Editor's Note:
State Bar Ethics Opinions cite the applicable California Rules of Professional Conduct in effect at the time of the writing of the opinion. Please refer to the California Rules of Professional Conduct Cross Reference Chart for a table indicating the corresponding current operative rule. There, you can also link to the text of the current rule.
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Is it ethically proper for an attorney to require a potential client to execute a blanket waiver of the client's right to disqualify the attorney in any other matter, based on a breach of the attorney's duty to maintain confidences and/or to avoid conflicts of interest?
Such an agreement is not ethically improper per se, is enforceable in appropriate circumstances, but creates a potential for violations of the Rules of Professional Conduct which are non- waivable by the client.
Business and Professions Code section 6068, subdivision (e).
Rules 3-110, 3-310, 3-400 and 3-700 of the Rules of Professional Conduct of the State Bar of California.
In a matter currently in litigation, lead counsel has requested local counsel to assist in the trial of the case. Local counsel represents a number of clients whose interests are presently or potentially adverse to lead counsel's client. Local counsel is willing to assist in the trial, but only on condition that lead counsel's client waive its right to disqualify local counsel in any matter in which local counsel represents parties adverse to lead counsel's client, and regardless of whether confidential information received by local counsel is relevant to the subsequent representation. The Committee has been asked to opine on the ethical propriety of the agreement.
Absent informed written consent, rule 3-310(A) of the California Rules of Professional Conduct precludes a lawyer from accepting or continuing representation if the lawyer has had a relationship with another party interested in the representation; rule 3-310(B) precludes the concurrent representation of multiple clients with conflicting interests; and rule 3-310(D) precludes acceptance of employment adverse to a present or former client if the lawyer has obtained material confidential information from the present or former client. Rule 3-310(F) defines "informed" as "full disclosure to the client of the circumstances and advice to the client of any actual or reasonably foreseeable adverse effects of those circumstances upon the representation." Finally, section 6068, subdivision (e) of the Business and Professions Code prohibits an attorney from revealing secrets and confidences of his or her client at any time, but that protection, too, is waivable by the client.
Whether a client's waiver of the protections provided by rule 3-310 or Business and Professions Code section 6068, subdivision (e) is "informed" is obviously a fact-specific inquiry. Nonetheless, the leading case of Maxwell v. Superior Court (1982) 30 Cal.3d 606 [180 Cal.Rptr. 177, 639 P.2d 248] is instructive. In Maxwell, an indigent criminal defendant charged with a capital offense entered into a fee agreement with his attorneys, granting them media rights in the story of his life, including the criminal matter then pending. The contract spelled out in general terms the potential conflict of interest issues, the extent of the waiver of confidentiality, and the risks inherent in the arrangement. The trial court after determining that the defendant knowingly and willingly had agreed to the contract, nevertheless disqualified the attorneys because of the inherent conflict of interest created by the agreement.
The California Supreme Court reversed and ordered the attorneys reinstated. Focusing specifically on the blanket waiver aspect of the agreement, the court stated that:
In determining whether the waiver of potential conflicts is knowing, intelligent, and unconditional, the trial court must 'navigate adroitly between the Scylla of denying a defendant the right to determine his own fate and the Charybdis of violating his right to counsel. . . . ' . . . Some federal cases have implied that the court's inquiry must separately explore each foreseeable conflict and consequence and that defendant's waiver may extend only to matters discussed in detail on the record.
. . . Rules that are that strict seem neither necessary nor workable. Not all imaginable consequences of a conflict that inheres in a life-story contract can be predicted before the trial . . . . The trial court's procedure here, we think, sufficiently established that petitioner was competent to waive his rights.
. . . The judge also acted properly by referring the disclosure provisions of the agreement and carefully determining that petitioner had read and understood each one. Those provisions explained the basic problem - that counsel's economic motivations might run counter to petitioner's trial concerns. They warned that counsel might be tempted in specified ways to sabotage petitioner's defense. They also cautioned that not all problems could be foreseen. Waiver of the consequences of potential conflict was not inadequate simply because neither the court nor the agreement undertook the impossible burden of explaining separately every conceivable ramification. (Maxwell v. Superior Court, supra, 30 Cal.3d at pp. 621-622.)
In arriving at its conclusion, the Maxwell court stressed the importance of the right of a criminal defendant to counsel of his choice. On the other hand, the prejudice to a defendant charged with a capital offense of having representation compromised by a conflict of interest is extreme. The issue presented to this Committee is different, in that it involves neither the Constitutional issues unique to criminal defendants, nor the severity of the prejudice of compromised representation in a capital case. In addition, Maxwell involved a potential conflict of interest between lawyer and client; here we are concerned with a potential conflict between one client and another. Despite these differences, the Committee believes that Maxwell stands for the general proposition that an advance waiver of both conflict of interest and confidentiality protections is not, per se, invalid.
Consequently, it is the opinion of the Committee that if, within the meaning of rule 3-310(F), the client is "informed" of the potential risks that are foreseeable at the time of the consent, no Rule of Professional Conduct is violated by the attorney's requiring the client's advance waiver. Moreover, to the extent that the client is adequately informed of the information and communications which may be disclosed and the use to which they may be put, we believe that the subsequent disclosure of such information by the attorney does not violate either rule 3-310 or Business and Professions Code section 6068, subdivision (e).
A more difficult question is presented if the conflict of interest is only potential at the commencement of the representation, but subsequently ripens into an actual conflict. Maxwell held only that "When the possibility of significant conflict has been brought to the court's attention and the danger of proceeding with chosen counsel has been disclosed generally to defendant, he may insist on retaining his attorneys if he waives the conflict knowingly and intelligently for purposes of the criminal trial." (Maxwell v. Superior Court, supra, 30 Cal.3d at p. 619.) The court noted, however, that "We do not deprive the trial court of power to act when an actual conflict materialized during the proceedings, producing an obviously deficient performance. Then the court's power and duty to ensure fairness and preserve the credibility of its judgments extends to recusal even when an informed defendant, for whatever reason, is cooperating in counsel's tactics." (Id. fn. 10.)
In addition to the caveat expressed by the Maxwell court, the Discussion section of rule 3-310 suggests that advance waivers of potential conflicts are insufficient if the lawyer subsequently represents another client against the client who executed the waiver. In discussing the circumstances under which multiple clients with potentially adverse interest might wish to consent to representation by one attorney, the Discussion states that "if the potential adversity should become actual, the member must obtain the further consent of the clients pursuant to paragraph (B)."
Both the language of Maxwell and the rule 3-310 Discussion lead the Committee to conclude that in the context of a litigated matter, the court retains the right to disqualify counsel, despite an advance blanket waiver, if continued representation would seriously compromise the integrity of the judicial process and the fairness of the particular proceeding.1 Whether such disqualification would be required is again a fact specific inquiry, but the two most significant factors involved are the degree of involvement in the original matter and the nature of the conflict in the subsequent representation. Local counsel's role in the original matter may range from serving as a "mail drop" for papers and correspondence to participating fully in preparing and trying the case. As the degree of involvement increases so, obviously, does the possibility of a direct conflict of interest should local counsel become involved in a matter in which it is opposing lead counsel's client. Moreover, as the involvement increases, so does the possibility that the original waiver was not "informed."
In addition, the nature of the subsequent conflict of interest may range from simply representing two clients in entirely unrelated matters to actually representing both sides in the same dispute. While a court would doubtless preclude a lawyer from representing both sides simultaneously,2 the Committee believes that in such situation, if the original waiver was informed, local counsel could withdraw from its representation of lead counsel's client and continue to represent its own client even if otherwise confidential information would be used against lead counsel's client.
If the subsequent representation was unrelated to the original matter, the Committee believes that local counsel could continue its participation in the original matter at the same time as it is representing its own client in the unrelated matter.
Wholly apart from the effectiveness of the waiver for purposes of disqualification, is its effect on the obligation of the lawyer to perform competently. Rule 3-110 prohibits an attorney from intentionally failing to perform legal services competently. In Maxwell, the attorneys specifically provided in the retainer agreement that they would "conduct all aspects of the defense of Maxwell as would a reasonably competent attorney acting as a diligent conscientious advocate." (Maxwell v. Superior Court, supra, 30 Cal.3d at p. 611.) Whether or not the advance waiver is sufficient to preclude a disqualification motion, it plainly cannot insulate the lawyer from disciplinary action by the State Bar if, as a result of the conflict of interest, the lawyer fails to perform services competently. Indeed, should it become clear to the lawyer that he or she cannot perform competently under the circumstances, the lawyer would be obligated under rule 3-700(B)(2) to withdraw from the representation, and his or her failure to do so would result in an independent violation of that rule.
Nor would the waiver, if otherwise valid, protect the lawyer from a malpractice action by the client if the conflict prevented the lawyer from performing competently. To the extent that the agreement in question is intended to so protect the lawyer, the mere execution of it would subject the lawyer to discipline under rule 3-400, which forbids contracts intended to prospectively limit malpractice liability.
In summary, then, it is the opinion of the Committee that the execution of an advance waiver of conflict of interest and confidentiality protections is not per se improper; that to the extent that the waiver of confidentiality is "informed," it is valid; that to the extent that a potential conflict ripens into an actual conflict, the advance waiver may or may not be sufficient depending upon the degree of involvement and the nature of the subsequent conflict; that regardless of the validity of the waiver, it cannot be asserted as a defense to a disciplinary proceeding charging incompetent performance of legal services; and that under no circumstances may the agreement be used for the purposes of limiting the lawyer's civil liability for malpractice.
In concluding, we observe that it is possible in appropriate circumstances and with knowledgeable and sophisticated clients to clarify obligations and responsibilities by agreements of the sort discussed. It is also possible that in many circumstances the agreement will be ineffectual and may well be perceived as over- reaching on the part of the lawyer.3 Consequently, the Committee wishes to make clear that this opinion should not be construed as an endorsement of the type of agreement discussed.
This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of the State Bar of California. It is advisory only. It is not binding upon the courts, the State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibilities or any member of the State Bar.
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