A lawyer is defending a small corporation in two lawsuits and is also representing its sole shareholder in his divorce. Can the lawyer keep doing both?

Plain-English summary

Opinion E-88-12 addressed a lawyer who had been retained to represent a respondent in a divorce action. The respondent was also the sole stockholder of a small corporation that the lawyer was defending in two lawsuits, which was the lawyer's only relationship with the corporation; the lawyer had not incorporated it, was not a director or officer, and had not advised it on other matters. The petitioner in the divorce was an officer of the corporation but owned no stock, and her only interest in the corporation derived from Wisconsin's marital property laws; the lawyer had told the petitioner's attorney that an evaluation of the corporation would be needed and that the petitioner's interest was 50 percent. The question was whether the lawyer could continue both representations.

The committee concluded that the answer was yes if the petitioner in the divorce is not a party individually, that is, not a client, in the corporate lawsuits. Assuming the lawyer represents only the entity in those lawsuits and that the issues there are not directly related to those in the divorce action, the committee found no basis in fact for prohibiting the concurrent divorce representation, citing SCR 20:1.7(a) on direct adversity and SCR 20:1.13(e), which relates to SCR 20:1.7. The committee added that if, however, the petitioner is a party the lawyer represents in the corporate lawsuits, the lawyer would have to obtain the petitioner's informed consent to the respondent's divorce representation, citing SCR 20:1.7(a)(2) and Formal Opinion E-83-9.

Currency note

This opinion was issued in 1988, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update). The concurrent-conflict rule SCR 20:1.7 and the organization-as-client rule SCR 20:1.13 were later revised. 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 Treat this page as historical context, not current guidance.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 a lawyer represent a person in a divorce while also defending that person's company?

A: Per the opinion, yes, if the other spouse is not a client in the corporate matters and the issues are not directly related, because there is then no direct adversity under SCR 20:1.7(a).

Q: What changes if the other spouse is also a client in the corporate suits?

A: The committee concluded the lawyer would then need that spouse's informed consent to the divorce representation, under SCR 20:1.7(a)(2).

Q: Did the lawyer's representation of the company count as representing the shareholder?

A: No. The committee treated the lawyer as representing only the entity, citing SCR 20:1.13(e), so defending the corporation did not by itself create a client relationship with the petitioner.

Background and rules framework

The opinion interpreted SCR 20:1.7 / Model Rule 1.7 (concurrent conflicts and direct adversity) together with SCR 20:1.13 / Model Rule 1.13 (organization as client), as applied to a lawyer representing both an individual in a divorce and that individual's closely held corporation.

Citations and references

Rules of Professional Conduct:

• Wis. SCR 20:1.7 / Model Rule 1.7 (conflicts of interest; direct adversity)
• Wis. SCR 20:1.13 / Model Rule 1.13 (organization as client)

Other opinions cited:

• Wisconsin Formal Op. E-83-9

See also

• WI Ethics Op. E-89-10: Representing Co-Investors
• WI Ethics Op. E-92-1: Plaintiff and Subrogated Insurer
• WI Ethics Op. E-89-8: House Counsel Guidelines

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-88-12.pdf