Firm-Wide Reach

Firm-Wide Reach

A prohibition in Rule 1.8 rarely stays with the lawyer who triggers it. Rule 1.8(k) 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.¹ Call this imputation: the restriction on one lawyer is attributed to every colleague in the firm. For business transactions the result is direct. Rule 1.8(a) forbids a lawyer to enter into a business transaction with a client, or to knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, unless the rule's conditions are met.² When those conditions are not met for one lawyer, the bar falls on every lawyer associated in the firm. The client need not be the personal client of the lawyer who proposes the deal. It is enough that the bar applies to a lawyer in the firm, because the bar then applies to all of them.

Imputation closes an obvious loophole. Without it, a lawyer who could not satisfy the conditions could pass the deal to a colleague, and the safeguards would disappear with a change of signature.

Imputation does not make Rule 1.8(a) any stricter than it already is. A deal that meets every condition (fair and reasonable terms, written disclosure, written advice about independent counsel, and the client's informed, signed consent) leaves no prohibition to impute, so it is open to any lawyer in the firm. The clause prevents only one mistake: treating the rule as a personal matter for whichever lawyer happens to negotiate.

Conflict rules also do not wait for injury. A lawyer may be subject to discipline for representing conflicting interests even if no harm to the client results.³ That principle fits imputation. A colleague who closes a barred deal cannot count on the client's coming out unharmed as a defense.

Rule 1.8(j) marks the edge of the clause. It forbids sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced.⁴ Paragraph (j) lies outside the range of paragraphs (a) through (i), so Rule 1.8(k) does not reach it. The rule is unusual in that the conflicts it recognizes are not imputed to other lawyers in the same firm.⁵ Its purposes are to protect vulnerable clients from abuse and to keep the lawyer's independent judgment from being compromised by feelings for the client.⁶ Both concerns attach to the individual lawyer's own relationship with the client. A colleague of a lawyer in a prohibited relationship does not become subject to the same prohibition by sharing a firm, while a colleague of a lawyer barred from taking a stake in a client's business does.

The disclosure, consent, and imputation requirements of Rule 1.8 may differ from the usual requirements of Rule 1.7(a)(2), so each one needs separate attention.⁷ The usual exam error is to treat imputation as reaching all of Rule 1.8, when the boundary is the range of paragraphs (a) through (i).