Can an assistant attorney general own a controlling stake in a company that bids for state work, and can the rest of the department still handle matters involving that company?

Plain-English summary

Opinion E-84-9 addressed Assistant Attorney General A, a majority shareholder in a Wisconsin construction company that bids for state construction work. The Department of Administration handles most of the contracting legal work, but Department of Justice lawyers routinely review final contract documents, and an assistant attorney general normally represents the state if litigation arises over such contracts. A's own assignments did not relate in any respect to the securing, letting, or review of construction contracts. The questions were whether A may be involved with the company and whether the Department of Justice may advise and represent state agencies in matters where A's company may be involved.

On the first, the committee concluded there is no ethical impropriety per se in A serving as an assistant attorney general while holding majority stock in the company (citing Formal Opinion E-82-11). However, because the former Code requires a lawyer to decline employment where professional judgment on behalf of a client is likely to be adversely affected (SCR 20.28(1)), and A's judgment for the state would be affected by his ownership interest, A likely could not handle Department of Justice matters relating to the company. On the second, the committee explained that, under general rules of imputed or vicarious disqualification, A's associates would have to decline such matters (SCR 20.28(4)), but that for practical reasons SCR 20.28(4) is construed not to apply to other government lawyers associated with a disqualified government lawyer (Formal Opinion E-79-1; ABA Formal Opinion 342). Accordingly, the Department of Justice may advise and represent state agencies in matters involving A's company, provided A is screened from any participation in such matters.

Currency note

This opinion was issued in 1984, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update), and it analyzes conduct under the former Code. A government lawyer's personal-interest conflict and the special imputation rules for government lawyers are now analyzed under SCR 20:1.7, 20:1.10, and 20:1.11 / Model Rules 1.7, 1.10, and 1.11. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can an assistant attorney general own a controlling stake in a company that bids for state work?

A: The committee concluded the ownership is not improper per se, but it creates a personal-interest conflict on matters involving the company.

Q: Can that lawyer handle DOJ matters relating to his own company?

A: No. The committee concluded the lawyer must decline such matters because his professional judgment for the state would be adversely affected (SCR 20.28(1)).

Q: Are the rest of the department's lawyers disqualified too?

A: No. The committee concluded the imputation rule (SCR 20.28(4)) is construed not to reach other government lawyers, so the department may handle the matters if the conflicted lawyer is screened.

Background and rules framework

The opinion interpreted the former Code's conflict rule requiring a lawyer to decline employment where judgment would be adversely affected (SCR 20.28(1)) and the imputed-disqualification rule (SCR 20.28(4)), with a government-lawyer exception drawn from Formal Opinion E-79-1 and ABA Formal Opinion 342. These subjects are now addressed by SCR 20:1.7, 20:1.10, and 20:1.11 / Model Rules 1.7, 1.10, and 1.11.

Citations and references

Rules of Professional Conduct:

• Wis. SCR 20.28(1) / Model Rule 1.7 (personal-interest conflict) (former Code provision)
• Wis. SCR 20.28(4) / Model Rules 1.10, 1.11 (imputed disqualification; government lawyers) (former Code provision)

Other opinions cited:

• Wisconsin Formal Opinions E-82-11, E-79-1
• ABA Formal Opinion 342 (Nov. 24, 1975)

See also

• WI Ethics Op. E-84-16: District Attorney Serving on a Community Board of Directors
• WI Ethics Op. E-88-2: Successive Government Employment and Related Lawyers
• WI Ethics Op. E-86-12: Lawyer-Legislator Representing Clients Against Same-Unit Employees

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-84-9.pdf