Also known as: material adverse · material adverse effect · MAE
Written by attorneys · grounded in primary & secondary sources — see below
An opposition between the interests of clients or prospective clients that is substantial enough to create a disqualifying conflict of interest for a lawyer or firm. The threshold is met when the matters are the same or substantially related and the lawyer possesses material information or the representation would directly harm the former or prospective client.
Marcus Mitchell left Matrix Technologies after handling its contract dispute with a supplier. The firm now seeks to represent the supplier against Matrix in a related arbitration. Because the matters are the same and remaining lawyers possess protected information, the firm cannot proceed without consent.
Michelle Murphy represents Marathon Logistics in a licensing negotiation. The client repeatedly misses meetings and refuses to pay invoices. A replacement firm is ready to step in with weeks remaining before deadlines, so Murphy moves to withdraw.
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Malcolm McKinley consulted Metro Bank about a loan dispute but never retained the bank. The bank later seeks to represent the opposing borrower in the same matter. Because McKinley disclosed information that could harm him, the bank is disqualified.
Melissa Mills formerly represented Maxwell Manufacturing in a patent suit. She now seeks to represent a competitor in the same litigation. The competitor's interests directly oppose those of the former client, so Mills may not proceed without written consent.
Michael Miller joined a firm that previously represented Meredith Maxwell in a contract matter. Miller now wants to represent an adverse party in the same dispute. Because Miller acquired material confidential information, the representation is barred absent consent.
A lawyer sits on the board of a legal services organization that decides to sue a company the lawyer represents. The board action would directly harm the lawyer's client, so the lawyer must not participate in that decision.
Withdrawal creates a material adverse effect when it leaves the client in a worse position regarding deadlines, continuity of representation, or case strategy. The presence of ready replacement counsel and remaining time before deadlines typically prevents such an effect.
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Yes, when the new matter is the same or substantially related and the new client's position directly opposes the former client's position in that matter. The rule prohibits the lawyer from switching sides without informed consent confirmed in writing.
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Information that could be significantly harmful to the prospective client in the same or substantially related matter triggers disqualification. The lawyer and the firm are then barred from representing an adverse client unless an exception applies.
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The standard applies when the board's decision or action would harm the representation of the lawyer's own client. The lawyer must not participate in any such decision.
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…a significant change in benefits. Compare Crady v. Liberty Nat. Bank & Trust Co. of Ind. , 993 F. 2d 132, 136 (CA7 1993) ("A materially adverse change might be indicated by a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly…