Risk Update

“Material” Adversity in Detail — More Detail on ABA Formal Opinion 497

Posted Dan Bressler

“How can lawyers balance materially adverse interests? New ABA ethics opinion explores” —

  • “Suing or negotiating against a former client: A lawyer suing a former client or defending a new client against a claim by a former client on the same or substantially related matter is a classic example of creating an impermissible conflict with “materially adverse” interests.”
  • “This applies not just to lawsuits but also to negotiations. The opinion explains that ‘being across the table, so to speak, from a former client and negotiating against that former client in transactional matters typically constitutes ‘material adverseness.’”
  • “A lawyer attacking their own work: A lawyer attacking their own prior work also constitutes material adverseness. The opinion cited as an example a federal circuit opinion in which a lawyer attempted to challenge a patent that the lawyer had previously obtained for a former client. ‘When a lawyer represents a current client challenging the lawyer’s own prior work done for a former client on the same or a substantially related matter, the situation creates a materially adverse conflict,’ the opinion explains.”
  • “The opinion also notes that material adverseness may exist when a lawyer seeks to undermine work or a result achieved for a former client.”
  • “Examining a former client: A lawyer cannot use information from a former client to the disadvantage of the former client under Rule 1.9(c)(1). Thus, if a lawyer has to use such information in examining a former client, the lawyer has a conflict of interest unless the negative information is ‘generally known.’ For example, the opinion cites an ethics opinion from Ohio holding that a lawyer can only impeach a former client with a criminal conviction if that conviction is ‘generally known’ under Rule 1.9(c).”
  • “The opinion adds that a lawyer could avoid this conflict by having the current client retain another attorney to examine the former client and screen the lawyer with the conflict from participating in such an examination of the former client.”