Can a lawyer represent a business competitor of an existing client over that client's objection?

Plain-English summary

A lawyer had long represented Client A. A and B had jointly owned a corporation operating retail stores, each holding fifty percent, and the lawyer represented both clients and the corporation. After A and B amicably severed their relationship, with the lawyer assisting in A's purchase of B's stock, B asked the lawyer to represent him in other business affairs. A objected, contending that B was now a competitor and that the two were likely to compete directly for retail store leases. A did not object to the lawyer representing B in purely personal matters unrelated to the business.

The lawyer reported that he had received no personal communications from either party during the joint representation bearing on future business affairs, and did not expect to be involved in obtaining leases over which they might compete, though he might advise B on the legal aspects of proposed leases B had already negotiated.

The committee concluded that, as long as the lawyer did not actually represent B in any matter in which B's interests came into conflict with A's, it saw no objection to the representation, and that if the situation remained as outlined the representation would appear permissible. The committee added, candidly, that as a practical matter such a relationship was unlikely to be preserved successfully, and that the exercise of good judgment, more a question of judgment than of ethics, should sometimes counsel a lawyer against placing himself in such a situation.

Currency note

This opinion was issued in 1968, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Canon 6 on conflicting interests. Concurrent conflicts of interest are now addressed by Rule 4-1.7. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Can a lawyer take on a client who competes with an existing client?

A: Under this opinion, yes, where the lawyer does not represent the new client in any matter in which the two clients' interests actually conflict; mere business competition over the first client's objection did not bar the representation.

Q: Did the committee endorse the arrangement?

A: The committee found it ethically permissible as outlined but observed candidly that, as a practical matter, the arrangement was unlikely to be preserved and that good judgment might counsel against it.

Background and rules framework

The opinion applied the former Canon 6 on representing conflicting interests to a lawyer's representation of two clients who were business competitors. Concurrent conflicts of interest are now addressed by Rule 4-1.7 of the Rules Regulating The Florida Bar; the Model Rule analogue is Rule 1.7.

Citations and references

Rules of Professional Conduct:

• Canon 6 [Canons of Professional Ethics; concurrent-conflict duties now in Rule 4-1.7]

See also

• FL Bar Ethics Op. 68-16: Suing a Former Client
• FL Bar Ethics Op. 72-17: Former Partner Conflict

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-68-10/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-68-10-1.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 68-10
April 4, 1968
Advisory ethics opinions are not binding.
A lawyer is not ethically precluded from representing a competitor of an established client in business affairs over the objection of the first client as long as the lawyer does not represent the second client in matters in which the interests of the two clients conflict.
Canon: 6
Chairman MacDonald stated the opinion of the committee:
A member of The Florida Bar advises that for some time he has represented Client A. Last year client A and B jointly entered into a business operated through a corporation wherein each owned fifty percent of the shares, such corporation operating a number of retail stores in shopping centers. The attorney was retained to represent both A and B in this endeavor, as well as the corporation.
Recently, because of a disparity of views on various subjects, A and B have severed their relationship amicably, the inquiring attorney having assisted in this severance which was accomplished by A purchasing the stock owned by B.
Subsequently B, having become acquainted with the inquiring attorney, had requested him to represent his interests in other business affairs. A has objected, arguing that B is now a business competitor and that there is a substantial probability that A and B both will be in direct competition for retail store leases in various shopping centers. Apparently A has no objection to the attorney representing B in purely personal matters having no relationship to the business.
We are told that the attorney received no personal communications from either of the parties during the course of his representation of both of them which would have any bearing on the future business affairs. He advises that he does not anticipate that his services will be required in obtaining leases over which the parties might compete, but that he does expect that he might be asked to advise B with respect to the legal aspects of proposed leases and to negotiate details of the leases, after the basic agreement for the lease has already been procured by B directly.
As long as the attorney does not actually represent B in any matter in which his interests come into conflict with those of A we see no objection to his representing B. If the situation remains precisely as outlined, the representation would thus appear permissible.
In all candor we must observe that from a practical standpoint it is hardly likely that such a relationship can be successfully preserved, and that it is likely that the attorney will in the final analysis offend both clients. Naturally this is a question of judgment more than of ethics, but it does not seem inappropriate to comment that on occasion the exercise of good judgment should dictate to the lawyer the undesirability of placing himself in situations of this type.