Ethics Question of the Month March 2022

The Things We Do For Love

The Question

Can your marriage to another attorney marriage cause client conflicts?

The Situation

Husband and Wife are litigation partners in two different law firms.  Wife’s firm is preparing to file a lawsuit on behalf of a firm client against a corporation that they know is represented by Husband’s firm.  Wife’s firm is handling the case on a contingency basis with a large upside that would generate significant income for the firm’s partners.  Husband’s firm handles all litigation matters for the prospective defendant, so they know that Husband’s firm will be retained as defense counsel after suit is filed. 

The client has worked with Wife before and wants her to be involved in the litigation. But her firm is concerned that putting her on the pleadings might cause the firm to be conflicted out of the representation, thus  missing out on a significant contingency fee.  On the other hand, Wife’s firm fears that if her name is left off the original petition, Husband’s firm will designate him as lead defense counsel in an effort to conflict out Wife or even Wife’s entire firm.    

The Question

If Wife’s firm goes forward with filing the lawsuit, which is most accurate?

The Correct Answer is D Of 22 Responses, 9% are correct.

  1. A 2
  2. B 3
  3. C 4
  4. D 2
  5. E 11

The Explanation

Nothing in the Texas Disciplinary Rules of Professional Conduct indicates that spouses working at different firms representing opposing parties in litigation creates an inherent conflict.  Any such conflict would fall under Rule 1.06, the relevant portions of which are highlighted below:

(a) A lawyer shall not represent opposing parties to the same litigation.

(b) In other situations and except to the extent permitted by paragraph (c), a lawyer shall not represent a person if the representation of that person:

(1) involves a substantially related matter in which that person's interests are materially and directly adverse to the interests of another client of the lawyer or the lawyer's firm; or

(2) reasonably appears to be or become adversely limited by the lawyer's or law firm's responsibilities to another client or to a third person or by the lawyer's or law firm's own interests.

(c) A lawyer may represent a client in the circumstances described in (b) if:

(1) the lawyer reasonably believes the representation of each client will not be materially affected; and

(2) each affected or potentially affected client consents to such representation after full disclosure of the existence, nature, implications, and possible adverse consequences of the common representation and the advantages involved, if any.

d) A lawyer who has represented multiple parties in a matter shall not thereafter represent any of such parties in a dispute among the parties arising out of the matter, unless prior consent is obtained from all such parties to the dispute.

(e) If a lawyer has accepted representation in violation of this Rule, or if multiple representation properly accepted becomes improper under this Rule, the lawyer shall promptly withdraw from one or more representations to the extent necessary for any remaining representation not to be in violation of these Rules.

(f) If a lawyer would be prohibited by this Rule from engaging in particular conduct, no other lawyer while a member or associated with that lawyer's firm may engage in that conduct.

Ethics Opinion 666 (2016) examines the potential personal interest conflicts that might arise when spouses work at law firms representing opposing parties in litigation. The Opinion states:

A lawyer does not necessarily or automatically have a conflict of interest merely because the lawyer’s law firm represents a party adverse to a party represented by the law firm of the lawyer’s spouse. Such a lawyer will have a conflict of interest, however, if the lawyer’s representation “reasonably appears to be or become adversely limited” by the lawyer’s relationship with his or her spouse. In most cases this will be a question of fact.

Here, the analysis is driven by the fact that Wife’s firm has a potentially large contingency recovery that would benefit her as a partner and benefit Husband as her spouse in a community property state.  Husband has a clear conflict because of his own potential financial gain at the expense of his client. While Rule 1.06(c) does allow the clients to waive the conflict in certain circumstances, such a waiver requires that the lawyer “reasonably believes the representation of each client will not be materially affected.”  Under these facts, any such belief would not be reasonable. 

While some jurisdictions would allow Husband’s firm to represent the defendant if Husband is screened and does not participate in the litigation, in Texas Husband’s personal conflict would be imputed to the entire firm under Rule 1.06(f).  The best answer is D.

Bluebook Citation

The Things We Do For Love: Ethics Question of the Month - March 2022, Texas Center for Legal Ethics (2022), from https://legalethicstexas.com/ethics-question-of-the-month/ethics-question-of-the-month-march-2022/ (last visited Feb 07, 2023)