Bar News - February 17, 2012|
Ethics Corner: Conflict of Interest: Spouse Attorneys
QUESTION: I am a member of a medium-size New Hampshire firm. My spouse will graduate from law school this year, and has received a job offer from a large New Hampshire firm. We have been told that our relationship as spouses will create a conflict of interest that will prevent us or the members of our two firms from ever representing adverse parties in the same matter. Is this correct?
No. It is now generally accepted that it is not a per se violation of the New Hampshire Rules of Professional Conduct ("Rules") for married attorneys who are practicing in different firms to represent different parties in the same matter, provided that they receive the consent of their clients. Similarly, a member of one firm may represent a party with interests adverse to a party who is represented by the spouse in the other firm. Comment  to ABA Model Rule 1.7; NH Ethics Committee Formal Opinion (10/31/81) (adopting ABA Formal Opinion No. 340 (1975)) (both decided under Code of Professional Responsibility), and former NH Rule 1.8(i).
The fact that the relationship between spouses does not result in a per se violation of the Rules, however, does not mean that no restrictions apply to the spouses or their firms. While the Rules and the associated Comments do not presume that attorneys who are married or otherwise closely related will violate the Rules, they caution such lawyers to be extra-vigilant to avoid breaches of the Rules. ABA Comment  to Rule 1.7. For example, spouses have to be particularly careful that they protect confidential client information whether in the form of phone conversations, hard copies of documents, or electronic records or communications while working at home.
Notwithstanding the general rule, it is very likely that, because of the personal relationship between spouses, one or both of them might feel constrained in the representation of their respective clients. For example, a spouse may feel pressure to be less aggressive if the other spouse has a material personal financial stake in the outcome of the matter, or a spouse may be reluctant to take advantage of a strategic error that has been made by the other spouse. If that is the case, then it would be inappropriate for the affected lawyer to request the client’s consent, and the lawyer may not proceed with the representation. Rule 1.7(a)(2) and 1.7(b)(1). NH Ethics Committee Formal Opinion 1988-89/24 (the "harsh reality test"). See also, Fiandaca v. Cunningham, 827 F.2d 825 (1st Cir, 1987)
You should be aware that even if a lawyer is permitted to seek client consent to continued representation despite the existence of a concurrent conflict, it may be very difficult for a lawyer to obtain a client’s informed consent. Once the lawyer provides the client with the information that is required by Rule 1.0 (e), one can envision that few clients will approve the concurrent conflict.
Even where the circumstances of the concurrent representation would be such as to prohibit spouses from appearing adverse to one another in a particular matter, such "personal" conflicts are not imputed to the other members of the spouses’ firms. Rules 1.7 and 1.10(a). Therefore, assuming compliance with all of the other Rules (including Rule 1.10), it is possible that, in certain cases, members of the spouses’ two firms could appear adverse to one another in a matter, even if the spouses themselves could not do so. In such cases, many opinions strongly recommend that, even if no "concurrent conflict" exists under Rule 1.7, the two firms should disclose the nature of the spousal relationship at the outset of the matter to avoid negative client reactions or misunderstandings. See Mississippi State Bar, Opinion No 112 (1986). (For a related discussion, see also NH Ethics Committee Formal Opinion #1992-93/12 relating to conflicts presented when spouses serve as a lawyer and a real estate broker in the same transaction.)
It is important to note that the conflict of interest rules that apply to you and your spouse also apply equally to any other attorneys to whom you are closely related by blood, or with whom you have a close personal relationship, including: parents, children, siblings, roommates, or partners in a civil union.
You may tell your spouse to accept the job offer, because it will not necessarily create a per se conflict between the two firms, but you should both make sure that your firms adopt appropriate procedures to identify any matters in which both firms are involved prior to undertaking the representation so that appropriate measures may be taken.
The Ethics Committee provides general guidance on the New Hampshire Rules of Professional Conduct with regard to a lawyer’s own prospective conduct. New Hampshire lawyers may contact the Ethics Committee for confidential and informal guidance by emailing Robin E. Knippers. Brief commentaries of ethics topics based upon member inquiries and suggestions will be published regularly in the NH Bar News.