had represented clients with conflicting interests in violation of DR 5-105, since Ross had "no specific proof that they were involved in criminal activity together." Id. at ¶ 11.
The Ohio Supreme Court held otherwise:
Respondent advised Brown to cooperate with authorities and name his supplier to obtain a reduction in sentence. Hollins, however, was the supplier that the government wanted Brown to incriminate, and the government refused to negotiate unless Brown proferred that information. Clearly, respondent could not recommend that Brown inform on Hollins without compromising one client's interests at the expense of the other.
Id. at ¶ 22. The Court was persuaded by relator's argument
that respondent's judgment was thereby "ineluctably clouded by the fact that the right strategy for one client would necessarily have harmed his other client." Thus, . . . relator claims that the situation presented such a great potential for conflict that it could not be obvious that respondent could represent both clients. Stated differently, even if respondent did disclose the risks of dual representation and did obtain his clients' consent, . . . the DR 5-105(C) exception still did not permit respondent to defend both of these clients.
We agree. Respondent disregarded all cautionary guidance in continuing to represent Brown and Hollins.
Id. at ¶¶ 23-24. In agreeing with this analysis, the Court also found support (even though Brown and Hollins were not, technically, "codefendants") in the language of ABA Model Rule 1.7 cmt.  (potential for conflict in representing multiple criminal defendants "so grave that ordinarily a lawyer should decline to represent more than one codefendant.") Id. at ¶ 24. The identical language is now found in Ohio Rule 1.7 cmt. . Finally, the Court quoted with approval from a New York Court of Appeals opinion the rule that "the availability of 'a plea by one defendant in exchange for testimony against the other in the same matter is virtually certain to place lawyers involved in representing both in an untenable position.'" Id. at ¶ 26. In sum, Ross was found to have violated DR 5-105(B) because he could not establish that he was "obviously" able adequately to continue to represent the adverse interests of both Brown and Hollins, as was required under the exception provided for multiple representation in DR 5-105(C).
Government lawyers employed in an agency that represents multiple clients: One source of difficulty arises where the government attorney's job is to represent private parties at the government's expense--those employed in a public defender's office, for example. In a position like this, the lawyer has numerous clients, and multiple-client conflicts can arise just as they do in the private setting. Such conflicts often arise in the context of representation of multiple defendants by the same public defender's office. See also section 1.10:200. For example, if a domestic-violence situation leads to the arrest of both husband and wife for their actions, the same public defender cannot represent both parties at any stage of the ensuing criminal action. There is an inherent conflict of interest that cannot be waived. Cincinnati Bar Ass'n Op. 95-96-01 (n.d.) (The same opinion also advised that two separate attorneys from public defender's office may separately represent each client, provided that each acts independently and maintains confidentiality, secrecy, and the attorney-client privilege, but we doubt that this is still good law. The Board opined to the contrary on comparable facts in Bd. of Comm’rs on Grievances & Discipline Op. 2008-4, 2008 Ohio Griev. Discip. LEXIS 4 (Aug. 15, 2008); see section 1.10:200, at “Imputed disqualification in non-law firm settings.”) In contrast, a prosecutor represents only the state; the victim of a crime is not the prosecutor's client. Given this, there is no inherent conflict of interest in different attorneys within the same prosecutor's office simultaneously handling prosecutions of multiple family members charged with committing domestic violence against each other out of the same altercation. Bd. of Comm'rs on Grievances & Discipline Op. 95-11, 1995 Ohio Griev. Discip. LEXIS 4 (Oct. 6, 1995).
In Opinion 2008-4, the Board of Commissioners addressed multi-client conflicts in a public defender’s office under the Rules of Professional Conduct. The Board’s syllabus states that:
Pursuant to Rule 1.7(a) and (a)(2), an assistant county defender should not represent co-defendants at a preliminary hearing in a felony case due to the inherent risk of a conflict of interest that likely could not be ameliorated under Rule 1.7(b).
2008 Ohio Griev. Discip. LEXIS 4, at *1. (In the course of so concluding, the Board stressed the importance of each step in a criminal proceeding, including the preliminary hearing. See id. at *13-15.) Nor, for the same reasons, should the public defender represent one co-defendant in a felony case while simultaneously representing the other co-defendant in an unrelated misdemeanor case. Id. at *1. As noted above, the imputation-of-conflict issue aspect of the opinion is discussed in section 1.10:200.
Government attorneys representing criminal defendants: Conflicts of interest can also arise when a part-time government attorney represents private clients in a criminal matter. See, under the Rules, Bd. of Comm'rs on Grievances & Discipline Op. 2008-5, 2008 Ohio Griev. Discip. LEXIS 5 (Aug. 15, 2008) and Bd of Comm’rs on Grievances & Discipline Op. 2008-6, 2008 Ohio Griev. Discip. LEXIS 6 (Dec. 5, 2008) (both addressing restrictions on city law director representing criminal defendants), further discussed this subpart infra. Comparable opinions under the Code include Bd. of Comm'rs on Grievances & Discipline Op. 96-6, 1996 Ohio Griev. Discip. LEXIS 4 (Aug. 9, 1996) (discussing restrictions on lawyer/city council member representing criminal defendants in municipal court); Ohio State Bar Ass'n Informal Op. 81-4 (Apr. 8, 1981) (discussing restrictions on part-time judges representing criminal defendants).
As a general rule, those charged with the authority to prosecute criminal actions are deemed to have the citizens of the state of Ohio as a client. Where that is the case, any criminal defense representation they undertake would create a direct conflict with that current client and cannot be accepted. E.g., Cain v. Calhoun, 61 Ohio App.2d 240, 401 N.E.2d 947 (Gallia 1979) (applying this limitation to county prosecutors and city solicitors); Bd. of Comm'rs on Grievances & Discipline Op. 92-13, 1992 Ohio Griev. Discip. LEXIS 8 (June 19, 1992) (applying this limitation to assistant county prosecutors); Bd. of Comm'rs on Grievances & Discipline Op. 88-008, 1988 Ohio Griev. Discip. LEXIS 28 (June 17, 1988) (applying this limitation to county prosecutors, assistant county prosecutors, city law directors, and city or municipal prosecutors). Even if the lawyer truly can exercise independent judgment on behalf of his clients in the matter -- a fact that would allow a lawyer with two private clients to represent both with their consent after full disclosure -- for the prosecutor, the disclosure and consent option is unavailable. Bd. of Comm'rs on Grievances & Discipline Op. 92-13, 1992 Ohio Griev. Discip. LEXIS 8 at *4 (June 19, 1992) (in addition to unavailability of consent, Board also noted that "[i]t is not obvious [under former OH DR 5-105(C)] that a part-time county prosecutor could represent the public and also privately represent criminal defendants"). Ethics opinions typically hold that the public cannot give the necessary consent to waive a conflict. E.g., Bd. of Comm'rs on Grievances & Discipline Op. 92-13, 1992 Ohio Griev. Discip. LEXIS 8 (June 19, 1992); Bd. of Comm'rs on Grievances & Discipline Op. 88-008, 1988 Ohio Griev. Discip. LEXIS 28 (June 17, 1988).
The Board has now opined that this prohibition against representation of criminal defendants by city or county prosecutors, as reflected in the above cases and Board decisions, is the law under the Rules of Professional Conduct as well. See Bd. of Comm'rs on Grievances & Discipline Op. 2008-5, 2008 Ohio Griev. Discip. LEXIS 5 (Aug. 15, 2008), which cites Cain v. Calhoun with approval and states in syllabus that a city law director or her assistant director cannot represent criminal defendants in cases in which the state is a plaintiff. Given this legal precedent, the Board finds that any such representation would run afoul of Rule 1.7(c)(1), barring representation where it is prohibited by law. Id. at *8. However, in Bd. of Comm’rs on Grievances & Discipline Op. 2008-6, 2008 Ohio Griev. Discip. LEXIS 6 (Dec. 5, 2008), the Board modified Opinion 2008-5 to make clear that the prohibition applies only to city law directors (or village solicitors) who have a duty to represent the state of Ohio. If they do not have such a duty, they (and their assistant law directors and solicitors) may represent criminal defendants in the following limited circumstances:
1) no city police officers from the city are involved; 2) the criminal charges are based solely on alleged violations of state law; and 3) the city is not otherwise directly or indirectly involved or affected.
Id. at *1 (syllabus) (reaffirming this aspect of Board Opinion 88-008, which had been disavowed on this point in Opinion 2008-5).
An interesting case under the Code was presented in Ohio State Bar Ass'n v. Wick, 116 Ohio St.3d 193, 2007 Ohio 6042, 877 N.E.2d 660. The respondent in Wick was the Mount Gilead village solicitor. While so serving, he was permitted by the village to represent criminal defendants in courts other than the Mt. Gilead mayor's court. He agreed to represent such a defendant on two counts pending before the Morrow County Municipal Court. Respondent did not know that the same defendant also had one related misdemeanor charge pending in the Mount Gilead mayor's court. When he found out, he filed a motion in mayor's court to have that case transferred to municipal court. The motion was granted and thereafter respondent negotiated a resolution of the three cases with the municipal court prosecutor. "After this transfer to the municipal court, respondent did not negotiate with or confer with the Mount Gilead police officers who had filed the misdemeanor charge against Belt in the mayor's court where respondent served as the prosecutor." Id. at para. 5. On these facts, respondent acknowledged a violation of DR 5-105(B) and entered into a consent-to-discipline agreement recommending a public reprimand. The panel and Board agreed, as did the Court, which stated that respondent “should not have represented a client on a criminal charge in a mayor’s court, where respondent served as a prosecutor.” Id. at para. 9. There were no aggravating factors and numerous mitigating factors.
The underlying premise in Wick under the Code – that the village prosecutor could represent criminal defendants in certain circumstances – seems consistent with the conclusion in Opinion 2008-6 under the Rules.
The Ohio State Bar Association has approved criminal defense representation by city solicitors in limited circumstances, but this approval may be limited to instances in which the city solicitor's duties involve only civil matters and the representation takes place in a court where no city official serves as judge or magistrate. Ohio State Bar Ass'n Informal Op. 81-4 (Apr. 8, 1981). In addition, an attorney who is hired on a case-by-case basis by a prosecutor to handle civil matters for the county can accept private criminal representations so long as the client is fully informed and consents. Ohio State Bar Ass'n Informal Op. 81-7 (Aug. 19, 1981).
The Board recognized another limited exception where a court appoints private counsel to act as special prosecutor in a particular case. Bd. of Comm'rs on Grievances & Discipline Op. 94-6, 1994 Ohio Griev. Discip. LEXIS 9 (Apr. 15, 1994). This practice may be permitted as long as the lawyer does not represent criminal defendants in the court in which he or she serves as special prosecutor and as long as such appointments are accepted only infrequently. These limitations also satisfy any concerns about the appearance of impropriety under former Canon 9. The appointment by the court is recognized as consent by the public to the potential conflict.
The exception recognized in Opinion 94-6 has recently been broadened to permit "an attorney to serve as a special prosecutor in the same county (and even in the same court) in which the attorney represents criminal defendants, if such appointment is only on an occasional basis and the appointee is competent to fill the special prosecutor position." Bd. of Comm'rs on Grievances & Discipline Op. 2003-7, 2003 Ohio Griev. Discip. LEXIS 7, at *2 (Dec. 5, 2003).
As a related matter, restrictions also have been placed on those only indirectly involved in criminal prosecutions. Ohio State Bar Ass'n Informal Op. 81-4 (Apr. 8, 1981) opined that, although a county commissioner has no direct involvement in prosecuting criminal cases, the commissioner's undertaking criminal defense representation still would be inappropriate. First, even though a county commissioner is not directly involved in the prosecution of criminal matters, the commissioner still represents the public by virtue of his public office. Representing a criminal defendant would place the commissioner in conflict with his other client, the public. It is not clear whether the lawyer-commissioner should be considered as having a lawyer-client relationship by virtue of his position as county commissioner, but the OSBA opinion presented the matter in these terms. Second, because the commissioner has fiscal responsibility for the operation of the prosecutor's office, sheriff's department, and others that might be involved, it may give rise to conflicting interests if the lawyer accepted a criminal defense client in opposition to these entities. The opinion addresses this second concern, however, more as a problem of the appearance of impropriety under former Canon 9. (A comparable argument was rejected by the Sixth Circuit in Fautenberry v. Mitchell, 515 F.3d 614 (6th Cir. 2008) (fact that defense counsel in murder prosecution was also trustee of township where one of bodies was found was not actual conflict rendering counsel's assistance ineffective).)
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 5.89-5.90 (1996).
Conflicts among current clients - Representing multiple clients involved in a business relationship: It is not unusual for a lawyer to represent multiple clients in a mutual business transaction. Often, when a lawyer identifies a need of one client, the lawyer knows of another client who could address that need, and the lawyer brings the clients together for their mutual benefit. Before undertaking the representation, however, the lawyer should explain fully to each client the implications of common representation and obtain their consent. See Ohio Rule 1.7 cmts.  & . As noted in Comment , in addition to informed consent, the lawyer in such circumstances must consider whether he or she can competently and diligently represent each client in the matter and whether the disclosures necessary to secure the clients' informed consent can be made. The comment also sets forth factors relevant in determining if there is a material limitation conflict; they include
the nature of the client's respective interests in the matter, the relative duration and intimacy of the lawyer's relationship with each client involved, the functions being performed by the lawyer, the likelihood that disagreements will arise and the likely prejudice to each client from the conflict.
Rule 1.7 cmt. .
Conflicts among current clients - Direct adversity: Ohio Rule 1.7 cmt.  recognizes that direct adversity can occur in transactional and counseling practice as well as litigation: "For example, a buyer and a seller or a borrower and a lender are directly adverse with respect to negotiations of the terms of the sale or loan." At times the interests of such clients will diverge as each seeks to maximize its interests at the expense of the other. A vivid illustration of such adversity under the former OHRPC, where a lawyer sought "for financial reasons" to maximize the interests of a corporate client at the expense of another, mentally-impaired client, is Cuyahoga County Bar Ass'n v. Newman, 102 Ohio St.3d 186, 2004 Ohio 2068, 808 N.E.2d 375. In Newman, respondent represented both a shopping center and a disabled client in leasing space in the center to the disabled client for a laundromat, in a transaction that ultimately forced the disabled client into bankruptcy. Respondent even prepared to sue, on behalf of the shopping center, the disabled lessee. The extent of respondent's violation of OH DR 5-105(A) and (C) is captured in the following excerpt from the Court's opinion:
Respondent also prepared the papers needed to incorporate the laundromat, and he arranged for them to be signed on or about the same day the parties executed the lease, security agreement, and sublease. Plus, in setting up the corporate structure for the laundromat, respondent agreed to be the company's statutory agent for the purpose of accepting service of any complaint, an arrangement that graphically demonstrated the competing interests at stake. At the hearing, respondent conceded the possibility that had his disabled client not signed the lease and related documents in his personal capacity, respondent might have had to serve himself -- as the statutory agent for the disabled client's corporation -- with the complaint he prepared for the shopping center's suit.
Id. at ¶ 16.
Such conflict problems can of course arise in marital matters. For example, in representing both prospective husband and wife in prepartion of an antenuptial agreement, such conflicts may render the instrument unenforceable. Rowland v. Rowland, 74 Ohio App.3d 415, 599 N.E.2d 315 (Ross 1991) (presence of conflict of interest in joint representation undercuts finding good faith and fairness necessary to create an enforceable antenuptial agreement). And in Akron Bar Ass'n v. Holder, 112 Ohio St.3d 90, 2006 Ohio 6506, 858 N.E.2d 356, respondent was disbarred under the Code for, among other violations, "representing a married couple considering divorce despite their divergent interests and without the informed consent of both spouses," id. at ¶ 12, in violation of DR 5-105(A) & (B).
Even where there is no direct adversity at the outset of a multiple-client transaction, the potential for adversity is always present. This is illustrated by the case of Columbus Bar Ass'n v. Mills, 109 Ohio St.3d 245, 2006 Ohio 2290, 846 N.E.2d 1253, where one couple approached another couple about investing in the operation of their horse-boarding/training facility. The couples jointly asked respondent to prepare the necessary papers, and respondent ended up representing both couples, as well as the resulting owning limited-liability company and operating corporation. Disputes arose and a buyout by one of the couples of the other was effected, again with respondent representing all parties. Problems continued after the buyout, however. In civil litigation between the couples, respondent represented one of the couples until withdrawing after the other side, with new counsel, moved to disqualify her. Respondent was found to have violated former DR 5-105(B) (multiple client representation resulting in exercise of professional judgment on any client's behalf likely to be adversely affected by representation of another client).
In Columbus Bar Ass'n v. Ewing, 63 Ohio St.3d 377, 588 N.E.2d 783 (1992) (six-month suspension; execution of discipline suspended on condition respondent be violation-free for three years), an attorney represented a farm family in bankruptcy. The attorney arranged for another of his clients to refinance the loan on the farmers' trailer and to pay off the FHA security interest in certain farm equipment. In carrying out these transactions, the lawyer neglected to take various steps a lawyer typically would take to protect the farmers' interest. Finding that these omissions may have resulted from the conflict of interest between these clients, the Court concluded that the lawyer had violated OH DR 5-105(B). (Ewing is cited in Ohio Rule 1.7 cmt. .)
Similarly, in Columbus Bar Ass'n v. Herrold, 61 Ohio St.3d 542, 575 N.E.2d 796 (1991) (indefinite suspension imposed), a lawyer arranged both a loan and a property transfer between unsophisticated bankruptcy clients and an investment company that he represented and in which he held a controlling stock interest. He then failed to fully inform the bankruptcy clients of their rights before their property was transferred to the investment company, which omission benefited the investment company and harmed the bankruptcy clients. This conduct was found to violate OH DR 5-105(A) and (B), and the lawyer's ownership interest in the investment company raised separate OH DR 5-104(A) concerns. A comparable pattern of misconduct occurred in Cleveland Bar Ass'n v. Greenberg, 112 Ohio St.3d 138, 2006 Ohio 6519, 858 N.E.2d 400, where the respondent, on retired status, engaged in a number of transactions in which he was representing his company in various transactions with the other side, the unsophisticated principals of which reasonably thought respondent was representing them as well. While found to have violated former OH DR 1-102(A)(3)-(6) and even though the obvious conflict of interest was mentioned more than once in the opinion, respondent was not charged with or found to have violated Code conflict-of-interest provisions. See also Columbus Bar Ass'n v. Ewing, 75 Ohio St.3d 244, 661 N.E.2d 1109 (1996) (lawyer's arranging with another client to buy property of financially strapped clients, without disclosing the lawyer's and the other client's interest until the Friday before the scheduled Monday closing, and related "coercive tactics," violated OH DR 5-101(A), 5-105(A), and 5-105(B), among other provisions).
For a lawyer serving as counsel to and executor of an estate, investing trust assets in another client's business venture can cause conflicts where an independent attorney would not make similar investments. In Bar Ass'n of Greater Cleveland v. Shillman, 61 Ohio St.2d 364, 402 N.E.2d 514 (1980) (indefinite suspension imposed), a lawyer-executor channeled over two-thirds of the assets of an estate and a trust into another client's business venture, which was of unproven viability and profitability, without arranging adequate security. Since the facts showed that the lawyer favored the interests of the business client over those of the estate for which he was a fiduciary, the representation of the estate was tainted by an impermissible conflict of interest. The Court found that the lawyer had been offered and accepted extraordinary privileges from the business client in apparent exchange for favoring that client over the interests of the estate.
As a general matter, it is ethically improper for a lawyer to represent both a bankruptcy debtor and a creditor in a bankruptcy proceeding. This conflict was said to be absolute and not curable by consent in Ohio State Bar Ass'n Informal Op. 81-006 (May 20, 1981). Such simultaneous representation seems particularly suspect when, in addition to representing a debtor in bankruptcy, the bankruptcy creditor that the lawyer is representing in the same proceeding is himself, as was the case in Akron Bar Ass'n v. Holder, 105 Ohio St.3d 443, 2005 Ohio 2695, 828 N.E.2d 621 (violation of DR 5-105(A) & (B)).
That is not to suggest, however, that a lawyer may never represent both a debtor and creditor in a common transaction. Where authorized by law, for example, a debtor may sign a cognovit note (a written instrument authorizing an attorney to confess judgment against the debtor without notice or hearing if the debtor defaults on his obligations). In essence, the debtor agrees in advance that an uncontested judgment may be entered against him if he defaults. At times, the creditor's attorney may later be the one to confess judgment under the cognovit. In doing so, the attorney may be viewed as representing the creditor, who seeks the judgment, and also the debtor, in whose name the confession is being entered. This raises a conflict of interest. Nevertheless, the practice is permissible as long as the parties have consented after full disclosure. To assure this requirement is met, the warrant of attorney under which the confession takes place must contain either an express waiver of the conflict or specifically provide that the creditor's attorney may confess judgment. Bd. of Comm'rs on Grievances & Discipline Op. 93-3, 1993 Ohio Griev. Discip. LEXIS 9 (Apr. 16, 1993).
But an impermissible conflict of interest exists where a lawyer represented both buyers and sellers in a complicated sale of a business and then subsequently represented the seller in an action against the buyers for failure to make scheduled payments due under the terms of the sale. Stark County Bar Ass'n v. Ergazos, 2 Ohio St.3d 59, 442 N.E.2d 1286 (1982). (Ergazos is cited in Ohio Rule 1.7 cmt. .)
Ergazos was also cited in an ethics opinion concluding, under the OHRPC, that a law firm could not properly assist a buyer/investment group in locating a seller and simultaneously represent the seller (whether the seller was or was not a longstanding client of the firm). Bd. of Comm'rs on Grievances & Discipline Op. 2003-1, 2003 Ohio Griev. Discip. LEXIS 1 (Apr. 11, 2003). Noting that the issue whether this multiple-representation conflict of interest was one that could be waived was not addressed in Ergazos and had never before been addressed by the Board, the Board concluded that in the circumstances presented it was not waivable. OH DR 5-105(A) provided that multiple representation had to be declined if independent professional judgment would be or was likely to be adversely affected, except as permitted under OH DR 5-105(C). Focusing on the 5-105(C) exception and pointing out that the interests of buyer and seller could diverge unexpectedly, even when most points were agreed upon, the Board determined that such simultaneous representation would be improper, "because it is not obvious as required under DR 5-105(C) that a lawyer would be able to adequately represent the interests of both the buyer and the seller of a business entity." Id. at *1 (syllabus). Since obviousness and consent after full disclosure both had to be present under OH DR 5-105(C), the absence of obviousness rendered the conflict nonconsentable. Accord Cincinnati Bar Ass'n Op. 97-98-03 (Apr. 21, 1998) (representing client and third-party lender where lawyer would be paid by both would violate "obviousness" requirement).
An interesting court of appeals case raising conflict-of-interest concerns is In re Estate of Knowlton, 2006 Ohio 4905, 2006 Ohio App. LEXIS 4835 (Hamilton). Mr. Knowlton, a major shareholder in the Cincinnati Bengals, died in 2003; his will left nothing to his children or grandchildren. Two of the children moved, for a variety of reasons, to have the co-executors removed. The reason relevant here was that one of the executors, Lindberg "and his firm, Taft, Stettinius, and Hollister ('Taft'), represented Knowlton in matters specifically relating to the Brown family and the Cincinnati Bengals while simultaneously representing the interests of the Brown family and the Bengals." Id. at ¶ 9. In response, Lindberg argued that "Taft obtained informed consent from Knowlton and the Cincinnati Bengals to represent them simultaneously more than 30 years ago. Also, Lindberg has testified that Taft observed a 'Chinese Wall,' an ethical screening concept where lawyers assigned to Knowlton and the Bengals, respectively, did not share confidences or secrets regarding Knowlton or the Bengals with lawyers working for the other client." Id. at ¶ 11. The magistrate and probate court ruled for Lindberg on the removal motion, and the appellate court, reviewing under an abuse-of-discretion standard, reluctantly affirmed. The magistrate's analysis focused primarily on the absence of evidence that Taft had failed adequately to represent the interests of each client or that there was any disclosure of confidences of either to the other, and that Taft had met the screening requirements set forth in Kala v. Aluminun Smelting & Refining Co., 81 Ohio St.3d 1, 688 N.E.2d 258 (1998). The author of the appellate court opinion, Judge Painter, however, could not resist commenting on the waiver issue; he noted that '[t]here exists not one scrap of paper to support the consent," Knowlton, at ¶ 12, and added parenthetically that
(The fact that a firm such as Taft, representing opposing parties in multimillion-dollar transactions, would obtain consent from both parties and erect a Chinese Wall, all without generating a single piece of paper evidencing a waiver, evidently did not pique the magistrate's interest.)
Id. at ¶ 34.
Conflicts among current clients - Referring one client's services to another: In some situations, current-client conflicts can arise where the lawyer refers or recommends the services of one client to another. See also sections 1.7:500 and 1.8:710. The permissibility of this practice under the former OHRPC was addressed in a number of settings:
Could a lawyer with a beneficial interest in a title insurance company that he also represented direct other clients to the title insurance company for title service? Ohio State Bar Ass'n Formal Op. 37 (July 3, 1989).
Could a lawyer who represented a college, and who also drafted wills for clients referred from a college-sponsored estate-planning presentation, recommend to the clients that they make charitable bequests to the college? Ohio State Bar Ass'n Informal Op. 88-3 (Feb. 3, 1988).
Could a lawyer representing a company that offered securities, insurance, and commodities investments do estate planning for individual clients and recommend the company's products to them? Ohio State Bar Ass'n Informal Op. 79-6 (Sept. 20, 1979); Toledo Bar Ass'n Op. 92-8 (n.d.).
In each of these situations, the answer was the same. The referral was acceptable if it was the product of independent judgment exercised on the client's behalf (i.e., the lawyer would have made the recommendation if the lawyer did not have a lawyer-client relationship with the entity to whom the referral was made) and the client to whom the advice was given consented after full disclosure of the possible conflict. Proving that the lawyer's independent judgment will not be affected, however, may be difficult, particularly where the lawyer's primary relationship is with the client who will receive the referral. Toledo Bar Ass'n Op. 92-8 (n.d.). Technically, the former OHRPC prohibited representation if the lawyer's exercise of independent professional judgment "will be or is likely to be adversely affected" by his duty to another client. OH DR 5-105(A)-(B). Consent could cure the possibility of conflict only if it was "obvious" that the lawyer could adequately represent the interest of each client. OH DR 5-105(C). Regarding consent, see section 1.7:240. The tests of DR 5-105(A), (B) & (C) are now set forth in different language, not expressly incorporating the "obvious" requirement, but intending no change in substance (see Ohio Code Comparison to Rule 1.7), in Rule 1.7(a)(2) and (b)(1) & (2). (The Ohio Code Comparison further says that the former obviousness test with respect to representation is the same as that under Rule 1.7(b) and (c); we believe this should be (a) and (b), since there is no "test" under (c) -- it prohibits the representations there listed.)
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 5.96 (1996).
Conflicts among current clients - Corporate counsel conflicts: As Ohio Rule 1.13(a) makes clear, "[a] lawyer employed or retained by an organization represents the organization acting through its constituents." Such a lawyer "owes allegiance to the organization and not to any constituent or other person connected with the organization." Id. No attorney-client relationship is formed with these others merely by the representation of the corporation itself. As a result, these individuals cannot sue the lawyer for malpractice should erroneous advice he or she provides to the corporation lead to personal liability for those acting pursuant to the advice. see, under the former OHRPC, Hile v. Firmin, Sprague & Huffman Co., L.P.A., 71 Ohio App.3d 838, 595 N.E.2d 1023 (Hancock 1991) (lawyers represented corporation, not board of directors, so board members could not sue lawyers for malpractice for failure to advise directors that they were personally liable if corporation failed to pay sales tax).
Former OH EC 5-19 stated a similar rule, but, rather than "organization," spoke only to representation of "a corporation or similar entity." The Ohio Supreme Court expressly determined that this provision did not extend to partnerships. Arpadi v. First MSP Corp., 68 Ohio St.3d 453, 628 N.E.2d 1335 (1994) (limited partnership is not "similar entity" to corporation because partnership is only aggregate of individuals, not separate legal entity). In that context, "the duty owed by an attorney to a partnership extends to the individual partners thereof," id. at 458, 628 N.E.2d at 1339, and abuse of that duty can give rise to malpractice liability.
Query whether the Arpadi no-entity rule survives under the Rules. Ohio Rule 1.13 cmt.  states that "[a]n organizational client is a legal entity" and that "[t]he duties defined in this rule apply equally to unincorporated associations." Since a partnership is by definition an unincorporated association, ABA Formal Op. 91-361, at 2 (July 12, 1991) (construing same language in MR 1.13 cmt.  and opining that a partnership is an organization within the meaning of MR 1.13), it seems clear that that result would follow under Ohio Rule 1.13 as well. Moreover, ORC 1782.08(B), enacted in response to and in apparent repudiation of the Arpadi no-entity holding, expressly states that a limited partnership is an "entity." This view is confirmed by the enactment of ORC 1775.01(G), effective October 12, 2006, defining "entity" as including both general and limited partnerships. These statutory enactments, together with the language of Ohio Rule 1.13 cmt. , should be more than sufficient to overcome Arpadi on the entity issue. See section 1.1:410 for further discussion of Arpadi, the subsequent statutory changes that arguably repudiate the Arpadi result, and post-amendment cases that continue to cite Arpadi as good law.
The lawyer's primary loyalty to the organization does not preclude the attorney from representing another person connected with the entity on an individual basis, but the lawyer may do so only "subject to the provisions of Rule 1.7." Ohio Rule 1.13(e). See also Rule 1.13(d), which provides that in dealing with constituents, "a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing." In such circumstances, the lawyer should advise the constituent that "the lawyer cannot represent such constituent, and that such person may wish to obtain independent representation." Ohio Rule 1.13 cmt. . See generally, under the former OHRPC, Bd. of Comm'rs on Grievances & Discipline Op. 92-17, 1992 Ohio Griev. Discip. LEXIS 4 (Oct. 16, 1992) (general counsel to corporation that provided tax-consulting services could privately represent clients of corporation in legal proceedings before tax officials relating to issues on which corporation worked only if consistent with OH DR 5-101 and OH DR 5-105(C), and if numerous other ethics problems were avoided). Where differing interests were present, joint representation was improper. For example, joint representation of a shareholder in a close corporation and the corporation itself in a dispute against the other shareholder over ownership of the corporate assets would constitute an impermissible conflict. See Sturm v. Sturm, 61 Ohio St.3d 298, 300, 574 N.E.2d 522, 524 (1991) (Brown, J., dissenting) (arguing, with respect to issue not reached by majority, that conflict should have led to disqualification of counsel in divorce action where ownership of close corporation assets was at issue). Representation of both the corporation and its majority shareholder, who is also an officer and director, is inappropriate in an action brought by a minority shareholder for mismanagement and breach of fiduciary duty owed by the officer/director to the corporation. Toledo Bar Ass'n Op. 81-1 (Nov. 17, 1981).
The question ultimately turns on a case-by-case assessment of the facts. In De Capite v. Cotton's Garage, Inc., Nos. 45949, 45969, 1983 Ohio App. LEXIS 14740 (Cuyahoga July 21, 1983), for example, the court found that joint representation of a corporation and its majority shareholder/president in defense of an action brought by the other shareholder alleging wrongful termination of employment was permissible where (1) all consented and the litigation was in its early stages and (2) counsel's role was primarily attempting to mediate an acceptable resolution of the controversy. The court noted that in later stages of the litigation conflict might arise making the representation impermissible, but that had not yet occurred.
Ohio Rule 1.7 cmt.  addresses the issue whether the organization's lawyer serving as a member of its board of directors constitutes a "material limitation" conflict:
For example, a lawyer's ability to assure the corporate client that its communications with counsel are privileged may be compromised if the lawyer is also a board member. Alternatively, in order to participate fully as a board member, a lawyer may have to decline to advise or represent the corporation in a matter. . . . Even with consent to the lawyer's acceptance of a dual role, if there is a material risk in a given situation that the dual role will compromise the lawyer's independent judgment or ability to consider, recommend, or carry out an appropriate course of action, the lawyer should abstain from participating as a director or withdraw as the corporation's lawyer as to that matter.
See further section 1.13:220.
- Primary Ohio References: Ohio Rules 1.7 and 1.8(f)(1)-(4)
- Background References:ABA Model Rule 1.7
- Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 5.94
- Commentary:ABA/BNA § 51:901; ALI-LGL § 134; Wolfram § 8.8
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 5.94 (1996).
Insured-insurer conflicts - The lawyer's relationship with the insurer and the insured: The first question to address in representation of an insurance company and its insured is how to characterize the relationship among the parties. Is the insured the lawyer's sole client and the insurer merely a third party paying the fees? Or does the lawyer represent both the insurance company and the insured? Substantial debate exists nationally on this issue, see Ronald E. Mallen, Legal Practice, Nat'l Law J., May 13, 1996, at B5 (discussing debate over this issue during the American Law Institute's consideration of a draft provision for what is now the Restatement (Third) of the Law Governing Lawyers (2000)), and existed in Ohio as well under the OHRPC. In two Ohio cases, the lawyer was treated as having two clients, both the insurer and the insured. Netzley v. Nationwide Mut. Ins. Co., 34 Ohio App.2d 65, 79, 296 N.E.2d 550, 561 (Montgomery 1971) ("We hold that both Nationwide as well as Mr. Netzley, its insured, were clients of the legal counsel retained by Nationwide."); Thornton v. Pers. Serv. Ins. Co., No. 2256, 1975 Ohio App. LEXIS 7114 (Lorain July 30, 1975) (following Netzley), rev'd on other grounds, 48 Ohio St.2d 306, 358 N.E.2d 579 (1976). Ohio ethics opinions, however, suggested otherwise. See Cincinnati Bar Ass'n Op. 94-95-04, at 1 (n.d.) ("It is noteworthy that the attorney-client relationship exists between the attorney and the insured, and not between the attorney and the insurance company, notwithstanding the typical arrangement whereby the insurance company selects the lawyer or law firm to represent the individual insured, and pays the fees."). If the problem is characterized this way, the lawyer's duties clearly are to the client/insured rather than to the insurer. The Board of Commissioners on Grievances and Discipline endorsed the Cincinnati Bar Association's view in Bd. of Comm'rs on Grievances & Discipline Op. 2000-3, 2000 Ohio Griev. Discip. LEXIS 3, at *14 (June 1, 2000) ("This Board supports the view expressed by the Cincinnati Bar Association that '[t]he insured, not the insurance company, is the client of defense counsel."). Accord Ohio State Bar Ass'n Informal Op. 76-8 (July 20, 1976). And see Swiss Reinsurance Am. Corp. v. Roetzel & Andress, 163 Ohio App.3d 336, 2005 Ohio 4799, 837 N.E.2d 1215, at para. 15 (Summit), discussed immediately below in this section.
Any lingering doubt on the issue has been removed by Ohio Rule 1.8(f)(4) & cmt. [12A]; it is now clear that in Ohio the insured is the client and the insurer is a payor third party.
Insured-insurer conflicts - In general: The interests of the insured and the insurer are often congruent -- the client clearly is covered by the insurance policy and the case can be resolved within the policy limits. Sometimes, however, their interests conflict. Conflict can occur, for example, where questions arise over whether the insured's conduct falls within the insurance coverage. See generally State Farm Fire & Cas. Co. v. Pildner, 40 Ohio St.2d 101, 104, 321 N.E.2d 600, 602 (1974) (O'Neill, C.J., concurring) (discussing conflict for attorney where it is in the insurance company's interest to have insured's conduct found intentional, and hence outside the policy, and it is in client's interest to have the conduct found negligent, and thus covered), overruled on other grounds by Preferred Risk Ins. Co. v. Gill, 30 Ohio St.3d 108, 507 N.E.2d 1118 (1987). It can also occur where the insurer and insured have differing interests with regard to a proposed settlement. This was the case in Swiss Reinsurance Am. Corp. v. Roetzel & Andress, 163 Ohio App.3d 336, 2005 Ohio 4799, 837 N.E.2d 1215 (Summit), in which an insurance company attempted to sue a lawyer for malpractice. In the underlying medical-malpractice action, the doctor/insured and his lawyer (appointed and compensated by the doctor's insurance company) wanted to settle the action, but the insurance company disagreed and wanted to try the case. As a result of this "clear conflict," id. at para. 25, under long-standing rules of agency law the attorney could not represent principals with conflicting interests; this "negate[s] any claim by [the insurance company] that it was also [the lawyer's] client" during the underlying medical-malpractice litigation. Id. at paras. 19-20. The appellate court therefore affirmed the granting of summary judgment in favor of the lawyer in the legal-malpractice case for want of standing on the part of the plaintiff insurance company because, among other reasons, it was not a client and thus failed to satisfy the general rule precluding lawyer malpractice liability to third parties based on conduct performed in good faith for the client, here the doctor/insured. This same conflict doomed the insurance company's alternative argument that it fell within an exception to the general no-liability-to-third-parties rule because it was in privity with the client doctor. Privity requires a mutuality of interest, but here
[t]he record reflects that Dr. Robinson's interest was in having the matter settled within the policy limits to avoid personal exposure. In contrast, [the insurance company]'s interest . . . was to minimize payout at the expense of Dr. Robinson's interests.
Id. at ¶ 28. Insurer-insured conflicts can also result in malpractice claims against the lawyer by the insured. See Dicus v. Laipply, No. 3-92-36, 1992 Ohio App. LEXIS 6305 (Crawford, Dec. 15, 1992) (summary judgment for lawyer reversed; question of fact whether lawyer negligent in, inter alia, not advising insured to seek own counsel after insurance company refused to settle within policy limits).
Assuming such a conflict arises and informed consent of the insured confirmed in writing pursuant to Rule 1.7(b)(2) is not forthcoming, the lawyer must withdraw, and the insured should be directed to select other counsel. If the action is one that the insurance company has a duty to defend, then the insurance company's responsibility for proper costs remains. In the words of Chief Justice O'Neill in State Farm Fire & Cas. Co. v. Pildner, when an insurance company notifies an insured that it denies coverage, the insurer "should invite the insured to select his own counsel to represent him in the damage action." 40 Ohio St.2d at 106, 321 N.E.2d at 603.
This language suggests that the insured could decline the invitation and proceed with original counsel, presumably waiving the conflict. Such conduct would be allowed, however, only where "the lawyer will be able to provide competent and diligent representation to each affected client" (here, the insured), Rule 1.7(b)(1), and "there is no interference with the lawyer's independent judgment or with the client-lawyer relationship." Rule 1.8(f)(2). Under the former OHRPC, for example, with full disclosure and consent by both parties, a lawyer could undertake the representation where the insurer was proceeding under a reservation-of-rights letter, as long as the lawyer was not involved in determining the coverage issue. Cleveland Bar Ass'n Op. 149 (July 22, 1983). See also Red Head Brass, Inc. v. Buckeye Union Ins. Co., 135 Ohio App.3d 616, 735 N.E.2d 48 (Wayne 1999) (insured not obligated to pay for insured's expense of private counsel, engaged after insurer issued reservation-of-rights letter, so long as insured satisfied its obligation to defend under the policy); Lusk v. Imperial Cas. & Indem. Co., 78 Ohio App.3d 11, 603 N.E.2d 420 (Franklin 1992) (rejecting argument by insured that reservation-of-rights letters by the two insurers breached duty to defend and created conflict necessitating that insured retain private counsel).
If withdrawal is required, it was opined under the Code that a lawyer representing both insurer and insured could not subsequently represent either of the parties against the other. Ohio State Bar Ass'n Informal Op. 76-8 (July 20, 1976). Thus, the attorney could not represent the insurance company in a declaratory judgment action against the insured over coverage, or in proceedings regarding the judgment in the underlying action brought directly against the insurance company by the plaintiff and defendant-insured under ORC 3929.06. This is true even if counsel obtained no confidential information of relevance while representing the insured:
But, irrespective of whether he may or may not have obtained information or confidences from the insured with respect to the controversy, either directly or indirectly, we are of the opinion that the lawyer owes a duty of loyalty to his former client, the insured, with respect to matters as to which the lawyer acted as counsel. That duty survives the formal conclusion of the lawyer-client relationship to the extent that, having undertaken representation of the insured in litigation, he may not thereafter represent the insurance company in an action against his former client arising out of or closely related to the same litigation. . . . It was precisely because of those conflicting loyalties that the lawyer withdrew from employment in the primary case when the question of coverage under the policy arose.
Op. 76-8, at 4. See Ohio Rule 1.8(f)(3), requiring protection of information relating to the representation pursuant to Rule 1.6.
While the usual conflicts in the insured-insurer context arise out of questions of coverage or disagreements about settlement, these matters do not exhaust the conflict possibilities. For example, the Ohio Supreme Court held that an attorney representing a client in a personal injury action could not ethically accept legal fees from the client's insurance carrier in exchange for the attorney's efforts to collect reimbursement for the carrier of its payment of the client's medical expenses, unless the client specifically consented to the dual employment after full disclosure. Cincinnati Bar Ass'n v. Schwartz, 74 Ohio St.3d 489, 660 N.E.2d 422 (1996). In this situation the clients were in obvious conflict — "both were competing for shares of the settlement proceeds." Id. at 491, 660 N.E.2d at 424.
Conflicts of interest also can arise where an insurance company has paid out funds to an insured who was injured by another and the insurer now seeks to prosecute an action against the tortfeasor. In a 1995 opinion, the Board of Commissioners on Grievances and Discipline confronted this problem in addressing whether it was appropriate for in-house counsel of an insurance company to pursue subrogation claims against the tortfeasor and also to seek to recover, on the insured's behalf, the insured's deductible. Bd. of Comm'rs on Grievances & Discipline Op. 95-14, 1995 Ohio Griev. Discip. LEXIS 1 (Dec. 1, 1995). See generally Robert J. Johnson, Note, In-House Counsel Employed by Insurance Companies: A Difficult Dilemma Confronting the Model Code of Professional Responsibility, 57 Ohio St. L.J. 945 (1996). The Board found no problem with the in-house counsel pursuing the subrogation claim since, in that context, the lawyer is representing only the insurer. By including a claim for the insured's deductible, however, a joint representation situation was created. The conflict-of-interest rules barred joint representation where the lawyer's professional judgment "will be or is likely to be adversely affected" by the joint representation, unless cured by client consent. OH DR 5-105(A)-(B). Consent, however, could be sought only where "it is obvious" that the lawyer could adequately represent the interest of each client. OH DR 5-105(C). In a 1994 opinion, the Board had concluded that in-house counsel for an insurance company could not represent an insured in such an action, and outside counsel provided by the insurance company was required. Bd. of Comm'rs on Grievances & Discipline Op. 94-9, 1994 Ohio Griev. Discip. LEXIS 6 (Aug. 12, 1994). In the 1995 opinion, the Board repudiated its earlier opinion. While acknowledging that in-house counsel may be particularly likely to favor the insurer over the insured should a conflict of interest arise, the chance that a conflict would arise in this limited circumstance was slight. In securing client consent for this joint representation, the lawyer must first make full disclosure to the insured of the implications of the arrangement, which includes explaining to the insured counsel's employment relationship with the insurer, offering the option of representation by outside counsel, and explaining the implications of statutory provisions pertaining to the deductibility of certain expenses from the insured's potential recovery.
The provisions of former OH DR 5-105(A), (B) & (C) cited in Opinion 95-14 are now contained in Rule 1.7. (The Task Force has stated that "[n]o change in the substance . . . is intended." Ohio Code Comparison to Rule 1.7.) The "will be adversely affected" test is now phrased in terms of "substantial risk" that the lawyer's ability to represent the client appropriately "will be materially limited by the lawyer's responsibilities to another client . . . ." Rule 1.7(a)(2). The client's consent must be informed and confirmed in writing. Rule 1.7(b)(2). In place of the former "obvious" test, the Rule now states that, as a condition of representation where there is a conflict under division (a), "the lawyer will be able to provide competent and diligent representation to each affected client." Rule 1.7(b)(1). From Comment , it would appear that the facts in Opinion 95-14 would not constitute a "material limitation" conflict under the Rule. For that to occur, in the language of the comment, would require "a substantial discrepancy in the client's testimony, incompatible positions in relation to another party, potential cross-claims, or substantially different possibilities of settlement of the claims or liabilities in question" -- none of which are present in the Opinion 95-14 scenario. Ohio Rule 1.7 cmt. . See also Rule 1.7 cmts. -, discussed in section 1.7:310 above.
In addition to disciplinary and disqualification concerns, insurance-related conflicts may carry malpractice exposure as well. Dicus v. Laipply, No. 3-92-36, 1992 Ohio App. LEXIS 6305 (Crawford Dec. 12, 1992) (lawyer was sued for malpractice for failure to inform insured of conflict of interest arising out of insurance company's settlement position and that insured probably should retain independent counsel). Further, some conflicts may lead to claims by the insured against the insurance company, which, in turn, may seek indemnification from the lawyer involved. Belcher v. Dooley, No. 10444, 1988 Ohio App. LEXIS 508 (Montgomery Feb. 16, 1988).
Insured-insurer conflicts - The duty of communication: To the extent the lawyer, while representing the insured, has acquired information that might trigger a policy exclusion, is withdrawal sufficient to avoid the conflict, or must the lawyer also communicate the information to the insurer? The question has been quite controversial nationally, but the majority view appears to allow the lawyer to remain silent on this matter. Cleveland Bar Ass'n Op. 149 (July 22, 1983). See generally 4 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 30:8 (2008 ed.). It would seem that the duty of confidentiality to the insured should take precedence over any contractual duties to the nonclient insurer.
Insured-insurer conflicts - Impermissible insurer-imposed controls on lawyer conduct: Under the Code, the Cincinnati Bar Association opined that it would be improper for an insurance company to retain a law firm for cases arising from its obligations to its insureds and to provide the firm a quarterly retainer, out of which all costs associated with the litigation must be met regardless of the number of claims or the requirements of the litigation involved. This cost-containment device created a conflict of interest, since the lawyer might make strategic judgments based on the financial impact of the choice on the lawyer rather than on what was best for the client, the insured. Cincinnati Bar Ass'n Op. 94-95-04 (n.d.) (practice would violate OH DR 5-101(A), since the arrangement created personal conflict between lawyer and client; bar association considered insured, not insurance company, the client).
In Board of Commissioners on Grievance & Discipline Op. 2000-3, 2000 Ohio Griev. Discip. LEXIS 3 (June 1, 2000), the Board considered the propriety of insurance company litigation-
management guidelines in the representation of the insured, with respect to such matters as the necessity of prior approval before research is undertaken by the lawyer; allocation of work assignments among the lawyer, his associates, and paralegals; and prior approval before undertaking discovery, consulting with experts, or filing motions or other pleadings. In all of these instances the Board, citing and quoting former OH DR 5-107(B), opined that such restrictions were an interference with the attorney's exercise of his or her professional judgment and therefore inappropriate. In so concluding, the Board stated as follows:
The disciplinary rules are unequivocal that it is the lawyer who directs and regulates his or her own professional judgment, not the persons or entities paying for the rendering of legal services to another. This is true regardless of whether an attorney represents one client or dual clients. One client cannot direct an attorney's professional judgment with respect to another client. An attorney has a duty of loyalty to the insured and regardless of whether the insurer is considered a dual client or a third party payer, the attorney cannot allow the insurer to direct or regulate his or her professional judgment in legal services to the insured.
2000 Ohio Griev. Discip. LEXIS 3, at *14. For the reaction of the American Insurance Association to Opinion 2000-3, see Huck Qavanaugh, Association Defends Use of Litigation Guidelines, Ohio L. Wkly., July 24, 2000, at 1.
Litigation-management guidelines of this sort by an insurance company receive a thumbs-down under the Rules as well. See Ohio Rule 1.8 cmt. [12A], which states:
Insurance defense counsel may not permit an insurer's right to control the defense to compromise the lawyer's independent judgment, for example, regarding the legal research or factual investigation necessary to support the defense.
See sections 1.8:710-:720.
1.7:500 Conflict of Interest Between Current Client and Lawyer's Interest [see also 1.8:210-:220, :1000]
- Primary Ohio References: Ohio Rule 1.7(a)(2)
- Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 5.14-5.17, 5.19-5.21, 5.22-5.25
- Background References: ABA Model Rule 1.7(a)(2)
- Commentary:ABA/BNA § 51:501; ALI-LGL §§ 125-127; Wolfram § 8.11
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 5.14-5.17, 5.19-5.20, 5.22-5.25 (1996).
Conflicting interests of lawyer and client - In general: Conflicts of interest can undercut the lawyer's duty of undivided loyalty to clients and lead to abuse of client confidences. Such conflicts can arise from many sources, including the personal interests of the lawyer.
Ohio Rule 1.7(a)(2) recites the applicable rule -- that
[a] lawyer's acceptance or continuation of representation of a client creates a conflict of interest if . . . :
* * * *
there is a substantial risk that the lawyer's ability to consider, recommend, or carry out an appropriate course of action for that client will be materially limited by . . . the lawyer's own personal interests.
There is one Board opinion dealing with the Rule 1.7(a)(2) material limitation conflict: Bd. of Comm'rs on Grievances & Discipline Op. 2008-2, 2008 Ohio Griev. Discip. LEXIS 2 (June 6, 2008). It is discussed in section 1.7:240 at "Nonconsentable conflicts - In general."
The formerly applicable disciplinary rule, 5-101(A)(1), spoke in terms of "the lawyer's own financial, business, property or personal interests." All of these interests have now been telescoped under the rubric "the lawyer's own personal interests." See Ohio Rule 1.7 cmts. -, grouped under the heading "Personal Interest Conflicts." Note further that some personal interest conflicts are singled out for more extensive treatment in Rule 1.8. See sections 1.8:200-:220.
Examples under the Code of cases in which the lawyer's "financial" interests impeded his exercise of professional judgment on behalf of a client are Disciplinary Counsel v. McNamee, 119 Ohio St.3d 269, 2008 Ohio 3883, 893 N.E.2d 490 (lawyer who attempted to represent multiple clients with respect to a real estate development venture, in which the lawyer had "a significant financial interest," violated DR 5-101(A)(1), among other rules), and Disciplinary Counsel v. Rafidi, 114 Ohio St.3d 336, 2007 3674, 872 N.E.2d 265 (soliciting more lucrative client without prior disclosure to existing client of his interest in new client for financial reasons violated this provision). See also Columbus Bar Ass'n v. Willette, 117 Ohio St.3d 433, 2008 Ohio 1198, 884 N.E.2d 581 (failure to disclose to clients that respondent was obligated to use agents of the firm with whom he had contracted for trust-funding advice). Another 5-101(A)(1) case involving the lawyer's financial-business-property interests is Toledo Bar Ass'n v. Cook, 114 Ohio St.3d 108, 2007 Ohio 3253, 868 N.E.2d 973; the case is discussed in section 1.8:220.
A case under the Code involving a personal interest conflict is Columbus Bar Ass’n v. Gueli, 119 Ohio St.3d 434, 2008 Ohio 4786, 894 N.E.2d 1231. In Gueli, the respondent represented an estate and also was counsel for plaintiffs in the related wrongful death action. But the defendant in the wrongful death action was respondent’s brother. In a series of actions and inactions (such as failing to pursue his brother’s considerable assets beyond accepting the policy-limit check for $250,000 from his brother’s liability carrier), respondent, in the Court’s words, “despite a patent conflict of interest, undertook the Barnhill wrongful-death claim, using his position to protect his brother at the expense of the decedent’s children.” Id. at para. 21. (The Court also found a violation of DR 5-105(A), which prohibits representing clients with conflicting interest without informed consent. Consistent with this charge, the Court at one point talks in terms of respondent’s “jeopardiz[ing] the interests of the decedent’s children by concurrently representing the adverse interests of the decedent’s family and respondent’s own brother.” Id. at para. 17. But since respondent was suing his own brother, it seems most unlikely that he was also “concurrently representing” the brother’s interests, other than in the sense of “using his position to protect his brother at the expense of decedent’s children.” In any event, it is difficult to see how 5-105(A) comes into play on the facts presented.)
It is important to keep in mind several caveats when applying the Rule. First, the conflict need not be actual for the prohibition to arise. Employment should be rejected if there is a "substantial risk" that the lawyer's professional judgment may be affected. Rule 1.7(a)(2). Second, the protection this provision affords to the client may be waived through informed consent of each affected client, 1.7(b)(2), so long as the other requisites of 1.7(b) are met. Where, however, Rule 1.7(a)(2) problems are intertwined with violations of rules that do not provide any exception for client consent, the conflict cannot be alleviated by consent. (This conclusion assumes that the line of BCGD opinions on this issue under the former OHRPC will continue to be followed under the Rules. See Bd. of Comm'rs on Grievances & Discipline Op. 2002-1, 2002 Ohio Griev. Discip. LEXIS 15 (Feb. 1, 2002) (conflict cannot be alleviated by consent where disciplinary rules applicable include those with no consent exception). Accord Bd. of Commr's on Grievances & Discipline Op. 2003-1, 2003 Ohio Griev. Discip. LEXIS 1 (Apr. 11, 2003); Bd. of Commr's on Grievances & Discipline Op. 2000-1, 2000 Ohio Griev. Discip. LEXIS 1 (Feb. 11, 2000).)
It is not possible to catalog all of the potential lawyer "personal interests" that may adversely affect the exercise of professional judgment on behalf of the client. As noted above, personal-interest conflicts are treated in Comments -. Rule 1.7 cmt.  provides examples of types of personal interests that may have an adverse effect on the representation (e.g., lawyer's own conduct is in question; seeking employment with opponent of lawyer's client; referring clients to business in which lawyer has undisclosed financial interest); it also specifically notes that business transactions with clients are dealt with in Rule 1.8 (1.8(a) to be precise). This personal-interest conflict is discussed in section 1.8:220. Rule 1.7 cmt.  deals with lawyers related by blood or marriage opposing one another; this topic is discussed in this section infra at "Conflicting interests of lawyer and client – Lawyer relatives opposing one another." The subject of Rule 1.7 cmt.  is sexual relationship with clients; the applicable Rule is 1.8(j), discussed at section 1.8:210. In addition to the conduct regulated by Rules 18(a) and (j), common instances of personal-interest conflicts arising in decisions and opinions rendered under the former OHRPC are treated in the paragraphs that follow.
Conflicting interests of lawyer and client - Conflicts arising from client allegations of lawyer misconduct: On occasion, clients who are dissatisfied with the representation provided by a lawyer raise allegations of lawyer misconduct. If this occurs and the employment continues, a question arises whether the lawyer's personal interest in his own integrity will compromise his ability to exercise professional judgment on the client's behalf. This issue often comes up in the context of the constitutional guarantee of effective assistance of counsel in criminal-defense representation.
When a lawyer represents a criminal defendant both at trial and on appeal, the lawyer may, not surprisingly, feel constrained from arguing that his conduct at trial amounted to ineffective assistance of counsel, which omission may in turn lead to ineffective assistance of counsel on appeal. This potential conflict, however, does not make such representation improper per se. State v. Otis, 73 Ohio St.3d 39, 652 N.E.2d 195 (1995) (rejecting per se conflict argument in context of criminal defendant's motion to reopen appeal). A case-by-case determination is required.
When, in the context of a criminal-defense representation, the defendant files a grievance against his counsel with the disciplinary authorities and the lawyer seeks to withdraw on conflict-of-interest grounds, the trial court has an affirmative duty to inquire as to whether a conflict actually exists. State v. Smith, Nos. 94-CA-62, 94-CA-64, 1995 Ohio App. LEXIS 4235 (Richland Aug. 28, 1995).
See Rule 1.7 cmt. .
Conflicting interests of lawyer and client - Conflicts arising from the attorney's criminal exposure: Special problems arise where a criminal-defense attorney becomes the object of a criminal prosecution. Under these circumstances, the lawyer's interest in currying favor with the government to secure more favorable personal treatment may color the advice he gives a client. For example, an attorney who was acting as a police informer, in an attempt to receive more favorable treatment in a bribery action brought against him, violated former OH DR 5-101(A) by continuing to handle new cases, since "as an informant, he was an agent of parties adverse to his clients." Office of Disciplinary Counsel v. Melamed, 62 Ohio St.3d 187, 580 N.E.2d 1077 (1991).
Under certain circumstances, a lawyer may be tempted to dissuade a client from a particular course of conduct, where that conduct may have a negative impact on the lawyer's own situation. For example, where an attorney defending a client in an alleged homicide was himself on trial for drug trafficking allegedly arising out of having been paid by his client with cocaine that the client allegedly stole in the homicide, a conflict of interest could arise if the government offered an attractive plea bargain to the client in exchange for testimony against the attorney. Under these circumstances, the lawyer's interest in the outcome of his own trial could lead him to discourage his client from taking what objectively was a favorable plea bargain. See State v. Bryant, No. L-84-249, 1985 Ohio App. LEXIS 8861 (Lucas Oct. 18, 1985) (in this ineffective-assistance-of-counsel case, court found conflict but concluded that, on facts, conflict did not adversely affect counsel's representation of defendant because no such plea offer was ever made to defendant).
See Rule 1.7 cmt. .
Conflicting interests of lawyer and client - Seeking new employment: Whenever a lawyer seeks to change jobs, the possibility arises that the lawyer might compromise the interests of a present client to curry favor with a future employer. To lessen such concerns, if the conflict is direct enough, the lawyer should disclose the future employment possibility to the present client and seek consent to continue in the representation. This issue was addressed under the OHRPC in the context of a county public defender running for the office of county prosecuting attorney in Bd. of Comm'rs on Grievances & Discipline Op. 88-002, 1988 Ohio Griev. Discip. LEXIS 34 (Feb. 12, 1988). The Board indicated that the lawyer need not resign or remove himself as a public defender, but he should disclose the candidacy to potential clients, since the exercise of his professional judgment reasonably might be affected by his personal interests in winning election to the new post. See, in connection with seeking new employment, discussion of the "side-switching" attorney case, Kala v. Aluminum Smelting & Refining Co., 81 Ohio St.3d 1, 688 N.E.2d 258 (1998), at sections 1.9:200, 1.9:400, and 1.10:300. And see Ohio Rule 1.11(d)(2)(ii) (current government officer or employee), discussed at section 1.11:500, and Ohio Rule 1.12(b) (judge or third-party neutral), discussed at section 1.12:300.
Conflicting interests of lawyer and client - Lawyer ownership interests affected by the representation: The lawyer's ability to exercise independent judgment on behalf of a client could be compromised by the lawyer's financial interest in an entity, if that interest might be affected by the outcome of the representation. The propriety of the representation turns on the severity of the potential conflict and whether the client gives informed consent, confirmed in writing. See Rule 1.7(a)(2) & (b)(2). Similarly, under the OHRPC, in Office of Disciplinary Counsel v. Allen, 91 Ohio St.3d 27, 740 N.E.2d 1094 (2001), the Supreme Court adopted the conclusion of the Board that respondent had violated OH DR 5-101(A)(1) in representing the seller in a sale of assets to a company in which the lawyer and the person with whom they were negotiating each held a twenty-percent ownership interest, without disclosing these facts to the seller. And in Bd. of Comm'rs on Grievances & Discipline Op. 2002-1, 2002 Ohio Griev. Discip. LEXIS 1 (Feb. 1, 2002), the Board opined:
A law firm that pays a real estate agency for promoting the services of the law firm as a recommended service provider has a business interest that may reasonably affect the lawyer's independent professional judgment. The law firm may perceive subtle pressure to perform legal services to clients in a manner that pleases the real estate agency to avoid any risk of being excluded as a service provider.
Id. at *10 (violation of OH DR 5-101(A)(1)). The same relationship ran afoul of OH DR 5-104(A) because, although the agreement on its face was with the real-estate agency, whose customers were eligible for discounted services from the law firm, the firm actually was circuitously entering into a business relationship with those customers as clients. Since the lawyer may have had business or financial interests that differ from those of the clients (i.e., the firm may have been influenced by its interest in receiving as many referrals as possible or in making enough money on the referrals to cover the annual membership fee paid by the firm to the agency), the clients' expectation that the firm would exercise its independent professional judgment could be compromised. Id.
A lawyer's representation of a client in litigation against another party in which the lawyer has an ownership interest, for example, would give rise to a conflict of interest because a victory for the client could reduce the value of the lawyer's ownership interests. Nevertheless, the Ohio Supreme Court found such conduct permissible where the lawyer had only an insignificant ownership interest in the adverse party and the client consented to the representation after full disclosure. Morgan v. N. Coast Cable Co., 63 Ohio St.3d 156, 586 N.E.2d 88 (1992) (lawyers were limited partners with less than one percent of outstanding interests in limited partnership). Compare Stark County Bar Ass'n v. Hare, 99 Ohio St.3d 310, 2003 Ohio 3651, 791 N.E.2d 966 (former OH DR 5-101(A)(1) violated where lawyer acquired interest in adoptions through improper payments to birth mother without disclosing these payments to his clients, the adoptive parents.
In a 1987 opinion, the Cincinnati Bar Association addressed the ethical implications of a lawyer pursuing workers' compensation cases against companies in which the lawyer owned stock. Plaintiff's Attorney as Investor in Defendant Corporation, Cincinnati Bar Ass'n Rep., Feb.-Mar. 1987, at 13. The opinion recognized that the extent of the conflict might vary depending on the size of the attorney's holdings and the circumstances surrounding the acquisition of the stock. Large holdings acquired by the attorney directly pose greater potential for conflict than smaller holdings acquired by an investment management company that exercises complete discretion over the stock purchases made on the lawyer's behalf. Under any combination of these factors, however, there was at least the potential for the lawyer to place his personal financial interests over that of the client, as well as a potential appearance of impropriety, so full disclosure and client consent were required.
A similar problem could arise if the lawyer represented a client in opposition to the lawyer's former law firm in which the lawyer retained some post-termination financial interest. A prosecuting attorney, for example, who was receiving money from his former partnership could not prosecute cases where members of that partnership were on the other side, since his business and financial interests might compromise his independent professional judgment. Because his client was the public, full disclosure and consent were not available to waive the conflict. Bd. of Comm'rs on Grievances & Discipline Op. 91-22, 1991 Ohio Griev. Discip. LEXIS 7 (Oct. 18, 1991).
Direct opposition to an entity in which the lawyer has a financial interest is not required to trigger this concern. For example, an ownership interest in a business that sold and provided house-arrest programs created a potential conflict of interest for a lawyer involved in criminal practice, since the lawyer could steer clients into sentences that would lead to use of those services. While such ownership was not barred, the client had to be given full disclosure and provide consent before the lawyer could undertake the criminal representation. Bd. of Comm'rs on Grievances & Discipline Op. 92-6, 1992 Ohio Griev. Discip. LEXIS 15 (Feb. 14, 1992).
In another ethics opinion, the Board found that former OH DR 5-104(A) governed where a lawyer acquired a mortgage on the client's home to secure a legal fee. This is a business transaction in which the lawyer and client have differing interests; as a result, full disclosure by the lawyer and consent by the client are required. Bd. of Comm'rs on Grievances & Discipline Op. 2004-8, 2004 Ohio Griev. Discip. LEXIS 12 (Oct. 8, 2004) (because Board found OH DR 5-104(A) applicable, it found no need to consider the issue under 5-101(A)(1)).
Although apparently there are no opinions on the subject in Ohio, the issue of the propriety of taking stock of the client in lieu of fees has been in the legal news, particularly with respect to Silicon Valley clients and law firms. See, e.g., Ruth E. Piller, Taking Stock, ABA Lit. News, Jan. 2001, at 8. Two ethics opinions treat the topic, with similar results: It is permissible, but the ethical perils are real and the steps that need be taken to ensure ethical propriety are substantial. See ABA Formal Op. 00-418 (July 7, 2000); Ass'n of the Bar of the City of N.Y. Comm. on Prof'l & Judicial Ethics Formal Op. 2000-3 (n.d.) (applying New York's versions of DR 5-101(A) and DR 5-104(A), which are similar to, but more stringent than, former Ohio version of these two disciplinary rules; opinion also cites a number of ethics opinions from other states, none of which impose a per se prohibition on a stock-for-fees arrangement).
In Ohio State Bar Ass'n Informal Op. 72-4 (Aug. 10, 1972), the mere potential for conflict was not enough to raise former OH DR 5-101(A)(1) problems. The bar association opined that there was no per se conflict in a lawyer owning an interest in a tavern and acting as city solicitor in prosecuting OMVI cases. If employees of the tavern became involved in such a matter, however, recusal was appropriate, to avoid the appearance of impropriety. With respect to the appearance-of-impropriety standard, see section 1.7:230.
See Rule 1.7 cmt. .
Conflicting interests of lawyer and client – Lawyer relatives opposing one another: Ohio Rule 1.7 cmt.  recognizes that a lawyer's personal interests may affect the ability to exercise professional judgment on behalf of a client when lawyers related by blood or marriage represent different parties in a matter. See, under the former OHRPC, Bd. of Comm'rs on Grievances & Discipline Op. 91-22, 1991 Ohio Griev. Discip. LEXIS 7 (Oct. 18, 1991) (siblings as opposing counsel) and Bd. of Comm'rs on Grievances & Discipline Op. 93-7, 1993 Ohio Griev. Discip. LEXIS 5 (Aug. 13, 1993) (spouses as opposing counsel).
Pursuant to Comment , lawyers closely related to one another (e.g., parent, child, sibling, or spouse) cannot represent a client in the same or a substantially related matter where the related lawyer represents another party, "unless each client gives informed, written consent." Ohio Rule 1.7 cmt. . (Note that the parties need not be opposing, as was the case in the cited Board opinions. Note also that, inasmuch as this conflict is personal, it is ordinarily not imputed to members of the lawyer's firm. Id.) The comment is designed to ensure that client confidences will be protected and that the lawyer's duty of loyalty and independent professional judgment will not be affected by the family relationship. Id. See Op. 93-7, 1993 Ohio Griev. Discip. LEXIS 5.
While the comment makes no distinction between private sector and government lawyers, ethics opinions under the former OHRPC were divided as to whether the personal conflict was waivable when one of the lawyers was a prosecutor. Compare Bd. of Comm'rs on Grievances & Discipline Op. 91-22, 1991 Ohio Griev. Discip. LEXIS 7 (Oct. 18, 1991), and Ohio State Bar Ass'n Informal Op. 87-5 (June 29, 1987) (nonwaivable), with Op. 93-7, 1993 Ohio Griev. Discip. LEXIS 5 (conflict waivable with consent from both sides). This later opinion seems more in step with Comment .
Under the former OHRPC, the concern that personal regard for opposing counsel may compromise the lawyer's exercise of judgment for the client was not limited to situations where the lawyer was related to opposing counsel by blood or marriage. For example, where lawyers who simply shared office space represented opposing parties, the possibility existed that financial or personal interests arising from their business relationship might affect their independent professional judgment. Hence, disclosure and consent of the clients were required. Bd. of Comm'rs on Grievances & Discipline Op. 89-005, 1989 Ohio Griev. Discip. LEXIS 12 (Feb. 17, 1989). Query whether this opinion survives under Rule 1.7 cmt. , which makes no mention of nonfamilial relationships. Nevertheless, obtaining written, informed consent from both clients may be in order as a cautionary measure.
Conflicting interests of lawyer and client - Lawyer ownership of or affiliation with nonlegal service providers: In many situations, lawyers may wish to refer their clients to nonlegal service providers in which the lawyer has some financial interest. While not improper per se, such arrangements run the risk that the lawyer's exercise of professional judgment on behalf of the client may be affected by the lawyer's relationship with the nonlegal service provider. The lawyer might be tempted to direct the client to the nonlegal service provider with which the lawyer is affiliated in instances where this would not be consistent with the exercise of independent professional judgment. Client consent after full disclosure is necessary before the lawyer may undertake arrangements of this kind. See, under the Code, the following bar opinions:
The practice of referring workers' compensation and personal injury clients to a health facility in which the lawyer has an economic interest carries a potential conflict of interest. For example, if persons from the health facility were expected to testify on behalf of the client, and the lawyer profited therefrom, loyalty to the client might be diluted. The lawyer also might be tempted to counsel the client to accept an inadequate settlement to assure that the health facility's charges are paid. Thus, the lawyer could engage in such referrals only upon full disclosure and consent. Ohio State Bar Ass'n Informal Op. 90-1 (May 4, 1990) (personal conflict was one of several potential ethical concerns arising from this conduct).
A lawyer accepted referrals from an insurance agency with which he had a close affiliation and provided estate planning services that could involve recommending products of the insurer. The situation presented a potential conflict of interest because the lawyer could be influenced to recommend the insurance company's products, rather than others that the exercise of independent judgment might commend, to assure continued referrals. To undertake such representation, full disclosure and consent were required. Toledo Bar Ass'n Op. 92-8 (n.d.); see also Toledo Bar Ass'n Op. 85-1 (Jan. 31, 1985) (raising like concerns where insurance company paid lawyer for preparing wills for insurer's customers). Where the arrangement required the lawyer to use the insurer's products, the conflict is even clearer. Cincinnati Bar Ass'n Op. 92-93-01 (n.d.) (lawyer for insurance agency that put on seminars on living trusts, interviewed clients and prepared the relevant legal instruments, and had affiliated lawyers available to review the documents and handle the closing, violated number of provisions, including former OH DR 5-101(A), because lawyer did not exercise independent professional judgment in estate planning but simply facilitated course of action initiated by insurer).
Of course, where the lawyer himself seeks to play dual roles as both lawyer and nonlegal service provider, similar problems can arise. Under the OHRPC,
Respondent violated former OH DR 5-101(A)(1) and 5-104(A) when, acting in dual role of lawyer and financial planner, he failed to provide full disclosure and obtain informed consent from his clients concerning his financial interest (commission) in his investment recommendations, as to which additional compensation he misled the clients or at best failed to explain the matter clearly to them. Stark County Bar Ass'n v. Buttacavoli, 96 Ohio St.3d 424, 2002 Ohio 4743, 775 N.E.2d 818 (because of mitigating circumstances, including fact that clients were fully compensated for their investment losses, respondent was given a stayed six-month suspension);
One who served both as an attorney for clients in trust and estate matters and as their insurance agent, and who steered clients to the products of the insurance company that employed him, would, without consent after full disclosure, violate OH DR 5-101(A) because the lawyer/insurance agent may be motivated by his own interest in commissions for life insurance sales, rather than the best interests of his clients. Lillback v. Metro. Life Ins. Co., 94 Ohio App.3d 100, 640 N.E.2d 250 (Montgomery 1994) (employment contract with insurer permitting this dual role void as matter of public policy and thus not enforceable by attorney against insurer);
A lawyer could, however, consistent with the former OHRPC, provide financial-planning services through his or her law firm to business and estate-planning clients of the firm when the financial-planning services were provided in connection with and related to the provision of legal services. In doing so, the lawyer should use a non-excessive fixed fee, flat or hourly. To avoid being subject to regulation as an "investment advisor," the lawyer's financial planning services should be "solely incidental" to the practice of law. See ORC 1707.01(X)(2). And, to avoid conflict-of-interest problems under OH DR 5-101(A)(1), the lawyer should inform the client of availability of such services elsewhere and should inform the client of the fee, if any, for providing such services. Bd. of Comm'rs on Grievances & Discipline Op. 2000-4, 2000 Ohio Griev. Discip. LEXIS 4 (Dec. 1, 2000);
Citing and quoting both Opinion 2000-4 supra and Opinion 94-7 (as to which see next paragraph of regular text), the Board concluded that a law firm representing a seller of a business entity may provide law-related services in assisting the client by helping to locate a buyer, and, conversely, may help to locate a seller on behalf of a client/buyer. In both instances, a fee may be charged the client, so long as not illegal or excessive and so long as there is full disclosure to and informed consent by the client. If the client is the seller, the buyer should be clearly informed that the firm is representing only the seller, not the buyer, and vice versa. Bd. of Comm'rs on Grievances & Discipline Op. 2003-1, 2003 Ohio Griev. Discip. LEXIS 1 (Apr. 11, 2003);
But it was improper for a lawyer, who was also a licensed insurance agent, to sell annuities to estate-planning clients; the lawyer's interest in selling annuities and the client's interest in obtaining uncompromised independent legal counsel were differing interests under former OH DR 5-104(A). Bd. of Comm'rs on Grievances & Discipline Op. 2001-4, 2001 Ohio Griev. Discip. LEXIS 5 (Aug. 10, 2001).
Ownership of an ancillary business that provides law-related services is permissible, as long as it is operated in a way that is consistent with basic ethical guidelines. See generally Ohio Rule 5.7 and section 5.7:200. Opinions under the Code included Bd. of Comm'rs on Grievances & Discipline Op. 94-7, 1994 Ohio Griev. Discip. LEXIS 8 (June 17, 1994) (comprehensively setting forth requirements to be followed). Accord Bd. of Comm'rs on Grievances & Discipline Op. 2003-1, 2003 Ohio Griev. Discip. LEXIS 1 (Apr. 11, 2003). To the extent a client of the business is in need of legal services, the lawyer may provide them, but must fully disclose his interest in the ancillary business and obtain client consent to the representation before proceeding. See generally Stephen R. Ripps, Law Firm Ownership of Ancillary Business in Ohio - A New Era?, 27 Akron L. Rev. 1 (1993).
See Rule 1.7 cmt. . With respect to the status of the multidisciplinary-practice issue in Ohio, see section 5.5:300.
Conflicting interests of lawyer and client - Conflicting property interests: Sometimes the conflicting-property-interests issue involves a lawyer and client who have interests in common property. In other instances, although they lack a common interest, the lawyer's ownership of property may affect property of the client. While such arrangements are not improper per se, they become improper if there is a substantial risk that the arrangement will materially limit the lawyer's exercise of professional judgment on behalf of the client. In either situation, the lawyer should decline employment if such a risk exists, or withdraw if the problem comes to light after the employment begins, unless the conflict is cured by informed client consent, confirmed in writing.
The problem of conflicting property interests is addressed not only by Ohio Rule 1.7(a)(2), but also by Rule 1.8(a), which provides that a lawyer shall not enter into a business transaction with a client unless (1) the transaction is fair and reasonable and the terms are disclosed, (2) the client is told in writing to seek independent counsel, and (3) the client gives informed, written, consent. See section 1.8:220. See, e.g., Disciplinary Counsel v. Tomlan, 118 Ohio St.3d 1, 2008 Ohio 1471, 885 N.E.2d 895 (placing elderly client's assets in joint and survivorship accounts in client's and respondent's names without informed consent of client violated DR 5-101(A)(1)); Cincinnati Bar Ass'n v. Hartke, 67 Ohio St.3d 65, 616 N.E.2d 186 (1993) (compromise of debt owed by lawyer to client on terms highly favorable to lawyer violated former OH DR 5-104(A); in circumstances, lawyer could not comply with full-disclosure requirement without insisting that client obtain independent legal advice concerning the compromise); Stark County Bar Ass'n v. Osborne, 1 Ohio St.3d 140, 438 N.E.2d 114 (1982) (various unfair real-estate transactions between lawyer, lawyer's wife, and client violated number of provisions, including OH DR 5-101(A) and 5-104(A)).
The interplay of these former Code provisions was well illustrated by the Ohio Supreme Court's opinion in Dayton Bar Ass'n v. Gunnoe, 64 Ohio St.2d 172, 413 N.E.2d 842 (1980). In Gunnoe, the attorney represented a client in the sale of a business. Ultimately, the lawyer formed a corporation, in which he was the majority stockholder, to purchase the business. When the client expressed reservations about certain aspects of the deal, including the lack of a down payment or personal liability on the note by the purchasers, the lawyer assured the client that he would provide his own personal note and mortgage as additional security for payment, but did not do so. Throughout the transaction, the client reminded the lawyer that she was relying on him to represent her interests. At no time did the lawyer advise her that their interests might be adverse or that she should contact another attorney to review the documents. The Court found this conduct to violate OH DR 5-101(A), because the lawyer accepted employment on a matter in which his professional judgment might be affected by his own interests; 5-104(A), because the lawyer, with the client, entered into a business transaction in which the client relied on the lawyer's independent professional judgment while the lawyer harbored interests differing from those of the client; and 5-105(B) [erroneously cited by the Court as 5-104(B)] because the lawyer was engaged in multiple employment that affected his representation of the client. By failing to make full disclosure to the client of his adverse interests, client consent would not be sufficient to excuse the conduct. See also Columbus Bar Ass'n v. Ewing, 75 Ohio St.3d 244, 661 N.E.2d 1109 (1996) (lawyer's arranging with another client to buy property of financially strapped client, without disclosing the lawyer's and other client's interest until the Friday before the scheduled Monday closing, and related "coercive tactics," violated OH DR 5-101(A), 5-105(A), and 5-105(B), among other provisions).
Cleveland Bar Ass'n Op. 90-3 (Jan. 18, 1991) addressed the question whether a law firm could purchase the uncollected debts of a client if the firm was not representing the client on that particular collection matter. The opinion found that such conduct would create a conflict of interest because the market value of uncollected debts would be affected by the level of recovery in represented actions. "The firm's interest in obtaining debts at a favorable discount is directly at odds with its duty in gaining higher recoveries on the dollar for its client." Id. at 4.
Conflicting interests of lawyer and client - Lawyer named fiduciary in an instrument: Lawyers often are named by clients as trustees, executors, or the like. Ohio Rule 1.7 cmt.  notes that a lawyer's duties of loyalty and independence may be limited by "the lawyer's responsibilities to other persons, such as . . . persons to whom the lawyer, in the capacity of a trustee, executor, or corporate director, owes fiduciary duties." Former OH EC 5-6 urged that a lawyer "should not consciously influence" a client to name the lawyer for such a role. In Office of Disciplinary Counsel v. Slavens, 63 Ohio St.3d 162, 586 N.E.2d 92 (1992), a lawyer was disciplined for, among other reasons, drafting a will for an incompetent client in which the lawyer was named a co-executor.
If, in the absence of improper influence, the client independently desires to name the lawyer as executor or trustee, the lawyer can accept the appointment but, at a minimum, should explain to the client the potential conflict of interest that could arise from the lawyer accepting the position. For example, under the Code, the Board opined that before agreeing to be named executor in a will, the lawyer should disclose that the lucrative practice of probating wills may color the lawyer's judgment in advising the client in the preparation of the will and that the lawyer may need to withdraw as executor if called upon to testify in a proceeding involving the estate. Bd. of Comm'rs on Grievances & Discipline Op. 89-014, 1989 Ohio Griev. Discip. LEXIS 21 (May 30, 1989). See also OH DR 5-101(B) and 5-102 (now Ohio Rule 3.7) and sections 3.7:100-:300 (lawyer as witness).
Conflicting interests of lawyer and client - Co-counsel arrangements: A lawyer should not permit his personal interests to influence his position on whether co-counsel should be employed on a particular matter. The lawyer must exercise his independent professional judgment in presenting the case for or against affiliation with co-counsel.
Under the former OHRPC, where co-counsel were involved in a case but could not agree on an important issue, the disagreement should be explained and presented to the client for resolution, and the client's decision should then control. OH EC 5-12. If the co-counsel relationship became too strained, withdrawal from the representation was an option. OH DR 2-110(C)(3). See section 1.16:300.
Conflicting interests of lawyer and client - Client solicitation: Conflict-of-interest concerns can influence how a lawyer solicits new clients, even where the underlying interests of the new clients and existing clients do not conflict. This problem was presented under the Code in a Cincinnati Bar Association opinion, where a lawyer, representing a client in an action against a car dealer and finance company, alleged that the dealer filled in a price on the retail installment contract higher than the advertised price. Cincinnati Bar Ass'n Op. 95-96-04 (n.d.). The lawyer wanted to send a letter to other purchasers involved with that dealer and finance company, in order to secure their testimony concerning their experiences in this regard. In addition, the lawyer intended to advise them that they might have causes of action of their own and to solicit their business should they wish to pursue them. The bar association found that the use of a single letter to secure both of these ends would be improper. To meet the solicitation rules, the text of the letter and the envelope in which it is mailed would have to have printed upon them, in red ink, "ADVERTISEMENT ONLY."See OH DR 2-101(F)(2)(e); the comparable provision in the Rules is Ohio Rule 7.3(c)(3). If the documents were so labeled, however, they might be ignored by the recipients, which would jeopardize the goal of identifying potential witnesses for the client's case. For this reason, among others, the practice of using a single letter to achieve these two goals was disapproved.
Conflicting interests of lawyer and client - Part-time government employment: Numerous bar-association opinions under the OHRPC addressed the propriety of part-time employment as a lawyer for the government. While the practice often is permissible, there are numerous ethical pitfalls to be avoided. Among them is a concern that multiple employment may create personal or financial interests that may come into conflict with full and effective client representation.
While there is no per se prohibition against serving as both a city police officer and an assistant county prosecutor in the same county, the practice is not permitted if one of the positions acts as a check on or is subordinate to the other position, or if conflict arises in a particular case. At that point, the prosecutor should withdraw from the case. Bd. of Comm'rs on Grievances & Discipline Op. 89-23, 1989 Ohio Griev. Discip. LEXIS 29 (Aug. 18, 1989).
A lawyer who is retained on a case-by-case basis to represent a county on certain non-criminal matters may undertake private criminal defense representation in the county. However, full disclosure to and consent from the client should be obtained. Ohio State Bar Ass'n Informal Op. 81-7 (Aug. 19, 1981).
While many opinions focus on the lawyer who works part-time for the government, others focus on the effect that a part-time employee may have on the government lawyer employing her:
Nothing in the [OHRPC] specifically prohibits a prosecuting attorney from appearing before a part-time municipal-court judge who employs the prosecutor's assistant in his or her private practice. However, if the prosecutor's professional judgment will be or reasonably may be affected by the assistant's conflict of interest then he or she should not appear before the judge. The prosecutor should also avoid the appearance of impropriety.
Bd. of Comm'rs on Grievances & Discipline Op. 88-013, 1988 Ohio Griev. Discip. LEXIS 23, at *1 (June 17, 1988) (syllabus). With respect to the appearance-of-impropriety standard, see section 1.7:230.
Conflicting interests of lawyer and client - Money-back guarantees: Such arrangements, here with respect to the outcome of intellectual property litigation matters, would violate former OH DR 5-101(A)(1), because if the agreed-upon outcome is not reached, the lawyer has a "strong financial incentive" to take the position that the client failed to comply with the conditions of the guarantee and therefore is not entitled to the refund. Bd. of Comm'rs on Grievances & Discipline Op. 2003-22003 Ohio Griev. Discip. LEXIS 2, at *1 (Apr. 11, 2003).
Conflicting interests of lawyer and client - Client gifts to lawyer: See section 1.8:400.