Concept

The Personal-Interest Exception

Imputation of a conflict to the firm while lawyers are associated

The Personal-Interest Exception

Rule 1.10(a)(1) offers the first of two ways out of imputation. A prohibition does not pass to the other lawyers in the firm when "the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm."¹ The rule sets two conditions joined by "and," and a firm must meet both. The first asks what the prohibition rests on: the lawyer's own stake, relationship, or belief. The second turns from that lawyer to the colleagues and asks whether they could still represent the client with undiminished diligence and judgment. A conflict that meets the first condition and fails the second remains imputed, which makes the exception narrower than its label suggests.

Colleagues are spared because a purely personal interest does not travel. When a lawyer is barred by relationships with, or investments in, persons or entities on the other side of the matter, the other lawyers in the firm ordinarily will not be similarly influenced or limited in zealous and loyal representation of the client.² The friendship or the shares belong to one lawyer's life, and a colleague who has neither has no reason to pull a punch. Extending the bar to that colleague would cost the client its lawyers without protecting the client from anything.

Ordinary examples are close at hand. A lawyer retained to pursue a claim against a social club to which she belongs, or against a corporation whose shares form a minimal part of her investment portfolio, may reasonably believe that these inconsequential interests will not influence her judgment, and after being informed of the risks the client might agree.³ When the interest is more than inconsequential and the lawyer steps aside, the question for this section arises: does the bar spread to the rest of the firm? Personal belief can create the same problem. A lawyer who handles supplier transactions and tax matters for a gun-shop owner while pursuing law reform to restrict private firearm ownership may come to regard firearms retailers as unsavory weapons dealers whose trade harms society. A conflict of interest may then arise, and the lawyer may be unable to continue the representation.⁴

In each of these settings the interest stays with the lawyer who holds it. Colleagues who own no shares in the corporation, belong to no club, and share no antipathy toward gun retailers can take the matter, because nothing suggests their work would soften. The exception reaches only a lawyer's personal interest. A bar that comes from a duty owed to another client falls outside it and stays under the baseline rule.

Hypothetical Illustration

The founding partner of a firm has a close personal relationship with the chief executive of a company that one of the firm's clients wants to sue. The partner steps aside, and an associate is assigned to the case. The associate knows that the partner sets associates' pay and promotions and would be reluctant to press the claim hard against the partner's friend. The partner's prohibition rests on a personal interest, but the associate's own representation faces a significant risk of material limitation, so the second condition fails and the conflict is imputed to the whole firm. Suppose instead that the friendship belonged to a junior associate with no say over the lawyers staffing the case. Nothing would then give those lawyers a reason to temper their work, and the exception would apply.

The two versions differ in what the colleagues would do, and that is the question the second condition asks. If the other lawyers in the firm would extend solicitude to the personally conflicted lawyer, and that solicitude would inhibit diligent and uncompromised representation of the client, the personal-interest conflict becomes a firm conflict as well.⁵ The exception is therefore not unbounded. Solicitude can come from several places; in the hypothetical it comes from the partner's authority over pay and promotion.

A different category of conflicts only looks personal. Rule 1.8 collects specific prohibitions in paragraphs (a) through (i), among them limits on a lawyer's business dealings with a client, and a lawyer's financial stake lies behind many of them. Their reach through the firm comes from their own rule, which provides that while lawyers are associated in a firm, a prohibition in paragraphs (a) through (i) that applies to any one of them applies to all of them.⁶ That rule operates on its own terms, so a firm cannot use Rule 1.10(a)(1) to argue that a colleague's prohibited business deal with a client is merely personal. Later sections take up the Rule 1.8 prohibitions group by group, including the sexual-relations carve-out.

A screen is not a condition of the personal-interest exception, but it can still be prudent. Confidentiality sits at the core of the client relationship, and its exceptions are narrow departures from that core.⁷ A lawyer who holds shares in the adverse corporation and sits in on strategy sessions learns what the client intends to do about a company in which that lawyer has money. Keeping the lawyer out of the matter guards against that exposure and keeps the lawyer's interest away from the colleagues' judgment. The screening exception taught next works differently. There, a screen and its companion steps are conditions of relief from a bar that already exists, whereas here the bar was never imputed.

Exam Analysis Steps

Because the exception turns on two linked questions, and the second is the one students most often skip, run it as a short sequence:

Confirm that a lawyer in the firm would be prohibited from the matter practicing alone. The exception relieves an imputation that would otherwise follow and cannot create one.
Identify what the prohibition rests on. Ask whether it is a personal interest of that lawyer, such as a relationship with or investment in the other side or a personal belief, rather than a duty to another client or a Rule 1.8 prohibition.
Ask whether the remaining lawyers would feel solicitude toward the conflicted lawyer, through authority over them or some other pull, so that their own representation would be materially limited.
If the prohibition is personal and that risk is absent, treat the conflict as confined to the one lawyer. If either condition fails, the conflict is imputed under the baseline rule.

The Personal-Interest Exception

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