My law partner wants to become counsel for the municipal pension board, but I represent union members who are suing the municipality over how the board calculates their disability benefits. Is that a conflict for the firm?
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Plain-English summary
Attorney A and Attorney B practice at the same firm. Attorney B proposes to serve as counsel for a municipality's five-member pension board, which administers retirement plans for the municipality's police, fire, and other employees, including making disability determinations and calculating benefits. Attorney A represents municipal employee unions in collective bargaining, grievances, and lawsuits against the municipality, represents individual union members and retirees, recently represented a firefighter before the pension board on a disability pension application, and currently represents several union members appealing a Superior Court decision that reversed an arbitrator's ruling on how disability pensions are calculated (Attorney A represented those members below as well).
The panel found that although the pending lawsuit names the municipality, not the pension board, as defendant, the pension board is the entity charged with determining and calculating disability benefits, so Attorney A's representation of the union members is directly adverse to both the pension board's and the municipality's interests; the panel treated the pension board and the municipality as a single client for conflict purposes, citing by analogy ABA Formal Opinion 97-405's functional approach to whether government entities within the same jurisdiction should be regarded as one client. That produced a Rule 1.7(a)(1) direct-adversity conflict barring Attorney B from becoming the pension board's lawyer. Independent of that, the panel found a Rule 1.7(a)(2) material-limitation conflict: Attorney B would face an unworkable set of questions in advising the board on disability-benefit calculations (comply with the municipality's new rules against the firm's own union clients, honor a union member's contractual rights, or follow past practice consistent with the other clients' interests), creating a significant risk that Attorney B's duties to the firm's union clients would materially limit the board representation. The panel concluded Attorney B could not satisfy Rule 1.7(b)'s waiver conditions because Attorney B could not reasonably conclude competent and diligent representation of the board was possible, and that Attorney B abstaining from disability-pension matters specifically would not cure the conflict, since the board would remain a current client of Attorney B and the firm regardless. The panel advised Attorney B to decline the representation, noting that even without the pending lawsuit, simultaneously representing the pension board and the union or its members through two lawyers in the same firm is "fraught with potential conflicts."
In practice
The opinion holds that a government pension board and the municipality that funds and oversees it can be treated as a single client for conflict-of-interest purposes where the board's substantive decisions are the subject of litigation naming the municipality, so that a firm lawyer representing parties adverse to the municipality in that litigation creates a direct-adversity conflict for any firm colleague who represents the board. The opinion also holds that a lawyer cannot cure a Rule 1.7(a)(2) material-limitation conflict by simply declining to handle the specific conflicted subject matter (here, disability-benefit calculations) while otherwise representing the board, because the conflicted entity remains a current client of the lawyer and the firm across all matters.
Common questions
Q: The lawsuit names the municipality, not the pension board. Does that mean there's no conflict for my partner representing the board?
A: No. The opinion holds the pension board and municipality should be regarded as a single client here because the board is the entity actually charged with the substantive decisions at issue (calculating disability benefits), so the lawsuit's adversity to the municipality is also adversity to the board.
Q: Could my partner just avoid advising the board on disability-benefit calculations specifically and take everything else?
A: No. The opinion holds that abstaining from the conflicted subject matter does not cure the conflict, because the pension board remains a current client of the lawyer and the firm regardless of which specific matters that lawyer personally handles.
Q: Is there any way to waive this conflict under Rule 1.7(b)?
A: The opinion concludes no, because the lawyer could not reasonably believe competent and diligent representation of the pension board was possible given the direct tension with the firm's union clients' interests, so the Rule 1.7(b)(1) threshold for waiver is not met.
Background and rules framework
The opinion applies Rhode Island Rule 1.7 (Conflict of Interest: Current Clients). Rule 1.7(a)(1) bars representation directly adverse to another client; Rule 1.7(a)(2) bars representation carrying a significant risk of material limitation from duties to another client, a former client, a third person, or the lawyer's personal interest. Rule 1.7(b) permits proceeding despite a conflict only where the lawyer reasonably believes competent and diligent representation remains possible, among other conditions. The opinion also applies Rule 1.10(a), which imputes one lawyer's Rule 1.7 or 1.9 disqualification to the whole firm unless the conflict is personal and poses no significant risk to other clients, and Rule 1.10(d), addressing waiver of imputed disqualification.
Citations and references
Rules of Professional Conduct:
- MR 1.7(a)(1) (direct adversity conflict)
- MR 1.7(a)(2) (material limitation conflict)
- MR 1.7(b) (conditions for proceeding despite a conflict)
- MR 1.10(a) (imputation of conflicts within a firm)
- MR 1.10(d) (waiver of imputed disqualification)
Statutes:
- None cited.
Cases:
- None cited.
Other opinions cited:
- ABA Formal Op. 97-405 (1997): functional approach to determining whether government entities within the same jurisdiction should be regarded as a single client for conflict-of-interest purposes.
See also
- ABA Formal Op. 97-405: Conflicts in Representing Government Entities
- Rhode Island Ethics Advisory Panel Op. 2013-04: A City Council Member May Represent Clients Charged by the City, With Rule 1.7(b) Written Waivers and a Co-Defendant Conflict Check
Source
- Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
- Original PDF: https://www.courts.ri.gov/Opinions/EAP%2014-02.pdf
Original opinion text
Final
Rhode Island Supreme Court
Ethics Advisory Panel Op. 2014-02
Issued February 21, 2014
FACTS
Attorney A and Attorney B, who is the inquiring attorney, are attorneys in a law
firm. Attorney B proposes to serve as the lawyer for a municipality's pension board.
Attorney A represents unions for employees of the municipality. Attorney A also
represents individual union members, and individual retired employees who were
members of the union. On behalf of the unions, Attorney A negotiates with the
municipality in pursuit of collect bargaining agreements, and files grievances and
lawsuits related to the collect bargaining agreements, against the municipality. Attorney
A recently represented a firefighter before the pension board in his application for a
service-related disability pension. Attorney A currently represents several municipal
employees who are union members in their appeal from a decision of a superior court
judge who reversed an arbitrator's decision relating to the manner in which disability
pensions are calculated. Attorney A had represented the union members in proceedings
below.
The pension board is a five-member board created by the municipal charter.
Members are appointed by the municipal council. The pension board is charged with the
administration of the retirement plans for the municipality's police, fire, and other
employees, excepting employees of the school department. Administration of the
retirement plans includes establishing regulations related to applications for benefits,
making individual disability determinations, conducting recertification of disabilities,
ensuring that applicants are eligible for benefits, calculating benefits, and investing funds
appropriated by the municipality and withheld from employee wages for the pension
fund. Pursuant to the municipality's request for qualifications for legal services, a lawyer
for the pension board will provide general legal advice and counsel to the pension board,
will negotiate and review contracts for the board, will represent the board in the appeals
process and in the various courts, and will "address other matters as delegated by the
board."
Pursuant to the response to the municipality's request for qualifications for legal
services, Attorney B is designated as the primary provider of legal services to the pension
board, and each of the law firm's attorneys would be available to Attorney B for
consultation on issues relating to the pension board's representation.
Final Op. #2014-02
Page | 2
ISSUE PRESENTED
Is it a conflict of interest for the Attorney B to serve as lawyer for the
municipality's pension board while Attorney A represents several union members who
are employees of the municipality in a pending lawsuit relating to the issue of the
calculation of disability pension benefits?
OPINION
Yes. Attorney B's representation of the municipality's pension board presents a
concurrent conflict of interest pursuant to Rule 1.7 and is not permitted.
REASONING
Attorney B seeks to serve as the lawyer for the municipality's pension board
while another lawyer in the firm, Attorney A, represents several municipal employees in
a pending appeal from a decision of a superior court relating to the manner in which
disability pension benefits are calculated. Attorney A had represented the employees in
proceedings below. This inquiry raises issues of conflict of interest and imputed
disqualification under Rule 1.7 and Rule 1.10 of the Rules of Professional Conduct. Rule
1.7 states:
Rule 1.7. Conflict of interest: Current clients. (a) Except
as provided in paragraph (b), a lawyer shall not represent a
client if the representation involves a concurrent conflict of
interest. A concurrent conflict of interest exists if:
(1) the representation of one client will be directly
adverse to another client; or
(2) there is a significant risk that the representation of
one or more clients will be materially limited by the
lawyer's responsibilities to another client, a former client or
a third person or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent
conflict of interest under paragraph (a), a lawyer may
represent a client if:
(1) the lawyer reasonably believes that the lawyer will
be able to provide competent and diligent representation to
each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a
claim by one client against another client represented by
the lawyer in the same litigation or other proceeding before
a tribunal; and
Final Op. #2014-02
Page | 3
(4) each affected client gives informed consent,
confirmed in writing.
In pertinent part, Rule 1.10 states:
Rule 1.10. Imputation of conflicts of interest: General
rule. (a) While lawyers are associated in a firm, none of
them shall knowingly represent a client when any one of
them practicing alone would be prohibited from doing so
by Rules 1.7 or 1.9, unless the prohibition is based on a
personal interest of the prohibited lawyer and does not
present a significant risk of materially limiting the
representation of the client by the remaining lawyers in the
firm.
***
(d) A disqualification prescribed by this rule may be
waived by the affected client under the conditions stated in
Rule 1.7.
The position advanced by Attorney A on behalf of his/her clients in the pending
case is that the municipality's recent change in the manner in which disability benefits are
calculated violates the terms of the collective bargaining argument. Attorney B
highlights the fact that the lawsuit names the municipality as the defendant, and not the
pension board. It is, however, the pension board who is charged with determining and
calculating disability benefits, and the Panel believes that Attorney A's representation of
the municipal employees in this case is directly adverse to both the interests of the
pension board and of the municipality. The pension board has an interest in the
substantive matters at issue in the pending lawsuit against the municipality, and both the
pension board and the municipality have a shared concern in its outcome. The Panel
believes that the pension board and the municipality should be regarded as a single client
for conflict of interest purposes under these facts. Cf. ABA Formal Op. 97-405 (1997)
(discussing employing functional approach to determine whether government entities in
same jurisdiction should be regarded as single client for conflict of interest purposes.) As
such, there is a concurrent conflict of interest pursuant to Rule 1.7(a)(1) which prohibits
Attorney B from undertaking the position of lawyer for the pension board.
Even if it could be argued that Attorney A's representation of the union members
in the pending case is not directly adverse to the pension board, the Panel believes that
Attorney B's undertaking the representation of the pension board creates a concurrent
conflict of interest under Rule 1.7(a)(2). Under paragraph (a)(2), a concurrent conflict of
interest exists if there is a significant risk that a lawyer's proposed representation would
be materially limited by the lawyer's responsibilities to another client, a former client or a
third person or by a personal interest of the lawyer. Rule 1.7(a)(2). How now will
Final Op. #2014-02
Page | 4
Attorney B counsel the pension board relative to calculating disability benefits? Does
Attorney B advise the board to comply with the municipality's new rules, in direct
opposition to his/her law firm's clients in the pending lawsuit? Does Attorney B advise it
to honor the contractual rights of a union member who applies for disability benefits?
Does Attorney B advise the board to calculate benefits in accordance with its past
practice, consistent with the interests of the law firm's other clients?
The Comment explains:
The critical questions are the likelihood that a difference in
interests will eventuate and, if it does, whether it will
materially interfere with the lawyer's independent
professional judgment in considering alternatives or
foreclose courses of action that reasonably should be
pursued on behalf of the client.
The Panel believes that there is a significant risk that Attorney B's representation
of the pension board will be materially limited by his/her duties to advance the interests
of the law firm's union clients and the interests of the law firm. Further, the Panel does
not believe that Attorney B can comply with Rule 1.7(b) which addresses waiver. The
simultaneous representation proposed in this inquiry cannot be reconciled, as Attorney B
could not reasonably conclude that he/he would be able to provide competent and diligent
representation to the pension board in these circumstances. See Rule 1.7(b)(1).
Abstaining from representing the pension board in matters relating to disability
pensions does not cure the conflict of interest. The pension board would remain Attorney
B's current client and the law firm's client whether or not Attorney B advises or
represents the board on a particular matter.
The Panel concludes that Attorney B's representation of the municipality's
pension board presents a concurrent conflict of interest, and pursuant to Rule 1.7 is not
permitted. Even in the absence of the pending lawsuit, the simultaneous representation of
the pension board and of the union and active or retired union members, by two lawyers
in the same law firm is fraught with potential conflicts of interest. The Panel advises
Attorney B to decline the representation.
The Panel's guidance is restricted to interpretations of the Rules of Professional
Conduct and does not extend to issues under the State Ethics Code or any other rules,
regulations or laws that may have bearing on the issues raised by this inquiry.
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