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Ethics Opinion

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CI-943

October 24, 1983

SYLLABUS

    The moving party seeking disqualification of a lawyer under DR 5-102(A) based on the assertion that it is obvious that the lawyer ought to be called as a witness on behalf of a client, has the burden of showing that the lawyer's testimony is necessary to support the claim of the attorney's client.

    If a party moves for disqualification of a lawyer under DR 5-102(B) based on the assertion that the moving party will call the lawyer to testify in a manner prejudicial to the client, the moving party has the burden of showing such prejudice.

    Since the withdrawal mandate of DR 5-102 is a drastic measure susceptible of becoming a trial tactic which could deprive the client of his or her right to counsel of choice, the moving party could not meet the burdens set forth in (1) and (2) by merely asserting that a lawyer will be called as a witness; i.e., the lawyer must show necessity of the testimony and/or prejudice to the client.

    When a lawyer's testimony is necessary to support a client's cause of action, and withdrawal from representation of the client would work a substantial personal and financial hardship upon the client, a lawyer should continue as counsel despite the necessity for such testimony.

    References: DR 5-101(A), DR 5-101(B); CI-821.

TEXT

This inquiry relate the following hypothetical facts:

    Another lawyer in your law firm currently represents Corporation A and on its behalf has negotiated an agreement with Corporation B, in which Corporation B guarantees, in writing, the payment of funds to Corporation A. This agreement was reached following numerous discussions and the receipt of oral and written promises from Corporation B to guarantee payment to Corporation A. In addition, the meeting at which the final agreement was reached lasted approximately three hours, during which time numerous negotiations occurred with the lawyer in your firm representing Corporation A. Subsequently, Corporation B refused to fulfill its guarantee and Corporation A has requested that you bring suit to enforce that guarantee. The inquiry thereafter states: "An attorney for Corporation B raises the issue of whether or not our law firm can represent Corporation A in this law suit since they intend to call the lawyer in my firm, who represented Corporation A. Although it will be our position that the entire agreement is contained in the written document, we can anticipate that Corporation B's defense will be that there were further agreements that were not reduced to writing concerning assignments of some of the payments."

Given these facts, you wish to know whether or not you are required to withdraw as counsel pursuant to DR 5-102(A) or whether you may continue your representation of Corporation A until the actual conduct of the trial; your inquiry indicating your belief that the case will settle long before trial. Additionally, Corporation A urgently wishes you to retain its lawyer and does not desire to retain other counsel; the client feeling that the time delay and further legal costs involved in familiarizing subsequent counsel with this complex controversy would be detrimental, as already Corporation A has paid in excess of $20,000 in fees to your firm with respect to this matter over the last year.

DR 5-101(A) and (B) provide that a lawyer must refuse employment or withdraw from employment if the lawyer knows that he or she or a lawyer in his or her firm will be called as a witness or if it is obvious that he or she or a lawyer in his of her firm ought to be called as a witness. See CI-319; ABA Formal Opinion 167. Four exceptions to this rule are enumerated in DR 5-102(A). The lawyer or a lawyer in the lawyer's firm may testify:

    "(1) if the testimony will relate solely to an uncontested matter.

    "(2) If the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony.

    "(3) If the testimony will relate solely to the nature and value of legal services rendered in the case by the lawyer or the lawyer's firm to the client.

    "(4) As to any matter, if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or the lawyer's firm as counsel in the particular case."

The facts describe indicate that the lawyer who previously negotiated the agreement between the two corporations on behalf of Corporation A will, according to opposing counsel, be called as a witness by said counsel to testify upon a contested matter. Whether or not this lawyer will be called is still a matter of speculation since only the mere allegation and/or assertion of Corporation B's counsel is apparent from the facts. In this regard, the phrase; "ought to be called as a witness" is unclear. This Committee has previously addressed this problem in CI-821 and CI-834 where it is stated that disqualification of a attorney is required when the lawyer's testimony is necessary to the case. See JT Foley and Co. v. Vanderbilt, 523 F 2d 1357 (CA2 1975) and Auseon v. Reading Brass Co., 22 Mich App 505 (1970). In CI-834, it was recognized that DR 5-010(B) and DR 5-102(A) could, upon the advancement of any arguable grounds in support of disqualification, force an opponent to change counsel. Quoting Zions First National Bank NA v. United Health Clubs, Inc., 505 F Supp 138, 140 (ED Pa 1981), the Committee opined:

    "The party seeking to have opposing counsel disqualified has the burden of establishing that counsel's continuing in the case would violate the disciplinary rules. Freeman, supra, 449 F. Supp. At 979; Kroungold, supra, 521 F 2d at 766. To grant a motion to disqualify without a clear showing that continued representation is impermissible would undermine the integrity of DR 5-102, for it 'was not designed to permit a lawyer to call opposing counsel as a witness and thereby disqualifying him/her as counsel.'"

However, here the danger alluded to CI-834 is not apparent. Corporation B is claiming that further agreements were made which was not reduced to writing. The facts as stated indicated that at the meeting wherein the final agreement was executed and during the discussions leading up to that meeting, the lawyer in your law firm conducted all of the discussions for Corporation A. Under these circumstances, that lawyer's testimony is necessary to the case, as only he or she can relate what the contents of those discussions were which resulted in the execution of the written agreement.

Where a lawyer is required to decline employment or to withdraw from employment under DR 5-105, no partner or associate of the firm may accept or continue such employment. CI-459. Thus, unless one of the four (4) exceptions outlined in DR 5-101(B) applies, you should withdraw representation. Clearly, sub-parts (1), (2) and (3) of DR 5-101(B), as applied to DR 5-102(A), have no application. Sub-part (4), on the other hand, permits otherwise improper testimony in cases where its omission would work a "substantial hardship" on the client because of the "distinctive value" of the lawyer or law firm under the circumstances. CI-821, CI-593, CI-513.

The circumstances referred to in DR 5-101(B) are described in Ethical Consideration 5-10 as exceptional situations where it would be manifestly unfair to the client for the lawyer to refuse employment or to withdraw on a contested issue. In making a decision whether to withdraw or not, a lawyer "should determine the personal or financial sacrifice of the client that may result from his or her refusal of employment or withdrawal therefrom, the materiality of his or her testimony, and the effectiveness of his or her representation in view of his or her personal involvement." EC 5-10. After weighing these factors "it should be clear that refusal or withdrawal will impose an unreasonable hardship upon the client," any doubt "should be resolved in favor of the lawyer testifying and against his or her becoming or continuing as an advocate." EC 5-10.

ABA Formal Opinion 339 states: "The critical question is whether the distinctive and particular value to the client of that lawyer or that law firm as trial counsel in that particular case is so great that withdrawal would work a substantial personal and financial hardship upon the client . . . . If withdrawal, under the circumstances, would clearly work such a hardship on the client, the lawyer or firm should continue as counsel despite the necessity for such testimony." Among the examples of exceptional situations posited by ABA Formal Opinion 339, the following were offered:

  1. A complex suit in preparation over a long period of time coupled with a development which could not be anticipated makes the lawyer's testimony essential.
  2. A long or extensive professional relationship with a client giving the lawyer or the firm such extraordinary familiarity with the client's affairs that the value to the client of representation by that lawyer or firm in a trial involving those matters clearly outweighs the disadvantages of having the lawyer, or a lawyer in the firm, testify to some disputed and significant issue.

The Committee has commented upon this critical question in CI-821: "In deciding on whether to withdraw, the attorney should consider all facts which bear upon his or her value to the client, and on the harm the client would suffer if the attorney withdraws from the case. In deciding your course of action, you should consider whether you have any particular expertise in the subject matter of the litigation of benefit to your client; whether the case presents complex issues which substituted counsel would be required to expend considerable time in learning at the expense of the client' whether the case is in its early stages or substantially completed; and whether the client can obtain competent substitute counsel without undue expense and difficulty."

In view of the foregoing, this writer has concluded that in balance a substantial hardship will be worked upon Corporation A should you withdraw your representation. While the legal issues which underscore the case are straightforward, the factual basis for those issues is particularly complex and permeates a consideration of those legal claims. Additionally, it is apparent that a considerable financial hardship would be imposed if withdrawal occurred; present counsel is able to avoid charging for the time spent in an effort to understand the negotiation process. Moreover, the fervent wishes of Corporation A clearly demonstrate the substantial financial hardship withdrawal would occasion. In contrast, the litigation as opposed to the case, is in its initial stages, no particular lawyer expertise is necessary to the conduct of the case, the testimony of your associate or partner is necessary to establish Corporation A's case, and adequate substitute counsel is reasonably available. These considerations, have been overborne by the demonstration of factual complexity and severe financial hardship.

Should you conclude that appropriate reason exists for your continued representation, you have the obligation to forthwith advise the court and opposing counsel that your associate or partner intends to testify and the nature of his or her testimony. In addition, you should refrain from expressly arguing the credibility of your partner or associate's testimony at trial.

Should you elect to withdraw, you must do so in accordance with DR 2-110(A)(2).

 
     

 

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