Ethics Opinon 1977-1
March 4, 1977
SUBJECT: Conflict of Interest
Is it a "conflict of interest" for a member of the State Bar to accept the position of City Attorney for a city in San Diego County; and, if so, can that "conflict of interest" be cured by said member's agreement to abstain from participating in or voting on Coastal Commission matters relating to the municipality involved?
Sitting on the Coastal Regional Commission while also serving as a City Attorney does not give rise to a "conflict of interest" in the technical sense, but it might otherwise be improper as a breach of the attorney's duty to his client (the City) to maintain independence of professional judgment. However, it is the opinion of the Committee that the potential breach of duty can effectively be cured by obtaining the written consent of both the City and the Coastal Regional Commission, and by abstaining, as a member of the commission, from participating in or voting on commission matters relating to the City.
STATUTES AND CANONS
Section 6076 of the California Business and Professions Code contains the Rules of Professional Conduct of the State Bar of California, of which the following are directly applicable to the question presented:
Rule 4-101. A member of the State Bar shall not accept employment adverse to a client or former client, without the informed and written consent of the client or former client, relating to a matter in reference to which he has obtained confidential information by reason of or in the course of his employment by such client or former client.
Rule 5-102(A) A member of the State Bar shall not accept professional employment without first disclosing his relation, if any, with the adverse party, and his interest, if any, in the subject matter of the employment. A member of the State Bar who accepts employment under this rule shall first obtain the client's written consent to such employment.
(B) A member of the State Bar shall not represent conflicting interests, except with the written consent of all parties concerned.
Section 6068(e) of the California Business and Professions Code provides that it is the duty of an attorney:
To maintain inviolate the confidence, and at every peril to himself to preserve the secrets, of his client.
The American Bar Association Code of Professional Responsibility consists of three separate but interrelated parts, namely, Canons, Ethical Considerations, and Disciplinary Rules, which are defined in the "Preliminary Statement" of the Code as follows:
The Canons are statements of axiomatic norms, expressing in general terms the standards of professional conduct expected of lawyers in their relationships with the public, with the legal system, and with the legal profession. They embody the general concepts from which the Ethical Considerations and the Disciplinary Rules are derived.
The Ethical Considerations are aspirational in character and represent the objectives toward which every member of the profession should strive. They constitute a body of principles upon which the lawyer can rely for guidance in many specific situations.
The Disciplinary Rules, unlike the Ethical Considerations, are mandatory in character. The Disciplinary Rules state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action.
The following portions of the ABA Code of Professional Responsibility are directly applicable to the question presented:
A LAWYER SHOULD PRESERVE THE CONFIDENCES AND SECRETS OF A CLIENT
EC 4-5 A lawyer should not use information acquired in the course of the representation of a client to the disadvantage of the client and a lawyer should not use, except with the consent of his client after full disclosure, such information for his own purposes.
DR 4-101 Preservation of Confidences and Secrets of a Client.
(E) Except when permitted under DR 4-101(C) a lawyer shall not knowingly:
(1) Reveal a confidence or secret of his client.
(2) Use a confidence or secret of his client to the disadvantage of the client.
(3) Use a confidence or secret of his client for the advantage of himself or of a third person, unless the client consents after full disclosure.
A LAWYER SHOULD EXERCISE INDEPENDENT PROFESSIONAL JUDGMENT ON BEHALF OF A CLIENT
EC 5-1 The professional judgment of a lawyer should be exercised, within the bounds of the law, solely for the benefit of his client and free of compromising influences and loyalties. Neither his personal interests, the interests of other clients, nor the desires of third persons should be permitted to dilute his loyalty to his client.
EC 5-2 . . . After accepting employment, a lawyer carefully should refrain from acquiring a property right or assuming a position that would tend to make his judgment less protective of the interests of his client.
EC 5-14 Maintaining the independence of professional judgment required of a lawyer precludes his acceptance or continuation of employment that will adversely affect his judgment on behalf of or dilute his loyalty to a client. This problem arises whenever a lawyer is asked to represent two or more clients who may have differing interests, whether such interests be conflicting, inconsistant, diverse, or otherwise discordant.
EC 5-21 The obligation of a lawyer to exercise professional judgment solely on behalf of his client requires that he disregard the desires of others that might impair his free judgment. . . .
DR 5-105 Refusing to Accept or Continue Employment if the Interests of Another Client May Impair the Independent Professional Judgment of the Lawyer
(A) A lawyer shall decline proffered employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve him in representing differing interests, except to the extent permitted under DR 5-105(C).
(C) In the situations covered by DR 5-105(A) and (B), a lawyer may represent multiple clients if it is obvious that he can adequately represent the interest of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each.
A LAWYER SHOULD AVOID EVEN THE APPEARANCE OF PROFESSIONAL IMPROPRIETY
EC 9-2 . . . When explicit ethical guidance does not exist, a lawyer should determine his conduct by acting in a manner that promotes public confidence in the integrity and efficiency of the legal system and the legal profession.
EC 9-6 Every lawyer owes a solemn duty . . . to strive to avoid not only professional impropriety but also the appearance of impropriety.
As used in the Disciplinary Rules of the Code of Professional Responsibility:
(1) "Differing interests" include every interest that will adversely affect either the judgment or the loyalty of a lawyer to a client, whether it be a conflicting, inconsistent, diverse or other interest.
Research has not disclosed any formal or informal American, state, county or city bar association opinions directly on point. Several opinions from other jurisdictions have been located which deal with the propriety of an attorney accepting employment, as an attorney, with two separate governmental entities at the same time. These opinions generally focus on the existence and extent of conflicting interests between two entities, and the conclusions are varied and somewhat inconsistent.
The question presented herein is significantly different, however, in that the attorney does not propose to represent, as an attorney, two clients with conflicting interests. To the contrary, he proposes to enter into an attorney-client relationship with only one client, the City, and to accept a position, but not as an attorney, with another entity, namely the San Diego Coast Regional Commission, the interests of which may on occasion conflict with those of the City. The significance of this distinction is discussed hereinbelow.
It is assumed by the Committee, as it has been by the attorney in question, that the interests of the San Diego Coast Regional Commission (which is created by State law, namely the California Coastal Act of 1976, and which will function basically at the state government level) will on occasion conflict with the interests of the City which is located within the geographic boundaries of the San Diego Coastal Zone. In light of that assumption, and in light of the decision reached by the committee, it is not necessary herein to speculate as to the exact nature, extent, or frequency of the potential conflicts between the two.
As discussed further hereinbelow, however, the aforementioned conflicting interests do not give rise to a "conflict of interest", in its technical sense, as that term is used in the American Bar Association Code of Professional Responsibility. Footnote #18 of Canon 5 defines "conflict of interest" as follows:
"Within the meaning of this Canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose.
The attorney in question proposes to represent only one client, namely, the City, and will not represent, in the professional sense, the San Diego Coast Regional Commission. Accordingly, technically speaking, there is no legal "conflict of interest" present.
The San Diego Coast Regional Commission, as a state-related entity, is represented in all legal matters by the Attorney General's Office. The attorney in question will not provide legal services to this commission, but will sit simply as a public member thereof representing the public at large pursuant to the applicable portions of the California Coastal Act of 1976 [Public Resources Code § 30302(f) and § 30303(d)]. Accordingly, the ethical obligations inherent in the attorney-client relationship do not exist in this situation.
On the other hand, the attorney in question proposes to accept employment with the City as City Attorney, and the ethical obligations inherent in the attorney-client relationship obviously do exist in that situation. Accordingly, the committee has analyzed the question presented only in light of the attorney's duties to his client, the City, and has not considered what duties, if any, he owes to the San Diego Coast Regional Commission. The latter consideration is left to the Committee itself, or to its counsel.
In light of the foregoing, the controlling portions of the Rules of Professional Conduct of the State Bar of California and the American Bar Association Code of Professional Responsibility become apparent. With regard to the latter, the only disciplinary rule (or mandatory rule) potentially applicable to the question presented is Disciplinary Rule 5-105, which is captioned as follows:
Refusing to accept or continue employment if the interests of another client may impair the independent professional judgment of the lawyer. [Emphasis Added].
The substance of the rule is to prohibit the representation, as attorney, of two clients who are likely to have differing interests. Even in that situation, however, sub-section (c) adds the exception that "a lawyer may represent multiple clients if it is obvious that he can adequately represent the interests of each and if each consents to the representation after full disclosure. . . ." It is likely, in the Committee's opinion, that the attorney in question could make such a showing and come within the exception even if he were acting as attorney for both parties, but, as indicated hereinabove, such a showing is unnecessary since he is entering into an attorney-client relationship with only one of the parties. Accordingly, it is the opinion of the Committee that Disciplinary Rule 5-105 does not control with regard to the question presented herein.
As indicated hereinabove, the Ethical Considerations of the American Bar Association Code of Professional Responsibility are not mandatory, but are "aspirational in character and represent the objectives toward which every member of the bar should strive." Nevertheless, it is the opinion of the Committee that the Ethical Considerations are not to be ignored, and that the proposed activity, unless otherwise specifically allowed, must be reconciled with them.
Ethical Consideration 5-14, at first glance, would seem to constitute a bar to the proposed conduct. The latter portion of that consideration, however, indicates that it, also, applies to the multiple-client situation:
"This problem arises whenever a lawyer is asked to represent two or more clients who may have differing interests, whether such interests be conflicting, inconsistent, diverse, or otherwise discordant."
Accordingly, it is the Committee's opinion that Ethical Consideration 5-14 does not apply to the question presented.
On the other hand, Ethical Considerations 5-1 and 5-2 appear to apply directly to the question presented, and, unless somehow reconciled with the proposed activity, would appear to bar that activity. In substance, both considerations provide that an attorney should refrain from assuming any position which might tend in any way to compromise his loyalty to his client, or breach his duty to maintain independent professional judgment, and this is the crux of the question presented. It is conceivable for instance, that the Coast Regional Commission might develop a land use policy, or take a position on a particular land use problem, adverse to the policy or position of the city and that the attorney in question, privy to the information and attitudes of both, might subconsciously or otherwise compromise his ordinarily zealous representation of his client, or, as a member of the commission, take some affirmative action adverse to his client. This is pure speculation, of course, but it appears to be the type of consideration contemplated by the above-mentioned ethical considerations.
It is the opinion of the Committee that the proposed activity can be reconciled with said ethical considerations by the imposition of two requirements. First, the attorney in question must advise both entities in writing of his dual employment, and obtain the written consent of both to said dual employment. Second, he must abstain, as a member of the San Diego Coast Regional Commission, from participating in or voting on any commission matters relating to the city. The imposition of these two requirements will, in the opinion of the committee, satisfy the intent and spirit of the aforementioned ethical considerations, and insure that the client is fully aware of, and is amenable to, the attorney's activities.
The imposition of these two requirements will also insure compliance with the applicable portions of the Rules of Professional Conduct of the State Bar of California. Rules 4-101 and 5-102 both provide, in instance, that an attorney shall not accept employment adverse to the interests of a client unless he obtains the written consent of the client. By advising both entities in writing of the dual employment, and obtaining the written consent of both, the attorney in question will bring himself into full compliance with the California Rules.
In light of the foregoing, it is the opinion of the Committee that sitting as a member on the San Diego Coast Regional Commission while also serving as City Attorney, upon the conditions stated herein, is not violative of the letter or spirit of the Rules of Professional Conduct of the State Bar of California, the American Bar Association Code of Professional Responsibility, or any applicable court or bar association opinion.
This opinion is advisory only. It is not binding upon the State Bar, the Board of Governors, its agents or employees.
Disclaimer: This opinion was issued by the Legal Ethics Committee of the San Diego County Bar Association. It is advisory only and is not binding upon any member of the SDCBA, any other member of the State Bar of California, the State Bar of California or its Board of Governors, or any persons or tribunals charged with regulatory responsibilities. The SDCBA, its officers, directors, agents, and the Legal Ethics Committee members assume no responsibility or liability in rendering this opinion.