Ethics Advisory Opinion No. 98-01

(Approved January 23, 1998)
Issue:
May an elected county attorney or other prosecutor who is allowed to engage in private practice continue to act as attorney in a civil matter in which the opposing party in the civil matter commits a crime or otherwise comes under suspicion as a potential criminal defendant in that county? Is it enough that the prosecutor refers any criminal matter involving the opposing litigant to another prosecutor, or must the attorney withdraw from both matters?

Opinion: As a general rule, a Utah prosecuting attorney acting as a private practitioner should avoid engaging in a civil action that involves parties and facts that have been or become the subject of criminal investigation within the prosecutor’s jurisdiction. Provided the attorney has not become personally substantially involved in and has no meaningful control over any investigation of the criminal matter, the attorney already involved in civil litigation need not withdraw from the civil matter and can avoid inherent conflicts by referring the criminal matter to an appropriate conflicts attorney.
Analysis: The Utah Rules of Professional Conduct do not expressly address the obligations of attorneys in public office or of public prosecutors where potential conflicts of interest may arise from simultaneous private civil practice. The question posed to the Committee supposes that the prosecutor at all times is “adverse” to the opposing party, both in the civil as well as the potential criminal matter. This situation is therefore governed by Rule 1.7(b) of the Rules of Professional Conduct, which prohibits representation of one client if the representation may be materially limited by the attorney’s responsibilities to another client or to a third person. As the Comment to Rule 1.7 sets forth, the rule applies not only where there is actual, immediate conflict between the interests involved, but wherever there exists “the likelihood that a conflict will eventuate [which] will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client.”
In evaluating the possible likelihood for conflict in this regard, the Committee joins in the opinion expressed by the majority of courts and others who have opined:
We can extend [the general rule's] prohibition beyond cases of actual present conflict to those in which the interests may with some reasonable degree of probability become conflicting. Even the possibility of conflict should deter a lawyer in public office from engaging in a civil action involving parties and facts which have been the subject of previous criminal investigation, as later developments may indicate, notwithstanding previous decision to the contrary, that criminal action should be taken.1
This general caution can logically be extended to ongoing litigation during which an opposing party becomes the subject of criminal investigation:
A lawyer should not be permitted to accept other or subsequent employment in a matter which may conflict with the interest covered by his professional obligation or which may be adverse to interests which are closely related to the law and facts involved in a matter which he has previously handled. The attempted double role is fraught with many conceivable inconsistencies and antagonisms. Public duty and fealty to private client, involving subordination of the interest of one or the other, may embarrassingly challenge the conscience of the lawyer who attempts to serve both.2
As various courts have recognized, a prosecuting attorney “holds an office of unusual responsibility, and he must exercise his duties with complete impartiality.”3The American Bar Association describe the prosecutor’s role in more specific terms, declaring that “[t]he prosecutor is both an administrator of justice and an advocate; he must exercise sound discretion in the performance of his functions.”4In Utah as in other jurisdictions, the prosecutor enjoys discretion in choosing which cases to pursue, what crimes to charge, and how to allocate governmental and police resources in investigative roles.5
Many commentators have recognized the concomitant ethical standards that must accompany the discretion vested in the public prosecutor’s function:
Our society can tolerate a system that allows such an accretion of power [vested in a prosecutor] despite the limited ability to review the decision-making process because we charge the district attorney or prosecuting attorney with a high ethical standard. That standard- the exercise of his “judicial capacity”- is breached not only by actual conflict of interest, but also by actions which have the appearance of conflict of interest.6
An attempt to act simultaneously in both a civil and a criminal capacity with respect to the same litigant is usually too difficult a situation to avoid impermissible conflicts. As one jurist reasons:
[I]n [such a] case, neither [the Court] nor the [accused] can know how or if the district attorney’s decision to prosecute was influenced by his representation of the victim in a civil suit. The situation is too ripe, however, with potential abuse: an attorney would be hard pressed to abandon prosecution of a defendant when a criminal conviction would be proof of the alleged tort in the civil suit; the attorney would be free to use public resources to rout out additional evidence against the criminal defendant, a pursuit based not necessarily on the prosecutor’s view of the social importance of the case, but solely on the private interest which he and his client have in the case. A defendant does not have a right not to be prosecuted; he does, however, have a right to have his case reviewed by an administrator of justice with his mind on the public purpose, not by an advocate whose judgment may be blurred by subjective reasons.7
For all these reasons, the Committee believes that, where a prosecutor is already engaged in representing a private party in civil litigation and the opposing party becomes the subject of criminal investigation or possible prosecution within the prosecutor’s jurisdiction, it is sufficient that the prosecutor recuse himself from the criminal matter and withdraw from any involvement in the investigation or prosecution of that litigant. In withdrawing from the criminal matter, the limitations and requirements of Rule 1.10 of the Rules of Professional Conduct, describing imputed disqualifications among attorneys associated in a firm, must also be strictly followed.
Further, to the extent that the prosecutor may have already become substantially personally involved in any material stage of the criminal investigation or prosecution, or if the prosecutor has or may exercise control over the prosecutorial function and decisions relating to the suspect, then withdrawal from both matters would be required.
Finally, the Committee specifically notes, as have courts and commentators generally, that the question posed here turns solely on the ethical guidelines for appropriate attorney behavior. These rules are not necessarily the same rules for determining misconduct in a trial setting or in determining whether any given potential conflict may adversely affect the rights of an accused in any proceeding.8
Footnotes
1.ABA Comm. On Ethics and Professional Responsibility, Formal Op. 135 (1935).
2.ABA Comm. On Ethics and Professional Responsibility, Formal Op. 128 (1935).
3.Commonwealth v. Wiggins, 328 A.2d 520, 522 (Pa. Superior Ct. 1974).
4.ABA Standards for Criminal Justice, Standards Relating to the Prosecution Function § 1.1(b).
5.See United States v. Cox, 342 F. 2d 167 (5th Cir. 1965); Brietel, Con-trols in Criminal Law Enforcement, 27 U. Chi. L. Rev. 427 (1960). There does not appear to be any excep-tion to the general rule and principles discussed here based on the relative “seriousness” of the crime with which a defendant may be charged. Whenever a prosecutor is called upon to exercise prosecutorial discretion, the potential for conflicts from dual represen-tation will arise.
6.Commonwealth v. Dunlap, 335 A.2d 364 (Pa. Superior Ct. 1975) (Hoffman, J., dissenting).
7.Id.
8.See, e.g., ABA Standards for Criminal Justice § 1.1 (“these standards are intended as guides for the conduct of lawyers and as the basis for disciplinary action, not as criteria for the judicial evaluation of prosecutorial misconduct to determine the validity of a conviction.”)

Ethics Advisory Opinion No. 98-02

(Approved April 17, 1998)
Issue:
May an attorney represent both a county and a city that lies within the jurisdiction of the county as to civil matters?

Opinion: The Utah Rules of Professional Conduct do not require a blanket prohibition of an attorney’s representation of both a city and county on civil matters. This general conclusion is, in part, in conflict with Utah Ethics Advisory Opinion No. 81, which is accordingly overruled in part. In the event the two entities are directly in conflict as to a particular matter, however, the attorney may not represent both (and perhaps neither) of the parties in that matter or other matters, unless the attorney can comply with the provisions of Rule 1.7(a). Similarly, in some circumstances the attorney may be unable to represent one or both entities under Rule 1.7(b).
Analysis: Utah Ethics Advisory Opinion No. 81 holds categorically that an attorney cannot simultaneously represent the civil interests of a county and city within the county’s jurisdiction. That opinion was issued in 1987, prior to the adoption of the current Rules of Professional Conduct and is based on concerns of divided loyalties, improper use of confidential information, and the appearance of impropriety. The current Rules of Professional Conduct no longer require such a blanket prohibition.
Utah Rule of Professional Conduct 1.7 establishes the ethical bounds of representation in conflict-of-interest situations.1When the city and county are directly adverse to each other, such as in negotiating or preparing a contract between the two entities, Rule 1.7(a) prohibits the attorney from representing either, unless the attorney reasonably believes it will not adversely affect either client and unless each client consents. While we do not decide who is capable of giving consent on behalf of a governmental entity, both the city and county may consent to the attorney’s representation of one or both of them. We also note that Rule 2.2 specifically contemplates the situation where the attorney acts as an intermediary between two parties,2but only if Rule 1.7 is satisfied. If, however, the attorney is not comfortable with representing either or both under the circumstances, or if the attorney is unable to consult adequately with either party in order to get consent due to Rule 1.6 confidentiality-of-information issues, the attorney must withdraw from representation in that matter.
Similarly, Rule 1.7(c) prohibits an attorney from representing the city or county in a matter when those two entities are adverse to each other in a separate matter.3So, for example, if th(a)e city and county are negotiating a contract between them and have hired separate counsel because of the Rule 1.7 conflict, the city/county attorney may not be able to represent either the city or the county and, perhaps, neither of them-in any other matter until the contract is resolved. Again, however, if the attorney believes the representation will not be affected, and if both clients consent to the representation of one or both of them, the attorney may proceed consistent with the consent. If not, the attorney must withdraw until the matter on which the two entities are in direct conflict is resolved.
Finally, Rule 1.7(b) prohibits representation where the attorney’s representation of another client may interfere. Can a city attorney adequately represent both the city’s civil interests and the county’s civil interests, or vice versa, where there is no directly adverse conflict? The comment to the rule states that no categorical rule can apply:
A possible conflict does not itself preclude the representation. The critical questions are the likelihood that a conflict will eventuate and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client.4
The question of whether the attorney can adequately represent either entity in the absence of a direct conflict may involve the confidentiality provisions of Rule 1.6. If the attorney cannot rightfully consider alternatives because of the restrictions of Rule 1.6, the attorney’s professional judgment may well be impaired and representation cannot continue. For this and for other case-specific reasons, the city/county attorney may decide the potential for conflict will impair representation and should withdraw in that particular matter.
In addition to addressing representation in civil actions, Opinion No. 81 holds that an attorney may perform prosecutorial services for both the county and a city within its jurisdiction. That holding is not inconsistent with this opinion and is still valid.5
Finally, while our opinions have stated that an attorney cannot prosecute for a city and defend criminal matters in any other jurisdiction in Utah, we can find no reason categorically to prohibit an attorney from representing a city or county on criminal or civil matters while maintaining a separate civil practice. Rules 1.7 and 1.9 and other Utah Ethics Advisory Opinions adequately cover possible conflicts that may arise.6
Footnotes
1.The full text of Rule 1.7 is found in the Appendix to the Opinion.
2.The full text of Rule 2.2 is found in the Appendix to the Opinion.
3.The ABA Model Rules of Professional Conduct do not contain a provision like Utah Rule 1.7(c). We have reviewed the history of the adoption of the Utah Rules of Professional Conduct and can find no explanation for the addition of this paragraph. Nor do the official Comments to Rule 1.7 explain the role or need for Rule 1.7(c) vis-à-vis Rule 1.7(a). We have previously resolved questions that might have been addressed by Rule 1.7(c) by applying Rule 1.7(a). See, e.g., Utah Ethics Adv. Op. 126, n.2, 1994 WL 579846. The facts in this case, however, appear to fall within the literal wording of Rule 1.7(c).
4.Utah Rules of Professional Conduct 1.7, cmt., “Loyalty to a Client.”
5.Nevertheless, there may be fact-specific circumstances that would require the attorney to withdraw from certain prosecutorial representation. By generally uphold-ing the dual prosecutorial aspects of Opinion No. 81, we did not intend to provide blanket authorization for a prosecuting attorney to represent both county and an included city in every possible circumstance.
6.See, e.g., Utah Ethics Advisory Op. 99, 1989 WL 509365 (attorney who serves as part-time city or county attorney is barred from representing a defendant in a civil action brought in the county by the state of Utah to collect delinquent child support payments); Utah Ethics Advisory Op. 95-03, 1995 WL 283826 (city attorney with prosecutorial functions may represent a defendant in a civil contempt proceeding, provided the city is not a party to the proceeding); Utah Ethics Advisory Op. 98-01, 1998 WL 32436 (prosecuting attorney acting as a private practitioner must avoid engag-ing in a civil action that involves parties and facts that have been or become the subject of criminal investigation within the prosecutor’s
APPENDIX
Utah Rules of Professional Conduct 1.7. Conflict of Interest: General Rule.
(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) The lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) Each client consents after consultation
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person or by the lawyer’s own interest, unless:
(1) The lawyer reasonably believes the representation will not be adversely affected; and
(2) Each client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation to each client of the implications of the common representation and the advantages and risks involved.
(c) A lawyer shall not simultaneously represent the interests of adverse parties in separate matters, unless:
(1) The lawyer reasonably believes the representation of each will not be adversely affected; and
(2) Each client consents after consultation.
Utah Rules of Professional Conduct 2.2. Intermediary.
(a) A lawyer may act as intermediary between clients if:
(1) The lawyer consults with each client concerning the implications of the common representation, including the advantages and risks involved, and the effect of the attorney-client privileges, and obtains each client’s consent to the common representation; and
(2) The lawyer reasonably believes that the matter can be resolved on terms compatible with the client’s best interest, that each client will be able to make adequately informed decisions in the matter and that there is little risk of material prejudice to the interests of any of the clients if the contemplated resolution is unsuccessful; and
(3) The lawyer reasonably believes that the common representation can be undertaken impartially and without improper effect on other responsibilities the lawyer has to any of the clients; and
(4) All requirements of Rules 1.7 and 1.8 are met.

Ethics Advisory Opinion No. 98-03

(Approved April 17, 1998)
Issue:
May a lawyer hired by an insurance company to defend an insured in a lawsuit submit billing statements to an outside audit service?

Opinion: Before a lawyer may submit billing statements to an outside audit service, the lawyer must have the client’s consent. If the lawyer is relying on an insurance agreement for consent, the lawyer must review the agreement with the client to renew the client’s consent before sending any billing statements to the outside audit service.
Facts: An insurance company hires a lawyer to represent an insured client. The lawyer routinely bills the insurance company for the representation. The lawyer’s billing statements, as required by the insurance company, are detailed and specific as to the services done by the lawyer on behalf of the client. The insurance company requests that the lawyer submit the billing statements directly to an outside audit service.
Analysis: Rules 1.6, 1.7, and 1.8 of the Utah Rules of Professional Conduct govern the relationship among a lawyer, a client, and third party paying for the lawyer’s services on behalf of the client.1Rule 1.8(f) states:
A lawyer shall not accept compensation for representing a client from one other than the client unless:
(1) The client consents after consultation;
(2) There is no interference with the lawyer’s independence of professional judgement or with the client-lawyer relationship; and
(3) Information relating to representation is protected as required by Rule 1.6.
Rule 1.8(f) applies whenever an insurance company pays a lawyer to represent a client.2The client’s consent is usually included in the agreement between the client and the insurance company. However, because Rule 1.8(f) requires that the “client consents after consultation,” the lawyer must consult with the client to make sure that the client understands and renews the consent.
Rule 1.6(a) states: “A lawyer shall not reveal information relating to representation of a client except as stated in paragraph (b), unless the client consents after disclosure.”3A lawyer’s billing statement is “information relating to the representation of a client.” This is especially true where the billing statement is detailed and specific as to the services done by the lawyer on behalf of the client. Therefore, unless one of the exceptions under Rule 1.6(a) applies, the lawyer may not reveal a billing statement to anyone other than the client “unless the client consents after disclosure.”
The client’s consent to release the billing statement to the insurance company is usually included in the agreement between the client and the insurance company. However, because the client must consent “after disclosure,” the lawyer should review the insurance agreement with the client and renew the client’s consent before sending any billing statements to the insurance company.4Whether the lawyer has an attorney-client duty to the insurance company in addition to the insured client is immaterial. Except as Rule 1.6(b) provides, a lawyer may not release information relating to the representation of a client to anyone, even another client, unless the first client consents after disclosure.
Likewise, before a lawyer may release any billing information to an outside audit service, the lawyer must have the client’s consent.5However, if the lawyer relies upon an insurance agreement for consent, the lawyer must review the agreement with the client and renew the client’s consent before sending any billing statements to the audit service.
Even where the lawyer has a consent from the client to release billing statements to an audit service, the lawyer should be careful about what information is included. For example, the lawyer may not want to include information that the client took and failed a lie detector test. The lawyer should make sure that no confidential information revealed by the client is in the billing statement.
Rule 1.6(a) is broader than the attorney-client privilege described in Utah Code Ann. § 78-24-8 and Utah Rules of Evidence 504. The attorney-client privilege protects only information revealed by the client to the lawyer in confidence. The Utah Supreme Court, holding that the attorney-client privilege did not protect a retainer agreement from discovery, noted:
The United States Supreme Court has stated that the purpose of the privilege is to “encourage clients to make full disclosure to their attorneys.” Fisher v. United States, 425 U.S. 391, 403, 96 S. Ct. 1569, 1577, 48 L. Ed. 2d 39 (1976). The Court cautioned, however, that “since the privilege has the effect of withholding relevant information from the factfinder, it applies only where necessary to achieve its purpose. Accordingly it protects only those disclosures—necessary to obtain informed legal advice—which might not have been made absent the privilege.” Id. This court has taken a similar view of the privilege, describing it as “necessary in the interest and administration of justice,” but noting that the privilege should be “strictly construed in accordance with its object.”6
However, Rule 1.6(a) protects all information relating to the representation of a client. The comment to Rule 1.6 notes:
The principle of confidentiality is given effect in two related bodies of law, the attorney-client privilege in the law of evidence and the rule of confidentiality established in professional ethics. The attorney-client privilege applies in judicial and other proceedings in which a lawyer may be called as a witness or otherwise required to produce evidence concerning a client. The rule of client-lawyer confidentiality applies in situations other than those where evidence is sought from lawyer through the compulsion of law. The confidentiality rule applies not merely to matters communicated in confidence by the client but also to all information relating to the representation, whatever the source. A lawyer may not disclose such information except as authorized or required by the Rules of Professional Conduct or other law.
Thus, a Utah case ordering the release of a retainer agreement in a discovery dispute does not allow a lawyer to send billing statements to an insurance company or an outside audit service without the client’s consent.
Conclusion: A lawyer may submit billing statements to an insurance carrier’s outside auditors only with the informed consent of the client.
Footnotes
1.Person Paying for Lawyer’s Services. Rule 1.8(f) requires disclosure of the fact that the lawyer’s services are being paid for by a third party. Such an arrangement must also conform to the requirements of Rule 1.6 concerning confidentiality and Rule 1.7 concerning conflict of interest.
Utah Rules of Professional Conduct 1.8, cmt.
2.Interest of Person Paying for Lawyer’s Service. A lawyer may be paid from a source other than the client if the client is informed of that fact and consents and the arrangement does not compromise the lawyer’s duty of loyalty to the client. See Rule 1.8(f). For example, when an insurer and its insured have conflicting interests in a matter arising from a liability insurance agreement and the insurer is required to provide separate counsel for the insured, the arrangement should assure the separate counsel’s professional independence.
Utah Rules of Professional Conduct 1.7, cmt.
3.None of the exceptions in paragraph (b) apply.
4.This does not require a separate, affirmative assent for each occasion—only that there be direct confirmation in connection with the particular case or incident.
5.See S. Car. Bar Assoc., Ethics Op. 97-22, “Upon receipt of informed consent from the insurer as well as the insured, a lawyer would not be ethically prohibited from submitting his bill directly to a third-party auditing firm, unless the lawyer believes that doing so would substantially affect the representation.”
6.Gold Standard, Inc. v. American Barrick Resources Corp., 801 P.2d 909.

Ethics Advisory Opinion No. 98-04

(Approved April 17, 1998)
Issue:
May a private practitioner who has been appointed as special deputy county attorney to investigate and prosecute a single matter continue to represent criminal defendants in any jurisdiction in Utah?

Opinion: No. Even assuming such conduct is permitted by Utah statute, Rule 1.7(a) of the Utah Rules of Professional Conduct and the reasoning of Utah Ethics Opinion No. 126 prevent a special deputy county attorney from representing criminal defense clients in any jurisdiction in the State. In addition, Rule 1.10 prohibits any member of the special deputy’s law firm from representing criminal defendants in any jurisdiction in the State during the period of the appointment.
Analysis: A county attorney proposes to appoint a special deputy county attorney. The appointment would authorize the special deputy “to investigate and take whatever action, if any, you deem appropriate” regarding alleged misconduct by certain public officials. We have been asked whether the attorney appointed as special deputy or his law firm may continue to represent criminal defendants during the tenure of the special deputy’s appointment.
Before we turn to the Utah Rules of Professional Conduct, we note that Utah statutes directly prohibit a county attorney from representing criminal defendants in any jurisdiction within the state.1Although the elected county attorney is authorized by statute to appoint deputies as necessary to fulfill the requirements of the position,2these statutes do not provide that deputies or special deputies are exempt from the prohibition against representing criminal defendants under §§ 17-18-1(9) and 17-18-1.5(7)(a). Indeed, we think it unlikely that this prohibition could be circumvented merely by the appointment of deputies or special deputies. Therefore, we believe that §§ 17-18-1(9) and 17-18-1.5(7)(a) directly control and prohibit the specially appointed deputy from representing criminal defendants any place in Utah.3Utah Rule of Professional Conduct 1.10 then imposes the same restriction on other members of his firm.
However, even if the Utah statutes could be construed or were changed to allow a special deputy appointed to prosecute a particular matter to continue to represent criminal defendants, such conduct would violate the Utah Rules of Professional Conduct.
In Opinion No. 126,4we concluded that:
* A city prosecutor may not represent a criminal defense client in any jurisdiction.
* A city attorney with no prosecutorial functions who has been appointed pursuant to statute may represent criminal defendants in any jurisdiction but that city.
* A city attorney with no prosecutorial functions who is retained on a contract basis may represent criminal clients in any jurisdiction, provided Rule 1.7(a) is satisfied.
* An attorney who is a partner or associate of a city attorney is bound by the same proscriptions as the city attorney.
We based this opinion on Rule 1.7(a), which generally prohibits an attorney from representing directly adverse clients, and found that “a criminal defendant’s interests are, almost by definition, adverse to the interests of the sovereign and the political subdivisions to which the sovereign has delegated law-enforcement authority.”
Rule 1.7(a) provides an opportunity for a client to consent to an otherwise conflicted representation, but only if the attorney could “reasonably believe” that the dual representation would not be “adversely affected.” As we noted in Opinion No. 126, no attorney could reasonably believe she could represent a defendant charged with violation of the city’s ordinances, when the attorney is also that city’s prosecutor.
Opinion No. 126 goes even further, however, and finds that the city attorney cannot reasonably believe she could represent criminal defendants in any jurisdiction in Utah. Adopting the reasoning of the Utah Supreme Court in State v. Brown5and the U.S. Court of Appeals for the Fourth Circuit in Goodson v. Peyton,6we found that a city prosecutor’s representation of a criminal defendant may be obstructed by unconscious influences, and that those who undertake to represent the sovereign in criminal matters should not represent criminal defendants in any jurisdiction within the state.
Although the special deputy would be acting as a county prosecutor and not as city prosecutor, the reasoning of Opinion No. 126 applies. The special deputy may not represent any criminal defendants in any jurisdiction in Utah while he is also acting as a special prosecutor for a county.
Opinion No. 126 does offer an exception for some city attorneys who are appointed and not elected pursuant to statute, reasoning that appointed or contracted attorneys are less likely than the elected city attorney to be associated with the interests of the city. The exception in Opinion No. 126 for appointed city attorneys is, however, limited to those who have no prosecutorial duties. In the case before us, the special attorney’s appointment contemplates that he will file criminal charges if warranted by the investigation. Thus, he has been appointed as a special prosecutor, albeit focused on certain individuals and certain conduct, and cannot make use of this exception.
Finally, Rule 1.10(a) prevents any member of the special deputy’s firm from representing criminal defendants in any jurisdiction within the State, since the special deputy himself is so prohibited.
Footnotes
1.Utah Code Ann. §§ 17-18-1(9)(a), 17-18-1.5(7)(a); see also § 17-18-1.7(6)(c) (1995).
2.Utah Code Ann. § 17-16-7 (1995).
3.The Committee does not render legal opinions, but it has the authority to cite applicable case law and statutes “as necessary to the opinion.” Utah Ethics Adv. Op. Comm. Rules of Proc. § IV(a); see also id. § III(c)(2).
4.Utah Ethics Advisory Op. No. 126, 1994 WL 579846.
5.853 P.2d 851 (Utah 1992).
6.351 F.2d 905 (4th Cir. 1965).

Ethics Advisory Opinion No. 98-05

(Approved April 17, 1998)
Issue:
Is it unethical for a defense attorney to offer a “full satisfaction” settlement, conditioned upon plaintiff’s waiving a claim for attorneys’ fees against a defendant?

Opinion: It is not unethical for a defense attorney to present an offer of settlement conditioned on waiver of attorneys’ fees. The defense attorney in such a case has an obligation to represent the defendant zealously within the limits of the law.1Moreover, it is the defendant and not the defense attorney who controls settlement offers. The defense attorney in such a case is bound to convey settlement proposals, and to accept settlement offers, as dictated by the client.2
This answer, however, does not fully address possible ethical issues raised in a situation in which a client is a plaintiff pursuing a claim under which the plaintiff may be able to recover attorneys’ fees for pursuing the cause of action. Such a circumstance could arise, for example, in many civil rights and employment discrimination actions.
Practitioners representing plaintiffs in such circumstances should be aware of a potential conflict of interest between the plaintiff’s attorney and the client if the plaintiff receives a settlement offer that is conditioned on a waiver or dismissal of the claim for attorneys’ fees. This conflict of interest can arise where the plaintiff’s attorney has pursued the case in anticipation of recovering attorneys’ fees from the defendant at the conclusion of the proceedings.3
Plaintiffs’ attorneys in such circumstances should be aware that this potential for a conflict of interest can be resolved by full disclosure in advance of this potential problem and the execution of an appropriate attorney-client fee agreement addressing this eventuality. So long as an attorney complies with the requirements of Rule 1.5 regarding fees,4the establishment of fees between lawyer and client and the method by which those fees are to be collected are matters of business and contract between the attorney and the client.
Attorneys representing plaintiffs in such cases are advised, however, to review carefully the language of Rule 1.2 5regarding the scope of representation of clients-specifically the requirement that a lawyer must abide by a client’s decision to accept or reject an offer of settlement of a legal matter.
It is not the purpose of this opinion to advise attorneys of all the possible ways to address the issue raised here; it is merely to alert practitioners to this issue. However, it is possible to address the problem by recognizing the issue early in the representation and agreeing with the client in advance concerning how the client will pay the attorney’s fee if attorneys’ fees are not recovered from the defendant. This might be accomplished by an agreement that the attorney would normally be paid on a contingent-fee basis, but alternately on an hourly fee basis if there is no recovery of attorneys’ fees from the defendant.
It is important to note also what a practitioner cannot do to resolve this problem. It would be unethical for an attorney to contract in advance with a client that the client may not accept or that the attorney may veto a particular offer in settlement of a case. An attorney must convey all offers of settlement to a client, and the client must always have final say whether or not it will be accepted.6This ultimate client authority cannot be contracted away.
In summary, defendants’ attorneys are not ethically prohibited from presenting settlement offers that include a provision precluding plaintiff’s recovery of attorneys’ fees.7There are appropriate means by which plaintiffs’ attorneys can foresee the possibility of such occurrences and deal with them by carefully constructed fee agreements with their clients.
Footnotes
1.Utah Rules of Professional Conduct 1.1.
2.Utah Rules of Professional Conduct 1.2.
3.See Utah Rules of Professional Conduct 1.7(b).
4.For example, the fee must be reasonable and not illegal or clearly exces-sive.
5.Utah Rules of Professional Conduct 1.2 provides, in pertinent part:
(a) A lawyer shall abide by a client’s decisions concerning the objectives of represen-tation, subject to paragraphs (b), (c), (d), and shall consult with the client as to the means by which they are to be pursued. A lawyer shall abide by a client’s decision whether to accept an offer of settlement of a matter. . . .
(d) When a lawyer knows that a client expects assistance not permitted by the Rules of Professional Conduct or other law, the lawyer shall consult with the client regarding the relevant limita-tions on the lawyer’s conduct.
6.See Utah Rules of Professional Conduct 1.2(a).
7.See Evans v. Jeff D., 475 U.S. 717 (1986).

Ethics Advisory Opinion No. 98-06

(Approved October 30, 1998)
Issue:
Members of a county attorney’s office have requested an advisory opinion concerning conflicts between (1) attorney-client relationships between a county attorney and county officers and (2) statutory duties of a county attorney under Utah Code Ann. § 17-5-206 to institute suits to recover or restrain unlawful payments of county funds.

Opinion: If a current attorney-client relationship exists between a county attorney or a deputy county attorney and a person who may be a defendant in an action under Utah Code Ann. § 17-5-206 to recover or restrain unlawful payments of county funds, the attorney with such an attorney-client relationship may not ethically participate in such an action, whether by way of investigation, evaluation, filing, prosecution, direction, supervision, or otherwise.1The rules of imputed disqualification of Utah Rules of Professional Conduct 1.10 do not apply to the office of a full-time county attorney, so that individual county attorneys or deputy county attorneys who are free from conflicts in the matter may participate in actions under § 17-5-206, provided that appropriate screening procedures are established and maintained. Past representations by individual members of a county attorney’s office must be evaluated for conflicts under the provisions of Rule 1.9.
Analysis: A. Introduction. In Utah, a county attorney is an officer of the county elected to a four-year term of office.2The county attorney must be an attorney duly licensed to practice law in Utah who is an active member in good standing of the Utah State Bar.3By statute, “[t]he county attorney is the legal adviser of the county.”4Among other duties, the county attorney must defend all actions brought against the county and must give, when required and without fee, an opinion in writing to the county, district, precinct, and prosecution district officers on matters relating to the duties of their respective offices.5
Lawyers in a Utah county attorney’s office may include both the elected county attorney and unelected deputy county attorneys.6By Utah statute, whenever the official name of any principal officer of a county is used in law conferring powers or imposing duties or liabilities, it includes deputies.7
County attorneys in Utah have a statutory duty to institute suits in the name of the county to recover or restrain unlawful payments of county funds. Utah Code Ann. § 17-5-206 provides:
Whenever any county legislative body shall without authorization of law order any money paid for any purpose and such money shall have been actually paid, or whenever any other county officer has drawn any warrant in his own favor or in favor of any other person without being authorized thereto by the county legislative body or by law and the same shall have been paid, the county attorney of such county shall institute suit in the name of the county against such person or such officer and his official bondsman to recover the money so paid, and when the money has not been paid on such order or warrants, the county attorney of such county upon receiving notice shall commence suit in the name of the county to restrain the payment of the same; no order of the county legislative body shall be necessary in order to maintain either of such actions.
When this statute applies, the county attorney or deputy county attorney involved may face a conflict if there is a current or past attorney-client relationship with the defendant.8
B. Application of Rule 1.10. Like other government attorneys, individual county attorneys and deputy county attorneys are subject to the Utah Rules of Professional Conduct. There are some situations where certain government lawyers are accorded somewhat different treatment in light of the constitutional or statutory context in which they operate. For example, this Committee has previously determined that the imputed conflict rules of Rule 1.10 of the Rules of Professional Conduct do not apply to the office of the Utah Attorney General in the same way they apply to attorneys in private firms.9Opinion No. 142 determined, as to the office of the Utah Attorney General, that the conflict-of-interest rules of Rule 1.10 apply only on an attorney-specific basis and that conflicts of one attorney in the Attorney General’s office should not be imputed to all attorneys in that office. Opinion No. 142 also determined that conflicts rules must be fully satisfied on an individual basis and that the Utah Attorney General must ensure that attorneys with conflict problems are removed and screened from the particular representation at issue.
Although the role, powers, and duties of county attorneys in Utah are significantly different from those of the Utah Attorney General, we believe that, for purposes of imputed disqualification under Rule 1.10, the office of a full-time county attorney should be analyzed in the same way as the office of the Utah Attorney General.10Across-the-board application of imputed disqualification rules to a full-time county attorney’s office would frustrate the fulfillment of the county attorney’s statutory duties and could require, at significant cost, excessive requirements for employment of private counsel. Accordingly, we conclude that, notwithstanding the usual imputation of conflicts of interest to all attorneys in a private firm under Rule 1.10, this strict imputation does not apply to the office of a full-time county attorney.
We also conclude, however, that the generally applicable conflicts rules of the Rules of Professional Conduct apply to each county attorney and deputy county attorney on an attorney-by-attorney basis. These rules include Rule 1.7 (Conflict of Interest: General Rule), Rule 1.8 (Conflict of Interest: Prohibited Transactions), Rule 1.9 (Conflict of Interest: Former Client); Rule 1.11 (Successive Government and Private Employment), Rule 1.12 (Former Judge or Arbitrator), and Rule 1.13 (Organization as a Client). A county attorney or deputy county attorney who cannot individually satisfy the requirements of these rules should not engage in, supervise, direct, or have access to confidential information pertaining to the representation in question. Moreover, county attorneys must adopt procedures to ensure that individual lawyers with conflict problems are sufficiently removed and screened from those matters so as not to compromise client confidences or any other purposes related to the representation as promoted by the Utah Rules of Professional Conduct.
C. Application of Rule 1.13. Consideration of Rule 1.13 (Organization as a Client) does not change this analysis. The duties defined by Rule 1.13 apply to government lawyers, except to the extent the responsibilities of government lawyers are otherwise controlled by the duties imposed upon them by law.11 Rule 1.13(b) provides an ethically sound method for a county attorney to deal with actions of county officers, county employees, or other persons associated with the county in violation of a legal obligation to the county:
If, in a matter related to the representation of an organization, a lawyer knows that an officer, employee or other person associated with the organization is engaged in, intends to engage in, or refuses to take action in violation of a legal obligation to the organization or that may reasonably be imputed to the organization, and is likely to result in substantial injury to the organization, the lawyer shall proceed as is reasonably necessary in the best interest of the organization. In determining how to proceed, the lawyer shall give due consideration to the seriousness of the violation and its consequences, the scope and nature of the lawyer’s representation, the responsibility in the organization and the apparent motivation of the person involved, the policies of the organization concerning such matters and any other relevant considerations. Any measures taken shall be designed to minimize disruption of the organization and the risk of revealing information relating to the representation to persons outside the organization, except as required by law or other rules of professional conduct. Such measures may include among others: (1) asking reconsideration of the matter; (2) advising that a separate legal opinion on the matter be sought for presentation to appropriate authority in the organization; and (3) referring the matter to higher authority in the organization, including, if warranted by the seriousness of the matter, referral to the highest authority that can act in behalf of the organization as determined by applicable law.
For example, in county matters governed by Utah Code Ann. § 17-5-206, Rule 1.13(b) imposes an ethical duty on county attorneys and deputy county attorneys not only to proceed in the best interests of the county but also to proceed only after giving due consideration to the seriousness of the violation and its consequences, the scope and nature of the attorney’s representation of the county, the responsibility of the county, the apparent motivation of the person involved, the policies of the county concerning such matters, and any other relevant consideration. We emphasize that Rule 1.13(b) also imposes an ethical duty on county attorneys and deputy county attorneys to assure that measures taken are designed to minimize disruption of the county organization and the risk of revealing information relating to the representation of the county to persons outside the county organization, except as required by law or other Rules of Professional Conduct.
Rule 1.13(c) provides for withdrawal in certain cases: “If, despite the lawyer’s efforts in accordance with paragraph (b), the highest authority that can act on behalf of the organization insists upon action, or a refusal to act, that is clearly a violation of law and is likely to result in substantial injury to the organization, the lawyer has ‘good cause’ to resign or withdraw, as appropriate, under Rule 1.16(b)(6).” For example, if despite a county attorney’s best efforts in accordance with Rule 1.13(b), the board of county commissioners insists upon action that is clearly a violation of law and is likely to result in substantial injury to the county, and if the county attorney has a present attorney-client relationship with the board of county commissioners, the county attorney has good cause to resign or withdraw, as appropriate, from the attorney-client relationship with the board of county commissioners, if permitted by law.12
The question of whether Utah law imposes an attorney-client relationship between a county attorney and a board of county commissioners or individual county officers, such that withdrawal is not possible, is a matter of substantive law external to the Rules of Professional Conduct.13Nevertheless, it is clear to this Committee that county attorneys and deputy county attorneys are ethically bound by the provisions of Rule 1.7, even if this means that in some cases a county attorney or deputy county attorney, on an individual basis, cannot ethically perform certain statutory duties.
Rule 1.13(f) provides:
A lawyer elected, appointed, retained, or employed to represent a governmental entity shall be considered for the purpose of this rule as representing an organization. The government lawyer’s client is the governmental entity except as the representation or duties are otherwise required by law. The responsibilities of the lawyer in paragraphs (b) and (c) may be modified by the duties required by law for the government lawyer.
Although these and other provisions of Rule 1.13 may apply directly in matters involving § 17-5-206 pertaining to payments of county money, nothing in Rule 1.13 relieves a county attorney or deputy county attorney from complying with the confidentiality and conflicts rules of the Rules of Professional Conduct.14
If an action under § 17-5-206 to recover or restrain payment of county funds must be investigated, evaluated, filed or prosecuted, an individual evaluation and application of conflicts rules must be made as to each county attorney or deputy county attorney involved in the § 17-5-206 matter. If an individual county attorney or deputy county attorney is free from conflicts and therefore properly may undertake the § 17-5-206 matter, the fact that another attorney in the office could not do so, because of a current or former attorney-client relationship, does not bar the first attorney from participating in the matter, so long as adequate screening measures are established and enforced.
If an individual county attorney or deputy county attorney currently has an attorney-client relationship in any matter with a defendant in a contemplated action under § 17-5-206, that attorney may not participate in the § 17-5-206 matter directly or indirectly, whether in a supervisory role or otherwise, and may not have access to confidential information pertaining to the matter. The Committee believes that there are no circumstances where an attorney could reasonably believe that investigating, evaluating, filing or prosecuting a § 17-5-206 matter against a particular defendant would not adversely affect the attorney’s current attorney-client relationship with that defendant.
D. Application of Rule 1.7. An official comment to Rule 1.7 states, in pertinent part:
Ordinarily, a lawyer may not act as advocate against a client the lawyer represents in some other matter, even if the other matter is wholly unrelated. However, there are circumstances in which a lawyer may act as an advocate against a client. . . . [G]overnment lawyers in some circumstances may represent government employees in proceedings in which a government agency is the opposing party. The propriety of concurrent representation can depend on the nature of the litigation. For example, a suit charging fraud entails conflict to a degree not involved in a suit for a declaratory judgment concerning statutory interpretation.
We believe that a § 17-5-206 action against a current client of a county attorney or deputy county attorney to recover money paid or restrain the payment of money entails conflict to the degree prohibited by Rule 1.7.
Accordingly, we conclude that Rule 1.7 prohibits an attorney from participating in the § 17-5-206 matter against a current client, whether or not that attorney is the elected county attorney having express statutory duties pertaining to actions under § 17-5-206. A county attorney’s statutory duties to bring actions under § 17-5-206 do not justify or excuse violations of applicable conflicts rules of the Utah Rules of Professional Conduct.
If an individual county attorney or deputy county attorney formerly had an attorney-client relationship in any matter with the defendant in a contemplated action under § 17-5-206, under Rule 1.9 that attorney may not participate in the § 17-5-206 matter if the former representation pertained to the payment in question or was substantially factually related to the payment in question, unless the former client consents after consultation. Furthermore, under Rule 1.9, the attorney could not use confidential information or information relating to the representation to the disadvantage of the former client except as Rule 1.6 would permit with respect to a client15or when the information has become generally known.
In all cases, appropriate screening procedures should be used to protect confidential client information. Appropriate screening procedures should also be used to prevent participation, supervision or control, whether direct or indirect, by a lawyer with a conflict in the § 17-5-206 matter, including a county attorney having statutory duties with respect to § 17-5-206 matters.
E. Organization of County Attorney’s Office. The request submitted to the Committee inquired about a specific form of organization in a county attorney’s office under which specific attorneys would be assigned, among other responsibilities, ongoing responsibility for matters under § 17-5-206. Whether specific attorneys may undertake § 17-5-206 matters, however, pertains to their individual freedom from conflicts, which must be evaluated on a case-by-case basis, attorney by attorney. The specific form of organization in question, as described, does not address this required individual evaluation. Provided that each lawyer designated for § 17-5-206 matters is and remains free from conflicts individually, and provided that adequate screening measures are in place to protect confidential information and to prevent supervisory influence or control of the matter by a lawyer with a conflict, that form of organization does not create an ethical problem.16
Under Rule 5.1(b), each lawyer having direct supervisory authority over another lawyer in a county attorney’s office has an independent obligation to make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct. Under Rule 5.2(a), a lawyer is bound by the Rules of Professional Conduct, notwithstanding that the lawyer acted at the direction of another person. Under Rule 5.2(b), a subordinate lawyer does not violate the Rules of Professional Conduct if that lawyer acts in accordance with a supervisory lawyer’s reasonable resolution of a question of professional duty.
F. Obligation of Subordinates. The request submitted to the Committee asked whether a deputy county attorney could ethically obey the direction of a county attorney to undertake an action under § 17-5-206 if the county attorney determined that a conflict did not exist. The limited shield provided to subordinate lawyers under Rule 5.2(b) applies only if the supervisory lawyer’s resolution of a question of professional duty is reasonable. This opinion determines that, as to current clients of a particular lawyer, there are no circumstances where a lawyer could reasonably believe that investigating, evaluating, filing or prosecuting a § 17-5-206 matter against a particular defendant would not adversely affect the attorney’s current attorney-client relationship with that defendant. Thus, a county attorney’s contrary direction to a deputy would not be reasonable.17As to past representations, a county attorney could make reasonable resolutions of questions arising under Rule 1.9 and, if the deputy obeyed, the shield provided by Rule 5.2(b) would apply. For example, a county attorney could make reasonable determinations of matters under Rule 1.9 such as whether the matters are the same or are substantially factually related and whether the interests in question are materially adverse.18
The request submitted to the Committee further inquired whether a deputy county attorney could direct a nonlawyer subordinate to investigate a potential defendant in an action under § 17-5-206 without violating Rule 5.3. Rule 5.3(c)(1) answers this question directly: “A lawyer shall be responsible for conduct of such a person [a nonlawyer employed or retained by or associated with a lawyer] that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if: (1) The lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved.” A deputy county attorney who, because of an individual conflict, could not investigate a potential defendant, could not ethically direct a nonlawyer assistant to do so.
G. Issues Not Addressed. As indicated in note 1, supra, several issues raised in the context of the ethical issues that we have addressed are beyond the scope of this Committee, and we decline to address them.
(a) We express no opinion on the legal questions of whether a county attorney’s performing statutory duties to defend actions against the county or to give written opinions to county officers relating to the duties of their offices establishes, without more, an attorney-client relationship with the officer. Furthermore, we have not assumed that the performance of such statutory duties, without more, establishes an attorney-client relationship with individual county officers. We note in this context, however, the requirement of Rule 1.13(d) that, in dealing with a county’s officers, employees, and constituents, a county attorney or deputy county attorney must explain the identity of the client when it is apparent that the county’s interests are adverse to those of the constituents with whom the attorney is dealing.19
(b) We also express no opinion on the legal questions of whether and how a county attorney or deputy county attorney may form (or have by operation of law) an attorney-client relationship with individual officers of a county.20Because the request submitted to the Committee and the materials submitted in response both assumed that an attorney-client relationship between a county attorney or deputy county attorney and a county officer or county officers may be established under given circumstances, this opinion makes the same assumption.21
(c) This Committee is not empowered to resolve conflicts, if any, between statutory duties and requirements of the Rules of Professional Responsibility. We can only opine on the ethical propriety of anticipated conduct of members of the Utah State Bar.22
(d) Finally, we express no opinion on legal questions concerning the authority of a county attorney to refer matters outside the county attorney’s office.
Conclusion: In spite of their having statutory duties, county attorneys and their deputies are ethically bound, on an attorney-by-attorney basis, by the conflicts provisions of the Rules of Professional Conduct.
Footnotes
1.Several relevant issues cannot be decided in this opinion because they are substantive issues of law whose determination is outside the scope of this Committee’s duties. See Rules of Procedure for the Ethics Advisory Op. Com. of the Utah State Bar §§ I, III(b)(3) and IV(a). These issues are outlined in § G of this Opinion.
2.Utah Code Ann. § 17-18-1.6.
3.Utah Code Ann. §§ 17-18-4, 17-18-5(2)(b).
4.Utah Code Ann. § 17-18-2.
5.Utah Code Ann. §§ 17-18-1(8)(a), (c) (counties not within a prosecution district); 17-18-1.5(6)(a), (c) (counties within a prosecution district). In Utah, the officers of a county are: three county commissioners, a county treasurer, a sheriff, a county clerk, a county auditor, a county recorder, a county attorney, a district attorney in a county which is part of a prosecution district, a county surveyor, a county assessor, and any others provided by law. Utah Code Ann. § 17-16-2. In counties having a taxable value of less than $100,000,000, the county clerk is an ex officio auditor of the county and performs the duties of the office without extra compensation. Id.
6.See Utah Code Ann. § 17-16-7 (every county officer may with the consent of the county legislative body appoint deputies and assistants as necessary for the discharge of official duties).
7.Utah Code Ann. § 17-16-8.
8.Under the Utah Rules of Professional Conduct, the client of a full-time county attorney or deputy county attorney is generally the county. See Rule 1.13(f) (“A lawyer elected, appointed, retained, or employed to represent a governmental entity shall be considered for the purpose of this rule as representing an organization. The governmental lawyer’s client is the governmental entity except as the representation or duties are otherwise required by law.”); see also Rule 1.13, cmt. (“The government lawyer’s client is generally the governmental entity itself, but the client relationship may be further defined by statute, ordinance or other law.”).
9.Utah Ethics Advisory Op. No. 142, 1994 WL 579860 (Utah State Bar).
10.The request before the Committee addresses the office of a full-time county attorney where all deputy county attorneys are full-time employees, and the analysis set forth in this opinion is made in that context. In the case of a part-time county attorney who is associated in a firm with an attorney who is not a full-time deputy, the imputation of conflicts as provided in Rule 1.10 is appropriate.
11.See Rules of Professional Conduct 1.13, cmt.
12.See also id.:
A lawyer for the government may have a legal duty to question the conduct of government officials and perform additional remedial or corrective actions including investigation and prosecution. The lawyer may also have an obligation to divulge information to persons outside the government to respond to illegal or improper conduct of the organizational client or its constituents. The remedial option under paragraph (c) concerning resignation under Rule 1.16 may be inconsistent with the government lawyer’s duties under the law. The obligation of the government lawyer may require representation of the public interest as that duty is specified by law.
13.See discussion in § G, infra.
14.See, e.g., Rule 1.13(e) (“A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of Rule 1.7.”); Rule 1.13(b), cmt. (“The authority and responsibility provided in paragraph (b) are concurrent with the authority and responsibility provided in other rules. In particular, this Rule does not limit or expand the lawyer’s responsibility under Rule 1.6. . .”).
15.Rule 1.6(b)(4), for example, provides that “[a] lawyer may reveal such information [relating to representation of a client] to the extent the lawyer believes necessary: . . . (4) To comply with the Rules of Professional Conduct or other law.”
16.The request submitted to the Committee suggested that, in lieu of this form of organization, a county attorney’s office might ask that the Utah Attorney General, a lawyer from another county attorney’s office, or outside private counsel undertake an action under Utah Code Ann. § 17-5-206. If available, conflict referrals to attorneys outside the county attorney’s office would be an appropriate means of addressing conflict issues, just as they are in cases involving private law firms.
17.See Rule 5.2, cmt.: “If the question can reasonably be answered only one way, the duty of both lawyers is clear and they are equally responsible for fulfilling it.”
18.See Rule 5.2(b), cmt.: “If the question is reasonably arguable, someone has to decide upon the course of action. That authority ordinarily reposes in the supervisor, and a subordinate may be guided accordingly. For example, if a question arises whether the interests of two clients conflict under Rule 1.7, the supervisor’s reasonable resolution of the question should protect the subordinate professionally if the resolution is subsequently challenged.”
19.See Official Comment to Rule 1.13(d):
There are times when the organization’s interest may be or become adverse to those of one or more of its constituents. In such circumstances the lawyer should advise any constituent whose interest the lawyer finds adverse to that of the organization of the conflict or potential conflict of interest, that the lawyer cannot represent such constituent, and that such person may wish to obtain independent representation. Care must be taken to assure that the individual understands that, when there is such adversity of interest, the lawyer for the organization cannot provide legal representation for that constituent individual, and that discussions between the lawyer for the organization and the individual may not be privileged.
20.See Utah Rules of Professional Conduct, Scope (“The Rules simply provide a framework for the ethical practice of law. Furthermore, for purposes of determining the lawyer’s authority and responsibility, principles of substantive law external to these Rules determine whether a client-lawyer relationship exists. . . . Whether a client-lawyer relationship exists for any specific purpose can depend on the circumstances and may be a question of fact.”).
21.Cf. Rule 1.13(e) (“A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of Rule 1.7. If the organization’s consent to the dual representation is required by Rule 1.7, the consent shall be given by a person or entity, other than the individual who is to be represented, properly authorized by the organization.”).
22.See Rules of Procedure for the Ethics Advisory Opinion Com. of the Utah State Bar § I; Cf. Utah Ethics Advisory Op. No. 97-12, 1998 WL 32435 (Utah State Bar). Although Utah Code Ann. § 62A-4a-403 obligates any person who suspects a child has been subjected to abuse to report such conduct to the nearest law enforcement officer, it is not a violation of the Rules of Professional Conduct if the attorney does not disclose such information, but the attorney may, to the extent the attorney believes necessary, disclose attorney-client information as provided in Rule 1.6(b).

Ethics Advisory Opinion No. 98-07

(Approved August 7, 1998)
Issue:
May the lawyer for the plaintiff in a personal-injury case directly contact the adjuster for defendant’s insurer without first obtaining the consent of the defendant’s attorney?

Opinion: Such a contact is improper if the lawyer for the plaintiff knows or reasonably should know that the insurer is represented by counsel in the case, either when the insurer has separate counsel or when it is represented by the same counsel as defendant. If defendant’s attorney does not also represent the insurer, plaintiff’s attorney need not obtain the consent of defendant’s attorney to contact the insurer or its attorney.
Analysis: Rule 4.2 of the Utah Rules of Professional Conduct prohibits a lawyer, in representing a client, from communicating “about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so.”
In connection with the typical insurance claim, the adjuster has been hired by the insurance company and acts as its agent. The contract between the insurance company and the insured provides for counsel for the insured, paid under the insurance contract. If there are no conflicts between the insurance company and the insured, counsel for the insured may act on behalf of both the insured and the insurance company. If there are conflicts, the insurance company will retain separate counsel if it wishes representation. The insured may also retain counsel outside of the insurance contract.
The question posed to the Committee involves one of two different situations: (a) the injured person has contacted a lawyer and is pursuing settlement of a claim on an informal basis; (b) the injured person and the insurance company have not been able to achieve a satisfactory resolution of the complaint, and the matter seems headed to litigation.
(a) In the first situation, the injured person has contacted a lawyer and is pursuing settlement of a claim on an informal basis. At this stage of informal dispute resolution, the plaintiff’s lawyer may wish to contact the insurance adjuster to achieve efficient claim resolution. Most typically in this situation, although the defendant’s contract of insurance provides for legal representation, a lawyer for defendant will not yet be involved. At this early stage, it is reasonable for the lawyer for the plaintiff to believe that neither defendant nor the insurance company is a “represented party” for purposes of Rule 4.2,1unless the lawyer has been informed by the adjuster or otherwise. So long as the attorney complies with the other Rules of Professional Conduct -for example, does not pretend to be a neutral party when he is representing the injured person2- the direct contact with the adjuster is proper.
(b) In a second situation, the injured person and the insurance company have not been able to achieve a satisfactory resolution of the claim, and the matter is either in or likely to proceed to litigation. The insured’s contract provides for defense from the insurance company, and pursuant to that contract, the company has provided the insured with counsel. Such insurance-provided counsel clearly represents the interests of the insured.3The question raised in the inquiry is, then, whether the insurance company should now be considered to be a “represented party” in the “matter.”
In the Committee’s view, the insurance company now has a direct interest in the results of any litigation or settlement and is a “party in the matter.”4Absent any indication to the contrary, therefore, the lawyer for the plaintiff reasonably should expect that the insurance company may be represented by counsel in this situation.5The Committee concludes that, at this stage, contact with the adjuster about the merits of the case would be improper unless plaintiff’s lawyer has affirmatively determined that the insurer does not consider itself represented by counsel in the matter. This conclusion is also reached in an ABA informal opinion,6and in ethics decisions from New Jersey,7Pennsylvania8and Vermont.9
In the absence of contrary information about the insurer’s internal decision-making process or hierarchy, plaintiff’s lawyer may verify the status of the insurer’s representation by counsel from the insurer’s adjuster. Contact of the insurance company’s general counsel or other person known to represent the company in such matters is another way to make the determination.
If plaintiff’s counsel determines that the insurance company is not represented in the matter, he may proceed to deal directly with the adjuster. If he has any reason to believe that the insurance company is likely to be represented, he must determine whether defendant’s counsel also represents the insurance company or whether anything has arisen that has caused the insurance company to retain separate counsel.
Finally, at any stage in these processes, the lawyer for the plaintiff may pursue settlement negotiations with the insurance adjuster after obtaining consent of the relevant attorney pursuant to Rule 4.2. In so doing, the lawyer for the plaintiff must comply with other applicable Rules of Professional Conduct, such as Rule 4.3.
Conclusion. Because the insurance carrier for a personal-injury defendant is a separate “party in the matter” for purposes of Rule 4.2, plaintiff’s attorney is responsible to determine whether the carrier is represented by counsel in the matter at hand. If plaintiff’s lawyer determines or reasonably should have determined that the insurance company is represented-either by the same attorney who represents defendant or by separate counsel-he may not contact the insurer’s adjuster directly without the consent of the carrier’s attorney. Ordinarily, plaintiff’s attorney may rely on the representations of the insurance company’s adjuster (as its agent) as to whether it is represented by counsel in the matter for purposes of Rule 4.2.
Footnotes
1.See Utah State Bar Ethics Advisory Op. 95-05, slip op. at 6-8, 1996 WL 73351, for interpretation of the meaning of “party to a matter” under Rule 4.2. In particular, “The ‘matter’ need not be a formal proceeding, but may be any matter for which a person has sought legal representation.” Id. at 6. See also In re Illuzzi, 616 A.2d 233 (Vt. 1992).
2.See Rule 4.3, Dealing with Unrepresented Person.
3.See, e.g., Rule 1.8(f):
A lawyer shall not accept compensation for representing a client from one other than the client unless: (1) the client consents after consultation; (2) there is no interference with the lawyer’s independence of professional judgment or with the client-attorney relationship; and (3) information relating to representation of a client is protected as required by Rule 1.6.
4.See note 1, supra; see also In re Illuzzi, 616 A.2d 233 (Vt. 1992).
5.Some plaintiffs’ attorneys have contended that these are situations in which the insurance carrier is not a “party” to the matter under Rule 4.2 and, accordingly, plaintiff’s counsel could contact the insurer’s adjuster without consent. A representative from the Insurance Law Section of the Utah State Bar appeared before the Committee and related the views of some of the members of that section.
6.ABA Comm. on Ethics and Professional Responsibility, Informal Op. 1149 (1970).
7.Heffner v. Jacobson, 469 A.2d 970 (N.J. Super. 1983).
8.Waller v. Kotzen, 567 F. Supp. 424 (E.D. Pa. 1983).
9.In re Illuzzi, 616 A.2d 233 (Vt. 1992).

Ethics Advisory Opinion No. 98-08

(Approved September 11, 1998)
Question:
May a law firm wholly own an accounting-practice subsidiary that is staffed by employees other than the firm’s lawyers and would perform services for the lawyer’s clients and others?

Response: Yes, although the law firm will be subject to the Utah Rules of Professional Conduct with respect to the provision of these law-related services in certain circumstances.
Analysis: In 1994 the American Bar Association addressed the general issue of attorneys who are involved with “law-related” services, such as those raised in this inquiry. After much debate, the ABA determined that it was not unethical for lawyers to offer non-legal services in conjunction with their law practices, but that the lawyers should be subject to the Rules of Professional Conduct with regard to those services.1
Model Rule 5.7 provides that a lawyer is subject to the Rules of Professional Conduct if the lawyer provides the law-related services in circumstances that are not distinct from the legal services offered or when the lawyer controls the entity that provides the law-related services and has not made reasonable efforts to inform clients that they are not receiving legal services and thus are not protected by an attorney-client relationship.
Although the Utah Supreme Court has not adopted Model Rule 5.7, its provisions are not inconsistent with the existing Utah Rules of Professional Conduct and our Ethics Advisory Opinions. Rules 5.1 and 5.3, for example, provide that a lawyer is responsible for the ethical conduct or misconduct of lawyers and non-lawyers whom the lawyer directs or controls in the context of offering legal services. Rule 8.4(a) prohibits a lawyer from directing others to do what the lawyer cannot ethically do herself. The controlling concept is that the lawyer is responsible for the ethical conduct or misconduct of others when the lawyer is in control of their actions, and cannot abrogate that responsibility merely by delegating the action to a non-lawyer.
Several Utah Ethics Advisory Opinions conclude that a lawyer is held to the ethical standards of a lawyer when performing non-legal services.2Utah Ethics Opinion 1513in particular holds that the Rules of Professional Conduct will apply to a lawyer acting as an appraiser, unless the lawyer makes clear to the client, in writing, that she is not providing legal services and that an attorney-client relationship is not established.
One basis for those opinions is that a lay person receiving advice and service from a lawyer may not distinguish between legal and non-legal services and may expect to receive the protections of an attorney-client relationship-protections of confidences and against conflicts, for example.
That a lawyer is responsible for the ethical conduct or misconduct of those whom she controls and is held to the standards of the Rules of Professional Conduct when acting as a non-lawyer under certain circumstances are the concepts that underlie Model Rule 5.7.
Other states that have not adopted Model Rule 5.7 have allowed lawyers to provide law-related services under strict guidelines designed to protect the clients receiving the non-legal services.4While we may not agree with the particular restrictions imposed, we agree with the prevailing concern of protecting the clients receiving the law-related services.
Therefore, in Utah, a lawyer or law firm may ethically own an accounting firm that provides services to the lawyer’s clients and to the public.5We note that an accounting firm fits the Model Rule 5.7 definition of law-related services as those that (a) might reasonably be performed in conjunction with, and in substance are related to, the provision of legal services, and (b) are not prohibited as the unauthorized practice of law when provided by a non-lawyer.
The lawyer will be responsible for the ethical conduct of the employees of the related entity, however, unless the lawyer has made reasonable attempts to inform the clients of the law-related services that they are not receiving legal services and are not protected by the attorney-client relationship. Such attempts to protect the clients are dependent upon the facts, but may include:
* Providing written notice of the lawyer’s interest in the wholly owned entity before providing the law-related services, with written acknowledgement of the notice by the client.
* Keeping the offices of the lawyer and the wholly owned accounting firm physically separate.
* Providing disclaimers in any marketing or advertising.
* Maintaining separate letterhead, or providing clear notice of the relationship between the lawyer and the entity.6
In addition, the lawyer should remember that the Rules of Professional Conduct will apply to the lawyer’s own actions, regardless of the actions of the wholly owned accounting firm. For example, the lawyer must take care not to disclose confidential information to the accounting firm regarding a joint client to which the accounting firm is not otherwise entitled. Neither may the lawyer accept value for referring clients to the accounting firm in violation of Rule 7.2(c), nor may the lawyer share fees with the accounting firm in a manner that violates Rule 5.4. The lawyer must be particularly careful of the potential of conflicts of interest that may arise between the lawyer, the client and the accounting firm. The lawyer should carefully review each of the Rules to determine which may cause difficulty under these circumstances.
Footnotes
1.(a) A lawyer shall be subject to the Rules of Professional Conduct with respect to the provision of law-related services, as defined in para-graph (b), if the law-related services are provided:
(1) by the lawyer in circumstances that are not distinct from the lawyer’s provision of legal services to clients; or
(2) by a separate entity controlled by the lawyer individually or with others if the lawyer fails to take reasonable measures to assure a per-son obtaining the law-related services knows that the services of the separate entity are not legal services and that the protection of the client-lawyer relation-ship do not exist.
(b) The term “law-related services” denotes services that might reason-ably be per-formed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer.
2.Responsibilities Regarding Law-Related Services, ABA Model Rules of Professional Conduct 5.7 (1996).
3.See Utah Ethics Advisory Op. 5 (Utah St. Bar Jan. 13, 1972) (attorney selling life insurance is held to the ethical standards of an attorney in both professions); Utah Ethics Advisory Op. 17 (Utah St. Bar Nov. 28, 1973) (lawyer engaged in a real estate business is held to the ethical standards of a lawyer in both occupations); Utah Ethics Advisory Op. 30 (Utah St. Bar Oct. 14, 1976) (attorney who is president of a title company must comply with the ethical rules of a lawyer in both occupations); Utah Ethics Advisory Op. 108, 1990 WL 600110 (Utah St. Bar) (attorney who is a licensed CPA may so indicate on letterhead but must be alert to protect the attorney-client privilege).
4.Utah Ethics Advisory Op. 151, 1994 WL 631268 (Utah St. Bar).
Penn. Ethics Advisory Op. No. 93-01 (1993) (lawyer may own an adoption agency but must get consent from the clients of the agency before providing legal services to them, must inform the clients about the different roles played by the lawyer and the adoption agency and the potential conflict that may arise because the lawyer could potentially represent the agency, and must keep the law offices and adoption agency offices physically separate); N.J. Ethics Advisory Op. No. 657 (1992) (lawyer may provide law-related services only if they are kept in a physically distinct location and if there is no joint advertising or marketing, and the lawyer may refer clients to the law-related business only if the lawyer’s interest is disclosed in writing and signed by the client, and the client is advised she can go elsewhere for the services and is urged to consult with independent counsel regarding the decision to accept law-related services from the lawyer); S.C. Ethics Advisory Op. No. 93-05 (1993) (a lawyer may refer clients to a wholly owned accounting firm, but must be aware of the danger of the unauthorized practice of law, and the lawyer may not provide value—capital, man-agement advice, employee compensation, referrals—in exchange for referrals).
5.Although certain aspects of this Opinion mirror the provisions of Model Rule 5.7, we draw these conclusions from an analysis of the existing Utah Rules of Professional Conduct. We do not necessarily endorse Model Rule 5.7; adoption of any such rule is the purview of the Utah Supreme Court.
6.See Utah Ethics Advisory Op. 131, 1993 WL 750907 (Utah St. Bar) (firm may list on its letterhead a non-lawyer CPA if the letterhead is otherwise not misleading).

Ethics Advisory Opinion No. 98-09

(Approved October 30, 1998)
Issues:
Is the Office of the Guardian ad Litem sufficiently similar to the Attorney General’s Office to render it a “government agency” within the meaning of the Utah Rules of Professional Conduct, and if so, does Rule 1.10 concerning imputed disqualifications, apply to the Office of the Guardian ad Litem? Does Rule 1.11, “Successive Government and Private Employment,” apply to the Office of the Guardian ad Litem?

Opinion: Both rules apply to the Office of the Guardian ad Litem. For purposes of Rule 1.10 the Office of the Guardian ad Litem is a “firm,” but the Office of the Guardian ad Litem’s government sponsorship and statutory duties also make that office a “government agency” for Rule 1.11 application. Under the Rules, the terms “firm” and “government agency” are not mutually exclusive and, in certain cases as with the Office of Guardian ad Litem both terms apply. Application of Rule 1.10 and Rule 1.11 serves to maintain confidentiality without unduly hampering the Office of the Guardian ad Litem from performing its duty to protect the best interests of children through hiring qualified attorneys.
Analysis: In response to an inquiry from the Office of the Guardian ad Litem, the Ethics Advisory Opinion Committee previously decided that that office is a “firm” for purposes of imputed disqualifications under Rule 1.10.1The Office of the Guardian ad Litem has submitted another request asking the Committee to reconsider the conclusion of Opinion 95-08 and to find that Rule 1.11 is the appropriate rule to apply to that office instead of Rule 1.10. As a request for reconsideration of a prior opinion, this request was not timely filed under our rules.2Nevertheless, because the request also raises a somewhat new issue involving Rule 1.11, we will grant a waiver of the 30-day requirement of Rule V(e)(1) and treat this as a late-filed request for reconsideration under our Rules of Procedure.
In Opinion 95-08, we found that the opportunity to discuss cases with other Guardian ad Litem attorneys, access to common files and common supervision required the Office of the Guardian ad Litem to be considered as a firm for Rule 1.10 purposes. It is, accordingly, subject to the application of rules dealing with conflicts, including Rule 1.7 and its companion rule, Rule 1.10.
For these purposes, the Office of the Guardian ad Litem is not a government agency similar to the Attorney General’s Office. First, the Utah Constitution broadly mandates that the Attorney General shall represent all the State officers, whose departments sometimes have conflicting interests, as well as undertake any other duties provided by law.3The Office of the Guardian ad Litem’s statutory mandate is narrowly defined and limited to representing minors before the court.4
Second, the Attorney General does not always represent specific clients, while the Office of the Guardian ad Litem’s statutory purpose is to represent the best interests of specific individual clients. For the purposes of determining whether an organization is a “firm” within the meaning of Rule 1.10, the identification of the structure and client is far more important than is the source of funding. Despite the fact that the government pays for the Office of the Guardian ad Litem, the office can still be a “firm” for conflicts purpose. For example, the government may hire a law firm to represent poor people in their personal law suits. This may be the only thing that the law firm does, and the government’s funding may be the only source of income. Nevertheless, the law firm would still be a “firm” within the meaning of Rule 1.10.
For these reasons, the Office of the Guardian ad Litem is different from the Attorney General’s Office, and we reaffirm our decision in Opinion 95-08 that the Guardian ad Litem is subject to full application of Rule 1.10.
We next turn to Rule 1.11, which deals with the ethical obligations of lawyers who move between government positions and private practice. In considering the applicability of Rule 1.11 to the Office of Guardian ad Litem, we note that Rule 1.10 and 1.11 are not mutually exclusive. The Guardian ad Litem’s request makes the foundational assumption that only one of these rules should apply to it. We do not reach this conclusion. For the reasons detailed in Opinion 95-08 and outlined above, the Office has firm-like characteristics for purposes of Rule 1.10. Yet, there are similarities between the Office of the Guardian ad Litem and the Attorney General’s Office. Both offices’ attorneys operate without some of the personal economic motivations of private-firm attorneys, as the attorneys receive a salary and not an hourly rate or a contingency fee.5The attorneys also serve the public interest, find the best solutions possible rather than serve only a client’s desires, and are employees of the State for the purposes of indemnification.6Thus, the Office of the Guardian ad Litem does share qualities with the Attorney General’s Office that allow for Rule 1.11 application.
As a government agency for Rule 1.11 application, the Guardian ad Litem can perform its statutory duties by hiring qualified attorneys while maintaining high ethical standards. Removing Rule 1.11 as a barrier for the Office of the Guardian ad Litem to hire qualified attorneys does not relax the individual lawyer’s responsibilities under Rules 1.7, 1.8, 1.9, and 1.10. The Office of the Guardian ad Litem can employ procedures to screen conflicting lawyers from compromising client confidences.
An effective screen needs to be in place before the potential for improper disclosure exists7and will contain the following types of elements: (1) a prohibition against the disqualified attorney from any participation, discussion, or information regarding the conflicting matter, (2) a restriction on access to files concerning the matter as well as on access to the disqualified attorney’s files and, (3) a memorandum circulated throughout the firm concerning the conflict of interest.8
Conclusion: Utah Rules of Professional Conduct 1.10 and 1.11 both apply to the Office of Guardian ad Litem: The office is a “firm” for purposes of Rule 1.10; and it is a “government agency” for purposes of Rule 1.11.
Footnotes
1.Utah Ethics Advisory Op. No. 95-08, at 10, 1996 WL 227375 (Utah State Bar).
2.Within 30 days of receipt of a response from the Committee under §§ V(b)(2) or V(b)(3), the recipient may seek reconsideration of Committee action by submitting a written request, outlining the factual, legal or policy considerations on which the request for relief is based.
Utah Ethics Advisory Op. Com. R. Proc. § V(e)(1
3.Utah Const., art. VII, § 16. See also Utah Ethics Advisory Op. No. 142, at 2, 1994 WL 579850 (Utah State Bar).
4.(1) The court may appoint an attorney guardian ad litem to represent the best interests of a minor involved in any case before the court . . . ; (2) An attorney guardian ad litem shall represent the best interest of each minor who may become subject of a petition alleging abuse, neglect, or dependency, from the date the minor is removed from his home by the Division of Child and Family Services . . . .
Utah Code Ann. § 78-3a-912 (Supp. 1997).
5.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 342, at 119-20 (the channeling of advocacy toward a just result as opposed to vindication of a particular claim lessens the temptation to circumvent disciplinary rules). See also State v. Fitzpatrick, 464 So. 2d 1185 (Fl. Sup. Ct. 1985) (the lack of economic motivations for the attorneys lessens the temptation to share confidences).
6.Utah Code Ann. § 78-3a-912 (7) (Supp. 1997) (“An attorney guardian ad litem appointed under this section, when serving in the scope of his duties as guardian ad litem is considered an employee of the state for purposes of indemnification under Title 63, Chapter 30, Governmental Immunity Act.”); Utah Code Ann. § 63-30-10 (Supp. 1997) (“[i]mmunity from suit for all government entities is waived”). In Utah Code Ann. § 63-30-2 (Supp. 1997), a government entity is defined as a political subdivision. The Attorney General’s Office is a political subdivision.
7.Hunter Douglas, Inc. v. Home Fashions, Inc., 811 F. Supp. 566 (D. Colo. 1992) (screen in place before the disqualified attorney joined the firm).
8.See id.; Scheissle v. Stephens, 717 F.2d 417 (7th)

Ethics Advisory Opinion No. 98-10

(Approved October 2, 1998)
Issue:
Is it ethical for an attorney to serve as member of the board of directors of a client corporation?

Opinion: The Utah Rules of Professional Conduct do not prohibit an attorney from serving as a member of the board of directors of a client corporation. However, to avoid ethical violations, an attorney who undertakes a dual role as director and counsel for a corporate client should take adequate precautions both before and during the relationship.
Before a lawyer undertakes the dual role of corporate director and attorney, he must comply with several ethical obligations: (a) determine whether the responsibilities of the two roles may conflict; (b) advise and consult with the client concerning this determination and of the risks of dual service; and (c) decline service as a director if it would create a conflict of interest or compromise the lawyer’s independent professional judgment.
A lawyer who has undertaken the dual role of corporate director and attorney must comply with similar ethical obligations during the existence of the dual role: (i) continue to determine whether the responsibilities of the two roles are in conflict on particular matters; (ii) advise and consult with the client concerning these determinations and of the risks of dual service; (iii) recuse from participation in board decisions where participation would present a conflict; (iv) exercise reasonable care to protect the corporation’s confidential information; and (v) resign service as a director and, if necessary, as counsel if continued service would create a conflict of interest or compromise the lawyer’s independent professional judgment.
Analysis: The request for this opinion notes that the American Bar Association has adopted a formal opinion on this topic and asks that this Committee consider the issue as well. This Committee has not previously addressed whether an attorney may ethically serve on the board of directors of a client corporation. An official Comment to Utah Rule of Professional Responsibility 1.7 recommends caution in undertaking a dual role as a corporate director and attorney:
A lawyer for a corporation or other organization who is also a member of its board of directors should determine whether the responsibilities of the two roles may conflict. The lawyer may be called on to advise the corporation in matters involving actions of the directors. Consideration should be given to the frequency with which such situations may arise, the potential intensity of the conflict, the effect of the lawyer’s resignation from the board and the possibility of the corporation’s obtaining legal advice from another lawyer in such situations. If there is a material risk that the dual role will compromise the lawyer’s independence of professional judgment while acting as counsel, the lawyer should not serve as a director.1
This comment underscores the lawyer’s ethical responsibility carefully to evaluate conflicts and risks to the client both before and during service as a director of a client corporation. Under Utah Rule of Professional Conduct 1.4(b), a lawyer must “explain a matter to the extent reasonably necessary to enable the client to make informed decisions regarding the representation.” A lawyer considering or fulfilling a dual role as a director and attorney of a corporate client must explain to the client matters reasonably necessary to enable the client to make informed decisions regarding the representation.
After several years of study, the ABA issued its Formal Opinion No. 98-410, “Lawyer Serving as Director of Client Corporation,” on February 27, 1998. The ABA’s Opinion begins with the following summary paragraph:
The Model Rules of Professional Conduct do not prohibit a lawyer from serving as a director of a corporation while simultaneously serving as its legal counsel, but there are ethical concerns that a lawyer occupying the dual role of a director and legal counsel should consider. The lawyer should reasonably assure at the outset of the dual relationship that management and the other board members understand the different responsibilities of legal counsel and director; understand that in some circumstances matters discussed at board meetings with the lawyer in her role as director will not receive the protection of the attorney-client privilege; and understand that conflicts of interest could arise requiring the lawyer to recuse herself as a director or to decline representation of the corporation in a matter. During the dual relationship, the lawyer should exercise reasonable care to protect the corporation’s confidential information and to confront and resolve conflicts of interest that arise. From the discussion of these ethical concerns, the Committee derives general guidelines that a lawyer, once having agreed to serve on the board of a corporate client, should follow in order to minimize the risk of violations of the Model Rules.2
We agree with this general statement.
The ABA’s opinion identifies several important ethical issues for evaluation by a lawyer and client considering or implementing a lawyer’s service on the client’s board:
* Avoiding conflicts of interest, including in the following areas:
* Serving as counsel in a matter the lawyer opposed as a director
* Giving a legal opinion on a board action in which the lawyer-director participated
* Acting as a director in corporate matters affecting the lawyer or the lawyer’s firm
* Representing the corporation in litigation naming directors as defendants
* Maintaining the professional independence of the lawyer
* Avoiding confusion over whether the lawyer-director’s views are legal advice or business suggestions
* Protecting against disclosure of confidential information and waiver of the attorney-client privilege
A lawyer who undertakes a dual role as director and attorney should evaluate each of these issues and take reasonable steps to avoid ethical violations.
The ABA’s opinion also identifies several important legal and risk issues forevaluation by a lawyer and client who is considering a lawyer’s service on the client’s board:
* Provisions of substantive law concerning agents, fiduciaries, and corporate governance
* Stock exchange regulations and rules of the Securities and Exchange Commission
* Possible exclusion of the lawyer-director from the corporation’s officer and director insurance coverage
* Possible exclusion of the lawyer-director from the lawyer’s own professional liability coverage
* Possible loss of indemnification under the statutes of some statutes in minority shareholder and derivative actions
* Possible exposure of the lawyer’s firm to vicarious liability
* Increased likelihood of disqualification from representing the corporation in litigation or other matters
A lawyer undertaking a dual role as director and attorney should evaluate each of these issues and take reasonable steps to avoid harm to the client. A lawyer considering a dual role as a director and attorney may properly decline to undertake the dual role based upon considerations of risk to the client, the lawyer or the lawyer’s firm.
The ABA’s opinion provides the following guidelines lawyer-directors may use in seeking to avoid ethical violations:
1. Reasonably assure that management and the board of directors understand (i) the different responsibilities of legal counsel and director; (ii) that when acting as legal counsel, the lawyer represents only the corporate entity and not its individual officers and directors; and (iii) that at times conflicts of interest may arise under the rules governing lawyers’ conduct that may cause the lawyer to recuse herself as a director or to recommend engaging other independent counsel to represent the corporation in the matter, or to serve as co-counsel with the lawyer or her firm.
2. Reasonably assure that management and the board of directors understand that, depending upon the applicable law, the attorney-client evidentiary privilege may not extend to matters discussed at board meetings when the lawyer-director is not acting in her corporate counsel role and when other lawyers representing the corporation are not present in order to provide legal advice on the matters.
3. Recuse herself as a director from the board and committee deliberations when the relationship of the corporation with the lawyer or her firm is under consideration, such as issues of engagement, performance, payment or discharge.
4. Maintain in practice the independent professional judgment required of a competent lawyer, recommending against a course of action that is illegal or likely to harm the corporation even when favored by management or other directors.
5. Perform diligently the duties of counsel once a decision is made by the board or management, even if, as a director, the lawyer disagrees with the decision, unless the representation would assist in fraudulent or criminal conduct, self-dealing or otherwise would violate the Model Rules.
6. Decline any representation as counsel when the lawyer’s interest as a director conflicts with her responsibilities of competent and diligent representation, for example, when the lawyer is so concerned over her personal liability as a director resulting from the course approved by management or the board that her representation of the corporation in the matter would be materially and adversely affected.3
We agree with the ABA’s opinion that following these guidelines should help to avoid disciplinary violations. The ABA’s opinion emphasizes that “[t]he issues to be faced will differ depending on the nature of the legal services to be provided by the lawyer-director or her firm, the nature of the client’s business, and the nature of the representation which could range from serving as general counsel to handling a few discrete transactions.”4No general list of guidelines can address all possible issues that may be presented by a lawyer’s serving as a director of a corporate client while simultaneously serving as the corporation’s counsel. Evaluation of issues arising in this dual relationship must be made on a case by case basis.
Footnotes
1.Utah Rules of Professional Conduct 1.7 cmt.
2.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 98-410, slip op. at 3 (1998).
3.Id. at 14-15.
4.Id. at 4.

Ethics Advisory Opinion No. 98-11

(Approved October 30, 1998)
Issue:
In a lawsuit against a Utah county, brought by the heirs of a decedent whose medical bills were paid (in part) by the State of Utah’s Medicaid program after the decedent had been in the county’s jail facility, what are the ethical considerations that govern a medical cost-recovery retainer agreement among the heirs, their attorney and the State’s Office of Recovery Services (ORS)?

Opinion: The attorney representing ORS may request the heirs and their attorney to execute a retainer agreement that precludes the heirs’ attorney from acting adversely to ORS and provides that ORS will be paid first from any recovery from third parties as a condition for ORS’s contributing to the heirs’ attorneys’ fees and costs. Whether the heirs’ attorney may execute such a retainer agreement depends on whether the attorney can satisfy the conflict-of-interest requirements of Rule 1.7(b).
Facts: Lawyer represents the surviving widow and daughter of the decedent, who was seriously injured while incarcerated in a county jail and died several months later after incurring significant medical bills. Through the Medicaid program, the State of Utah, Department of Health (the “Department”), paid a portion of these medical bills. Lawyer has commenced a lawsuit on behalf of the surviving widow and daughter (the “Heirs”) against the county.1
The Department has claimed a lien in the action for the medical assistance provided to the decedent (the “Medicaid lien”). Lawyer contacted ORS to negotiate a reduction in the Medicaid lien in an effort to reach a negotiated settlement of the lawsuit. The Heirs have claimed that the damages being sought in the lawsuit are not for “medical assistance” and that the Medicaid lien is inapplicable or invalid as to any recovery in the action.
ORS responded by refusing to negotiate the Medicaid lien and by requesting that Lawyer enter into a retainer agreement to be executed by Lawyer, the Heirs, and ORS under which Lawyer would agree to represent the interests of ORS in the recovery of the medical assistance provided by the State of Utah. The retainer agreement provided that Lawyer would agree not to represent the Heirs in a manner adverse to the interests of ORS with respect to the matter, and that ORS would be paid first out of any recovery from the defendant county the full amount of the Medicaid lien, without discount or reduction.
ORS made execution of the retainer agreement by Lawyer and Heirs a condition to ORS’s agreeing to pay any portion of the attorneys’ fees or costs incurred by Lawyer in the prosecution of the lawsuit. The retainer agreement contained an acknowledgment of the potential conflict of interest between ORS, Lawyer and the Heirs. It stated that this potential conflict of interest had been fully discussed with the Heirs and stated that the Heirs consented to Lawyer’s undertaking the dual representation. Paragraph 11 of the retainer agreement further provided: “This Retainer Agreement may be terminated only upon a showing of good cause, written notice being given to all other parties. Upon termination, the attorney agrees that he/she shall not continue representation of either ORS or Recipient in the Cause of Action.” The retainer agreement also provided: “A copy of any separate fee agreement between the Attorney and the Recipient shall be provided to ORS.”
Issue No. 1: As a condition of ORS’s contributing any attorneys’ fees or costs incurred by the attorney in seeking recovery from the responsible third parties, is it unethical for the attorney for ORS to require an attorney representing the Heirs of the decedent in a claim against third parties allegedly responsible for the decedent’s injuries necessitating the medical assistance, to enter into a retainer agreement described above for execution by the attorney, the Heirs and ORS?
Opinion: If the retainer agreement does not otherwise violate the Rules of Professional Conduct, it is not unethical for the Utah Attorney General’s Office to prepare a retainer agreement with these terms for execution by ORS, the Heirs and the attorney representing the Heirs as a condition to ORS’s agreement to contribute to the payment of any attorneys’ fees or costs incurred by the attorney in seeking a recovery from the responsible third parties. It is the attorney’s ethical obligation to determine if the retainer agreement imposes obligations on the attorney or the Heirs that would create an unwaivable conflict of interest under Utah Rules of Professional Conduct 1.7(b).2
Analysis: By statute, the Department is provided a lien against any proceeds payable to or on behalf of a recipient of medical assistance by a third party responsible for the injuries.3The Department is allowed to make a direct claim against the responsible third party.4This does not bar a recipient or a dependent of a recipient from bringing a claim against the responsible third party for damages not included in the Department’s action.5A recipient may not, however, “file a claim, commence an action, or settle, compromise, release, or waive a claim against a third party for recovery of medical costs for an injury, disease, or disability for which the department has provided or has become obligated to provide medical assistance, without the department’s written consent.”6The State of Utah’s written consent, if given, is required to “state under what terms the interests of the department may be represented in an action commenced by the recipient.”7
Section 26-19-7(4) addresses the issue of the Department’s obligation to pay attorneys’ fees and costs: “The department may not pay more than 33% of its total recovery for attorney’s fees, but shall pay a proportionate share of the costs in an action that is commenced with the department’s written consent.”
If a legal action is commenced by a recipient without the Department’s written consent, the Department has no obligation to pay any attorneys’ fees or costs incurred by the recipient’s attorneys in that legal action.8The Legislature has therefore determined that a legal action may not be commenced by a recipient for the recovery of medical costs paid by the State without the consent of the Department, and that the Department has no obligation to pay any attorneys’ fees or costs incurred in such an action unless the Department has consented to the legal action.
It is not unethical for the Department to condition the consent to such a legal action by a recipient and to condition any obligation to pay attorneys’ fees or costs upon the agreement of the recipient and the recipient’s attorney that the recipient’s attorney will represent the interests of ORS. The Legislature left to the discretion of the Department the terms under which it would consent to a legal action by a recipient for the recovery of medical expenses paid by ORS.
If these conditions are unacceptable to the recipient or to the recipient’s attorney, they may simply decline to bring a legal action for the recovery of medical costs paid by the State of Utah. We recognize that the State may seek to enforce its Medicaid lien even as to any recovery by the recipient for damages other than the medical expenses paid by the State of Utah.9If the State does so, it avoids any obligation to pay a portion of the attorneys’ fees and costs incurred to recover such amounts. The Legislature has inherently already addressed these issues and has resolved them in favor of the protection of the public treasury.
This is not to suggest that attorneys representing Utah, including attorneys in the Attorney General’s Office, may draft retainer agreements that violate the Utah Rules of Professional Conduct. However, because we do not find a per se unwaivable conflict of interest present in these circumstances, we do not believe the consent to the conflict of interest arising from the joint representation contained in the retainer agreement necessarily violates Rule 1.7(b).10
However, two provisions of the retainer agreement warrant additional discussion. As quoted above, paragraph 11 of the retainer agreement requires a showing of good cause to terminate the agreement. The comment to Utah Rules of Professional Conduct 1.2 provides: “An agreement concerning the scope of representation must accord with the Rules of Professional Conduct and other law. Thus, the client may not be asked to agree . . . to surrender the right to terminate the lawyer’s services . . . .” The restriction in the retainer agreement limiting the clients’ rights of termination of the agreement to “for cause” terminations is inconsistent with this comment to Rule 1.2. Accordingly, it would be unethical for lawyer to enter into a retainer agreement containing this limitation. Further, if an Assistant Attorney General prepared the retainer agreement and knew that the termination clause would cause the attorney executing it to violate the Rules of Professional Conduct, then that attorney would violate Rule 8.4(a).11
Finally, the retainer agreement provides that: “A copy of any separate fee agreement between the Attorney and the Recipient shall be provided to ORS.” The fee agreement between the recipient and Lawyer is confidential information under Rules 1.6 of the Utah Rules of Professional Conduct.12This paragraph does not, however, violate the Rule 1.6, as it constitutes a written consent to the disclosure of this confidential information by the recipient.
Issue No. 2: Is it unethical for the Heirs’ attorney to enter into the retainer agreement to represent both ORS and the Heirs in claims against third parties, when the retainer agreement precludes the attorney from contesting the validity or the amount of ORS’s lien and contains an agreement by the attorney and the Heirs that any recovery will be paid first to ORS for payment in full of all medical expenses paid by the State of Utah, without discount or reduction.
Opinion: Whether it is ethical for the attorney in such circumstances to represent both the Heirs and ORS, or to represent the Heirs given the limitations of the retainer agreement, depends upon whether the attorney can satisfy the requirements of Utah Rules of Professional Conduct 1.7(b). If the attorney’s representation of the Heirs may be materially limited by the attorney’s agreement in the retainer agreement to represent the interests of ORS, or by the attorney’s obligations to ORS under the retainer agreement, including the attorney’s duty not to undertake representation adverse to the interests of ORS, then the attorney may undertake the representation only if the attorney reasonably believes the representation of the Heirs will not be adversely affected by the execution of the retainer agreement. If this condition is satisfied, then, if an attorney-client relationship is created with ORS, ORS and the Heirs must consent to the multiple representation after consultation, including an explanation to each client of the implications of the common representation and the advantages and risks involved. If an attorney-client relationship is not created with ORS by the retainer agreement, then only the Heirs must consent to the representation after a disclosure of the limitations on the representation.
Analysis: Whether an attorney representing a recipient may ethically enter into a retainer agreement to represent both the recipient and ORS is dependent on the facts of each case. The Utah Supreme Court has recently cast doubt on whether the retainer agreement, notwithstanding its language, creates an attorney-client relationship between an attorney and ORS.13
Yet, whether or not an attorney has an attorney-client relationship with ORS under the retainer agreement does not alter the analysis of a potential conflict of interest under Rule 1.7(b). The attorney’s representation of the Heirs may be materially limited by the responsibilities to ORS under the retainer agreement, whether ORS is a client or a non-client third party. Rule 1.7(b) provides that such representation may be undertaken only if: (1) the attorney reasonably believes the representation will not be adversely affected; and (2) each client consents after consultation, which consultation shall include explanation to each client of the implications of the common representation and the advantages and risks involved.14
Under the facts of the request to the Committee, it is doubtful that Lawyer can satisfy the first requirement of Rule 1.7(b). If a bona fide legal dispute exists between the Heirs and ORS as to the applicability or validity of the Medicaid lien to any recovery in the lawsuit, Lawyer could not reasonably believe that the representation of the Heirs would not be adversely affected by the retainer agreement and Lawyer’s obligations to ORS. The retainer agreement contains an agreement by Lawyer and the Heirs that ORS will be paid first out of any recovery from the third party the total medical expenses paid by the State, without discount or reduction. It further provides that Lawyer may not undertake any representation adverse to the interests of ORS. Lawyer could therefore not represent the Heirs in negotiating a reduction in the Medicaid lien. The retainer agreement terms will obviously adversely affect the representation of the Heirs, unless the Heirs knowingly and voluntarily waive and release their defenses to the Medicaid lien.
In other circumstances where a bona fide dispute does not exist between the Heirs and ORS as to the applicability or validity of the Medicaid lien to any recovery, but the recipient desires to negotiate with ORS an equitable reduction in the Medicaid lien, an attorney may be able to satisfy the conditions of Rule 1.7(b) and execute the retainer agreement. The attorney would be required to disclose fully and completely to the recipient the limitations upon the attorney’s representation of the Heirs caused by the retainer agreement, including the following: the recipient and the attorney would agree contractually to ORS’s entitlement to the full lien amount, and would rely on the equitable discretion of ORS to reduce the lien amount; and the attorney could not advise the recipient with respect to negotiating a reduction in the lien amount and could not represent the recipient in negotiating a reduction in the lien amount. If the attorney satisfies both requirements of Rule 1.7(b), it would not be unethical for the attorney to execute a retainer agreement, assuming it otherwise complies with the Utah Rules of Professional Conduct.
Footnotes
1.In the facts of the request to the Committee, Lawyer’s clients are the heirs of the decedent, who was the recipient of the medical services paid by the State of Utah. Utah Code Ann. § 26-19-2(6) defines “recipient” to include the estate and heirs of a person receiving medical assistance from the State of Utah. This Opinion addresses the decedent’s heirs as “recipients,” but the analysis is equally applicable to situations where the attorney represents the actual recipient of the medical assistance.
2.(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person or by the lawyer’s own interest, unless:
(1) The lawyer reasonably believes the representation will not be adversely affected; and
(2) Each client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation to each client of the implications of the common representation and the advantages and risks involved.
Utah Rules of Professional Conduct 1.7(b).
3.Utah Code Ann. § 26-19-5(1)(b) (1998).
4.Id. § 26-19-5(3).
5.Id. § 26-19-5(5).
6.Id. § 26-19-7(1)(a).
7.Id. § 26-19-7(3).
8.Camp v. Office of Recovery Services, 779 P.2d 242, 247-48 (Utah App. 1989).
9.See Utah Code Ann. § 26-19-5(1)(b); In re: Estate of Higley, 810 P.2d 436, 439 (Utah App. 1991).
10.The application of Rule 1.7(b) in those circumstances is discussed in greater detail in the Analysis of Issue No. 2.
11. “It is professional misconduct for a lawyer to . . . [v]iolate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another.” Utah Rules of Professional Conduct 8.4(a).
12.See generally Utah Ethics Advisory Op. No. 98-03, 1998 WL 199533 (Utah State Bar).
13.Houghton v. Department of Health, 962 P.2d 58 (Utah 1998) (suggesting an attorney under the ORS retainer agreement acts as a collections agent for ORS, not as an attorney for ORS).
14.To the extent that the retainer agreement does not create an attorney-client relationship with ORS, ORS’s consent is not required and an explanation need not be made of the advantages and disadvantages of common representation

Ethics Advisory Opinion No. 98-12

(Approved December 4, 1998)
Question:
When a lawyer becomes aware that another lawyer has illegally used or possessed controlled substances, under what circumstances must the first lawyer report such conduct to the Utah State Bar?

Opinion: A lawyer is required to report to the Utah State Bar any unlawful possession or use of controlled substances by another lawyer if two conditions are satisfied: (1) the lawyer has actual knowledge of the illegal use or possession, and (2) the lawyer has a reasonable, good-faith belief that the illegal use or possession raises a substantial question as to the offending lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects. A lawyer is excused from this reporting requirement only if (i) the lawyer learns of such use or possession through a bona fide attorney-client relationship with the offending lawyer, or (ii) the lawyer becomes aware of the unlawful use or possession through providing services to the offending lawyer under the auspices of the Lawyers Helping Lawyers program of the Bar.
Analysis: The unlawful use or possession of controlled substances is criminal conduct and may constitute the commission of “a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects,” which is professional misconduct under Utah Rules of Professional Conduct 8.4(b). If another lawyer has actual knowledge that a lawyer has unlawfully possessed or used controlled substances, such that it raises a substantial question as to the offending lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects, the lawyer is bound by the provisions of Rule 8.3(a) to make a report to the Office of Professional Conduct of the Utah State Bar,1unless this disclosure obligation is excused by Rules 8.3(c) or 8.3(d). Rule 8.3(a) provides:
A lawyer having knowledge that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority
However, Rule 8.3(a) imposes an obligation to report only if the lawyer has “knowledge” that the other lawyer has committed a violation of the Rules. “Knowledge” as used in Rule 8.3(a) requires actual knowledge of the violation of the Rules by the other lawyer.2In addition, whether the unlawful use or possession of a controlled substance reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects is dependent upon the facts and circumstances.
Rule 8.3(a) imposes a reporting requirement only when the known misconduct raises a “substantial question” regarding a lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects. The Comment to Rule 8.3 recognizes that the rule does not require disclosure of every violation of the Rules of Professional Conduct. Rule 8.3(a) limits the violations that must be reported to “those offenses that a self-regulating profession must vigorously endeavor to prevent.” The Comment further states: “A measure of judgment is, therefore, required in complying with the provisions of this Rule.” Whether a “substantial question” arises is therefore measured by the subjective, reasonable, good-faith belief of the lawyer with knowledge of the violation. But the Comment to Rule 8.3 also states that the use of the “term ‘substantial’ refers to the seriousness of the possible offense and not the quantum of evidence of which the lawyer is aware.”
In the matter at issue, whether the lawyer has actual knowledge of a violation of Rule 8.4(a) by the offending lawyer and whether the lawyer has a duty to report the violation under Rule 8.3(a) is governed by the same inquiry: the subjective good-faith belief of the lawyer as to whether the misconduct raises a substantial question regarding the offending lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects. The reporting lawyer’s obligation under Rule 8.3(a) arises only on the subjective, reasonable, good-faith belief, considering all the facts and circumstances, that the illegal possession or use of a controlled substance by the offending lawyer raises a substantial question regarding the offending lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects.
There are, however, two exceptions to the reporting requirement of Rule 8.3(a). Rule 8.3(c) provides that the reporting provision “does not require disclosure of information otherwise protected by Rule 1.6.” Rule 1.6 protects information obtained by a lawyer in an attorney-client representation.3Therefore, if knowledge of illegal possession or use of a controlled substance is learned in the course of an attorney-client representation of the offending lawyer, disclosure is not required under Rule 8.3(a).
Rule 8.3(d) provides that the lawyer is not required to report the use or possession to the Bar if the lawyer becomes aware of information regarding the offending lawyer in the course of service on the Lawyers Helping Lawyers Committee, a Utah State Bar program that assists lawyers with substance abuse and psychological and emotional problems.4
The somewhat inartful wording of Rule 8.3(d) raises the question of whether a lawyer fulfills the Rule 8.3(a) requirement by simply reporting an offending lawyer’s illegal actions to the Lawyers Helping Lawyers Committee. We conclude that the focus of the Rule 8.3(d) exception only extends to those lawyers who receive or discover information in connection with their active participation on the Lawyers Helping Lawyers Committee. This committee is a volunteer operation sponsored by the Utah State Bar, but it possesses no authority over lawyers who may need assistance. Indeed, lawyers who may need substance-abuse help, for example, are under no obligation to participate in the program, even when contacted by that organization. Merely reporting information to Lawyers Helping Lawyers does not satisfy the reporting lawyer’s Rule 8.3(a) obligation.
Additional support for this conclusion is found in the Comment to Rule 8.3, which states: “A report should be made to the Bar disciplinary agency unless some other agency, such as a peer review agency, is more appropriate in the circumstances.” This appears to contemplate reporting misconduct to an “agency” that has some measure of authority or official advisory role in the Bar’s lawyer-discipline function. Accordingly, we conclude that, if there is an obligation to report a lawyer’s criminal drug use or possession under Rule 8.3(a), it can not be satisfied by a report to the Lawyers Helping Lawyers Committee.
Footnotes
1.Formerly, the Office of Attorney Discipline.
2.The Terminology section of the Preamble to the Rules of Professional Conduct provides that: “‘Knowingly,’ ‘known’ or ‘knows’ denotes actual knowledge of the fact in question. A person’s knowledge may be inferred from the circumstances.”
3.Rule 1.6(b) permits, but does not require, disclosure by the lawyer of information obtained in an attorney-client representation under limited circumstances. Rule 1.6(b)(4) permits disclosure of such information by the lawyer to comply with the Rules of Professional Conduct. Rule 8.3(c) makes clear that a lawyer may not exercise the exception to confidentiality contained in Rule 1.6(b)(4) to disclose violations of the rules by another lawyer under Rule 8.3(a).
4. This rule does not require disclosure of information provided to or discovered by members of the Utah State Bar during the course of their work on the Lawyers Helping Lawyers Committee, a committee which has as its purpose the counseling of other Bar members about substance abuse or psychological or emotional problems.
Utah Rules of Professional Conduct 8.3(d).

Ethics Advisory Opinion No. 98-13

(Approved December 4, 1998)
Issue:
What are the ethical obligations and considerations that govern a law firm’s acceptance of a financial interest such as stock in a client company in return for performing legal services for that company?

Opinion: A law firm’s acquisition of a financial interest such as stock ownership in a client, whether the investment is made directly by the law firm or through a blind trust, holding company, investment partnership or other investment vehicle, and whether the interest is acquired in exchange for legal services or whether the client’s primary attorney is involved in investment decisions concerning the client’s stock, is not per se unethical. However, in all such arrangements, counsel must comply with the requirements of Rules 1.5, 1.7(b) and 1.8(a) of the Utah Rules of Professional Conduct.

Factual background:
It is reportedly common for a law firm for example, those representing high-tech, start-up companies in California to acquire financial interests in its clients in connection with legal services rendered to those firms. This may take the form of the client company’s payment of common stock to a law firm for its legal services. Payment arrangements might also be structured as formal purchases of the client company’s stock by the law firm, with an agreement that the cash paid for the purchase price be used by the company to pay legal fees charged by the law firm as services are rendered over time.
There are other variations on this general approach, including the use of mechanisms such as blind trusts, investment partnerships and other vehicles that operate in such a way that the client’s primary attorney is not involved in the firm’s decision on whether to invest in a client.
Analysis: Utah Rules of Professional Conduct 1.5 provides that a lawyer shall not enter into an agreement for, charge or collect an illegal or clearly excessive fee. A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee.
This Committee has previously issued Opinion 97-05,1in which it reached the conclusion that accepting payment for legal services in a form other than money is not per se unethical. Nothing in the rules requires that payment be in money. The fundamental requirement is that the fee be reasonable.
We reach the same conclusion with regard to the application of Rule 1.5 to the present question. However, in addition to the factors specifically listed in Rule 1.5 that must be considered to determine the reasonableness of the fee,2the Committee believes that other factors should be considered by the lawyer in determining whether a fee in the form of equity ownership of a client is reasonable. These other factors include: (a) the liquidity of the client’s stock, including whether the client’s stock trades publicly at the time of the fee agreement and, if the stock is not publicly traded, the risk that the client’s stock will not be publicly traded in the future; (b) the present and anticipated value of the client’s stock, including the risks that a proposed patent or trademark may not be granted, that necessary government approvals (such as FDA approvals) may not be received; (c) whether the stock is subject to restrictions after the law firm receives it, and which affect the value of the stock to the lawyer; (d) the quantity of stock owned by the lawyer and whether the lawyer may exercise voting control over the client after receipt of the stock; and (e) any restrictions placed by the lawyer on the consideration paid for the stock.
Certainly, the analysis of whether the fee is reasonable will be more easily made when the client is a corporation whose stock is publicly traded, because the value of the consideration paid by the client can be readily determined. However, it is likely that most instances where the law firm takes the client’s stock in payment of fees will occur with corporations whose stock is not publicly traded. In these instances, determining the value of the consideration paid by the client for the legal fees will be more difficult.
The lawyer and his firm should take steps to avoid confusion about whether the firm is acting as an independent legal advisor or as a business partner. Of course, the law firm must abide by any applicable securities regulations and requirements. In addition, the law firm should consider whether the client should be advised to seek independent counsel concerning the terms of the proposed arrangement for the payment of legal fees to the firm.
It is also true that a simple trade of stock for legal services is more easily assessed for reasonableness than is a purchase of stock with a restriction that the client purchase an equivalent value of legal services. In the latter case, the lawyer receives both the stock and payment for legal services.
The law firm must also take care that any such arrangement does not run afoul of Rule 1.7(b), which provides in pertinent part: “A lawyer shall not represent a client if the representation of that client may be materially limited . . . by the lawyer’s own interest, unless: (1) The lawyer reasonably believes the representation will not be adversely affected; and (2) Each client consents after consultation.”
A lawyer holding stock in a client may be asked to advise the client on matters that may affect the value of the lawyer’s own stock. The official comment to Rule 1.7(b) advises a cautious approach under such circumstances:
Loyalty to a client is also impaired when a lawyer cannot consider, recommend or carry out an appropriate course of action for the client because of the lawyer’s other responsibilities or interests. The conflict in effect forecloses alternatives that would otherwise be available to the client. Paragraph (b) addresses such situations. A possible conflict does not itself preclude the representation. The critical questions are the likelihood that a conflict will eventuate and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client. Consideration should be give to whether the client wishes to accommodate the other interest involved.
If the lawyer’s representation of a corporate client may be materially limited by the lawyer’s interest as a shareholder of the client, the lawyer must not undertake the representation or provide legal advice, unless the lawyer reasonably believes the representation or advice will not be adversely affected, and the client consents after a full disclosure to the client of the possibly adverse consequences of the lawyer’s ownership of the client’s stock. The lawyer should consider whether stock ownership would disqualify the lawyer from representing the client in any existing matters.
Whether the law firm accepts stock in payment of legal fees or actually buys stock in the client, with the funds paid to the client for the purchase earmarked for the payment of legal fees to the client, the law firm must also comply with Rule 1.8(a), which provides:
a. A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
1. The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which can be reasonably understood by the client; and
2. The client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and
3. The client consents in writing thereto.
The Comment to Rule 1.8 states that “Paragraph (a) does not, however, apply to standard commercial transactions between the lawyer and the client for products or services that the client generally markets to others, for example, banking or brokerage services, medical services, products manufactured or distributed by the client and utility services.”
It could be argued that the acquisition of a client’s stock for cash, or in exchange for legal services valued at the customary and reasonable hourly rates of the lawyer, for the stock price the client generally sells the stock to others is a “standard commercial transaction” not requiring compliance with Rule 1.8(a). However, the Committee believes that Rule 1.8(a) was intended to apply to any transaction with a client in which the lawyer acquires an ownership interest in the client.
Rule 1.8(a) requires that: the transaction be fair and reasonable to the client; the terms of the transaction be fully discussed with the client and transmitted in writing to the client in understandable terms; the client be given a reasonable opportunity to obtain the advice of independent counsel in the transaction; and the client consent to the transaction in writing.
The Committee believes that the same factors discussed above with regard to Rule 1.5 would also apply in determining whether the law firm’s purchase of stock in a client comports with the requirement of Rule 1.8(a) that the terms of the transaction be reasonable and fair.
While owning the stock in a blind trust, holding company, investment partnership or other investment vehicle results in the law firm’s being one step removed from its client, the same analysis must be applied under Rules 1.5, 1.7(b) and 1.8(a). The fee charged must still be reasonable. The lawyer must reasonably believe that the representation of the client will not be adversely affected by the firm’s stock ownership through an investment vehicle, and the client must consent after consultation to the representation. A transaction under which the firm obtains ownership in the client through the firm’s investment vehicle must still be fair and reasonable to the client; the client must be given a reasonable opportunity to seek the advice of independent counsel in the transaction; and the client must consent in writing to the transaction. Furthermore, whether the client’s primary attorney is involved in the investment decision and whether the funds paid for the stock are earmarked for payment of the firm’s fees, while factors in any Rule 1.5, 1.7 and 1.8 analysis, will not be determinative of whether the fee is reasonable, whether there is an impermissible conflict, or whether the transaction between the law firm and client is fair and reasonable to the client.
In other words, the law firm must comply with Rules 1.5, 1.7(b) and 1.8(a), regardless of whether the firm owns the stock outright or through an investment vehicle, whether the client’s primary attorney is involved in the law firm’s investment decision, or whether the firm receives stock directly in payment of fees or buys the stock with the purchase funds earmarked for payment of fees.
Footnotes
1.Utah Ethics Advisory Op. No. 97-05, 1997 WL 223851 (Utah State Bar).
2.
(1) The time and labor required, the novelty and difficulty of the questions involved and the skill requisite to perform the legal service properly; (2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) The fee customarily charged in the locality for similar legal services; (4) The amount involved and the results obtained; (5) The time limitations imposed by the client or by the circumstances; (6) The nature and length of the professional relationship with the client; (7) The experience, reputation and ability of the lawyer or lawyers performing the services; and (8) Whether the fee is fixed or contingent.
Utah Rules of Professional Conduct 1.5(a).

Ethics Advisory Opinion No. 98-14

(Approved December 4, 1998)
Issue:
Is it unethical for a lawyer in a divorce case to advise a client that she may obtain a protective order pro se or to allow the client to appear pro se in the protective-order case, while the lawyer continues to represent the client in the divorce proceeding?

Opinion: Because a protective-order proceeding is a separate legal action from a divorce proceeding and is clearly delineated as such by state statute, an attorney who represents a client in a divorce proceeding is not automatically counsel for that client within the protective-order proceeding. Further, an attorney representing a client in a divorce proceeding is not ethically bound to represent the same client in a protective-order proceeding filed between the same parties. The lawyer may advise the client of her right to obtain a protective order and to do so pro se.
Analysis: Chapter 3 of Title 30 of the Utah Code governs divorce proceedings,1and Chapter 6 of Title 30 establishes a procedure for obtaining a “protective order” in a protective order or “cohabitant abuse” proceeding.2Sometimes, the relief sought in a protective-order action will overlap with or will be identical to relief sought in a divorce proceeding. The Ethics Advisory Opinion Committee has been asked whether an attorney who is representing a client in a divorce proceeding is required to represent the same client in a protective-order proceeding involving the same opposing party as the divorce proceeding. The request notes that, because the relief sought in the protective-order action may duplicate the relief sought in the divorce action, it may cause difficulty for one or both litigants to the actions, or to the court, if a party appears pro se seeking the issuance of relief pursuant to a protective order.
A lawyer has an obligation to advise a client of all lawful options to resolve a legal problem.3If an attorney believes that a protective order is appropriate in a case, the Rules of Professional Conduct may, therefore, require the attorney to advise the client of the option of obtaining a protective order. Because the protective-order system in Utah allows pro se litigants to obtain protective orders at no cost through the assistance of the court and without incurring attorney’s fees, an attorney may properly advise a client that she has the option not only of obtaining a protective order, but of obtaining one either through counsel or pro se. If an attorney advises a client of the availability of the protective-order system and of the possibility of obtaining a protective order without counsel, the attorney is not breaching any of the Rules of Professional Conduct.
It goes without saying that a lawyer cannot accept representation in a case, promise to represent a client in a protective-order proceeding, and then fail to do so. This would clearly be a violation of Rules 1.1, 1.2 and 1.4. Conversely, however, if the lawyer advises the client of the option of obtaining a protective order, and the client specifically elects to do so pro se, the attorney is ethically prohibited from interfering in the client’s decision, since this would violate the specific instructions from the client as to the scope and direction of the representation.4Once an attorney has advised a client of all her options in any case, it is exclusively the client’s right to determine whether to pursue one course of action or another, and whether to pursue relief pro se or with counsel. Under Rule 1.2(a), the lawyer is bound by the client’s determinations in this regard and may not act adversely to the client’s specific instructions. Indeed, it might violate a lawyer’s ethical obligations to insist upon appearing for a client in a protective-order case, if the client specifically instructed the attorney not to do so.
Practitioners should continue to bear in mind that it is a violation of the Rules of Professional Conduct for an attorney to approach a court to seek relief on behalf of a client when the relief is not sought in good faith.5It is likewise a breach of an attorney’s ethical obligations to suggest to a client that she advance a claim for relief in court pro se, when such an action is not brought in good faith. Obviously, it is a breach of an attorney’s ethical obligations to suborn perjury in seeking any relief from any court, and it is a breach of an attorney’s ethical obligations to suggest to a client that she make false statements to a court in seeking any relief, including pro se actions.
Footnotes
1.Utah Code Ann. §§ 30-3-1 to -38 (1998).
2.Id. §§ 30-6-1 to -14.
3.Utah Rules of Professional Conduct 1.1, 1.2(c), 1.4(a), 1.4(b) and 2.1.
4.Id. 1.2(a).
5.Id. 1.2(c), 1.16(b)(1), 1.16(b)(2), 3.1, 3.2 and 3.3.

Ethics Advisory Opinion No. 98-15

(Approved January 29, 1999)
Issue:
May a lawyer, who identifies himself as a lawyer, write an article or letter to the editor for a non-legal publication on (a) a legal subject or (b) a non-legal subject?

Opinion: Generally, a lawyer, identified as a lawyer, may write for publication about any subject matter, subject to certain limitations such as compliance with Rule 3.6 on trial publicity.
Background: The Ethics Advisory Opinion Committee has been asked to consider whether a lawyer, who identifies himself as a lawyer, may ethically publish articles and letters to the editor in newspapers, magazines and other publications. This request arises, in part, because of a 1979 Utah Ethics Advisory Opinion, which declared that “It is improper for an attorney to identify himself as an attorney in a letter to the editor.”1
In a short opinion that recites a portion of a 1962 informal ABA opinion, this Committee appears to have concluded that an attorney may only publish a letter to the editor “express[ing] a view point on public matters if, of course, he doesn’t mention the fact that he is a lawyer.”2
The foundation for this restriction is somewhat unclear, but appears to be partially grounded in Canon 27 of the Code of Professional Responsibility, which proscribed lawyers’ advertising.
Discussion: We find that the conclusion and the apparent reasoning behind Opinion 54 are not consistent with the current Utah Rules of Professional Conduct3 and the case law that has addressed the First Amendment rights of lawyers and law firms.4
Turning first to the Rules of Professional Conduct, we find no rule that directly proscribes either a lawyer’s letter to the editor or an article written on any subject-legal or otherwise. Nor do we find anything in the rules that restricts the lawyer from identifying himself as a lawyer. We do note that there are some limitations on communicating through the media about currently pending litigation of a lawyer’s client, and we assume here that the letters and articles in question are not targeted toward or about the lawyer’s client’s legal affairs5or otherwise designed “to embarrass, delay or burden a third person” when representing a client.6
The “advertising rules,” Rules 7.1 through 7.5, do not deal directly with the subject of lawyers’ letters and articles, and we can find no other rules that would have direct application. Perhaps more fundamentally, however, a lawyer should be generally free to communicate about matters of interest, legal or otherwise, and not be constrained to hide his identity as a lawyer. To the extent that Opinion No. 54 was based on the notion that identifying oneself as a lawyer in a letter to the editor or other publication is a form of advertising, the application of the First Amendment in such cases as Bates and the replacement of the Code of Professional Responsibility by the Rules of Professional Conduct has swept this aside.
As the New Jersey Supreme Court Committee on Attorney Advertising recently concluded, “There is nothing inherently improper about the publication of a column discussing a legal topic.”7We agree, and we further conclude that the identification of the author as a lawyer is not inherently improper. The principle is that lawyers’ communications are generally protected by the First Amendment, subject to the restriction that they not be false or misleading. Writing letters and articles about matters of interest does not constitute improper or unethical behavior.8
Conclusion: Subject to the limitations discussed in the body of this Opinion, it is not unethical under the Utah Rules of Professional Conduct for a lawyer, identified as a lawyer, to publish articles or write a letter to the editor about subjects of interest, both legal and non-legal. Accordingly, Ethics Advisory Opinion No. 54, which prohibited professional identification of such publications, is overruled.
Footnotes
1.Utah Ethics Advisory Op. No. 54 (Utah St. Bar April 12, 1979).
2.ABA Comm. on Professional Ethics, Informal Op. C-473 (1962).
3.The current Utah Rules of Professional Conduct replaced the Utah Code of Professional Responsibility (the canons and ethical considerations) on January 1, 1988.
4.See, e.g., Bates v. State Bar of Arizona, 433 U.S. 350 (1977).
5.See, e.g. , Utah Rules of Professional Conduct 3.6, Trial Publicity; but see Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991).
6.Utah Rules of Professional Conduct 4.4.
7.N.J. Att’y Advertising Comm. Op. 23, 1997 WL 612281, 149 N.J.L.J. 1298 (1997). In this case, the article was accompanied by information about the attorney and a solicitation of business, and the New Jersey committee required that the word “advertisement” appear with the column. In our Opinion, we address only the non-solicitational communications that a lawyer might publish in a variety of media. See also ABA/BNA Law. Manual on Prof. Conduct, 81:504 (1989) (“canned” columns that combine lawyer advertising with general information about a legal topic), cited in Annot. Model Rules of Professional Conduct (ABA 3d ed. 1996).
8.Other states have reached similar conclusions. See N.J. Att’y Advertising Comm. Op. 23, id.; Tex. Ethics Op. 425, 1985 WL 57297 (Tex. Sup. Ct. Prof. Ethics Comm.); Ill. Ethics Adv. Op. 763, 1982 WL 198398 (Ill. St. Bar Ass’n).