State Bar Association
Committee on Professional Ethics
Topic: Conflicting interests; former client
Digest: A law school legal clinic
which previously represented a not-for-profit organization may thereafter
represent an organization with similar objectives in applying to the Internal
Revenue Service for not-for-profit status, since the matters for the proposed and former clients are not
substantially related within the meaning of the Rules, the new representation
would not involve use of confidential information of the former client, and the
relevant interests of the clients are not materially adverse.
Rules: 1.6(a), 1.9
A law school legal clinic (the “Clinic”)
previously represented a not-for-profit organization (the “Former
Client”). As a result of a dispute
within the organization, a group of dissident organization members has formed a
new organization (the “Proposed Client”) that would perform the same kinds of
functions as the Former Client, and has asked the Clinic to represent it in
applying for tax-exempt status under Section 501(c)(3) of the Internal Revenue
Code (the “New Representation”).
the Clinic undertake the New Representation, or would such representation
constitute a conflict of interest?
the Rules of Professional Conduct (the “Rules”), a lawyer has ethical
responsibilities to former clients as well as to current ones: “After termination of a client lawyer
relationship, a lawyer has certain continuing duties with respect to
confidentiality and conflicts of interest and thus may not represent another
client except in conformity with these Rules.”
Rule 1.9, Cmt. .
particular, Rule 1.9 (Duties to Former Clients) provides:
(a) A lawyer who has formerly represented a
client in a matter shall not thereafter represent another person in the same or
a substantially related matter in which that person’s interests are materially adverse to the interests of the
former client unless the former client gives informed consent, confirmed in
(c) A lawyer who has formerly represented a
client in a matter … shall not thereafter:
(1) use confidential information of the former
client protected by Rule 1.6 to the disadvantage of the former client, except
as these Rules would permit or require with respect to a current client or when
the information has become generally known; or
(2) reveal confidential information of the former
client protected by Rule 1.6 except as these Rules would permit or require with
respect to a current client.
term “substantially related” is explained in Comment 3 to Rule 1.9:
“substantially related” for purposes of this Rule if they involve the same
transaction or legal dispute or if, under the circumstances, a reasonable
lawyer would conclude that there is otherwise a substantial risk that
confidential factual information that would normally have been obtained in the
prior representation would materially advance the client’s position in the
Clinic were to undertake an extensive or continuing relationship with the
Proposed Client, that representation could include matters substantially related
to the representation of the Former Client in which the two clients’ interests
were materially adverse. In that case,
Rule 1.9(a) would preclude representation of the Proposed Client unless the
Former Client gave informed consent, confirmed in writing.
7. For two reasons, however, we believe that
the limited New Representation proposed in the inquiry would be unlikely to
give rise to such a conflict.
8. First, on the facts presented, the New
Representation does not seem “substantially related” to the representation of
the Former Client within the meaning of Rule 1.9. The filing of an application for tax
exemption would generally not implicate confidential information of the Former
Client. The information needed for such an
application is, rather, information about the Proposed Client and its
conformity with legal requirements for tax-exempt status.
the facts presented do not suggest that the Proposed Client’s interests in the
IRS application would be materially adverse to the interests of the Former
Client. While the Former Client may be
concerned with competition from a new organization with similar goals, this
kind of general enterprise competition is not enough to create a conflict of
interest. Cf. Rule 1.7, Cmt. 
(“simultaneous representation in unrelated matters of clients whose interests
are only economically adverse, such as representation of competing economic
enterprises in unrelated litigation, does not ordinarily constitute a conflict
of interest and thus may not require consent of the respective clients”). Just as representation of competing business
enterprises is not automatically representation of “differing interests” under
Rule 1.7(a), we believe that competition between not-for-profit organizations
would not ordinarily make establishment of the newer organization materially
adverse to the interests of the existing one under Rule 1.9(a).
10. Under Rule 1.9, the Clinic’s representation
of the Proposed Client would not be in a matter substantially related to its
representation of the Former Client; it would not involve use of the Former
Client’s confidential information; and the relevant interests of the Former
Client and Proposed Client are not materially adverse. The Clinic may thus undertake the New
Representation, representing the Proposed Client in applying for not-for-profit
status, without obtaining the Former Client’s consent.
 See Rule 1.6(a) (“‘Confidential
information’ does not ordinarily include (i) a lawyer’s legal knowledge or
legal research or (ii) information that is generally known in the local
community or in the trade, field or profession to which the information
relates.”); Rule 1.6, Cmt. [4A] (“The accumulation of legal knowledge or legal
research that a lawyer acquires through practice ordinarily is not client
information protected by this Rule.
However, in some circumstances, including where the client and the
lawyer have so agreed, a client may have a proprietary interest in a particular
product of the lawyer’s research.”); Rule 1.9, Cmt.  (“In the case of an
organizational client, general knowledge of the client’s policies and practices
ordinarily will not preclude a subsequent representation. On the other hand, knowledge of specific
facts gained in a prior representation that are relevant to the matter in
question ordinarily will preclude such a representation.”).