Can a lawyer keep representing a client and testify in support of an advice-of-counsel defense when the opposing party files a frivolous-proceedings counterclaim attacking the lawyer's advice?

Plain-English summary

The inquiring lawyer took a consumer case on a contingent fee when the client could not find another attorney, then filed suit. The defendant counterclaimed against the client under the Frivolous Civil Proceedings Sanctions Act for bringing the lawsuit. Because the client filed on the lawyer's advice, the lawyer needed to assert that advice as a defense to the counterclaim. The lawyer, having re-evaluated the claim, was convinced it was strong, believed the counterclaim itself was frivolous and intended to jeopardize the representation, and noted the client could not afford to pay an hourly fee to other counsel. The lawyer expected to have to assert an advice-of-counsel defense while remaining as the client's counsel, and asked whether continued representation was permitted and, if not, what steps could preserve it with the client's consent.

The committee concluded the contemplated situation does not violate the Rules. It explained that Rule 3.7(a) generally bars a lawyer from acting as advocate at a trial in which the lawyer is likely to be a necessary witness, but contains exceptions. The committee found the first exception applies because the lawyer would be defending a counterclaim that speaks directly to the nature and value of legal services rendered in the case, the situation covered by Rule 3.7(a)(2). It cited Comment 3, which notes that permitting the lawyer to testify about legal services avoids the need for a second trial with new counsel to resolve that issue and gives the judge firsthand knowledge of the matter, reducing dependence on the adversary process to test credibility.

The committee added that the second exception, Rule 3.7(a)(3), permits a lawyer to testify when disqualification would work a substantial hardship on the client. Citing Comment 4, it explained the effect on the client must be balanced against the potential for the tribunal to be misled or the opposing party to suffer prejudice, and that, depending on the severity of the hardship from the client's inability to obtain other counsel, Rule 3.7(a)(3) may apply. The committee noted Rule 1.16 (termination) was not implicated because nothing indicated the lawyer wished to withdraw, and that withdrawing might fall short of diligent representation under Rule 1.3, whose Comment 4 advises a lawyer to carry a matter through to conclusion unless the relationship is terminated under Rule 1.16. Because the situation violates no Rule, the committee did not address the lawyer's second question about steps to continue with the client's consent.

In practice

Under this opinion, a lawyer facing a frivolous-proceedings counterclaim built on the lawyer's own advice may continue as advocate and serve as a witness. The committee held the advocate-witness bar in Rule 3.7(a) does not apply because the testimony relates to the nature and value of legal services rendered (Rule 3.7(a)(2)), and because disqualifying the lawyer could work a substantial hardship on a client who cannot find or afford replacement counsel (Rule 3.7(a)(3)). It held Rule 1.16 was not triggered absent any wish to withdraw, and noted that withdrawing could conflict with the diligence duty in Rule 1.3.

Common questions

Q: Can a lawyer stay on the case and testify about the advice that led to the suit?

A: The committee concluded yes. Rule 3.7(a)(2) lets the lawyer act as advocate while testifying because the testimony relates to the nature and value of legal services rendered in the case.

Q: Does the client's inability to find other counsel matter?

A: Yes. The committee said the second exception, Rule 3.7(a)(3), can apply where disqualification would work a substantial hardship on the client, and that the client's inability to obtain other counsel may qualify, balanced against any risk of misleading the tribunal or prejudicing the opposing party.

Q: Does the lawyer have to withdraw?

A: No. The committee found Rule 1.16 inapplicable because nothing indicated a desire to withdraw, and noted that withdrawing might fall short of the diligence required by Rule 1.3, whose Comment 4 advises carrying a matter through to conclusion.

Background and rules framework

The opinion applies South Carolina Rule 3.7(a) (lawyer as witness), including the exceptions in Rule 3.7(a)(2) (testimony about the nature and value of legal services) and Rule 3.7(a)(3) (substantial hardship on the client), and references Rule 1.16 (declining or terminating representation) and Rule 1.3 (diligence). These correspond to the like-numbered Model Rules. The committee relied on Comments 3 and 4 to Rule 3.7 and Comment 4 to Rule 1.3.

Citations and references

Rules of Professional Conduct:

• MR 3.7 / SC Rule 3.7(a), 3.7(a)(2), 3.7(a)(3) (lawyer as witness; legal-services and substantial-hardship exceptions), Comments 3 and 4
• MR 1.16 / SC Rule 1.16 (declining or terminating representation)
• MR 1.3 / SC Rule 1.3 (diligence), Comment 4

Statutes:

• South Carolina Frivolous Civil Proceedings Sanctions Act (basis of the counterclaim)

See also

• SC Bar Ethics Op. 05-06: Defense Lawyer as Witness
• SC Bar Ethics Op. 06-09: Lawyer as Officer and Prosecutor
• SC Bar Ethics Op. 04-08: Ex-Guardian ad Litem Conflict

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-07-07/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 07-07

SC Rules of Professional Conduct: 1.3, 1.16, 3.7(a), 3.7(a)(2), 3.7(a)(3)

Facts
Lawyer undertook representation of Client in a consumer case when Client had been unable to find another attorney. Lawyer eventually filed suit for Client. Defendant’s attorney has filed a counterclaim against Client for violation of the Frivolous Civil Proceedings Sanctions Act for bringing the lawsuit. Client’s lawsuit was brought on Lawyer’s advice, and Lawyer needs to assert that for Client as a defense to the counterclaim.

Lawyer has re-evaluated Client’s claim and a substantial amount of evidence in light of the counterclaim and is convinced that Client’s claim is not just meritorious, but is strong. Lawyer reasonably believes that the counterclaim itself is frivolous and that it is asserted to jeopardize Lawyer’s representation and make it difficult for Client to continue with lawsuit. Lawyer is on a contingent-fee basis, and Client cannot pay an hourly fee to another lawyer. Nevertheless, Lawyer must wait until the case is further developed before moving for summary judgment on the counterclaim. In the meantime, Lawyer is in the position of having to assert an advice-of-counsel defense for Client while Lawyer remains as Client’s counsel.

Questions
May Lawyer continue to represent Client under this circumstance?
If this would violate the Rules of Professional Responsibility, are there any steps that Lawyer can take to continue representation with Client’s knowledge and consent?

Summary
Rule 3.7(a) of the Rules of Professional Conduct does not prohibit Lawyer in this arrangement from continued representation because Lawyer’s “testimony relates to the nature and value of legal services rendered in the case.” Further, a second exception allows an attorney to act as a witness when “disqualification of the lawyer would work substantial hardship on the client.” In the contemplated context, the inability of the Client to find other representation may qualify as working a substantial hardship.

Opinion
Rule 3.7(a) provides the general prohibition on a lawyer acting as an advocate at a trial in which the lawyer is likely to be a necessary witness. However, the Rule allows a lawyer to act as an advocate at a trial in which the lawyer is also likely to be a necessary witness when “the testimony relates to the nature and value of legal services rendered in the case,” and also when “disqualification of the lawyer would work substantial hardship on the client.” Rule 3.7(a)(2) and (3) (respectively). In the facts presented, the lawyer is defending a counterclaim that speaks directly to the “nature and value of legal services rendered in the case.” Comment 3 acknowledges that where the testimony concerns the legal services rendered, “permitting the lawyers to testify avoids the need for a second trial with new counsel to resolve that issue.” Comment 3 also points out that this situation gives the judge “firsthand knowledge of the matter in issue; hence, there is less dependence on the adversary process to test the credibility of the testimony.”

Comment 4 notes, with respect to Rule 3.7(a)(3), that consideration must be given to the effect on the lawyer’s client if lawyer is disqualified. This must be balanced, however, with the potential for the tribunal to be misled or the opposing party to suffer prejudice. Depending on the severity of the hardship on the Client in the inquiry, namely the inability to obtain other counsel, Rule 3.7(a)(3) may be applicable.

While Rule 1.16 directly addresses termination of representation, there is no indication in the facts that Lawyer wishes to do so. The correct analysis, therefore, falls under Rule 3.7.

Finally, a withdrawal at this point may fall short of diligent representation under Rule 1.3. Comment 4 to Rule 1.3 advises that, “unless the relationship is terminated as provided in Rule 1.16, a lawyer should carry through to conclusion all matters undertaken for a client.” There is no indication that Lawyer desires to withdraw, making Rule 1.16 inapplicable, and possibly requiring the lawyer to continue with the representation in order to comply with Rule 1.3.

The inquirer’s second question need not be addressed because it is the Committee’s opinion that the contemplated situation does not violate any Rules of Professional Conduct.