Opinion 1743

You wish to know whether your firm can represent a corporation where the CEO of the proposed client corporation is also a consultant to the law firm on technical matters. The Committee assumes for the purposes of this inquiry that the law firm's proposed client is the corporation and no attorney-client relationship exists with the CEO. The law firm needs to examine the relationship it has with the CEO as an independent contractor or consultant. That relationship must not interfere with the independent judgment rendered by the firm on behalf of the corporation. Assuming that the firm is satisfied, on an objective basis, that it can meet this standard, RPC 1.7(b) would require disclosure of the relationship as a potential conflict and a waiver by the corporation in writing. Under the circumstances of the potential interference of independent judgment because of the relationship between the law firm and the CEO, waiver should be accomplished by the Board of the corporation (if a closely held corporation, by the shareholders as well) rather than simply by the CEO acting on behalf of the corporation.

Next, the law firm should give notice to both the corporation and the CEO defining the differing relationships. Those differing relationships include the non-representation of the CEO individually, the severability of the CEO's relationship as an outside consultant to the firm from the representation of the corporation (the two are unrelated and one could cease [one] without ceasing the other) and the limits of confidentiality under RPC 1.6. For example, if the firm learned of information about the CEO while using the CEO as a consultant, that information would not be confidential from the corporation and would have to be passed on to the corporation even though adverse to the CEO. There should also be a warning under RPC 1.7(b) that should a dispute arise between the law firm and the CEO in the consultancy relationship, this might also require a withdrawal of the law firm from representing the corporation.

Advisory Opinions are provided for the education of the Bar and reflect the opinion of the Committee on Professional Ethics (CPE) or its predecessors. Advisory Opinions are provided pursuant to the authorization granted by the Board of Governors, but are not individually approved by the Board and do not reflect the official position of the Bar association. Laws other than the Washington State Rules of Professional Conduct may apply to the inquiry. The Committee's answer does not include or opine about any other applicable law other than the meaning of the Rules of Professional Conduct.