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Ethics Advisory Opinion 07-07

April 13, 2007

South Carolina Bar Ethics Advisory Opinion 07-07

SC Rules of Professional Conduct: 1.3, 1.16, 3.7(a), 3.7(a)(2), 3.7(a)(3)

Date: August 24, 2007

Facts
Lawyer undertook representation of Client in a consumer case when Client had been unable to find another attorney. Lawyer eventually filed suit for Client. Defendant’s attorney has filed a counterclaim against Client for violation of the Frivolous Civil Proceedings Sanctions Act for bringing the lawsuit. Client’s lawsuit was brought on Lawyer’s advice, and Lawyer needs to assert that for Client as a defense to the counterclaim.

Lawyer has re-evaluated Client’s claim and a substantial amount of evidence in light of the counterclaim and is convinced that Client’s claim is not just meritorious, but is strong. Lawyer reasonably believes that the counterclaim itself is frivolous and that it is asserted to jeopardize Lawyer’s representation and make it difficult for Client to continue with lawsuit. Lawyer is on a contingent-fee basis, and Client cannot pay an hourly fee to another lawyer. Nevertheless, Lawyer must wait until the case is further developed before moving for summary judgment on the counterclaim. In the meantime, Lawyer is in the position of having to assert an advice-of-counsel defense for Client while Lawyer remains as Client’s counsel.

Questions

  1. May Lawyer continue to represent Client under this circumstance?
  2. If this would violate the Rules of Professional Responsibility, are there any steps that Lawyer can take to continue representation with Client’s knowledge and consent?

Summary
Rule 3.7(a) of the Rules of Professional Conduct does not prohibit Lawyer in this arrangement from continued representation because Lawyer’s “testimony relates to the nature and value of legal services rendered in the case.” Further, a second exception allows an attorney to act as a witness when “disqualification of the lawyer would work substantial hardship on the client.” In the contemplated context, the inability of the Client to find other representation may qualify as working a substantial hardship.

Opinion
Rule 3.7(a) provides the general prohibition on a lawyer acting as an advocate at a trial in which the lawyer is likely to be a necessary witness. However, the Rule allows a lawyer to act as an advocate at a trial in which the lawyer is also likely to be a necessary witness when “the testimony relates to the nature and value of legal services rendered in the case,” and also when “disqualification of the lawyer would work substantial hardship on the client.” Rule 3.7(a)(2) and (3) (respectively). In the facts presented, the lawyer is defending a counterclaim that speaks directly to the “nature and value of legal services rendered in the case.” Comment 3 acknowledges that where the testimony concerns the legal services rendered, “permitting the lawyers to testify avoids the need for a second trial with new counsel to resolve that issue.” Comment 3 also points out that this situation gives the judge “firsthand knowledge of the matter in issue; hence, there is less dependence on the adversary process to test the credibility of the testimony.”

Comment 4 notes, with respect to Rule 3.7(a)(3), that consideration must be given to the effect on the lawyer’s client if lawyer is disqualified. This must be balanced, however, with the potential for the tribunal to be misled or the opposing party to suffer prejudice. Depending on the severity of the hardship on the Client in the inquiry, namely the inability to obtain other counsel, Rule 3.7(a)(3) may be applicable.

While Rule 1.16 directly addresses termination of representation, there is no indication in the facts that Lawyer wishes to do so. The correct analysis, therefore, falls under Rule 3.7.

Finally, a withdrawal at this point may fall short of diligent representation under Rule 1.3. Comment 4 to Rule 1.3 advises that, “unless the relationship is terminated as provided in Rule 1.16, a lawyer should carry through to conclusion all matters undertaken for a client.” There is no indication that Lawyer desires to withdraw, making Rule 1.16 inapplicable, and possibly requiring the lawyer to continue with the representation in order to comply with Rule 1.3.

The inquirer’s second question need not be addressed because it is the Committee’s opinion that the contemplated situation does not violate any Rules of Professional Conduct.

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