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MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 1988-66
CONFLICTS: WITHDRAWAL OF APPEARANCE WHEN POSSIBILITY OF CONFLICT EXISTS
You present the following circumstances. You were hired by a person who wanted your assistance in drafting and filing Articles of Incorporation so that your client could become a recruitment agency. This job you completed. This person, now incorporated, began recruiting nurses from the Philippines to work for various health care providers. She referred several. of these nurses to you for assistance in obtaining temporary work visas.
Several nurses did in fact retain you, signing retainer agreements calling for the payment in advance of a portion of your stated fee and monthly payments thereafter. You later discovered that the recruiter had collected your retainer from a number of the nurses and apparently has not turned that money over to you. You have demanded that the recruiter either return these funds to the nurses or to turn the funds over to you.
As concerns the applications for the temporary work visas you have filed applications for some of the nurses but not all who retained you. Even for those nurses for whom you have not yet filed an application you have completed significant work.
Your question is whether ethically you should withdraw from representing the nurses because of a potential conflict of interest.
Rule 1.7 of the Rules of Professional Conduct addresses the issue of conflicting interest. In short, the rule prohibits an attorney from representing one client if that representation will be directly adverse to another client or if the representation of one client may be materially limited by the attorney's responsibilities to another client, a third person, or the attorney's own interest. The exception to the rule allows the attorney to represent a client if the attorney reasonably believes the representation will not adversely affect his relationship with another client and each client consents after consultation.
The consultation required with a client prior to consent must include an explanation of the implications of common representation and any limitations on the attorney because of the responsibilities to another. An attorney consulting with a client in this context must also explain any limitations on the attorney resulting from the attorney's own interest. Finally, the attorney must explain the advantages and risks involved.
In the facts that you present it is apparent that you no longer represent the recruiter and that your only representation involving this person was the drafting and filing of Articles of Incorporation. You currently represent several of the nurses recruited by your former client. And your former client, the recruiter, has collected and continues to hold your retainers from the nurses. You have classified this situation as a ""potential"" conflict of interest.
You may not represent your current clients, the nurses, if your representation may be materially limited by your responsibilities to your former client, the recruiter, or if your representation of the may be materially limited by your own interest. Your responsibilities to your former client, the recruiter, include at a minimum not revealing confidences or client secrets. If your representation of the nurses would be limited by this responsibility then you cannot represent the nurses.
Your own interest involving the former client, the recruiter, and your current claim upon the fees in her possession and possible complications resulting from this appear to present the greater possibility of a conflict of interest. If you can pursue your interest of having those funds turned over to you or returned to your clients and not have that interest materially limit or adversely affect your representation of the nurses then you may continue to represent them.
You must also consider the possible courses which your dispute with the recruiter may take and whether those possible courses will materially limit your responsibilities to the nurses. However, you need not make that determination until these future events occur.
Final1y, even if you determine that your representation of the nurses may be materially limited either by your responsibilities to your former client, the recruiter, or because of your own interests you may still continue your representation of the nurses on two conditions: that you reasonably believe that your representation won't be adversely affected and that the nurses consent to your representation after proper consultation.
If you represent the nurses in any kind of an action against your former client, the recruiter, (e.g. for return of money paid by the nurses to the recruiter) then Rule 1.9 would apply. This rule requires that if you represent one client you shall not thereafter:
A. Represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation or
B. Use information relating to the representation to the disadvantage of the former client except as Rule 1.6 would permit with respect to a client or when the information has become generally known.
It is the opinion of the Committee that although possible, it would be unlikely that the representing of your current clients against the recruiter would involve the same or a substantially related matter as your drafting and filing Articles of Incorporation. You must determine what information gained from your prior representation, if any, would be useable in your current representation.
Based on the facts you have presented it is the opinion of the Committee that your continued representation of the nurses is not materially limited by any responsibilities you have to the recruiter, to a third person or by your own interests. It is also the opinion of the Committee that your representation of the nurses, either in assisting them with their visa applications or in assisting them with claims against the recruiter, does not create a conflict because the representation does not pertain to the same or substantially related matters.
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