October 5, 1990
There is no disqualifying conflict of interest when a law firm represents an individual member or a local unit of a union and the law firm's secretarial staff has been organized by a local unit of the same union, provided that the law firm's client and the organizing local are not one and the same local.
The obligation to maintain client confidences is not at risk simply because a secretary who is a member of a union works on a legal matter for a client who is a member of a union, provided that the law firm has taken sufficient measures to protect client confidentiality.
Tenancy in a building in which a client may have an indirect ownership interest does not create a conflict of interest if the requirements of MRPC 1.8(a) are observed.
References: MRPC 1.6(d), 1.7(b), 1.8, 5.3.
A law firm represents a large number of clients who are members of a union organization ("Union"). A significant portion of the firm's practice involves workers' compensation claims but the firm also represents a large number of Union members in a variety of other legal matters. Additionally, the firm represents specific locals within the Union on various legal matters. The law firm has recently received notification that its secretarial staff has agreed to be represented as a bargaining unit of a Union local. The law firm asks whether the arrangement raises ethics problems.
MRPC 1.7(b) states the general rule regarding conflicts as follows:
"(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests unless:
"(1)The lawyer reasonably believes the representation will not be adversely effected; and
"(2)The client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall exclude explanation of the implications of the common representation and the advantages and risks involved."
The law firm is concerned that in the event the law firm, as employer, and the local representing the secretarial staff reach an impasse during contract negotiations, resulting in a strike and/or a picket line, a possible conflict may exist in that the law firm's Union clients (or other Union clients) would be likely to honor the picket line, thereby hindering the law firm's representation of its clients. It seems that the only way a disqualifying conflict of interest would exist under this scenario would be if the law firm is representing the very same local that is representing the secretarial staff in its labor negotiations. Assuming that is not the case, it is the Committee's opinion that no disqualifying conflict of interest exists under MRPC 1.7(b). If the Union or other clients of the law firm are sympathetic to the strike and refuse to cross the picket line, it would be the client's choice rather than a limitation of the law firm's responsibilities to its clients. The sympathetic clients of the law firm certainly have the legal right to cross the picket line. In addition, the lawyers can meet with their clients outside of their offices.
MRPC 1.6(d) addresses the issue of confidentiality requirements for law firm employees, as follows:
"(d) A lawyer shall exercise reasonable care to prevent employees, associates, and others whose services are utilized by the lawyer from disclosing or using confidences or secrets of a client, except that a lawyer may reveal the information allowed by paragraph (c) through an employee."
MRPC 5.3 deals generally with a lawyer's responsibility regarding nonlawyer assistants and states, in part:
"With respect to a nonlawyer employed by, retained by, or associated with a lawyer:
"(a) a partner in a law firm shall make reasonable efforts to insure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer;
"(b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; . . . ."
The law firm also has a concern that there may be a confidentiality problem if a unionized staff member of the law firm works on a matter involving a Union member or a local of the Union. The above rules reflect that it is the lawyer's responsibility to take measures to ensure that client confidences are protected. It should not matter that the client and the law firm employee working on the client's matter are both in the same local or different locals of the Union, so long as the subject matter of the representation does not involve a claim affecting the same local as that which represents the firm's secretaries.
MRPC 1.8 sets forth certain prohibited transactions which are conflicts of interest and states, in part, as follows:
"(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client unless:
"(1)The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner that can be reasonably understood by the client;
"(2)The client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and
"(3)The client consents in writing thereto."
The law firm rents an auxiliary office from a landlord who apparently receives funds from various labor organizations in the geographical area, including the Union. The law firm is concerned with the possibility that the Union local representing its secretarial staff could contribute funds to the landlord and therefore the law firm could somehow be in a business relationship with its client. First, the secretaries' bargaining unit is not a client. Second, if any client participates in the funding of the landlord and if a business relationship could be established, given the indirect interest of the client in the tenants of the landlord, if the lease is entered into as an arms-length transaction, there may be an interest adverse to the client creating a conflict or requiring client consent pursuant to MRPC 1.8(a). The risk of pickets at the auxiliary office is, as with the risk of the same action at the firm's main office, more a problem of business or business ethics than one of professional conduct.