Risk Update

Client Risk — ABA Opinion on Permissive Withdrawal of Client Representation (#HotPotato), Executive Action Activates Ethical Conflicts, More Firms Forging Executive Deals

Adams Case, Big Law Deals Launch Era Rife With Ethical Conflicts” —

  • “Albany Law School’s Ray Brescia says judges must probe whether counsel from one of the Big Law firms that made deals with the president can effectively represent defendants in government cases—as the executive order threat still hangs over those firms’ heads.”
  • “Almost at the same time that US District Judge Dale Ho was dismissing the prosecution of New York City Mayor Eric Adams on April 2, another major law firm agreed to provide volunteer time on causes preferred by President Donald Trump with the understanding that he will go easy on them.”
  • “But these events are connected by more than just time. The apparent quid pro quo that doomed the Adams prosecution, and led Ho to rule that the Trump administration shouldn’t be able to hold the threat of continued prosecution of Adams ‘like the proverbial Sword of Damocles’ over the mayor, is precisely the kind of deal these law firms have struck to avoid executive orders damaging their business. Could Big Law’s wheeling and dealing cause greater havoc in the courts than Adams’s case did?”
  • “Ho found he had to dismiss the prosecution of Adams in part because there was credible evidence that the Trump administration had dangled the prospect of abandoning the prosecution of the mayor before him to exact future policy concessions from him. Such an abuse of legal process is illegitimate and undermines a criminal defendant’s rights. Ho determined it was appropriate to not just dismiss the case, but to dismiss it ‘with prejudice’: that is, the Department of Justice couldn’t reinstate it at a later time should it determine Adams wasn’t acceding to the administration’s policy preferences.”
  • “The prosecution—and the promise to abandon it—had all the hallmarks of an inappropriate quid pro quo and created a clear conflict that delegitimized the Adams prosecution. When law firms enter into agreements to accede to the demands of the Trump administration, they are creating similar conflicts of interest that threaten the legitimacy of criminal proceedings when they represent defendants in cases brought by the government.”
  • “In order to protect the integrity of their proceedings, when judges know or have reason to know that a potential for a conflict exists, they have an affirmative duty to ensure lawyers appearing before them can provide conflict-free representation.”
  • “The fact that law firms have struck agreements with the Trump administration raises serious questions about whether they can provide effective assistance of counsel in cases against the government.”
  • “What happens if the Trump administration doesn’t like the way in which a particular case is being litigated by one of these firms? What’s to stop the administration from going back to those firms and telling them they should pull their punches, to not be so aggressive in their representation of a particular client that gets under the president’s skin? These agreements don’t provide any assurances that Trump won’t demand more concessions from the law firms.”
  • “To ensure that both federal and state courts across the country are protecting the constitutional rights of the defendants before them, judges now must inquire whether any criminal defense attorney from one of these firms that has cut a deal with the Trump administration is operating under a conflict similar to the one that doomed the Adams prosecution.”
  • “The outcome in the Adams case is a stain on the DOJ, and the profession as a whole. But it is just one case. As more firms agree to enter into deals with the administration, the potential mischief such agreements can cause in the courts is exponentially greater than the Adams affair and goes beyond just one case. It’s every case in which lawyers from these firms represent the defendants. As more firms take this path, it will create a significant drain not just on the courts that must conduct this review but also on clients themselves should they have to bear the burden of finding new counsel.”
  • “There is one way to prevent this chaos though. Courts should start these inquiries immediately. Should judges find the lawyers operating under real constraints, they should disqualify those lawyers where appropriate.”
  • “As firms—and their clients—realize that they can’t enter such agreements without it exacting a real cost, perhaps other firms considering whether they should also cut a deal with the Trump administration will think twice before they do so.”

Kirkland & Ellis in talks with White House to avoid executive order, WSJ reports” —

  • “Kirkland & Ellis, the largest U.S. law firm by revenue, is in talks with the White House to avoid an executive order similar to those levied against several of its rivals, the Wall Street Journal reported on Thursday.”
  • “The news comes as President Donald Trump wages a pressure campaign against his perceived enemies in the legal profession, leading some major law firms to strike deals with the White House to avoid executive orders seeking to curtail their business with the federal government.”
  • “Kirkland has been ranked for years as the top-grossing U.S. law firm by American Lawyer, with a reported $8.8 billion in revenues in 2024, and is known for its work on deals for private equity firms and for litigation.”

Trump Announces Deal With Doug Emhoff’s Law Firm” —

  • “President Trump announced Tuesday another deal with a law firm he had targeted for potential punishment, this time the one that employs Doug Emhoff, former Vice President Kamala Harris’s husband.”
  • “Mr. Trump did not say why he targeted the firm. Along with its connection to Mr. Trump’s defeated opponent in the November election, the firm also employs a top investigator for the congressional committee that documented President Trump’s role in the Jan. 6, 2021, attack on the U.S. Capitol, and a litigator who spearheaded a lawsuit that two Georgia election workers brought against Rudolph W. Giuliani in which he was ordered to pay the women $148 million.”
  • “Willkie, Mr. Trump said in a Truth Social post, committed to representing clients, no matter their political leanings, and pledged $100 million in pro bono legal work to causes Mr. Trump has championed. The firm, Mr. Trump said, would ‘not engage in illegal DEI discrimination and preferences,’ Mr. Trump announced in a Truth Social post.”

ABA Formal Opinion 516 April 2, 2025: “Terminating a Client Representation Under MRPC 1.16(b)(1): What ‘Material Adverse Effects’ Prevent Permissive Withdrawal?” —

  • “ABA Model Rule of Professional Conduct 1.16(b)(1) permits a lawyer to voluntarily end, or seek to end, an ongoing representation if ‘withdrawal can be accomplished without material adverse effect on the interests of the client.’ A lawyer’s withdrawal would have a ‘material adverse effect on the interests of the client’ if it would result in significant harm to the forward progress of the client’s matter, significant increase in the cost of the matter, or significant harm to the client’s ability to achieve the legal objectives that the lawyer previously agreed to pursue in the representation.”
  • “A lawyer may be able to remediate these adverse effects and withdraw in a manner that avoids or mitigates the harm that the Rule seeks to prevent. The lawyer’s motivation for withdrawal is not relevant under Model Rule 1.16(b)(1).”
  • “Therefore, under the Model Rules, if the lawyer’s withdrawal does not cause ‘material adverse effect’ to the client’s interests in the matter in which the lawyer represents the client, a lawyer may withdraw to be able to accept the representation of a different client, including to avoid the conflict of interest that might otherwise result.”
  • “The opinion addresses the meaning of the Rule’s phrase ‘material adverse effect on the interests of the client’ and provides a framework for analyzing when and whether such an effect prevents a lawyer from permissive unilateral withdrawal. The opinion concludes that a material adverse effect is one which, despite a lawyer’s efforts to remediate negative consequences, will significantly impede the forward progress of the matter, significantly increase the cost of the matter and/or significantly jeopardize the client’s ability to accomplish the objectives of the representation.4 In other words, the material adverse effect must relate to the client’s interests in the matter in which the lawyer represents the client.”
  • “In the context of litigation, some courts have held that without the client’s consent, a lawyer may not withdraw from a representation to litigate against the now-former client.24 Lawyers who end a representation for this reason have sometimes been disqualified from representing the new client. The so-called ‘hot potato’ rule or doctrine comes from Picker International, Inc. v. Varian Associates, Inc., 670 F. Supp. 1363, 1365 (N.D. Ohio 1987), aff’d, 869 F.2d 578 (Fed. Cir.1989), where the court concluded, ‘a firm may not drop a client like a hot potato, especially if it is in order to keep happy a far more lucrative client.’ “
  • “The implication of these decisions is that, even if the lawyer’s withdrawal would otherwise be permissible, the lawyer may not withdraw to litigate against the client whose representation is terminated. But some courts recognize that the principle is not absolute and that it should not necessarily apply when the lawyer’s withdrawal is not significantly prejudicial because, for example, ‘a lawyer’s representation is sporadic, non-litigious and unrelated to the issues involved in the newer case.'”
  • “Rule 1.16(b)(1) and other Rules of Professional Conduct do not incorporate the ‘hot potato’ concept for the reason discussed above, namely, that a lawyer’s motivation for invoking Rule 1.16(b)(1) is irrelevant. Even if the lawyer’s reason for invoking Rule 1.16(b)(1) may be perceived as disloyal, the lawyer’s motivation is not relevant. The salient question under Rule 1.16(b)(1) is whether, by withdrawing from a representation, the lawyer will materially adversely affect the client’s interests in the matter in which the lawyer represented the client, not whether the lawyer will be adverse to the client in an unrelated matter after the representation is over.”
  • “Courts are, of course, free to exercise their supervisory authority over trial lawyers by disqualifying those who drop a client ‘like a hot potato’ to advocate against that client in another case. Courts may elect to do so as a sanction or remedy for the lawyer’s perceived disloyalty or to remove the incentive for lawyers to end representations for what courts regard as inappropriate reasons. But it does not necessarily follow that the lawyer’s withdrawal, for a purpose of which courts may disapprove, constitutes a violation of the Rules of Professional Conduct for which a lawyer could be professionally sanctioned.”