ETHICS OPINION 490-1960 CONFLICT OF INTEREST

NUMBER 490

QUESTION.

 

Our firm shares an office with an insurance brokerage corporation. My partner and I are counsel to and the sole stockholders of the brokerage corporation, but otherwise have no connection with it whatsoever, being neither directors, officers, employees or agents.

 

On occasion, as the result of an automobile accident, a passenger injured in a vehicle operated by an assured of the brokerage corporation, desires to retain us to prosecute a claim against such operator.

 

May we represent such injured passenger against an assured of the brokerate corporation? Would your answer be otherwise if we did not act as counsel to the corporation?

 

ANSWER.

 

There is a strong likelihood that upon the facts stated, if counsel for the brokerage corporation represents the injured passenger, it would constitute unethical conduct whether or not the inquiring attorneys acted as counsel to brokerage corporation. This follows from Canon 6:

 

“The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed.”

 

The fact that the attorneys were sole stockholders and shared offices with the corporation may place them in a position where such confidence has been reposed.

 

The violation of Canon 27 is even more pronounced. A.B.A. Opinion 57 condemns using a law office as a feeder of business:

 

“It is not necessarily improper for an attorney to engage in a business; but impropriety arises when the business is of such a nature or is conducted in such a manner as to be inconsistent with the lawyer’s duties as a member of the Bar. Such an inconsistency arises when the business is one that will readily lend itself as a means for procuring professional employment for him, is such that it can be used as a cloak for indirect solicitation on his behalf, or is of a nature that, if handled by a lawyer, would be regarded as the practice of law. ***”

 

See also Ref. No. 58-16 of the City Bar dated December 9, 1958; Opinions 489, 582, 610 City Bar and Opinions 342 and 377 of our Committee.

 

Dated: April 29, 1960.