Application of Conflict of Interest Rules to the Conduct of

Government Litigation by Private Attorneys

W h eth er the A m erican Bar A ssociation's C o d e o f Professional R esponsibility w ould bar 

private attorneys, retained as co n tracto rs to represent the interests o f the U nited States 

in railroad litigation, from sim ultaneously representing o th e r parties w hose interests are 

ad verse to those o f the U nited States, depends on the facts o f each situation.

E thical constraints on private atto rn ey s retained to co n d u ct railroad litigation on behalf 

o f the U nited States d o not end w ith the term ination o f the railroad litigation itself.

T h e m aking o f litigation ju d g m en ts is a function at the co re o f the P resident’s A rticle II 

du ty to take care that the law s be faithfully executed, and m ust, therefore, be p erform ed by those w h o serve under, and are responsible ultim ately to, the President.

T h e scope o f ethical restraints on private atto rn ey s retained by the U nited States depends 

upon extent of necessary interaction w ith and supervision by governm ent officials; if 

close interaction and supervision can be anticipated, likelihood o f ethical problem s 

developing increases.

A ppendix identifies and discusses issues und er the conflict o f interest law s applicable to 

the tem p o rary appointm ent o f an atto rn ey in private p ractice as a g overnm ent attorney.

February 22, 1980

M EM ORAND UM O PIN IO N FOR T H E SPEC IA L A SSISTA N T 

TO T H E A TTO RN EY G E N E R A L

This responds to your request for our discussion of the possible 

application of the American Bar Association’s Code of Professional 

Responsibility (ABA Code) to a transfer of litigation from the United 

States Railway Association (USRA) to a department or agency, such as 

the Department of Justice. This issue has arisen in the course of this 

D epartm ent’s preparation of a feasibility study for Congress on the 

transfer of U SRA ’s litigation to an agency of the government. This 

Office has written tw o earlier memoranda that bear on that subject.1 At 

this time, you have requested our discussion of the following question. 

Assuming that USRA is abolished and its litigation were transferred

1 One memorandum deall directly with the issue of possibly transferring U SR A ’s litigation to the 

Deparim ent of Justice. See memorandum of April 11, 1979, for the Deputy Associate A ttorney 

General, “ Possibility of Transferring the Litigating Functions of the United Stales Railway Association to the D epartm ent o f Justice." A second memorandum discussed at a general level the application 

o f conflict of interest statutes and principles to the conduct o f governm ent litigation by private 

counsel. See memorandum of M arch 23, 1979, for the Deputy Associate A ttorney General, “Questions 

Raised by Proposed Appointment of Law yer in Private Practice as a G overnm ent Attorney for 

Purposes o f Trying Selected Civil Cases." [Note: The M arch 23, 1979, memorandum is published as an 

appendix to this opinion at p. 441, infra. Ed.)

434
pursuant to statute to the Department of Justice, and assuming that the 

Department received authority to hire private attorneys as contractors 

to represent the interests of the United States in litigation,2 would the 

Code bar such private attorneys from simultaneously representing in 

other litigation corporations or other parties whose interests are adverse 

to those of the United States?

We should stress at the outset that the application of the ABA Code 

in this situation, as in others, depends on the particular facts of each 

case. O f crucial importance, of course, is the nature of the representation which the private attorneys may seek to undertake or have already 

undertaken. These facts are, in the first instance, peculiarly within the 

knowledge of the private attorneys. Therefore, in this discussion we 

can only identify the general principles that would apply in a particular 

case.

Three of the ABA Code’s canons of ethics may bear on a situation in 

which a private attorney is to be engaged as an independent contractor 

of the Department to conduct railroad litigation. Canon 4 provides that 

a lawyer should preserve the confidences and secrets of a client learned 

while representing the client. Canon 5 establishes that a lawyer should 

exercise independent professional judgm ent on behalf of a client. In 

particular, such judgment should be exercised “solely for the benefit of 

[the] client and free of compromising influences and loyalties.” Ethical 

Consideration 5-1. Canon 9 directs that a lawyer should avoid even the 

appearance of professional impropriety. We will focus here on Canon 5. 

It states explicitly the principle that is most directly relevant to your 

question, namely, that an attorney should not compromise his independent professional judgm ent by “serving two masters” and is obligated to 

represent each client with undivided loyalty.

The applicable disciplinary rule, DR 5-105, reads as follows:

(A) A lawyer shall decline proffered employment if 

the exercise of his independent professional judgment in behalf of a client will be or is likely to be 

adversely affected by the acceptance of the proffered employment, or if it would be likely to 

involve him in representing differing interests, 

except to the extent permitted under D R 5- 

105(C).

2 We believe lhat under existing statutes the Attorney General would not have such authority. The 

issues surrounding the authority o f the Attorney General to hire counsel outside the Departm ent, and 

the A ttorney G eneral's duty to supervise litigation involving the interests of the United States, are 

discussed in our April II, 1979, memorandum for the Deputy Associate A ttorney General.

435
(B) A lawyer shall not continue multiple employment if the exercise of his independent professional judgm ent in behalf of a client will be or is 

likely to be adversely affected by his representation of another client, or if it would be likely to 

involve him in representing differing interests, 

except to the extent permitted under DR 5- 

105(C).

(C) In the situations covered by DR 5 -105(A) and

(B), a lawyer may represent multiple clients if it 

is obvious that he can adequately represent the 

interest of each and if each consents to the representation after full disclosure of the possible 

effect of such representation on the exercise of 

his independent professional judgm ent on behalf 

of each.

(D) If a lawyer is required to decline employment or 

to w ithdraw from employment under a Disciplinary Rule, no partner, or associate, or any other 

lawyer affiliated with him or his firm, may 

accept or continue such employment.

The foregoing rule establishes a two-part analysis for determining 

whether, in a particular case, an exception may be made to the principle that a lawyer should not represent multiple clients with “differing 

interests” :3 (1) it must be “obvious” that the lawyer can “adequately” 

represent each client’s interest, and (2) each client must consent to the 

representation after full disclosure of the facts. This two-part analysis is 

also reflected in the proposed rules of professional conduct, not yet 

adopted by the ABA, which were circulated at the ABA mid-winter 

meeting in a discussion draft dated January 30, 1980. That draft enunciates the basic principle that “a lawyer may not act as advocate against a 

person the lawyer represents in some other matter, even if the litigation 

is wholly unrelated.” {Id. at p. 29.) The draft goes on to say, however, 

that “. . . there are circumstances in which a lawyer may act as 

advocate against a client. For example, a lawyer engaged in a suit 

against a large corporation with diverse operations may accept employment by the corporation in an unrelated m atter if doing so will not 

affect the lawyer’s conduct of the suit and if both the litigant and the 

corporation consent upon adequate disclosure.” {Id.) Accordingly, the 

proposed ethical rules maintain both the requirement that dual representation would “not affect the lawyer’s conduct of the suit” and, thus,

3 T he phrase, “differing interests,” is defined rather broadly in the ABA Code. It includes “every 

interest that will adversely affect either the judgm ent or the loyally o f a lawyer to a client, w hether it 

be a conflicting, inconsistent, diverse, or other interest."

436
that the lawyer can adequately represent the client’s interests and the 

requirement that each client must consent to such representation.

The principles of Canon 5 would apply to the government’s independent contractor that sought simultaneously to represent both the 

United States, and in other litigation another party with interests adverse to those of the United States. In such a situation, a court will 

consider not just whether the two matters as to which simultaneous 

representation is to be undertaken are substantially related, but also 

whether “the duty of undivided loyalty which an attorney owes to 

each of his clients” may be discharged. Cinema 5, Ltd. v. Cinerama,

Inc., 528 F.2d 1384, 1385-87 (2d Cir. 1976). At a minimum, a court 

would normally expect that participation in a lawsuit against a client, or 

similar adverse representation, had been fully disclosed to and consented to by all concerned clients. See id. at 1386; see also IB M v. Levin,

579 F.2d 271, 280 (3d Cir. 1978) (an attorney “must resolve all doubts 

in favor of full disclosure to a client of the facts o f the attorney’s 

concurrent representation of another client in a lawsuit against him.”). 

Moreover, a court may well take an independent look at the underlying 

facts of the dual representation. As the Court of Appeals for the 

Second Circuit has written:

Where the relationship is a continuing one, adverse representation is prima facie improper . . . and the attorney 

must be prepared to show, at the very least, that there 

will be no actual or apparent conflict in loyalties or diminution in the vigor of his representation.4

In view of these principles, as a practical matter tw o different steps 

would have to be taken in the present situation. First, before any 

private firm were retained to represent the United States in the railroad 

litigation, it would be necessary for the United States to know about 

cases—involving litigation, counseling or other aspects of representation—that the firm presently has in which the interests of the United 

States in the railroad litigation would be implicated. Then, each of the 

cases should be studied in order to determine w hether the representation called for by them would make it unlikely that the private attorneys could also represent with undivided loyalty the interests of the 

United States in the railroad litigation. If agencies or instrumentalities 

of the United States other than the Department of Justice were involved in the firm’s other cases, those agencies should be consulted in 

determining w hether a conflict of interest would arise from engaging 

the firm in the railroad litigation.

Second, both the United States and the law firm’s other present 

clients would have to agree to its representation of the United States in 

the railroad litigation. And, whenever the firm sought to engage a new

4 Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384, 1387 (2d Cir. 1976) (emphasis in original).

437
client in a m atter involving the United States, the firm would have an 

obligation to inform the United States of that fact. In that way, the 

United States would be able to determine w hether it should continue to 

consent to representation by the private attorneys of its interests in the 

railroad litigation.

Also, the ethical constraints would not end with the termination of 

the railroad litigation itself. Even after the attorney-client relationship 

between private attorneys and the United States ended, the private 

attorneys would be bound not to reveal confidences of the United 

States gained as its lawyer. The “clearly settled test” in disqualification 

matters where the adverse party is the attorney’s former client is the socalled “substantial relationship” test: “ . . . the attorney will be 

disqualified if the subject m atter of the tw o representations are ‘substantially related.’ ” Westinghouse Elec. Corp. v. G u lf O il Corp., 588 F.2d 

221, 223 (7th Cir. 1978); see also T.C. & Theatre Corp. v. Warner Bros.

Pictures, Inc., 113 F. Supp. 265, 268 (S.D.N.Y. 1953). This test “embodies the substance of Canons 4 and 9 of the ABA Code of Professional Responsibility,” 588 F.2d at 224. It turns on “the possibility, or 

appearance thereof, that confidential information might have been given 

to the attorney in relation to the subsequent m atter in which disqualification is sought.” Id.; see also Westinghouse Elec. Corp. v. Kerr-McGee

Corp., 580 F.2d 1311, 1322 (7th Cir. 1978).5

In addition to the foregoing, we think a word is in order on a related, 

but somewhat distinct, set of issues. There has always been in this 

Office a basic question w hether it is appropriate for the Attorney 

General (or the President) to contract out the litigation responsibility of 

the United States. The question has both a constitutional and a policy 

aspect. First, on the constitutional level, we have long asserted that the 

making of litigation judgm ents (variously described as prosecutorial 

discretion or litigation management) is a function at the core of the 

President’s Article II duty to take care that the laws be faithfully 

executed, and must, therefore, be performed by those who serve under, 

and are responsible ultimately to, the President. Second, on the policy 

level, we have enunciated the view that the performance of this function is best assured by centralizing all litigation in one agency under 

one Cabinet official. W e have long defended the essentiality of A ttorney General “supervision” and “control” of litigation involving the 

United States.

O f course, at the same time, this Departm ent has often acknowledged 

the merit—or at least the tolerability—of allowing the independent 

regulatory commissions and government chartered corporations to

* A num ber o f steps should also be taken by a law firm during the course o f representing the United 

States to protect any confidences gained during that representation from other attorneys in the firm 

w ho may be involved in cases involving the United States, such as assuring that the files o f the 

railroad case will only be accessible to certain attorneys and those attorneys will have no contacts 

w ith others in the firm with respect to other cases involving the United States.

438
retain independent litigating authtirity. (Indeed, USRA was one of these 

independent entities.) O ur acceptance of that independence has grown 

out of an appreciation of the rather distinct nature of these entities; they 

were created by Congress to function to some extent beyond the 

control of the President. As long as their functions are not controllable 

in the normal manner by the Executive Branch, it makes at least 

reasonably good sense to allow their litigation judgments to go forward 

outside the President’s and the Attorney General’s control. However, 

the abolition of the independent entity and its incorporation into the 

structure of the Executive Branch would remove the only legitimate 

traditional reason for independent litigation responsibility.

If the USRA is to be no longer a party to the litigation, and if the 

United States is to be the only party having an interest in the outcome 

of the pending valuation cases, our knee jerk response ordinarily would 

be that there is no cause for having lawyers other than those supervised 

by the Attorney General making the litigation judgments and arguing 

the United States’ cause in court. The question you have posed as an 

ethical issue has, candidly, given us considerable concern because it 

involves a proposal that is alien to our experience and contrary to this 

Departm ent’s usual stance on questions of litigation supervision. How 

can a lawyer represent the United States in court if he or she is not 

accountable to the United States? How can that lawyer divine w hether 

the position he or she intends to take in court—both on questions of 

procedure and substance—is the view of the United States? At the least, 

unless there is central supervisory authority, the positions taken in these 

cases could only reflect the position of the United States in these cases

and not in other cases litigated by this Department.

Our study of the ethical question you posed has led us to the view 

that the ethical inquiry inevitably merges with these overarching questions of policy. They merge for this reason: The extent to which a 

private lawyer or firm can both represent the United States and litigate 

against it may depend upon the extent to which the work done on 

behalf of the United States can take place in a sterile environment 

removed from the usual exchange of information and personal interchange that characterizes our litigation practice. That is, if the representational activity could be performed without consultation and exchange within this Department, it might be fairly easy to conclude that 

there is less reason to believe that client confidences will be misused or 

that loyalty will be undercut. The fully independent contractor probably 

fits well within that structure. Such a contractor would receive an 

assignment and carry it out without further input or second-guessing by 

the Department. Thus, if we were to retain a law firm to perform a 

study on behalf of the Department, the performance of that segregable 

activity would probably not jeopardize the firm’s ability to litigate 

against this Departm ent in cases unrelated to that subject matter.

439
The question that we find especially troubling here is whether that 

same firm can, realistically and consistently with our traditional understanding of the role of this Department, undertake a contract to litigate 

on behalf of the United States that will not force it to interact closely 

with this Department. If the answer is that interaction and supervision 

are to be anticipated, then to that extent the likelihood of ethical 

problems correspondingly increases. In this same vein, one additional 

point should be reemphasized. It will not suffice for this Department 

alone to make the judgm ents w hether ethical problems appear in other 

cases in which the lawyer or firm may be involved. In those cases the 

views of our client agencies will have to be seriously evaluated, and we 

see no way in advance of consultation with those agencies that this 

Departm ent can pass on w hether disqualification would be required in 

some other cases.

The question you raise is obviously a difficult one, and we would not 

want our discussion here to suggest that the ethical dilemma presents an 

insurmountable obstacle. We would be pleased to address this question 

further as more concrete facts become available.

L a r r y A . H a m m o n d

Acting Assistant Attorney General

Office of Legal Counsel

440
A PPEN D IX

M arch 23, 1979

M EM ORANDUM O PIN IO N FO R T H E D EPU TY A SSO CIA TE 

A TTO RN EY G E N E R A L

This responds to your request for advice regarding problems that 

would be raised under the conflict of interest laws in connection with a 

proposed temporary appointment of a lawyer (L) in private practice as 

a government attorney for the purpose of trying selected civil cases. 

You stated that a number of alternatives are being considered: service 

with or without compensation, on a part- or full-time basis, with or 

without continuing affiliation with a private firm, for a period of time 

of a few months to about two years. In this memorandum we discuss 

the principal questions raised by these alternative proposals: (1) whether 

the lawyer may be hired as an independent contractor rather than as a 

government employee; (2) the compensation he can be paid; (3) the 

extent to which his disqualification would be necessary pursuant to 18 

U.S.C. § 208; (4) other limitations applicable to the lawyer and his 

partners during the lawyer’s tenure with the government; (5) restrictions on post-employment activities applicable to the lawyer and his 

partners; and (6) issues raised under the ABA Code of Professional 

Responsibility in connection with the proposed appointment. As you 

know, and as our comments in this memorandum demonstrate, the 

relevant federal personnel, conflict of interest, and ethical requirements 

constitute a formidable body of regulation. In our work in these areas 

we have frequently found that there is no reasonable substitute for 

careful case-by-case assessments. At the level of generality called for by 

your request we can do little more than identify the major considerations and suggest how they have been resolved in the past. We would, 

of course, be pleased to elaborate on any of these matters, or to provide 

specific advice on any particular arrangements as you may deem 

helpful.

1. Independent Contractor or Government Employee

Officers and employees in the Executive Branch are covered by the 

conflict of interest laws; independent contractors are not. One w ho in 

fact will serve as a government employee may not, however, be hired 

as an independent contractor to avoid the application of the conflict of

441
interest laws. The terms “officer” and “employee” are not defined in 

the conflict of interest laws themselves. The definitions of these terms 

provided by §§2104 and 2105 of Title 5 are ordinarily referred to for 

guidance. Three elements are regarded as having critical significance: 

(1) appointment in the civil service by one of the federal officers or 

employees specified; (2) performance of a federal function under authority of law or an “executive act”;‘ and (3) supervision by a federal 

official of the performance of the duties of the position.2 In this case, L 

would seem plainly to be an employee: he would be formally appointed, would perform services ordinarily performed by Department 

employees pursuant to 28 U.S.C. § 516,3 and would be under the supervision o f Departm ent officials who would remain responsible for the 

conduct of the litigation in question.4 In addition, § 516 of Title 28 

reserves to “officers” of the Departm ent of Justice the authority to 

conduct litigation in which the United States is a party. For both these 

reasons, we believe L must be appointed as an employee, rather than as 

an independent contractor.

2. Compensation

We assume that L would be employed on a temporary basis either as 

a Special Assistant United States A ttorney pursuant to 28 U.S.C. §543, 

or as a special attorney or special assistant to the A ttorney General 

pursuant to 28 U.S.C. § 515(b).5 If appointed as a Special Assistant

'T h e meaning of the phrase “executive act,’* used in 5 U.S.C. § 2105(a)(2), is unclear. Performance 

of executive functions would, however, clearly come within the terms o f the statute.

2 T he Civil Service Commission has developed a more lengthy list o f indicia of employee status: 

service under the supervision o f a federal employee; w ork in governm ent space with government 

equipment; access to governm ent files; handling of specific agency problems; service on more than one 

occasion on the same project; work on dates and hours requjred to be reported to the agency. See

Federal Personnel Manual, ch. 304. See also Lodge 1858. Am. Fed. o f Gov't Emp. v. Administrator,

NASA, 424 F. Supp. 186 (D .D .C . 1976); B. M anning, Federal Conflict o f Interest Law 27-34 (1964).

3 He would not, therefore, qualify as an expert or a consultant whose services may be procured by 

contract pursuant to 5 U.S.C. §3109 as authorized by §4(c), D epartm ent o f Justice A ppropriation 

Authorization A ct, Fiscal Year 1979, Pub. L. No. 95-624, 92 Stat. 3459, 3462.

4 T he C om ptroller Genera) has recognized that notw ithstanding the general rule that purely persona) services must be performed by regular governm ent employees, there may be unusual circum ­

stances w here—because of the nature of the w ork or the existence of conditions not permitting its 

perform ance in the usual manner (such as w here regular employees are not qualified or are not 

available)—contracting for personal services may be perm itted. Such circum stances exist where, in 

order to avoid the appearance o f conflict o f interest, it becomes necessary to retain private counsel to 

defend a federal employee sued in his individual,* rather than official, capacity in a civil proceeding 

w hich arises out of his perform ance of official duties at the same time that the employee is the target 

o f a criminal investigation concerning the act or acts for which he seeks representation. See 28 C.F.R. 

§§ 50.15, 50.16 (1978). No such unusual circum stances appear to exist in the instant case.

5 Notw ithstanding the existence of this authority, government*wide limitations on hiring may be in 

effect at the time o f the proposed appointment. A general freeze on permanent hiring could continue 

in effect in order to implement the requirements o f § 3 1 1(a) of the Civil Service Reform A ct of 1978, 

Public Law No. 95-454, 92 Stat. 1111, 1153, w hich provides that the total number of federal civilian 

employees on Septem ber 30, 1979, may not exceed the number on Septem ber 30, 1977. Tem porary 

hiring may not be used to circum vent such a freeze. See OM B Bulletin 79-2, H 3, (O ctober 27, 1978). 

In addition, it is notew orthy that the em ployment ceiling on total employees, imposed by OM B on 

each agency, encompasses tem porary employees.

442
United States Attorney, L ’s salary would be administratively determined pursuant to 28 U.S.C. § 548. Because of the ceiling now imposed 

by 5 U.S.C. §5308, the maximum per diem rate paid Special Assistant 

United States Attorneys is $182. Since no minimum salary is established 

by law for such positions, L might also be appointed without com pensation should he so desire.6 If appointed as a special assistant or special 

attorney, L could be paid an annual salary fixed by the A ttorney 

General at not more than $12,000. 28 U.S.C. § 515(b). We have previously opined that this provision permits compensation at a per diem 

rate of V360 of $12,000, rather than payment at a greater rate so long as 

his total compensation for the year does not exceed the $12,000 ceiling. 

Like §543, § 5 15(b) does not establish a minimum salary; service w ithout compensation would thus for similar reasons be permissible.

W hether additional payments may be made by his firm to supplement 

L’s government salary, and the extent to which compensation reflecting 

his or his partners’ earnings unrelated to his government service may be 

received by him to supplement his government salary, depends on 

whether L will qualify as a special government employee within the 

terms of § 202(a) of Title 18. The term “special Governm ent employee” 

is there defined to include “an officer or employee of the executive or 

legislative branch of the United States Government, . . . who is retained, designated, appointed, or employed to perform, with or without 

compensation, for not to exceed one hundred and thirty days in any 

period of three hundred and sixty-five days, temporary duties either on 

a full-time or intermittent basis.” For an individual to be appointed as a 

special government employee, the Department must in good faith estimate in advance of the appointment that he will serve for no more than 

130 days in the 365-day period beginning on the day of his appointment. In estimating the number of days to be served, a part of a day 

must be counted as a full day, and a Saturday, Sunday, or holiday on 

which duties are to be performed must be counted equally with a 

regular work day. Federal Personnel Manual, ch. 735, Appendix C. If 

an employee does, however, serve for more than 130 days in a 365-day 

period, he will nevertheless continue to be regarded as a special government employee so long as the original estimate was made in good 

faith. Id. Once an individual is appointed as a special government 

employee, the restrictions imposed by the conflict of interest laws apply 

even on days he does not serve the government. Id.

Sections 203 and 209 of Title 18 limit the compensation employees 

may receive in addition to their government salary. Section 209, which 

prohibits receipt or payment of any salary, contribution to or

6 Section 663(b) o f title 31 prohibits the acceptance o f ’'voluntary serv ice/’ This prohibition was not 

intended to preclude acceptance of “gratuitous” services rendered in an official capacity under regular 

appointment otherwise perm itted by law to be nonsalaried w here an agreem ent is reached prior to 

appointment that the employee is to serve without compensation. 30 Op. A tt’y Gen. SI (1913).

443
supplementation of salary as compensation for an employee’s services as 

an employee of the Executive Branch, is expressly not applicable to 

special government employees. 18 U.S.C. § 209(c). Section 203 prohibits 

receipt or payment of any compensation for services rendered or to be 

rendered either by a special government employee currently employed 

in the Executive Branch or by “another” (such as his law partner) only 

in relation to a particular m atter involving a specific party or parties in 

which he has at any time participated personally and substantially as a 

government employee or which is pending in the department in which 

he is serving. M oreover, the Department-wide ban applies only where 

he has served in the Departm ent for at least 61 days during the 

immediately proceeding 365 days. A special government employee 

would therefore be free to receive and to share in fees generated by his 

partners except as to a limited class of matters such as, for example, 

representation in connection with a criminal investigation that has not 

yet resulted in an indictment and is therefore still pending in the 

Department. Section 203 does not, however, bar receipt of fees in 

relation to representation before the federal courts even though the 

m atter may incidentally be pending in the Departm ent because of the 

D epartm ent’s role in the court proceeding.

Broader restrictions on receipt of outside compensation would apply 

if L does not qualify as a special government employee, i.e., if he 

would be a regular employee. If L were to serve without compensation, §209 would still be inapplicable. 18 U.S.C. § 209(c). However, 

§ 203 would prohibit receipt or payment of compensation for any services rendered or to be rendered by another before any department, 

agency, court-martial, officer, civil, military or naval commission in 

relation to any particular m atter in which the United States is a party 

or has a direct and substantial interest. L could not, therefore, share in 

fees for representational services rendered under such circumstances. 

While he could share in fees received by his partners for services 

rendered in court,7 he could not himself act as agent or attorney for 

anyone in court in connection with any particular m atter in which the 

United States is a party or has a substantial interest.8 Thus his income 

would be limited accordingly.9

Finally, if L is a regular employee, but does receive compensation 

from the government for his efforts, he would be subject both to the

7 He could not, how ever, receive any gratuity, or any share o f or interest in any claim against the 

United States in consideration o f assistance in the prosecution for such claim. 18 U.S.C. §205(1).

* 18 U .S .C §205(2).

9 D epartm ent regulations also prohibit private professional practice by other than special government employees. 28 C .F.R . 45.735-9(a) (1978). This requirement has been interpreted to require 

regular governm ent employees to resign from private practice during their period o f governm ent 

service. T he Associate A ttorney G eneral may make exceptions to this requirement in unusual circum ­

stances. 28 C .F.R . 45.735(c) (1978). Outside employm ent that would interfere with the proper perform ­

ance o f an em ployee’s duties, create or appear to create a conflict o f interest, o r reflect adversely on 

the D epartm ent o f Justice, is in any event barred. 28 C .F.R . 45.735-9(d) (1978).

444
restrictions imposed by § 209 and those imposed by § 203. He thus 

could not receive supplemental compensation from his firm for performing his government job. And if he were to work for the government on a full-time basis, he would probably be treated by the firm as 

having gone on a leave of absence from the firm and hence would be 

barred altogether from sharing in firm profits unless under established 

firm policy persons having such a status would be entitled to certain 

compensation regardless of their efforts on behalf of the firm. If L as a 

regular employee were to work only part-time for the government, an 

even more knotty problem of accounting would be posed. To satisfy 

the requirements of § 209, his share in firm profits would have to be 

reduced to reflect his more limited participation in the firm’s business; 

to satisfy § 203, his share would have to be further reduced in light of 

his inability to share in fees for representational services performed by 

another as outlined above.10 Perhaps the most workable solution to this 

problem would be for L to receive a salary reflecting the value of 

services he would render to the firm while working on a part-time 

basis. Any definite conclusion as to the compensation that might be 

received in these circumstances must, in any event, be deferred until 

more specific facts are presented.

3. Disqualification Pursuant to Section 208

The feasibility of your proposal may well ultimately turn on the 

application of §208 of Title 18 to the facts of each particular case. 

Section 208 requires an officer or employee (including a special government employee) to disqualify himself from participating in decisions 

with regard to particular matters where he, his spouse, minor child, 

partner, organization in which he is serving as officer, director, trustee, 

partner or employee or any person or organization with whom he is 

negotiating or has any arrangement concerning prospective employment has a financial interest. So long as L is affiliated with his firm,11 

and the firm, through its representation of certain clients, has a financial 

interest in decisions he might make in the course of his government 

service, disqualification would be necessary unless a waiver could be 

obtained under § 208(b).12 A waiver is available on an ad hoc basis 

where an employee receives in advance a written determination that 

the interest is not so substantial as to be deemed likely to affect the 

integrity of the services which the government may expect from that 

employee. Decisions in the situation you have described would not,

10 H e could, however, continue to participate in bona Tide pension, retirement, group life, health, or 

accident insurance, profit-sharing, stock bonus, or other employee welfare o r benefit plans. 18 U.S.C. 

§ 209(b).

11 A leave o f absence is regarded as a continuation o f employment within the terms o f § 208. 

lz„Thus, w here his law partner performs a significant amount o f w ork on behalf o f client X, L

would be required to refrain from participating in a decision that would significantly affect client X ’s 

business.

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however, appear to fall within this de minimus exception at least where 

clients of a major law firm are involved. Careful consideration would 

therefore have to be given to the circumstances in which decisions by 

L in the course of his government employment would affect clients of 

his firm, and thus, the financial interests of himself or his partners. 

Although § 208 does not, in terms, prohibit an individual’s appointment, 

if disqualification will frequently be required, the appointment may at 

the outset be futile.

4. Other Restrictions Under the Conflict of Interest Laws Applicable 

During Government Tenure

a. Restrictions on L. We have previously discussed the restrictions on 

receipt of compensation and on participation in decisions affecting a 

personal financial interest, and have briefly alluded to the prohibition 

on certain activities of government employees imposed by § 205. If L is 

a special government employee who serves for at least 61 days, he will 

be barred by § 205 from acting as attorney or agent in relation to any 

particular matter involving a specific party or parties in which he has at 

any time participated in the course of his government service, or which 

is pending in the department in which he is serving. He would not 

otherwise be barred from acting as an attorney in court proceedings or 

in proceedings before other agencies. If he does not qualify as a special 

government employee, he must refrain from acting as agent or attorney 

for anyone before any department, agency, court, court-martial, officer 

or any civil, military or naval commission in connection with any 

particular matter in which the United States is a party or has a direct 

and substantial interest.

b. Restrictions on L ’s partners. L’s partners are precluded from acting 

as agents or attorneys for anyone other than the United States in 

connection with any judicial proceeding or other particular matter in 

which the United States is a party or has a direct and substantial 

interest and in which L participates or has participated personally and 

substantially as a government employee, or which is under his official 

responsibility.13 This bar is only effective during the period in which L 

serves as a government employee. Thus, if L remains affiliated with his 

firm, the firm may not, during his tenure with the government, participate as attorney for parties to the litigation in which L is involved. L’s 

partners may not be charged on an imputation theory of wrongdoing in 

violation of §§ 203 and 205.14

13 18 U.S.C. § 207(c), redesignated as § 207(g), effective July 1, 1979.

14 T he obligations directly imposed on L ’s partners to observe the prohibitions against providing L 

with outside compensation are discussed above.

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5. Post-employment Restrictions

We assume that L, if appointed, will leave government service some 

time after the July 1 effective date of the recent amendments to § 207 

of Title 18. Unless he is designated for coverage under § 207(d),15 he 

would not be subject to the aiding and assisting bar of § 207(b)(ii) and 

the 1-year bar on contacts with the Department under § 207(c). He 

would, however, be permanently barred from acting as attorney or 

agent or otherwise representing any person other than the United States 

in making any communication, with intent to influence, to or in making 

any formal or informal appearance before any department or court in 

relation to any particular matter in which the United States or the 

District of Columbia is a party or has a direct and substantial interest 

and in which he participated personally and substantially. He would 

also be prohibited for 2 years from acting as agent or attorney in 

similar circumstances with regard to matters under his official responsibility during the last year of his government service. In all likelihood, 

L’s realm of official responsibility will be no broader than the matter in 

which he participates personally and substantially, and he will essentially be barred simply from switching sides in the case in which he 

served as government counsel and in closely related cases.

Ethical obligations, rather than statutory requirements, are the source 

of the principal restrictions applicable to L’s partners during the postemployment period.

6. Ethical Constraints

While we will touch here briefly upon ethical constraints that may be 

of significance, you should be aware that a general discussion of this 

sort is of limited value and adequate guidance can only be given where 

reference can be made to particular facts and circumstances.

a. Restraints on L ’s service with the government. If L or his firm has 

previously represented any of the defendants in the case he will be 

trying for the government, he may be subject to a motion to disqualify 

based on the American Bar Association’s Canon 4 directive to preserve 

the secrets and confidences of a client unless he could demonstrate that 

he never received confidential information in a case substantially related to the case he handles for the government. Even were the former 

client to waive such disqualification, a question would be presented 

whether the United States should accept such a waiver, particularly in 

a case in which the United States is suing the client, since the govern15 Persons paid al Che executive level are automatically covered. Those paid at a rate o f G S-17 or 

above who have significant decisionmaking or supervisory responsibility and others in positions with 

comparable decisionmaking authority are to be designated for coverage by the D irector o f the Office 

o f G overnm ent Ethics.

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ment should be above reproach and should avoid even the appearance 

of impropriety.

b. Restraints on L's firm following his service with the government.

Following his government service, L would be obliged, pursuant to 

DR 9 -101(B) of the ABA Code of Professional Responsibility, to decline private employment in a matter in which he had substantial 

responsibility while he was a public employee. His disqualification 

would also be imputed to his firm pursuant to DR 5 -105(D) of the 

ABA Code of Professional Responsibility. This Department has taken 

the position, approved in ABA Formal Opinion 342, that the disqualification of a firm may be waived by the government whenever effective 

screening measures by the firm will effectively isolate the lawyer who 

is personally barred from participating in the particular matter and 

sharing in the fees attributable to it, so long as there is no appearance of 

significant impropriety affecting the interests of the government.16

7. Conclusions

The above discussion has necessarily been rather general in nature. 

Should you determine that as a policy matter appointment of L would 

be appropriate, a more detailed review of the conflict of interest problems likely to be presented would certainly be advisable. For present 

purposes, however, the following conclusions are perhaps the most 

significant.

a. L could be appointed as a Special Assistant United States Attorney 

to be paid at a per diem rate of up to $182. If he is appointed as a 

special government employee or serves without compensation, his firm 

may supplement his salary.

b. For L to qualify as a special government employee the Department would be required to estimate in good faith that he would serve 

the government on no more than 130 out of the 365 consecutive days 

beginning with the day of his appointment. Days on which only part of 

his time was devoted to government service would count as days 

worked for purposes of this estimate.

c. Unless L qualifies as a special government employee, he may as a 

regular employee be required significantly to limit his activities in 

private practice pursuant to 18 U.S.C. §§ 203 and 205.

d. Depending on the facts of the case on which L will be working 

and the clients of the firm with which he is affiliated, L may be 

seriously handicapped in his performance of his governmental duties 

because of his obligation under § 208 to refrain from participating in 

decisions with regard to a matter in which he or his partners have a 

financial interest or in which his law firm has a financial interest

16 T he currently pending proposal for revision o f the D istrict of Columbia Bar’s Code o f Professional Responsibility also addresses this question.

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because of it representation of a party in the matter. If so, he should 

probably not be appointed.

e. L may not subsequently serve as agent or attorney in a particular 

matter in which he personally and substantially participated while in 

the government.

f. During L’s tenure with the government, L’s partners are barred 

from serving as attorneys in a particular matter in which L participates 

personally and substantially. Following his return to private practice, 

their obligations would be ethical in nature.

L a r r y A. H a m m o n d 

Deputy Assistant Attorney General

Office o f Legal Counsel

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