This is the seventh of a series of articles, based on a chapter from the 2015 edition of Lawyers’ Professional Responsibility in Colorado by attorney Michael T. Mihm, discussing the current law of conflicts of interest as it applies to Colorado lawyers. It draws upon the Colorado Rules of Professional Conduct; the former Colorado Rules of Professional Conduct, effective through December 31, 2007 (former Colorado Rules or former Colo. RPC); Colorado appellate decisions; ethics opinions; the ABA Model Rules of Professional Conduct; the Restatement (Third) of the Law Governing Lawyers (Restatement); and other resources.
Lawyers increasingly encounter positional or “issue” conflicts. A law firm may be representing unrelated clients in unrelated matters, and yet a conflict develops because it may be necessary for the law firm to take a position on a legal issue in one case and take a contrary position on the same legal issue in another case.
To confuse matters further, “issue conflicts” are not readily detectable by systems to screen for conflicts; in larger law firms, lawyers may not know what position other lawyers in the firm are taking on disputed issues of law, or it may not become clear that the law firm will need to take a different position on an issue of law until well into a representation.
The rules and the case law give only very general guidance on how to handle issue conflicts. The best guide appears to be Colo. RPC 1.7(a)(2)’s admonition that a lawyer shall not represent a client if “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client. . . .” Comment  to Colo. RPC 1.7 addresses issue conflicts and the risk factors to consider:
Ordinarily, a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients. The mere fact that advocating a legal position on behalf of one client might create precedent adverse to the interests of a client represented by the lawyer in an unrelated matter does not create a conflict of interest. A conflict of interest exists, however, if there is a significant risk that a lawyer’s action on behalf of one client will materially limit the lawyer’s effectiveness in representing another client in a different case; for example, when a decision favoring one client will create a precedent likely to seriously weaken the position taken on behalf of the other client. Factors relevant in determining whether the clients need to be advised of the risk include: where the cases are pending, whether the issue is substantive or procedural, the temporal relationship between the matters, the significance of the issue to the immediate and long-term interests of the clients involved and the clients’ reasonable expectations in retaining the lawyer. If there is significant risk of material limitation, then absent informed consent of the affected clients, the lawyer must refuse one of the representations from one or both matters.
See also ABA Model Rules 1.7, cmt. . The rationale behind the comment appears to be that, if the legal position is legitimately in dispute, a trial court’s decision in one case is not going to bind another trial court deciding the same legal issue in another case. Once the issue goes before the appellate court, however, the position for which the lawyer is arguing, if successful, may injure another client taking a contrary position.
The Comments to the Restatement (Third) of the Law Governing Lawyers generally track the Comments to Colorado Rule 1.7. Restatement § 128, cmt. f; see also ABA Formal Opinion 93-377 (Oct. 16, 1993) (positional conflicts).
Note that even if the two cases are in two different trial courts, a client may be prejudiced by which case is decided first. A copy of a trial court order received in one case can prove very embarrassing when attached by a clever opposing counsel to a motion filed in the second case.
Lawyers’ responsibilities with respect to “issue conflicts” are largely unsettled. For example, the California State Bar Committee on Professional Responsibility and Conduct has concluded that a client should have no reasonable expectation that lawyers will not take inconsistent legal positions on behalf of another client. California State Bar Standing Committee on Professional Responsibility and Conduct, Formal Op. 1989-108 (1989). The same committee has stated that a lawyer may ethically argue conflicting sides of the same legal issue before the same judge. Id.; see contra Association of the Bar of the City of New York Committee on Professional and Judicial Ethics, Formal Op. 1990-4 (May 22, 1990). Indeed, it is sometimes a point of pride among lawyers to be able to effectively argue both sides of the same issue.
In short, the best lawyers can do is be aware of the issue, review the requirements of Colo. RPC 1.7 and Comment , and consider each matter on a case-by-case basis.