If a lawyer helped a property owner who was not a formal client with financial problems, can the lawyer later represent a broker suing that owner?

Plain-English summary

A lawyer obtained a real-estate listing for a broker from an owner who was not the lawyer's client. While doing so, the owner was seeking help with financial difficulties, and the lawyer assisted him without compensation from either the owner or the broker. After the listing agreement was made, the owner terminated it and litigation followed. The committee was asked whether the lawyer could now represent the broker against the owner, and answered no.

The committee's stated reasoning was brief: it assumed the lawyer had acquired information concerning the owner's financial difficulties and financial status that would, or necessarily would, affect the outcome of the litigation. On that assumption, and citing DR 4-101 (confidences), DR 5-105 (conflicts in multiple representation), and EC 5-14 and EC 5-15, the representation of the broker against the owner was improper.

Currency note

This opinion was issued in 1977 under Kentucky's former Code of Professional Responsibility (in effect 1971 to 1990), before the Kentucky Bar Association's 1990 adoption of the Rules of Professional Conduct (SCR 3.130) and the substantial 2009 revisions to those rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer represent a broker against an owner the lawyer previously helped, even though the owner never paid or formally retained the lawyer?

A: No, under this opinion. The committee assumed the lawyer learned confidential financial information about the owner that would bear on the litigation, which barred the adverse representation.

Q: Did the absence of a fee or a formal engagement matter?

A: The committee treated the lawyer as having acquired the owner's confidences despite the lack of compensation, and the duty attached on that basis.

Background and rules framework

The opinion applies DR 4-101 (preservation of client confidences and secrets) and DR 5-105 (declining or withdrawing from employment that involves conflicting interests), along with EC 5-14 and EC 5-15 of the former Code. The modern analogs are Model Rule 1.6 (confidentiality), Model Rule 1.9 (duties to former clients), and Model Rule 1.18 (duties to prospective clients).

Citations and references

Rules of Professional Conduct:

• DR 4-101 (confidences and secrets), DR 5-105 (conflicting interests); EC 5-14, EC 5-15; modern analogs Model Rules 1.6, 1.9, and 1.18

Cases:

• United States v. Standard Oil Co., 136 F. Supp. 345 (S.D.N.Y. 1955)

See also

• KBA Ethics Op. E-316: Adverse Representation After Prospective-Client Inquiry
• KBA Ethics Op. E-325: Second Opinion for an Already-Represented Person

Source

• Landing page: https://kybar.org/For-Members/Rules-Ethics-Information/Ethics-Opinions
• Original PDF: https://kybar.org/Portals/0/Admin/Ethics%20Opinions/KBA_E-178.pdf

Original opinion text

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

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-178
Issued: November 1977

This opinion was decided under the Code of Professional Responsibility, which was in effect from 1971 to 1990. Lawyers should consult the current version of the Rules of Professional Conduct and Comments, SCR 3.130 (available at http://www.kybar.org), before relying on this opinion.

Question:

Attorney, without compensation, obtains for a real estate broker, a listing of real property from an owner who is not a client of the attorney. Owner, when listing is made, is seeking assistance in solving some financial difficulties. Owner pays no fee to the attorney yet attorney helps him with his difficulties. Attorney is not compensated by real estate broker. After listing agreement is entered into, the owner terminates said listing agreement, and litigation ensues. May the attorney who obtained the real estate listing now represent the broker in litigation against the owner?

Answer:

No.

References:

United States v. Standard Oil Co, 136 F.Supp. 345 (S.D. New York 1955); DR 4-101(A)(B), 5-105; EC 5-14, 5-15
OPINION

It is assumed that the attorney acquired information concerning the owner’s financial difficulties and financial status, which may or would necessarily have an effect upon the outcome of the litigation.

Note to Reader
This ethics opinion has been formally adopted by the Board of Governors of the Kentucky Bar Association under the provisions of Kentucky Supreme Court Rule 3.530 (or its predecessor rule). The Rule provides that formal opinions are advisory only.