ISBA Ethics Opinions by IRPC Rule 1.7

A lawyer who receives compensation in exchange for the referral of clients to an investment advisor has a conflict of interest and is involved in a business transaction with a client. Whether a lawyer can engage in such a transaction must be analyzed on a case-by-case basis.

A law firm seeking to represent the employees of an adverse corporate entity in matters unrelated to the current dispute may do so, but only if the firm determines it can comply with Rule 1.7 and the appropriate parties provide informed consent.

A lawyer in possession of funds whose ownership is disputed is required to hold those funds until the dispute has been properly resolved, or to initiate an interpleader action to have the court decide the proper disposition of the money.

An Illinois lawyer may “outsource” legal and legal support services relating to a matter provided the lawyer reasonably believes that the other lawyers’ and nonlawyers’ services will contribute to the competent and ethical representation of the client and reasonable measures are taken to protect client information and to avoid conflicts of interest. Disclosure to, and informed consent by, the client will ordinarily be required. Informed client consent is always required if the lawyer delegates or transfers complete or substantial responsibility for a matter to an unaffiliated lawyer.

Lawyers should carefully consider fee agreements under which they may be required to use part of their court-awarded fees in a class action case to compensate class representatives beyond the amount the court approves for that purpose. Such agreements create a substantial risk that the lawyer is operating under a conflict of interest that cannot be waived, because such a fee agreement places the interests of the lawyer’s client, the class representative, at odds with the interests of absent class members, to whom the lawyer owes fiduciary obligations. In addition, such a fee agreement could, in some circumstances, violate the prohibition on sharing fees with non-lawyers.

In most circumstances, a lawyer will not be able to represent both the buyer and seller in a real estate transaction.

A law firm may continue to represent a city in municipal matters even though a paralegal employed by the firm is a member of the city council and the council has authority over the work and whether the firm’s bills get paid.

A lawyer who represents the second wife in obtaining child support for her two young children from a former husband has a conflict of interest with the first wife of the same husband under Rule 1.9 because of his previous representation of the first wife in obtaining child support from that same husband for her child who is now 15 years old. The lawyer also has a “material interest” conflict under Rule 1.7 in connection with his representation of the second wife in her child support claim. These two Rules require the lawyer to obtain the informed consent of both wives in order to undertake the representation.

A State’s Attorney may represent his county in union negotiations while simultaneously calling law enforcement personnel as witnesses in criminal cases provided the attorney has completed an analysis of any conflicts of interest pursuant to Rule 1.7 of the Illinois Rules of Professional Conduct.

When a lawyer discovers that his or her client in an administrative hearing has previously submitted false material evidence to the tribunal, the lawyer must attempt to persuade the client to correct or withdraw the false evidence, but if that fails and if the effect of the false evidence cannot otherwise be undone, the lawyer must disclose the false evidence.

A lawyer ordinarily represents a partnership as an entity for conflicts of interest purposes. Where a lawyer has represented a partnership and all individual partners in various matters in a common representation, and one partner subsequently files an arbitration matter against another partner, whether the lawyer may represent the defending partner with informed consent will depend on the circumstances. Similarly, whether the lawyer can continue to represent the partnership or any of the partners in other matters with informed consent will depend on the circumstances.

Formal mentoring programs create an opportunity for a new or recently licensed lawyer to receive professional guidance and practical knowledge from a more experienced lawyer. However, both the new lawyer and the mentor must take care to protect client confidentiality and the attorney-client privilege and take care to avoid creating a conflict of interest with existing clients.

A lawyer may not continue to represent a plan commission or city council after the lawyer’s partner has appeared before those bodies to oppose a zoning change. The lawyer’s recusal from the plan commission’s or city council’s consideration of the partner’s zoning matter will not remove the conflict of interest. However, the plan commission and city council may give informed consent to the lawyer’s continued representation in unrelated matters if the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation despite the conflict of interest. If the lawyer’s partner represents others in the zoning matter before the plan commission or city council, the partner must disclose the representation and conform to the applicable rules regarding candor to a tribunal.

A conflict of interest would be created between Lawyer’s representation of one client and other similar clients if Lawyer were to sign a confidentiality agreement required by an accounting firm that would prohibit Lawyer from divulging a package of ideas developed by the accounting firm that would reduce the client’s tax obligations. For purposes of the Illinois Rules of Professional Conduct, a lawyer cannot agree to keep confidential interpretations of the law.

A lawyer may not provide a personal guarantee that s/he will pay the liens and subrogation claims chargeable against a client’s settlement proceeds.

A lawyer may represent a client in a matter unrelated to a prior divorce proceeding in which the lawyer represented former client who now may testify against his current client. However, the lawyer may not cross-examine the former client unless it can be done both without using information relating to the prior representation to the disadvantage of the former client and without materially limiting his ability to effectively cross-examine the former client to the detriment of the current litigation client.

Two lawyers in the same law firm may continue to represent two different governmental units at the same time where the agencies interest are potentially in conflict, but there is no current direct adversity between the clients. Under traditional methods for separating organizational entities, the units of government are separate clients for conflicts of interest purposes; the units function under separate boards, a different set of rules, and the representation of one entity is not of significant importance to the other entity. Depending on the foreseeability of future conflicts, however, the lawyer may have a duty to inform their clients of the limitations that would be placed on their representation of each unit should an actual conflict develop.

A lawyer who receives fees as a trust administrator from a trust company to whom he refers clients has a conflict of interest and is involved in a business transaction with a client; the lawyer must disclose his relationship with the trust company to the client, the method and source of his compensation, and obtain the client's consent after disclosure.

A lawyer should not undertake representation of one spouse in a marriage dissolution matter if the lawyer already represents the client's spouse in another family law matter.

Lawyer may represent husband against wife in divorce where wife is not represented; but lawyer may not, at same time, represent husband and wife jointly in filing for bankruptcy.

Patent law firm may not provide or receive a royalty-type fee for services matching client-inventors with client-product promoters, unless the firm can rebut the presumption of undue influence and the firm obtains informed written consent of all affected clients to the fee arrangement, to the potential disclosure of confidential information, and to the inherent conflicts of interest. The specific facts of particular situations may make consent to certain conflicts of interest unreasonable. Any fees for such services must be fair and reasonable to the clients.

Lawyer who previously worked for DCFS as supervisor and not as lawyer may represent client in juvenile court provided (1) lawyer did not personally and substantially participate in same matter while at DCFS; and (2) lawyer did not acquire relevant confidential information about DCFS or about person adverse to his client that would be used against DCFS or against such person. Under appropriate circumstances DCFS or person adverse to client could waive objection to lawyer's representing client.

It may be professionally improper for a lawyer to represent both a renouncing spouse and a claimant in the same proceedings.

It is not professionally improper for a lawyer to represent the same person in a representative capacity as executor and in an individual capacity as debtor to the estate, especially where a special administrator has been appointed to collect the debt.

It is not necessarily improper for a lawyer whose firm represents a city in defense of a variety of civil matters to undertake representation in unrelated matters of clients charged with violations of the Human Rights Ordinance of the city before its Human Rights Commission if both clients consent after full disclosure.

Any client of any lawyer in a law firm or of the firm itself is a client of every lawyer in the firm for the purpose of conflict of interest analysis.

Representation of a public body client in defense of various civil matters is directly adverse to the interests of that client in representation of another client before the Human Rights Commission, a creature of the city, empowered to enforce the city’s Human Rights Ordinance.

The fact that a corporation's lawyer is related to its president and principal shareholder does not, standing alone, create a conflict of interest.

Partner of lawyer who is also a municipal police officer should not represent a client in a claim against the municipality.

It is professionally improper for a law firm to participate in a cellular telephone service offering legal advice where, based on the facts presented: the promotional materials are misleading; the promotional materials fail to include the name of a lawyer responsible for the contents; the firm may be participating in improper fee splitting and a partnership with a nonlawyer; there is no apparent avoidance of conflicts of interest; and client confidences may not be preserved.

An attorney should not represent both the driver and the passenger of a vehicle in a claim against the driver of the adverse vehicle. The driver and passenger may, in unusual circumstances, consent to dual representation after appropriate disclosure.

Attorney report is not mandatory under Rule 8.3 unless the attorney has knowledge, which is not otherwise protected, of a violation of Rule 8.4(a)(3) or (4).

Attorney is required by Rule 1.15(c) to hold in a separate account, the funds disputed by the client and the client's former attorney.

An interpleader action is not inconsistent with Rule 1.15.

Attorney practicing before Internal Revenue Service may not give reductions in fees to IRS agent before whom attorney practices in exchange for agent "doing what he could to further career of attorney."

There is no prohibition against lawyer engaging in divorce mediation business with a non-lawyer and operating the business from the law office where lawyer does not represent either party in the underlying divorce

Where legal services are provided for a client, which services also benefit a third party, the third party cannot establish an attorney-client relationship with the attorney in conflict with the initial client merely by paying the bill for the services initially rendered.

Lawyer who is a part time Assistant State's Attorney engaged in criminal work, may not represent defendants in criminal matters in a contiguous county absent appropriate consent if a conflict of interest exists.

It is improper for assistant public defenders sharing defense of delinquency cases from a common office, with shared secretarial and investigatory services, severally to represent both parent and child in a neglect/dependence proceeding.

An attorney aids in the unauthorized practice of law, and violates Rules of Professional Conduct regarding conflict of interest, fee splitting, and the provision of independent legal advice, when the attorney participates in a financial planning company's arrangement whereby the company gathers information necessary to prepare estate planning documents, prepares the documents, and send the documents to the client's selected attorney for review, legal advice, and execution.

Attorney retained by mother and minor daughter to pursue paternity action. Case is tried, lost, appealed, briefed and argued on appeal. While awaiting decision by Appellate Court, attorney may not honor mother's instruction to dismiss appeal.

It is permissible for two attorneys to form a partnership where one is a City Attorney prosecuting ordinance violation and the other is a part-time public defender in the same county. However, neither may defend clients charged with violations of said City's ordinances nor charges initiated or investigated by said City's Police Department.

Multiple representation of buyer and lender in real estate transaction may be prohibited where interest of each cannot be adequately represented.

Lawyer who is a part time Assistant State's Attorney, engaged in felony work, should not represent prisoners in civil rights actions against law enforcement officials of an adjacent county.

1. It is improper for attorneys to sign a surety bond on behalf of another attorney from the same firm, when the firm has been hired by the attorney to represent him in his capacity as administrator of a decedent's estate.
2. It is not necessarily improper for a judge to appoint an attorney as administrator of an estate, even though that attorney has made financial contributions to the judge's campaign committee, and another attorney from the same firm served on the judge's campaign committee when the judge sought to be elected to his present judicial post; whether the attorney should accept such appointment depends upon whether the appointment is likely to result in a violation of the Rules of Professional Conduct or other law, and ultimately whether the acceptance of the appointment will be prejudicial to the administration of justice.

Lawyer who is a city council member and the lawyer's firm generally should not represent clients before city council, even if lawyer abstains from participation in matters handled by the firm.

Division of fees permitted when proportionate to services performed or responsibility assumed. Fees may not be divided with lawyer under ethical impediment to representing the client.

Under stated facts, it is professionally improper for lawyer to insist that client name lawyer's bank client as fiduciary.

Where an insurance company provides counsel to its insureds, the retained attorney's primary obligation is to the insured/client. The attorney for insured/client may not allow the exercise of his independent professional judgment to be influenced by one other than his client.

1. A lawyer who is also an insurance agent may perform legal services and provide insurance services for same client.
2. A lawyer who is also an insurance agent may refer a client to another insurance agent and receive an insurance commission upon disclosure and consent.

Multiple Representation of Business Broker and the Seller and Buyer of a Business in the Same Transaction is Professionally Improper.

A lawyer who is elected member of school board may not accept private employment to oppose an annexation supported by school board.

A lawyer director of Student Legal Services at a university whose office is funded by a portion of student activity fees paid by all students at the university may defend a student against criminal charges of battery against another student and may represent one student in a civil case against another student, provided that such lawyer has not consulted with or represented the other student involved.

It is generally improper for a lawyer to represent both the buyer and the seller in a real estate transaction. Instances where such multiple representation may appropriately be undertaken are extremely rare and depend on the facts of the particular situation.

A law firm may, with consent, represent an insurance company in a declaratory judgment action seeking to have other insurers provide coverage for the insurance company's insured while defending that insured in the underlying action where the insurance company will not contest coverage.

Representing a police officer in departmental disciplinary proceedings does not disqualify the attorney from defending criminal cases investigated by the same police department as long as the matters are not related.

Lawyers of a law firm may act as criminal defense counsel where other lawyers of firm act as Special Assistant State's Attorneys in the same county where the nature of the latters' work is unrelated to that of the former and if both clients consent after full disclosure. A public entity may grant consent to partners or associates of a part-time public lawyer to work on unrelated matters.

There is no per se rule against two Assistant Public Defenders who share office space but maintain separate law practices representing defendants with conflicting interests provided each fully discloses the situation to the clients and obtains the clients' consents and provided further that each can represent his client with undivided allegiance.

It is ethically improper for these two Assistant Public Defenders to involve a common secretary if they represent defendants with conflicting interests.

An Assistant State's Attorney who is responsible for all family court matters in the county may not represent private clients in marriage dissolution cases in the same county.

A lawyer who is a real estate broker may not, nor may an associate lawyer, act as lawyer for a customer or for the other party to the transaction without consent after full disclosure. Such representation may also violate the Illinois Real Estate License Act of 1983.

A lawyer representing a corporation in bankruptcy proceedings may not at the same time file a Workmen's Compensation claim on behalf of a former employee of the corporation arising from an injury suffered while in the employ of the corporation.

A law firm which represents the sole shareholder of a corporation may not represent an individual against whom the corporation has a damage suit pending.

A conflict of interest exists which prevents a lawyer or his firm from representing a regional planning commission of which the lawyer serves as a member.

It is not a per se conflict to represent a client where a blood or spousal relation may have an interest.

A lawyer who is a part-time Assistant States Attorney assigned to civil cases cannot represent private clients on zoning matters before the County Board.

A partner of a law firm can represent a defendant in a criminal prosecution if another partner in that same firm is a Special Assistant State's Attorney responsible for civil matters only, and the client is fully advised and grants a waiver.

Lawyer may not represent a contract purchaser who seeks amendments to the contract where that lawyer's law firm represented the contract seller at time contract entered into.