April 18, 2018 – Is it disloyal to a current client to recommend a lawyer or law firm to a potential client, when you have to turn down that case because of a potential conflict?
Question
A prospective client made an appointment to speak with me about possible representation.
After chatting with the prospective client for a few minutes, I gathered the necessary information for a conflicts check, and discovered that our firm represents an entity that is likely to be brought into the case at a later stage. When I informed the prospective client that we could not take the case because of a conflict, they asked if I could recommend another law firm.
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Ethical dilemmas affect every lawyer’s practice. This series of questions and answers appears each month in InsideTrack. The answers, offered by the State Bar’s ethics counsel Timothy Pierce and Aviva Kaiser, are intended to provide guidance only and are not legal authority. Each situation will depend on the facts and circumstances involved.
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This is not the first time that I have turned down a case because of a conflict, and been asked to recommend another lawyer. While I would like to give the person some names – because I believe that effective representation is usually good for all parties involved in a case – I worry that I might be disloyal to our current client.
May I recommend a lawyer to the prospective client in this case?
Answer
This situation has been addressed by several ethics opinions, the most recent being New York City Bar Formal Opinion 2016-1.1 That opinion takes the position that a lawyer who turns down a case because of a conflict arising from representation of a client in an unrelated matter is not ethically prohibited from recommending a lawyer to the prospective client.2
While New York has several rules that differ from Wisconsin’s, two New York rules that were key to the reasoning in the opinion are similar to Wisconsin’s rules – namely ABA Comment [1] to SCR 20:1.3 (Diligence) and SCR 20:4.3 (Dealing with Unrepresented Persons).
The opinion addresses these rules, in discussing a prior D.C. opinion:
D.C. Ethics Op. 326 (Dec. 2004) also concluded that a lawyer faced with a conflict of interest may refer the prospective client to competent counsel.The opinion observed that referring the prospective client to competent counsel does not violate the lawyer’s duty of loyalty, because, as Rule 1.3 makes clear, “zealous representation does not require a lawyer to press for every advantage that might be realized for a client.” (quoting Cmt. [1] to D.C. R. Prof. Conduct 1.3). Opinion 326 also reasoned that lawyers regularly advise potentially adverse parties to retain counsel under Rule 4.3, and thus “[w]e do not believe that the further step of recommending a specific lawyer or list of lawyers prejudices the referring lawyer’s existing client.” Finally, the Opinion noted that “inherent in our adversary system is the principle that persons ought to be represented by competent lawyers and that disputes ought to be resolved on their merits. Assisting a person to obtain competent representation is entirely consistent with that principle.”
While these opinions take the position that there is no prohibition in the disciplinary rules to recommending competent counsel, there are several points to bear in mind:
First, there is no obligation to recommend counsel when declining a case, and the lawyer would be free to refuse to do so.3
Second, while the lawyer may state that she is declining the case because of a conflict, the identity of the firm client and the details of that representation remain protected by SCR 20:1.6 and should not be disclosed.4
Third, in recommending a specific lawyer or firm, the lawyer should have a good faith basis for believing that the recommended lawyer would competently represent the prospective client.
Finally, the lawyer should be clear with the prospective client that the lawyer cannot represent the prospective client and cannot give legal advice.
In Case You Missed It: Read Past Ethical Dilemmas
Ethical Dilemmas appears monthly in InsideTrack. Check out these topics from recent issues:
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Can You Bill a Client for Creating the Bill? April 4, 2018
Is it OK to bill your client for the time spent in creating the bill and for doing other administrative tasks? Or it is unreasonable to bill clients for time spent on administrative tasks that are only ancillary to the provision of legal services to the client?
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When Can You View Social Media Information on an Opposing Client? Feb. 21, 2018
When your client has access to information helpful to the client on an opposing party's social media page, what, if anything, can you do with it?
Endnotes
1 The other opinions are N.Y. State op. 1018 (2014) and D.C. Ethics Op. 326 (2004).
2 The opinion is careful to take no position on the situation where the conflict arises from representation of the another client in the same matter.
3 Or the lawyer may simply recommend that the prospective client contact the Lawyer Referral and Information Service (800) 362-9082.
4 See Wisconsin Ethics Opinion EF-17-02. Because it is not necessary to disclose the identity of the firm client to detect or resolve a conflict, the exception in SCR 20:1.6(c)(6) would not apply. If, however, the lawyer determined that the conflict was waivable and was seeking to obtain necessary waivers, then SCR 20:1.6(c)(6) would likely apply.
