by Jeremy G. Suiter

Attorneys occasionally are asked to represent more than one client in the same matter, such as filing a lawsuit on behalf of a husband and wife who were injured in a car accident, or defending a founder and his company in a lawsuit filed by a disgruntled investor. Representing more than one client in the same matter may offer practical advantages, such as strategic benefits, cost savings, and a unified front. But joint representation also presents disadvantages and ethical concerns that would not exist if each client hired separate counsel. This article highlights ethical issues that a lawyer should consider up front when deciding whether to accept joint representation of multiple clients.

Our duties as lawyers

The attorney-client relationship “is a fiduciary relation of the very highest character.” Cox v. Delmas, 99 Cal. 104, 123 (1893). As fiduciaries, attorneys owe fundamental duties to each client, including the duties of loyalty, confidentiality, and communication. If an attorney believes for any reason that he or she cannot fulfill all of these fundamental duties to each potential joint client, the attorney should not accept the joint representation.

Admittedly, however, this is easier said than done. We all believe that we will treat each joint client fairly and equally. But what if one of the potential joint clients is a longtime family friend, or the one paying all of your fees, or the one selected to speak for all the joint clients? Or, what if the potential joint clients have an actual or potential conflict with each other before the matter even begins?

Recognizing that such scenarios may arise, the California Rules of Professional Conduct, and the case law interpreting these rules, impose various ethical requirements that lawyers must follow to protect joint clients and to promote respect and confidence in the legal profession.

Do the joint clients have conflicting interests?

The first thing to consider is whether the interests of the potential joint clients are in conflict. Rule 3-310(C) of the California Rules of Professional Conduct says that, unless an attorney obtains “informed written consent” from each client, the attorney shall not accept representation of more than one client in a matter in which the interests of the clients (1) potentially conflict or (2) actually conflict.

Rule 3-310(A)(2) defines “informed written consent” as the client’s “written agreement to the representation following written disclosure.” Rule 3-310(A)(1) defines “disclosure” as informing the client “of the relevant circumstances and of the actual and reasonably foreseeable adverse consequences to the client . . . .”

In many cases, the interests of joint clients are aligned, at least in the beginning, and do not present an actual conflict. But in perhaps most cases, if not every case, “reasonably foreseeable adverse consequences” could arise from the joint representation, including the possibility that joint clients could take different positions on the underlying facts, the legal strategies, or the approaches to accepting settlement or pursuing trial.

Potential conflicts also can arise from the fact that there are no “secrets” among joint clients. For example, the attorney-client privilege set forth in Rule 3-100 and Business & Professions Code section 6068(e)(1) protects your communications with joint clients from disclosure to outside third parties, but the privilege does not apply within the joint client relationship itself. See Zador Corp. v. Kwan, 31 Cal. App. 4th 1285, 1294 (1995). This means that anything a joint client discloses to you is subject to disclosure to all other joint clients, and can be admissible in a subsequent civil proceeding between the joint clients. Cal. Evid. Code § 962. Similarly, if a joint client gives you significant information about the representation, you are obligated to provide this information to all of the other joint clients, even if the first joint client wants you to keep that information secret. See Rule 3-500; Cal. Bus. & Prof. Code § 6068(e)(1).

Before entering into joint representation, you should discuss all potential or actual conflicts with each potential joint client. You should explain that if two or more joint clients develop a conflict with each other during the joint representation that cannot be resolved by further informed written consent, you may have to withdraw from representing all of the joint clients. This may impose a substantial burden of both time and money on any joint client that you cease to represent.

A careful attorney also may want to discuss in advance with the joint clients whether they want the attorney to continue to represent any of them if an unresolvable conflict arises during the joint representation. In that scenario, the attorney likely would take positions adverse to the former joint clients that the attorney ceases to represent. This would implicate Rule 3-310(E), which states that, without informed written consent, an attorney may not be adverse to a former client where, by reason of the prior representation, the attorney has obtained confidential information material to the current representation. Although a court may not approve a boilerplate advance waiver in which the disclosure was insufficient to permit informed written consent (see, e.g., Sheppard, Mullin, Richter & Hampton, LLP v. J-M Mfg., 244 Cal. App. 4th 590 (2016)), the court of appeal did approve an advance waiver in Zador Corp., 31 Cal. App. 4th at 1285.

If all potential joint clients want to engage you after that discussion, you should give them a detailed letter disclosing all “of the relevant circumstances and of the actual and reasonably foreseeable adverse consequences to the client,” Rule 3-310(A)(1), including the terms of any advance waiver should an unresolvable conflict arise during the joint representation, and request that they sign and return the letter to confirm their informed written consent to the proposed joint representation.

But what if a prospective joint client is an organization? Who may give informed written consent to joint representation on the organization’s behalf? According to Rule 3-600, consent to joint representation may be given “by an appropriate constituent of the organization other than the individual or constituent who is to be represented, or by the shareholder(s) or organization members.” This means that if you are asked to defend a corporation and one of its officers, the same individual cannot give informed written consent on behalf of himself or herself and the company. There are narrow exceptions where no one else can give consent, but such situations are fact-specific and rare. See COPRAC Formal Opinion No. 1999-153.

Of course, some conflicts cannot be waived. For example, in Klemm v. Superior Court, 75 Cal. App. 3d 893, 899 (1977), the court stated that an attorney could not represent both opposing sides in a contested hearing, and that any purported informed consent by the clients “would be neither intelligent nor informed.” For a further discussion of Klemm and other non-waivable conflicts, see Kevin Mohr, “Unwaivable Conflicts of Interest,” Los Angeles County Bar Association, County Bar Update, August 2012, Vol. 32, No. 7.

Do you have a relationship with a joint client that requires written disclosure to the others?

Another important issue to consider is whether you have or had a legal, business, financial, professional, or personal relationship with any of the potential joint clients. For example, is one of the potential joint clients a family friend, a business associate, or a current client? That relationship could affect your representation and may need to be disclosed in writing to the other potential joint clients.

Of relevance here, Rule 3-310(B) states that an attorney may not accept representation of a client without providing written disclosure to that client where: (1) the attorney has a legal, business, financial, professional, or personal relationship with a party in the same matter; (2) the attorney knows or reasonably should know that he or she previously had a legal, business, financial, professional, or personal relationship with a party in the same matter which would substantially affect the attorney’s representation; or (3) the attorney has or had a legal, business, financial, professional, or personal relationship with another person or entity the attorney knows or reasonably should know would be affected substantially by resolution of the matter.

If Rule 3-310(B) applies, you should discuss the applicable relationship with each potential joint client and give them written disclosures informing them of the relevant circumstances and the actual and reasonably foreseeable adverse consequences to the potential joint client. Although Rule 3-310(B) does not require the client’s informed written consent, a careful lawyer may want to include all such written disclosures in the letter seeking the potential joint client’s informed written consent under Rule 3-310(C).

Who will pay your legal fees?

The fee arrangement is another important issue that you should address at the inception. Do the potential joint clients want to split your legal fees equally amongst themselves? Do they want one joint client to pay all of your fees? Or is there another payment arrangement they want to pursue?

Whatever the arrangement, if it requires one joint client to pay some or all of the fees of another joint client, the arrangement likely implicates Rule 3-310(F). That rule states that an attorney may not accept compensation for representing a client from anyone other than that client unless: (1) there is no interference with the attorney’s independence of professional judgment or with the client-lawyer relationship; (2) the information relating to representation of the client is protected as required by California Business and Professions Code section 6068(e) (the attorney-client privilege); and (3) the attorney obtains the client’s informed written consent, unless such nondisclosure is otherwise authorized by law or the member is rendering legal services on behalf of any public agency that provides legal services to other public agencies or the public.

If Rule 3-310(F) applies, you should discuss the fee arrangement in advance with all potential joint clients before sending written disclosures and seeking their informed written consent. You also should document the payment arrangement in your engagement letter or other writing to the client. See Cal. Bus. & Prof. Code §§ 6147, 6148. This will help ensure compliance with Rule 3-310(F), make sure that everyone is on the same page about the payment of your fees, and prevent misunderstandings and fee disputes down the road.

Will the joint clients have a designated spokesperson?

Another factor to consider is how the potential joint clients want to communicate with you about the case. Rule 3-500 requires attorneys to “keep a client reasonably informed about significant developments relating to the employment or representation, including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed.” This means that you should inform all joint clients about significant developments throughout the representation, and include all joint clients if possible on your clients’ letters and emails.

But what about routine questions that require client input as the case proceeds, such as when opposing counsel wants a deadline extension or you want to file a discovery motion? You should ask all joint clients in advance if they want to participate in a discussion with you about these types of issues, or if they instead want to appoint one joint client as their designated spokesperson to convey the group’s decision.

No matter what they choose, it is a good idea to document their decision in the engagement letter or other writing sent to all joint clients afterwards. Doing so will help manage client expectations and reduce the likelihood of miscommunication going forward.

But even if the potential joint clients designate a spokesperson, significant issues warrant communication with all joint clients, such as potential or actual conflicts that develop as the matter progresses. In addition, Rule 3-310(D) requires the attorney to obtain the informed written consent of each joint client before entering into an aggregate settlement of claims by or against the joint clients. See, e.g., Jeremy G. Suiter, “Don’t Forget the Aggregate Settlement Rule When Negotiating a Civil Settlement for Multiple Defendants,” Orange County Lawyer, Oct. 2015, Vol. 57, No. 10.

Who will get the client file after the representation ends?

Last but not least, you should determine which joint client will get the original client file after your representation ends. Rule 3-700(D)(1) states that an attorney whose representation has ended must “promptly release to the client, at the request of the client, all the client papers and property.” The rule defines “client papers and property” to include “correspondence, pleadings, deposition transcripts, exhibits, physical evidence, expert’s reports, and other items reasonably necessary to the client’s representation, whether the client has paid for them or not.” Id.

But who gets the original client file when you have multiple clients? A prudent course is to discuss the issue with each joint client in advance of the joint representation and reach agreement as to which joint client is entitled to receive the original file, and which of them may request copies of that file. You should document this agreement in your engagement letter or other writing sent to all joint clients afterwards.

Conclusion

Joint representation offers meaningful benefits to clients, but also potential pitfalls. Taking the time to review and comply with the various ethics rules governing joint representation will help ensure that we fulfill our duty as lawyers to treat all joint clients equally and fairly.

Jeremy G. Suiter is a litigation shareholder in the Newport Beach office of Stradling Yocca Carlson & Rauth and is a member of the OCBA’s Professionalism & Ethics Committee. He can be reached at jsuiter@sycr.com.