Risk Update

Ethics Updates — Lawyer Personal Interest Conflicts (Relationships & Beliefs v Financial), Judicial Conflicts Considerations

Posted Dan Bressler

Hat tip to Bill Freivogel for noting a recent opinion issued by the Advisory Committee on Professional Conduct (New Jersey): “OPINION 743: RPC 1.10(a) – Imputing Conflicts of Interest That Are Based on a Personal Interest of the Lawyer” —

  • The Advisory Committee on Professional Ethics received an inquiry regarding a law firm that was retained to advise a client entity in a commercial loan refinancing. The client entity is fully owned by a parent limited liability company that has two members who each own equal shares. A shareholder in the law firm is one of the two members of the parent company.
  • “The Committee found that the lawyer with the financial stake has a conflict of interest based on a personal interest of the lawyer, Rule of Professional Conduct 1.7(a)(2), and that the affected lawyer’s conflict of interest is imputed to the firm under Rule of Professional Conduct 1.10(a).”
  • “The exception for imputing ‘personal interest’ conflicts in Rule of Professional Conduct 1.10(a) is narrow and generally includes only interests arising due to family relationships or personal beliefs, not business or investment interests.”
  • “See Michels, K., New Jersey Attorney Ethics, § 24:3-1(a), p. 618 (Gann 2022) (the ABA comments suggest that the RPC 1.10(a) exception for imputing personal conflicts ‘does not apply when the affected lawyer’s interest is pecuniary or proprietary’).”
  • “Family-based or belief-based personal interests ordinarily are not considered to present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm. Conflicts arising from a lawyer’s personal business interests – particularly when those business interests affect the client’s objectives of legal representation – ordinarily would present a significant risk of materially limiting the representation of the client by the other lawyers in the firm.”
  • “If, however, the lawyer with the relationship is not handling the case, the conflict is not likely to materially and adversely impair the representation of the client by the remaining lawyers in the firm. This personal interest conflict generally is not imputed to the firm 5under RPC 1.10(a), though the affected lawyer should be screened from the matter. Ibid. In this case, the client need not be informed of the relationship or provide consent to a conflict.”

“Judicial Ethics Opinion 21-164” —

  • “Provided the judge is satisfied they can be fair and impartial, the judge may preside in a case where (1) the plaintiff is an attorney who frequently appears before the judge and was previously co-counsel with the judge’s sibling on several discrete cases and (2) plaintiff’s counsel rents office space in the same office as the judge’s sibling and also is an elected county legislator representing the district where the judge resides.”
  • “We note, initially, that there is no indication here that the judge’s sibling has any involvement or interest in the case before the judge. Nor does the inquiry suggest that any litigant or attorney in the case is the partner or associate of the judge’s sibling (see Opinion 06-111) or has a current, ongoing business relationship with the judge’s sibling (cf. Opinion 95-35 [judge should recuse in cases involving appearances by a law firm, where the judge’s spouse, who is a lawyer, has a continuing counsel relationship with the law firm, and not merely a retainer interest in occasional, separate, discrete cases]).”
  • “We do not believe the judge’s impartiality can reasonably be questioned merely because plaintiff’s counsel “rents office space in the same office” as the judge’s sibling (see e.g. Opinion 14-91).”
  • “We have also advised that a judge is not disqualified in a matter merely because a litigant or witness before them is an attorney who regularly practices before the judge (see e.g. Opinions 17-130; 14-120; 14-62; 09-239; 07-122; 92-49). We likewise conclude here that the judge’s impartiality cannot be reasonably questioned merely because plaintiff is also an attorney who regularly appears before the judge.”
  • “Finally, we believe the judge’s impartiality cannot reasonably be questioned merely because the plaintiff was previously co-counsel with the judge’s sibling “on several high-profile criminal cases.” We note that a judge is disqualified, subject to remittal, when their sibling’s law partners or associates appear before the judge (see Opinion 06-111).”

“Judicial Ethics Opinion 22-16” —

  • “A judge need not disqualify from a custody case merely because the judge’s confidential secretary has connections to both parties through marriage, but must insulate the secretary from any involvement in the matter. If a party objects to the judge’s participation in the case, the judge has the sole discretion to decide whether to exercise recusal.”
  • “A judge is presiding in a custody case in which the judge’s secretary has personal connections to both sides through marriage. Specifically, the secretary was formerly married to one party and formerly married to an ex-partner of the other party.”
  • “Where a judge’s staff member has a conflict, ‘it is ordinarily sufficient to insulate the staff member and disclose the insulation’ (Opinion 19-72).”
  • “Here, too, we believe the judge’s impartiality cannot ‘reasonably be questioned’ based on the secretary’s personal connections with both sides in the custody case (22 NYCRR 100.3[E][1] [emphasis added]). Accordingly, this judge need not disqualify merely because the judge’s confidential secretary has connections to both parties through marriage, but must insulate the secretary from any involvement in the matter. Because disqualification is not mandatory here, the judge ‘is the sole arbiter of recusal’ (People v Moreno, 70 NY2d 403, 405 [1987]) even if a party objects to the judge’s participation.”