The Colorado Bar Association Ethics Committee has been working on updating their Formal Ethics Opinions in order to reflect changes in the law, including the 2008 revision to the Colorado Rules of Professional Conduct. As part of that effort, the Ethics Committee released an updated version of Formal Opinion 68, “Conflicts of Interest; Propriety of Multiple Representation” in December 2011, and it was published in the March 2012 issue of The Colorado Lawyer.
Formal Opinion 68 addresses four specific conflict situations:
1) representation of both a husband and wife in negotiating a property settlement before dissolution proceedings commence;
2) representation of both the buyer and seller in a residential real estate transaction;
3) representation of both the buyer and seller of a business; and
4) representation of individuals in drafting an entity agreement, and representation of solely an entity in its formation.
The Ethics Committee opines that, in the first scenario, the dual representation would be impermissible under the Colorado Rules of Professional Conduct (Colo. RPC or Rules) because even if the divorce settlement agreement is uncontested, it must be approved by the court, and counsel cannot represent two parties whose interests are adverse under Colo. RPC 1.7.
In the second, third, and fourth scenarios, which are all transactional, the Ethics Committee declines to issue a blanket prohibition on representing both parties to the proposed transactions, but rather notes that each individual situation will require a thorough analysis of the propriety of the representation.
Opinion 68 provides a thoughtful and detailed evaluation of Colo. RPC 1.7 and its comments. It thoroughly examines informed consent, including when and whether it is appropriate, what can be consented to, how to obtain informed consent, the need to obtain new consent when there are situational changes, and confirmation in writing. Each scenario listed above is explored in depth, and the propriety of dual representation is examined for all for sample scenarios. The message of the Ethics Committee is clear: an attorney must examine the specific scenario involving a concurrent conflict of interest with the utmost scrutiny and caution prior to undertaking representation of conflicting parties.
The Ethics Committee develops its formal opinions as a means for providing Colorado attorneys with guidance. However, they issue the following caveat:
Formal Ethics Opinions are issued for advisory purposes only and are not in any way binding on the Colorado Supreme Court, the Presiding Disciplinary Judge, the Attorney Regulation Committee, or the Office of Attorney Regulation Counsel, and do not provide protection against disciplinary actions.