Rule 1.7 Conflict of Interest: General Rule
Rule Text
(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after consultation.
(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.
Plain-English Summary (for reference only — not a substitute for the rule text above)
This summary is not the rule. The rule text controls.
A lawyer usually cannot represent someone if that would work against another client the lawyer already represents. If taking on a new case would put the lawyer directly against a current client's interests, the lawyer can only move forward if two things happen: the lawyer honestly believes it won't hurt the relationship with the other client, and both clients agree after being told what's going on.
There's also a rule about situations that don't involve a direct conflict but still create problems. This happens when a lawyer's duties to another client, to someone else, or even the lawyer's own personal interests might get in the way of doing a good job for the client. Here again, the lawyer needs to honestly believe the representation won't suffer, and the client has to agree after hearing a full explanation.
When a lawyer represents more than one person in the same case, the lawyer has to explain what that means. This includes talking about the benefits of having one lawyer handle everything, but also the risks, like what happens if the clients later disagree with each other. Clients need this information before they decide whether to move forward with a shared lawyer.
The point of this rule is to protect clients from lawyers whose loyalty gets split between different people or interests. It also makes sure clients get to make an informed choice. If a lawyer has a conflict, the client deserves to know about it and decide for themselves whether they're comfortable moving forward.
Committee Notes
Loyalty to a Client.
Loyalty is an essential element in the lawyer’s relationship to a client. An impermissible conflict
of interest may exist before representation is undertaken, in which event the representation
should be declined. The lawyer should adopt reasonable procedures, appropriate for the size and
type of firm and practice, to determine in both litigation and nonlitigation matters the parties and
issues involved and to determine whether there are actual or potential conflicts of interest.
If such a conflict arises after representation has been undertaken, the lawyer should withdraw
from the representation. See Rule 1.16. Where more than one client is involved and the lawyer
withdraws because a conflict arises after representation, whether the lawyer may continue to
represent any of the clients is determined by Rule 1.9. See also Rule 2.2(c). As to whether a
client-lawyer relationship exists or, having once been established, is continuing, see comment to
Rule 1.3 and Scope, ante, p M 1-18.
As a general proposition, loyalty to a client prohibits undertaking representation directly adverse
to that client without that client’s consent. Paragraph (a) expresses that general rule. Thus, a
lawyer ordinarily may not act as advocate against a person the lawyer represents in some other
matter, even if it is wholly unrelated. On the other hand, simultaneous representation in
unrelated matters of clients whose interests are only generally adverse, such as competing
economic enterprises, does not require consent of the respective clients. Paragraph (a) applies
only when the representation of one client would be directly adverse to the other.
Loyalty to a client is also impaired when a lawyer cannot consider, recommend, or carry out an
appropriate course of action for the client because of the lawyer’s other responsibilities or
interests. The conflict in effect forecloses alternatives that would otherwise be available to the
client. Paragraph (b) addresses such situations. A possible conflict does not itself preclude the
representation. The critical questions are the likelihood that a conflict will eventuate and, if it
does, whether it will materially interfere with the lawyer’s independent professional judgment in
considering alternatives or foreclose courses of action that reasonably should be pursued on
behalf of the client. Consideration should be given to whether the client wishes to accommodate
the other interest involved.
Consultation and Consent.
A client may consent to representation notwithstanding a conflict. However, as indicated in
paragraph (a)(1) with respect to representation directly adverse to a client, and paragraph (b)(1)
with respect to material limitations on representation of a client, when a disinterested lawyer
would conclude that the client should not agree to the representation under the circumstances, the
lawyer involved cannot properly ask for such agreement or provide representation on the basis of
the client’s consent. When more than one client is involved, the question of conflict must be
resolved as to each client. Moreover, there may be circumstances where it is impossible to make
the disclosure necessary to obtain consent. For example, when the lawyer represents different
clients in related matters and one of the clients refuses to consent to the disclosure necessary to
permit the other client to make an informed decision, the lawyer cannot properly ask the latter to
consent.
Lawyer’s Interests.
The lawyer’s own interests should not be permitted to have adverse effect on representation of a
client. For example, a lawyer’s need for income should not lead the lawyer to undertake matters
that cannot be handled competently and at a reasonable fee. See Rules 1.1 and 1.5. If the
probity of a lawyer’s own conduct in a transaction is in serious question, it may be difficult or
impossible for the lawyer to give a client detached advice. A lawyer may not allow related
business interests to affect representation, for example, by referring clients to an enterprise in
which the lawyer has an undisclosed interest.
Conflicts in Litigation.
Paragraph (a) prohibits representation of opposing parties in litigation.
Simultaneous
representation of parties whose interests in litigation may conflict, such as coplaintiffs or
codefendants, is governed by paragraph (b). An impermissible conflict may exist by reason of
substantial discrepancy in the parties’ testimony, incompatibility in positions in relation to an
opposing party, or the fact that there are substantially different possibilities of settlement of the
claims or liabilities in question. Such conflicts can arise in criminal cases as well as civil. The
potential for conflict of interest in representing multiple defendants in a criminal case is so grave
that ordinarily a lawyer should decline to represent more than one codefendant. On the other
hand, common representation of persons having similar interests is proper if the risk of adverse
effect is minimal and the requirements of paragraph (b) are met. Compare Rule 2.2 involving
intermediation between clients.
Ordinarily, a lawyer may not act as advocate against a client the lawyer represents in some other
matter, even if the other matter is wholly unrelated. However, there are circumstances in which
a lawyer may act as advocate against a client. For example, a lawyer representing an enterprise
with diverse operations may accept employment as an advocate against the enterprise in an
unrelated matter if doing so will not adversely affect the lawyer’s relationship with the enterprise
or conduct of the suit and if both clients consent upon consultation. By the same token,
government lawyers in some circumstances may represent government employees in proceedings
in which a government agency is the opposing party. The propriety of concurrent representation
can depend on the nature of the litigation. For example, a suit charging fraud entails conflict to a
degree not involved in a suit for a declaratory judgment concerning statutory interpretation.
Interest of Person Paying for a Lawyer’s Service.
A lawyer may be paid from a source other than the client if the client is informed of that fact and
consents and the arrangement does not compromise the lawyer’s duty of loyalty to the client.
See Rule 1.8(f). For example, when an insurer and its insured have conflicting interests in a
matter arising from a liability insurance agreement, and the insurer is required to provide special
counsel for the insured, the arrangement should assure the special counsel’s professional
independence. So also, when a corporation and its directors or employees are involved in a
controversy in which they have conflicting interests, the corporation may provide funds for
separate legal representation of the directors or employees if the clients consent after
consultation and the arrangement ensures the lawyer’s professional independence.
Other Conflict Situations.
Conflicts of interest in contexts other than litigation sometimes may be difficult to assess.
Relevant factors in determining whether there is potential for adverse effect include the duration
and intimacy of the lawyer’s relationship with the client or clients involved, the functions being
performed by the lawyer, the likelihood that actual conflict will arise, and the likely prejudice to
the client from the conflict if it does arise. The question is often one of proximity and degree.
For example, a lawyer may not represent multiple parties in a negotiation whose interests are
fundamentally antagonistic to each other, but common representation is permissible where the
clients are generally aligned in interest even though there is some difference of interest among
them.
Conflict questions may also arise in estate planning and estate administration. A lawyer may be
called upon to prepare wills for several family members, such as husband and wife, and,
depending upon the circumstances, a conflict of interest may arise. In estate administration the
identity of the client may be a question of law. The lawyer should make clear the relationship to
the parties involved.
A lawyer for a corporation or other organization who is also a member of its board of directors
should determine whether the responsibilities of the two roles may conflict. The lawyer may be
called on to advise the corporation in matters involving actions of the directors. Consideration
should be given to the frequency with which such situations may arise, the potential intensity of
the conflict, the effect of the lawyer’s resignation from the board, and the possibility of the
corporation’s obtaining legal advice from another lawyer in such situations. If there is material
risk that the dual role will compromise the lawyer’s independence of professional judgment, the
lawyer should not serve as a director.
Conflict Charged by an Opposing Party.
Resolving questions of conflict of interest is primarily the responsibility of the lawyer
undertaking the representation. In litigation, a court may raise the question when there is reason
to infer that the lawyer has neglected the responsibility. In a criminal case, inquiry by the court
is generally required when a lawyer represents multiple defendants. See MCR 6.101(C)(4).
Where the conflict is such as clearly to call in question the fair or efficient administration of
justice, opposing counsel may properly raise the question. Such an objection should be viewed
with caution, however, for it can be misused as a technique of harassment. See Scope, ante, p M
1-18.