No Concurrent Conflict in Representing Market Competitors

The New York State Bar Association recently clarified that a lawyer may concurrently represent clients who are competitors in the same industry—even when it would be in one client’s economic interest for the other client to lose the case handled by the lawyer. See N.Y. State Bar Assoc’n Ethics Op. 1103 (2016).  Mere economic adversity does not make the clients “materially adverse” to one another for purposes of either Rule 1.7 (as to concurrent clients) or Rule 1.9 (as to former clients). See id.

While the opinion is correct (and consistent with Comment 6 to ABA Model Rule 1.7), a lawyer would have a conflict if “there is a significant risk” that the lawyer’s representation of one client would be “materially limited” by the lawyer’s current or prior representation of that client’s competitor. See La. Rules of Prof’l Cond. 1.7(a)(2). Although not dispositive, the clients’ economic adversity could be a factor considered in evaluating the existence such a material-limitation conflict.

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