Rules of Professional Conduct Related Ethical Opinions

1.0  Terminology


11-03: Liens; Safekeeping Client Property; Third-Party Interest in Settlement Funds

A lawyer holding property in which both the client and a third person have an “interest” must account for the property, pay undisputed sums to the proper party, and abide resolution of any disputes.  Arizona Rules of Professional Conduct (“ERs”) 1.15(d), (e).  ER 1.15(d) requires a lawyer with knowledge of claims against the client to protect those with an “interest” in funds in the lawyer’s control.  An “interest” is a matured legal or equitable claim.  The ethical rules do not require a claimant’s lawyer to search public records or other sources for medical liens or claims in order to acquire knowledge of an “interest.”

07-04: Joint Representation; Conflicts; Communication; Informed Consent

The representation of multiple clients in a single litigation matter is generally permissible so long as the lawyer reasonably believes that he or she will be able to provide competent and diligent representation to each client, the representation does not involve the assertion of a claim by one client against another client, and each client gives informed consent, confirmed in writing.  Ethical Rule (“ER”) 1.7(b). The requirement of informed consent arises only if, as an initial matter, the lawyer determines that the lawyer can, in fact, competently and diligently represent each client in the particular matter. Once that determination is made, the lawyer bears the burden of showing that there was adequate disclosure to each client and that each client gave an informed consent.

The disclosures required to obtain the client’s “informed consent” will depend on the facts and circumstances of the particular matter. The lawyer must explain the possible effects of the common representation on the lawyer’s obligations of loyalty, confidentiality and the attorney-client privilege. In addition to the confirming writing required by ER 1.7(b), informed consent usually will require that the lawyer explain the advantages and disadvantages of the common representation in sufficient detail so that each client can understand why separate counsel may be desirable. Finally, during the course of the matter, the lawyer must continue to evaluate whether conflicts have arisen that may require additional disclosures and consent or withdrawal from the representation.

06-08: Ancillary Services; Conflict of Interest; Mortgage/Refinancing Services; Imputed Conflicts

A lawyer may provide mortgage/refinancing services separate from the lawyer’s law firm so long as the proper disclosures are made, including that the lawyer is not providing legal services and the customers do not have the protections of the lawyer-client relationship. Referrals of clients must meet the “heavy burden” of compliance with ERs 1.7 and 1.8(a). Lawyers from separate law firms may participate as loan officers in the separate mortgage/refinancing company without imputed conflicts of interests for their law firms’ clients. However, these lawyers must not only make proper disclosures, but each lawyer also must determine whether the lawyer’s personal interests materially limit the lawyer’s professional judgment and whether any information known by the lawyer from these professional and business relationships creates any conflict of interest such that the lawyer may not proceed in any particular circumstance. Confidentiality requirements for clients and former clients also must be strictly followed.

06-04: Disclosure; Third Parties; Prepaid Legal Services; Conflict

In the context of a prepaid legal services program, attorneys may not release confidential or privileged information to a third-party auditor without the client's informed consent.  Because billing information often contains confidential information, contractual provisions requiring an attorney to allow, without exception, third parties to review the client file and billing records violate ER 1.6(a).

An attorney may agree to represent a client under a prepaid legal services agreement that limits the presumptive compensation allowable for "basic" legal services if the attorney complies with ER 1.8(f)(2), including determining that the limit on payment does not interfere "with the lawyer's independence of professional judgment or with the client-lawyer relationship."  When agreeing to accept third-party payments, the attorney must be careful to abide by the client's "decisions concerning the objectives of representation and ... whether to settle a matter."  ER 1.2(a).  An attorney's agreement to limit compensation from a third party does not limit the attorney's duty provide a diligent and thorough representation of the client.

Provisions in a prepaid legal services contract between a client and the issuing trust do not excuse a lawyer's compliance with applicable ethical rules. An attorney may not enter into a contract that requires the attorney to violate his or her ethical duties.

06-01: Sale of Law Practice; Communication; Confidentiality; Covenants/Restrictions on Right to Practice

A lawyer seeking to sell his or her solo law practice may disclose limited client-specific information to the prospective lawyer-buyer without client consent to the disclosure.

The selling lawyer must sell at least an entire legal area of practice throughout the geographic area or areas where that practice is being conducted. After the sale, the selling lawyer may be able to resume practicing law, depending on what part of the lawyer’s law practice was sold.

The selling lawyer may not seek through contractual provisions to avoid prohibitions in the Ethical Rules on his or her ability to practice law after the sale. Nonetheless, the parties may negotiate a covenant not to compete and/or a covenant not to solicit within the sale contract.

The selling lawyer may supplement his or her notice of sale to clients with additional information as long as the notice at least meets the requirements of ER 1.17.

05-05: Candor to Tribunal; Client Perjury; Confidentiality

This opinion reviews the ethical dilemma posed when an attorney learns that, due to a former client’s apparent perjury in a civil proceeding, the attorney has offered false material evidence to a tribunal. The Committee concludes that the Arizona Rules of Professional Conduct, under the facts of this case, provide that the attorney’s duty of candor to the tribunal overcomes the ethical duty of preserving the former client’s confidences and that the attorney must take reasonable remedial measures effective to undo the effect of the false evidence with respect to the affected tribunal.

04-04: Conflicts of Interest; Public Defenders; Screening; Disqualification; Imputed Disqualification

Under revised Ethical Rule 1.10 a separate “Conflicts Unit” may not be employed to address imputed conflicts involving former clients even if screening is employed as defined under ER 1.0. Two current clients may give a written informed waiver of a conflict under certain circumstances in accordance with ER 1.7. If both clients do not give consent, however, the Public Defender’s office and the proposed Conflicts Unit would constitute one firm for purposes of ER 1.10, such that referral of a case to the Conflicts Unit would not resolve the ethical conflict.