PROFESSIONAL CONDUCT AND LEGAL ETHICS
BY CEDRIC LOGAN
This article looks at the relevant rules and case law regarding attorney obligations to decline representations in litigation where the individual attorney or law firm participated in the transaction at issue.
If you are a practicing lawyer, at some point in your career you have likely helped clients negotiate a business transaction, litigation settlement, agreement with regulators, or another type of contract. Clients hire lawyers to assist with these deals in part because they hope a good lawyer will reduce the chances that the deal will fall apart. They also believe it will help them avoid litigation or other adversity.
But even the best deals, drafted by the ablest attorneys, may ultimately result in litigation because negotiations fall apart, contracts are subject to different interpretations, and parties sometimes breach their contractual duties. When that happens, the client may ask the lawyer who advised on the deal to represent the client in court. After all, the lawyer who did the deal knows the facts better than anyone else (maybe even better than the client), and bringing another lawyer up to speed for the litigation may increase the client's short-term costs.
Although there are circumstances where a lawyer can represent a client even though the lawyer was involved in the underlying events, lawyers should proceed with caution in these circumstances. Aside from the well-known "lawyer as witness" rule, which generally prohibits lawyers from trying cases if they might be a witness, conflict-of-interest rules also may prohibit lawyers from taking cases where the lawyer's own advice or actions may be at issue in the case. Lawyers who ignore these rules risk disqualification by courts, malpractice suits, and harm to their professional reputations.
Below is a look at the relevant Colorado Rules of Professional Conduct (Colo. RPC or Rules) and case law regarding attorney obligations to decline representations in litigation matters where the individual attorney or law firm participated in the transaction at issue. Lawyers and law firms defy these rules at their own risk.
The Crucial Rules
Like most states, Colorado's Rules are based on the American Bar Association (ABA) Model Rules of Professional Conduct. The Rules are binding on lawyers who are licensed in or practice in Colorado, and lawyers who violate the Rules are subject to discipline by the Office of Attorney Regulation Counsel. Further, lawyers who take on representations prohibited by the Rules may be disqualified by Colorado state and federal courts.
When a client asks a lawyer for representation in a case in which the lawyer was involved in the underlying facts, the lawyer should carefully consider Rules 3.7 and 1.7 before agreeing to the representation.
Rule 3.7 is the "lawyer as witness" rule. Rule 3.7(a) prevents lawyers from representing clients where the lawyer is a necessary witness:
A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:
1. the testimony relates to an uncontested issue;
2. the testimony relates to the nature and value of legal services rendered in the case; or
3. disqualification of the lawyer would work substantial hardship on the client.
rule is frequently litigated in Colorado courts, and as a
result, several opinions have interpreted and applied
it.1 These opinions note that lawyers who
perform the dual roles of advocate and witness pose obvious
difficulties, particularly at trial.2 A comment to Rule
3.7 explains that "[c]ombining the roles of advocate and
witness can prejudice the tribunal and the opposing party and
can also involve a conflict of interest between lawyer and
In other words, a lawyer who testifies at trial may confuse jurors, who may not appreciate the difference between evidence and argument.4 Moreover, the lawyer may prejudice the opposing party by spinning facts in favor of her client; or, on the other hand, a testifying lawyer may be detrimental to her client, if, for example, she changes her legal arguments to place herself in a better light. Not all of these downsides are likely to be realized in every case, but the FEATURE PROFESSIONAL CONDUCT AND LEGAL ETHICS risk that someone's interests will be harmed by attorney testimony provides ample justification for the rule.
While Rule 3.7(a) is limited to individual lawyers, Rule 3.7(b) imputes individual lawyers' conflicts to their law firms: "A lawyer may act as advocate in a trial in which another lawyer in the lawyer's firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9." Thus, a lawyer may act as an advocate at a trial in which a member of the firm was a witness so long as the representation was not prohibited by Rule 1.9, which covers conflicts of interest with former clients, or Rule 1.7.
Rule 1.7 is the "concurrent conflict of interest" rule. It prevents lawyers from taking representations that present a conflict involving the lawyer's current interests. Rule 1.7(a)(2) provides:
[A] lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if . . . there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
Rule 1.7 is not litigated as frequently as Rule 3.7 in the context of a lawyer who negotiates a deal that winds up in court, but it nevertheless provides a critical check on a lawyer's ability to take such cases. The phrase "a personal interest of the lawyer" includes situations in which a...