State Bar of Arizona Ethics Opinions
93-09: Conflicts; Imputed Disqualification
Case-by-case analysis required for lawyer-legislator conflict and disqualification issues arising from lobbying activities. *This opinion was adopted by the Board of Governors of the State Bar in place of the formal opinion by the State Bar Committee on the Rules of Professional Conduct.
BOARD OF GOVERNORS' NOTE: On October 22, 1993, the Board of Governors of the State Bar voted to reject Formal Opinion No. 93-09 as an expression of the State Bar's position on the issues presented, especially with respect to the second issue. On December 17, 1993, the Board voted to publish the following opinion in place of the formal opinion by the State Bar Committee on the Rules of Professional Conduct ( Ethics Committee). Like all opinions of the Ethics Committee, what follows is a non-binding, advisory opinion.
An attorney/partner in a law firm has been elected to serve in the Arizona State Legislature. His law firm has been engaged in lobbying activities before the State Legislature and anticipates continuing those activities.
Under a legislative rule, if a legislator has a personal financial interest in a piece of legislation, he is required, among other things, to recuse himself from participating in the consideration of the legislation or voting thereon. Recognizing that his partnership interest might give him an "interest in the legislation" within the rule, the lawyer intends to "take a leave of absence" from the partnership during his service in the Legislature. He does, however, intend to continue the private practice of law with his firm under an arrangement where his "salary is determined by sole reference to [his] work effort."
The inquiring attorney has indicated that as a legislator, his obligations to recuse himself on matters in which his firm is involved in lobbying on behalf of clients will be governed by the legislative rules and A.R. S. § 38-503, recently made applicable to members of the legislature by 1992 Laws Chapter 140. His current interpretation of those rules is that there is no per se requirement of recusal on such matters.
The lawyer/legislator sought the advice of the Committee as to whether as a legislator he would have a conflict of interest when as a member of the legislature he is asked to vote on a matter in which his law firm has engaged in lobbying on behalf of a client. He also asked whether members of his firm would have a conflict of interest in lobbying before the legislature while the inquirer was a member of the body.
1. May the state legislator vote on legislation with regard to which his firm has conducted lobbying activities?
2. May the firm continue to lobby the legislature when one of the lawyers in the firm is a member of the body to be lobbied?
Applicable Ethical Rules
ER 1.7(b), 1.10(a) and 8.4
ER 1.7 Conflict of Interest; General Rule
(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 affected; and
(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.
ER 1.10 Imputed Disqualification: General Rule
(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by ER 1.7, 1.8(c), 1.9 or 2.2.
ER 8.4 Misconduct
It is a professional misconduct for a lawyer to:
(a) violate or attempt to violate the rules of professional conduct, knowingly assist or induce another to do so, or do so through the acts of another;
(b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects;
(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice;
(e) state or imply an ability to influence improperly a government agency or official; or
(f) knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of
judicial conduct or other law.
As a threshold matter, one must address the question whether a lawyer-legislator is subject to the Supreme Court's ethical rules. If not, then any questions regarding the propriety of voting on legislation is beyond the State Bar's jurisdiction.
It is beyond question that an Arizona attorney is bound by the Rules of Professional Conduct, even when not acting in the capacity of an attorney. See In re Rayes, 166 Ariz. 273, 801 P.2d 1176 (1988); In re Grimble, 157 Ariz. 448, 759 P.2d 594 (1988); In re Pappas, 159 Ariz. 516, 768 P.2d 1161 (1988). However, whether a particular provision of the ethical rules applies when a lawyer is not acting as an attorney depends on the language of the particular rule and the conduct under consideration.
Take, for example, ER 8.4. This rule identifies various acts which constitute professional misconduct if engaged in by a lawyer. By its very terms, its coverage is not limited to a lawyer acting as a lawyer. There is no express limitation on the context in which the prohibited conduct may occur. Thus, a lawyer who commits perjury as a witness in a matter in which he is a party rather than counsel or is dishonest in connection with a non-law related business venture can be sanctioned under ER 8.4, even while clearly not acting in the capacity of a lawyer.
On the other hand, many of the ethical rules, by their plain language, apply only when the lawyer is acting as a lawyer 'representing a client." Take, for example, ER 1.7 (a) and (b), which provisions begin, "A lawyer shall not represent a client if .." A lawyer can only violate these provisions when he or she is representing a client. If the lawyer is not representing or considering the representation of a client, this conflict of interest rule does not apply to the lawyer's conduct and no sanction would be appropriate.
If a lawyer is acting as a business person, a private citizen, or a legislator, ER 1.7 has no applicability unless the lawyer is also representing a client. Acting solely as a legislator, a lawyer may be representing a constituency; he or she may be serving on behalf of the public, but the lawyer has no client with whom a conflict situation under the Supreme Court's ethical rules may be created. Thus, in answer to the threshold question, the Supreme Court can and does regulate the conduct of lawyers, even when they are not acting as lawyers, but whether a particular rule applies depends on the language of the rule and the conduct involved.
Turning now to the first question presented by the inquiring lawyer, it becomes readily apparent that the answer is outside the jurisdiction of the State Bar. A review of the current ethical rules fails to reveal a single rule that applies to the conduct in question. Whatever may have been the answer to that question under the old canons or the Code of Professional Responsibility, provisions not incorporated into the current rules or prior ethic opinions grounded in these rules2, there currently exists no ethical rule addressing the propriety of a lawyer-legislator voting on legislation with regard to which his firm had conducted lobbying activities.
Under the current lawyer ethical rules, the question of when a legislator may or may not vote on legislation, or may or may not have an impermissible conflict of interest, is reserved to the legislature. It must be resolved, if at all, by reference to legislative rules and applicable conflict of interest statutes. E.g., A.R.S. § 38-501, et seq. It is to those sources and not the State Bar to which the inquiring lawyer must look for an answer to the first question posed above.
The second question posed by the inquiring attorney(s)-- whether and under what circumstances the law firm may continue its lobbying activities when a lawyer in the firm is a member of the legislative body being lobbied--can be resolved by reference to the ethical rules. This is because it deals squarely with the conduct of lawyers in the course of their representation of clients—the parties for whom the lawyer or law firm is lobbying. One way to analyze the issue is to ask whether the legislator could represent a client in lobbying efforts before the body of which he or she is a member. That is the question posed by ER 1.10, the imputed disqualification rule, because the lawyer-legislator will continue to be a lawyer in a firm while also serving in the legislature. Under ER 1.10, no lawyer in a firm may represent a client when any one of them practicing alone would be prohibited from doing so by ER 1.7, 1.8(c), 1.9 or 2.2.
ER 1.7(a) does not apply because there is no dual representation of clients in this situation. As indicated above, the lawyer-legislator does not represent a client in serving his constituency or the public. However, ER 1.7(b) prohibits a lawyer from representing a client where the representation may be materially limited by the lawyer's responsibilities to another client, to a third person or by the lawyer's own interests, unless the lawyer reasonably believes that the representation would not be adversely affected and the client consents after consultation. The comment to ER 1.7 indicates that where a disinterested lawyer would conclude that the client should not consent to the representation under the circumstances, the lawyer should not even seek the consent.
Here it would seem that a lawyer-legislator's duty to third persons--the public or his or her constituency--is a responsibility that may materially limit his or her ability to lobby for a client. The issue then becomes whether the lawyer-legislator could reasonably conclude that the representation would not be adversely affected by these conflicting interests and, if so, whether the client will consent. If the lawyer determines that the representation would be adversely affected, he or she must decline or terminate the representation of the client, without seeking consent. If the lawyer determines that the representation would not be adversely affected, he or she may seek client consent after consultation.
While there may be many situations in which a disinterested lawyer would conclude that the client should not consent to the representation, we do not believe that a per se prohibition against such representation or against seeking client consent is mandated by the rule. Whatever public outcry or criticism might result from a legislator lobbying on a particular bill on behalf of a client, the appropriate place to deal with those concerns is within the legislature or at the ballot box. Our analysis must be limited to the effect on the representation of the client as regulated by the lawyer ethical rules, not by whether there is an appearance of impropriety from the perspective of the public or the legislator's constituency. That ethical tenet, like the provisions imposing ethical restrictions on public officers and officials, is no longer part of the ethical code governing the conduct of Arizona attorneys. Thus, under the existing ethical rules, it is for the legislature, not the State Bar, to address any perceived appearance of impropriety arising out of a lawyer-legislator lobbying situation.
We conclude that ER 1.7(b) does not establish a per se prohibition against a lawyer-legislator engaging in lobbying activities. We believe that the analysis required under ER 1.7(b) must be conducted on a case-by-case basis. Whether the lawyer-legislator could seek client consent would depend on the outcome of the lawyer's analysis of whether the representation would be adversely affected by his or her responsibilities to the public, to his or her constituency or his or her own interests. Having reached this conclusion, it follows that there can, likewise, be no per se rule prohibiting members of the lawyer-legislator's law firm from engaging in lobbying activities. To the extent that the lawyer-legislator can engage in lobbying efforts, so too can the members of the lawyer's law firm.
The foregoing analysis is, of course, based on a double fiction. The first fiction is ER 1.10, itself, which imputes a conflict to all members of the law firm whether there is an actual conflict or not. The wisdom of that rule is not at issue in this discussion. However, in considering the question of whether the members of the firm can lobby a legislative body in which a member of the firm is serving, there is a second fiction which makes the reasoning above even more attenuated. Specifically, the fiction is that there is a lawyer-legislator who is or may also be engaged in lobbying efforts on behalf of a law client. Under the facts presented by the inquiring attorney(s), there is no lobbying lawyer-legislator and no indication that the lawyer-legislator would even contemplate engaging in such activity, if it were even feasible as a legal matter or subject to the rules of the legislature.
The entire imputed disqualification analysis conducted above, leading to the conclusion that a case-by-case analysis must be conducted by a lobbying lawyer legislator and, thus, by members of the law firm, is premised on a fictional lawyer-legislator-lobbyist. If one looks at the situation as it exists and acknowledges the reality that there is no lawyer-legislator-lobbyist from whom a conflict can be imputed, the lawyers in the law firm are left with the need to conduct their own individual ER 1.7(b) analysis each time they are involved in lobbying on behalf of a client in a legislative body in which a member of their firm is serving. If the lobbying lawyer had a conflict as described in ER 1.7(b), he or she would have to consider whether the representation would be adversely affected and, if not, to obtain client consent. Absent a lobbying lawyer-legislator from whom a conflict might be imputed, the lawyer-lobbyist would consider only his or her own responsibilities to another client, a third person or the lawyer's own interests. There would be neither a per se prohibition or a per se license to accept or maintain the representation. Like virtually all ER 1.7(b) analyses, the answer to the question whether the lawyer could accept or maintain the representation would depend upon the circumstances presented and, in the appropriate case, whether the lawyer obtained client consent.
Under either analysis, ER 1.10 or ER 1.7(b), we believe that the answer to the question whether the law firm may continue to lobby the legislature when one of its lawyers is a member of the body to be lobbied, depends on the facts of the particular situation. There will be situations where the lawyer-lobbyist will reasonably conclude that the representation of the client would be adversely affected because of the conflicting interests identified in ER 1.7(b) and, therefore, it will be inappropriate to seek client consent. In those cases, the lawyer must decline or terminate the lobbying effort on behalf of the client. We believe there may also be situations when the lawyer-lobbyist could reasonably conclude that the client's interests will not be adversely affected. In those cases, the lawyer will have an obligation to make full disclosure of the conflict and let the client decide the consent issue. If the client consents after consultation, the representation may continue; if the client declines consent, the representation must be terminated. In all cases, the analysis will be from the perspective of the client's interests because under the prevailing ethical rules, that is the only perspective relevant to this discussion.
Lawyers who lobby a legislative body in which a member of their firm sits as a member may have an actual or potential conflict of interest under either an ER 1.10 imputed disqualification analysis or under an ER 1.7(b) analysis. In neither instance is there a per se conflict which automatically prohibits the lawyer from undertaking lobbying efforts on behalf of a client. The lawyer-lobbyist may be in a position to undertake the lobbying effort, if he or she can reasonably determine that representation of the client will not be adversely affected, and the lawyer obtains the client's consent after consultation. In this regard, the lawyer-lobbyist must make the initial determination that it is appropriate to seek consent and, in so doing, should be sensitive to the proscription of ER 8.4(e ) in seeking consent.
To the extent that this opinion is inconsistent with the result reached by the Supreme Court in In Re Ethics Opinion 74-28, 111 Ariz. 519, 533 P.2d 1154 (1975), the Board believes that the current ethical code, which did not adopt the provisions on which that opinion was based, is overriding and must be given priority.
Formal Opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceedings.
©State Bar of Arizona 1993
1 E.g., EC 8-8 (Public Officer), DR 8-101 (Public Official), DR 9-101 (Appearance of Impropriety).
2 E.g., Arizona Ethics Opinions No. 124 (July 3, 1963); No. 170 (May 4, 1965); No. 73-3; No. 74-28; American Bar Association Formal Opinions No. 296 (August 1, 1959), and No. 306 (May 26, 1962).