ABA Formal Opinion 07-447, which issued on August 9, 2007, is entitled “Ethical Considerations in Collaborative Law Practice." It concludes that this type of alternative dispute resolution is not inherently inconsistent with the Model Rules, but rather, provides a permissible limited scope representation under Model Rule 1.2 that does not set up a non-waivable conflict under Rule 1.7(a)(2).

Collaborative law practice, which has its roots in interest-based negotiation and client empowerment, is a type of alternative dispute resolution in which the parties and their lawyers commit to negotiating a mutually acceptable settlement without court intervention. While collaborative law practice models vary, common to all models is a “four-way” agreement between clients and their lawyers that sets out the parties’ commitment to certain guiding principles, such as open communication and information sharing. In addition, the agreement includes a requirement that, should the process break down, the lawyers will withdraw from representing their respective clients and will not handle any subsequent court proceedings. It is this requirement that raises the issue of whether a non-consentable conflict arises in collaborative practice, premised on the view that an agreement to withdraw is essentially an agreement to limit the lawyer’s ability to represent the client.

Consistent with the several state bar opinions that have analyzed collaborative practice, Formal Opinion 07-447 treats collaborative law practice as a permissible limited scope representation under Model Rule 1.2, that, when considered together with the duties of competence, diligence, and communication, is not inherently inconsistent with the Model Rules. To date, only one state bar opinion, Colorado Bar Ass’n Eth. Op. 155 (Feb. 24, 2007), has concluded otherwise.  Although agreeing that the contractual promise to withdraw creates on the part of each lawyer a “responsibility to a third party” under Rule 1.7(a)(2), Formal Opinion 07-447 specifically rejects the suggestion in the Colorado opinion that collaborative law practice sets up a non-waivable conflict under that provision.  This is because Rule 1.2(c) (Scope of Representation and Allocation of Authority between Client and Lawyer) allows a lawyer to set limitations on the scope of representation so long as two conditions are met:  (i) the limitations are reasonable under the circumstances; and (ii) the client gives informed consent. With regard to the first condition, Comment [6] provides that “[a] limited representation may be appropriate because the client has limited objectives for the representation” and that “the terms upon which representation is undertaken may exclude specific means that might otherwise be used to accomplish the client's objectives.” Moreover, nothing in the Rule or its Comment can be read to suggest that limiting the scope of representation to a collaborative effort towards achieving an out-of-court settlement is per se unreasonable.

With regard to the second condition, informed consent requires that the lawyer provide adequate information about, and explanation of, the risks and alternatives to this type of limited representation. As part of this process, the lawyer must ensure that the client understands that both lawyers will withdraw from representing their respective clients in the event that the collaboration fails. Although this contractual obligation to withdraw creates on the part of each lawyer a “responsibility to a third party” within the meaning of Rule 1.7(a)(2), contrary to the Colorado Bar Association opinion, Formal Opinion 07-447 reasons that such responsibility does not create a conflict of interest because “responsibilities to third parties constitute conflicts with one’s own client only if there is a significant risk that those responsibilities will materially limit the lawyer’s representation of the client.” Because Formal Opinion 07-447 starts from the premise that participation in the collaborative process is a limited scope representation, and that agreement to such representation does not exempt the lawyer from the duties of competence and diligence respecting the contours of that representation, it follows that a lawyer’s agreement to withdraw from representation in the event the collaboration fails is not tantamount to an agreement to impair her representation. Instead, it is “consistent with the client’s limited goals for the representation,” leaving the client free to pursue other alternatives, i.e., litigation, precisely because the client has limited the scope of the lawyer’s representation to the collaborative negotiation of settlement only.

This article was prepared by Kim Scheckner of National Labor Relations Board Office of Special Litigation, Washington, D.C.