Legal View: When representing common clients, confidentiality matters

By William C. Saturley and Bernard D. Posner The Daily Record Newswire Can you represent different clients in the same matter? If so, can that change at some point during the engagement? Suppose two business partners ask you to defend them in a lawsuit -- each one named individually -- and they have concluded that their interests are entwined. From their perspective, and yours, common representation makes sense, as it saves both time and money. The arrangement comes with risks for you, however. What if one partner tells you something that could influence how you defend the case, but forbids you to reveal that information to his partner? Rule 1.7 of the Model Rules of Professional Conduct prohibits a lawyer from representing a client if that undertaking involves a "concurrent conflict of interest." Such a conflict exists if the representation of one client will be "directly adverse" to another, or if a "significant risk" exists that the lawyer will "materially" limit his representation of one client due to his responsibilities to another. In our scenario, you have no such conflict at the outset; the joint representation can be undertaken. The American Bar Association comments to the Model Code acknowledge that common representation of persons having similar interests in civil litigation is proper if the lawyer reasonably believes he can represent both properly, and if each client gives informed, written consent. Rule 1.6 embodies one of the bedrock duties we owe clients: We must keep the client's information secret. In our hypothetical situation, one of your clients has given you confidential information and you are bound to keep it secret. But you know that the information, if it comes out during the litigation, could significantly affect the defense. In light of the importance of the information, you should share it with your other client; indeed, Rule 1.4(a) requires you to do so, since you must keep your clients reasonably informed about the status of their matters. Since one client gave you confidential information and instructed you to keep it secret from the other, you now have conflicting obligations. Your duty of loyalty runs equally to both, and you are now in a very hard place. Rule 1.7 resolves the impasse, though in somewhat Draconian fashion. In most instances, it suggests, the only solution to the dilemma is withdrawal. There are ways, however, to avoid taking such evasive action. At the outset of a common representation, and as part of the process of obtaining each client's consent, advise each that the information you obtain will be jointly shared. Explain that the procedure lets you satisfy your duty of loyalty to both. Open communications will allow you to best accomplish the goal of the representation. Explain in advance that a request from one that you keep information from the other may necessitate your withdrawal. Presumably, they will understand that your leaving midway through the matter will result in additional costs and possible embarrassment. In limited circumstances, the clients may agree that certain information may be kept confidential. For example, personal health information irrelevant to the litigation, the secrecy of which will not compromise the lawyer's role, can be kept confidential with the informed consent of both clients. Your writing may deal with the consequences if common clients disagree on the treatment of communications and information during the course of the litigation. If you disclose in advance that you will continue to represent one particular client if a disagreement occurs, and the clients both agree, you may avoid having to withdraw. Talk with the partner who wants the communication kept confidential. Explain that the burden of the confidential information affects your representation, and the result of his refusal to share it may be your withdrawal from the case. In many instances, that will convince the client to allow you to disclose the information. Parties with aligned interests may seek to use a common attorney as a cost-saving measure. When engaging in such representation, make sure you explain both the risks and advantages of the representation at the outset, and get informed consent in writing. Consult your broker, insurer's risk management team, or bar counsel for forms that adequately express these terms. By doing so, you can avoid the pitfalls commonly encountered during common representation. ---------- William C. Saturley and Bernard D. Posner are members of the business litigation and professional liability practice groups at Nelson, Kinder, Mosseau & Saturley in Boston. Saturley can be contacted at wsaturley@nkms.com; Posner is at bposner@nkms.com. Published: Wed, Jun 22, 2011