Should One Attorney Represent Two or More Persons Forming a New Business

Attorneys representing Idaho clients must not only adhere to the legal requirements that apply to all Idaho citizens, but must also follow the ethics rules that apply to attorneys. These rules are known as the Idaho Rules of Professional Responsibility Conduct. Failure to follow these rules can result in an attorney being disbarred. Among these rules are provisions that forbid an attorney from representing a client where it would pose a conflict of interest with another client.

For more comprehensive answers to your legal questions, contact a business litigation lawyer Coeur d’Alene ID business owners can rely on.

For example, assume attorney John Smith is approached by a landlord to evict a tenant (Mary Smith) for non-payment of rent. If attorney Smith is presently representing Smith in a personal injury case, Smith must reject the potential landlord/tenant case even these cases involve different areas of law. An attorney is strictly barred from suing an existing client.

Under certain circumstances, Idaho Bar rules also forbid an attorney from representing two or more persons at the same time, even if these persons are not suing each other. For example, if two neighbors are fighting over the location of a fence line for their properties, it would normally be a conflict of interest for one attorney to represent both of them. However, this rule would not prevent the attorney from acting as a Mediator, hired to act as a neutral to help two or more parties to resolve their differences.

Nevertheless, the Idaho Bar rules do permit an attorney to represent multiple persons if this can be done in a way that does not prejudice any of the interests of these persons. For example, a portion of Rule 1.7 contains the following language:

“For example, a lawyer may not represent multiple parties to a negotiation whose interests are fundamentally antagonistic to each other, but common representation is permissible where the clients are generally aligned in interest even though there is some difference in interest among them. Thus, a lawyer may seek to establish or adjust a relationship between clients on an amicable and mutually advantageous basis; for example, in helping to organize a business in which two or more clients are entrepreneurs, working out the financial reorganization of an enterprise in which two or more clients have an interest or arranging a property distribution in settlement of an estate. The lawyer seeks to resolve potentially adverse interests by developing the parties’ mutual interests. Otherwise, each party might have to obtain separate representation, with the possibility of incurring additional cost, complication or even litigation. Given these and other relevant factors, the clients may prefer that the lawyer act for all of them.

But, because dual representation is permitted, does that always mean that it is wise? Short answer – No.

For example, assume Patricia Greene and Rose Johnson wish to form a partnership to start a catering business. Assume that Greene is a wealthy person and Johnson has more modest financial means. Under the Idaho laws of partnership, both partners can be held liability for debts and liabilities of the partnership. This fact means that Johnson may have little to lose if the business fails, but Greene could put at risk her entire fortune. Under these circumstances it would be more product for the two women to have separate attorneys representing them in forming the partnership.


Thanks to our friends and contributors from Bendell Law Firm PLLC for their insight into finding an attorney.