By Jessica Gray Kelly and Lily Malloy
It is common practice for lawyers and law firms to represent multiple clients in the same matter. For example, a lawyer may represent an employer and an officer or director of the employer in a noncompete case, multiple family members in estate planning, or business partners in forming a company. Joint representation is particularly advantageous when it comes to minimizing legal costs, improving information sharing, and simplifying the coordination of claims and defenses. It can, however, raise significant and tricky ethical concerns and requires careful management and oversight by the lawyer.
Ethical Considerations
Before entering into any joint representation, lawyers should be mindful of the Massachusetts Rules of Professional Conduct governing such representation, especially those addressing conflicts of interest and confidentiality.
Conflicts of Interest
Joint representations are a minefield for conflicts of interest issues.
Rule 1.7 prohibits lawyers from representing a client if the representation involves a concurrent conflict of interest. The rule includes the obvious prohibition against lawyers representing one client in a matter directly adverse to another client in either a litigation or a transactional matter.
The not-as-obvious conflicts arise from the rule’s prohibition on lawyers representing a client when that representation would be “materially limited” by the lawyer’s representation of another client, a former client, a third person, or by the lawyer’s own interests. In the context of a joint representation, a material limitation conflict exists if the lawyer represents two clients in the same matter, and one client’s interests do not fully align with the other client’s interests. This could happen if one client wants to pursue a different strategy than the other client, if one client faces more liability than the other client, or if one client blames the other client for what happened. This type of conflict may exist at the outset of the contemplated joint representation or it may arise during the course of the representation.
Confidentiality
The confidentiality rules can also present challenges in joint representations.
Rule 1.6 prohibits lawyers from revealing confidential information relating to the representation of a client unless the client gives informed consent. In joint representation, a lawyer’s duty of confidentiality to one client may impede his or her ability to discharge the duty of loyalty owed to the other client. See Rule 1.8(b). For example, in a litigation where a lawyer jointly represents an employee and his employer against a pedestrian who alleges that she was struck by the company’s delivery truck driver, the employee admits to the lawyer that he was running a personal errand while driving the employer’s truck, and demands that the lawyer keep the information confidential. The lawyer faces competing interests between preserving the employee’s confidentiality and fulfilling the duty to inform the employer of this critical information, thus pulling the lawyer’s loyalties in two opposite directions. A lawyer cannot keep information material to the representation confidential, as between the two clients. In this circumstance, in the absence of the employee’s permission to share the information with the employer, the attorney should explore whether the joint representation needs to be terminated.
Consequences of Failed Joint Representation
Lawyers who fail to properly handle joint representation risks expose themselves to a range of consequences. They may face disqualification, malpractice liability, and discipline from the Board of Bar Overseers.
Two notable decisions serve as cautionary tales illustrating the severity of these ethical pitfalls. In In re Wainwright, 448 Mass. 378 (2007), two attorneys were sanctioned with public reprimands for their dual representation of both the debtor and creditor in the same transaction without obtaining informed consent from either client. In McCann v. Davis, Malm & D’Agostine, 423 Mass. 558 (1996), a former shareholder in a corporation brought a malpractice action against a law firm that represented both the shareholder, as the seller of corporate stock, and the buyer. The firm prepared documents to carry out the sale but never advised the plaintiff that he should have separate counsel representing him as the seller. The law firm avoided liability on causation grounds, but the Massachusetts Supreme Judicial Court noted that the firm’s failure to obtain client consent or provide full disclosure of the parties’ differing interests—contrary to the ethical rules—supported the jury’s negligence finding.
Practice Tips for Avoiding Common Pitfalls
To reduce ethical and liability risks, lawyers should adopt proactive strategies when engaging in joint representation:
- Explain the Risks and Benefits of Joint Representation. Before accepting an engagement entailing joint representation, lawyers should advise the clients about the benefits and risks of joint representation and outline what will happen if a conflict arises, including the possibility that the lawyer might not be able to continue with the joint representation. Lawyers should make clear that their role is to objectively explain the pros and cons of each client’s position but not advocate in favor of one side over the other. Lawyers also need to inform joint clients that communications with one client are not confidential as to the other client(s).
- Draft Engagement Letters. Lawyers should ensure that their engagement letters for a joint representation fully and clearly identify each client and the scope of the engagement. The engagement letter should define the lawyer’s roles and responsibilities and the boundaries of representation, include provisions for handling potential future conflicts, and note the lawyer’s limitations on advocacy in the event of a conflict.
- Obtain Informed Consent. If a conflict exists (and is waivable), or may arise in the future, lawyers should obtain informed consent in writing from all clients in the joint representation. This ensures all clients know the benefits and risks of joint representation and consent to the terms and proposed course of action.
- Monitor for Conflicts. Lawyers should continually monitor for conflicts throughout the entire representation. The relationship between jointly represented clients may change or evolve, potentially leading to misaligned interests and ethical challenges. Conflicts can also emerge from the service of subpoenas on third parties, hiring of experts, changes to a client’s ownership or corporate structure, and new parties being added to the case or transaction, among other scenarios.
Withdraw If/When Necessary. Rule 1.16 allows a lawyer to withdraw when the representation will result in violation of the Rules of Professional Conduct or other law. If a conflict cannot be resolved, the lawyer must determine whether the rules require withdrawal.
Conclusion
Joint representation offers significant benefits in certain situations but also presents complex ethical issues that require careful management and vigilance. Clear engagement letters, written consent, and close monitoring for evolving conflicts help reduce these risks and ensure compliance with the Rules of Professional Conduct.
Jessica Gray Kelly is a partner and Chair of Freeman Mathis & Gary’s Professional Liability/Errors and Omissions national practice section. She represents lawyers and law firms in malpractice matters and in disciplinary actions before the Board of Bar Overseers.
Lily Malloy is an associate in Freeman Mathis & Gary’s Professional Liability/Errors and Omissions and Construction & Design Law practice sections.
