Opinion ID: 1442167
Heading Depth: 2
Heading Rank: 2

Heading: Client Conflicts of Interest

Text: Disciplinary rules regulating conflicts of interest, in effect at the relevant time, provided in part (emphasis has been added): Except with the consent of his client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of his client will be or reasonably may be affected by his own financial, business, property, or personal interests. DR 5-101(A). A lawyer shall not enter into a business transaction with a client if they have differing interests therein and if the client expects the lawyer to exercise his professional judgment therein for the protection of the client, unless the client has consented after full disclosure. DR 5-104(A). (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, except to the extent permitted under DR 5-105(C). (B) A lawyer shall not continue multiple employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by his representation of another client, 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 judgment on behalf of each. DR 5-105. The words emphasized indicate that the lawyer-client relationship is an element required by each of the conflict of interest disciplinary rules. The Bar's complaint does not directly or separately allege any specific lawyer-client relationship, but it does allege: Both Mr. and Mrs. Hartley and Miljus reasonably assumed that the Accused was acting as their lawyer in handling the note and the mortgage transactions for the benefit of MTC.    By reason of the Accused being a shareholder and director of MTC, obligating himself jointly on promissory notes to Miljus and failing to disclose to the Hartleys or Miljus the extent of his representation of them.    By reason of his involvement in the transactions among MTC, the Hartleys and Miljus, all of whom had adverse interests in the transactions and each of whom believed himself or herself to be represented by the Accused. The Bar alleged that accused's acts in the loan transactions violated the relevant disciplinary rules. In effect, the Bar argues that, because some of the services performed by accused were of the kind that lawyers traditionally perform for clients, all the persons involved on all three sides of the transaction were the clients of the lawyer performing the services. The Bar and accused agree that MTC was accused's client when he performed the tasks. The Bar asserts that both Miljus and the shareholders who put up their property interests as security were also his clients in the transactions.