Advisory Opinion Calls On Indiana Officials, Private Attorneys To Avoid Conflicts Of Interest

By: Casey Smith

In a recent advisory opinion, the Indiana Supreme Court Disciplinary Commission doubled down on expectations that public officials and government lawyers avoid potential conflicts when moving between public and private service, or when moving from one government agency to another.

Up for interpretation is Indiana Professional Conduct Rules as they apply to former government employees who “personally and substantially” worked on a specific matter during their tenure with the government, and whether the former employee “possesses confidential governmental information that could be damaging to a third party.”

Specifically, the commission’s new analysis contemplates a key question: When must a lawyer who is a current or former government official or employee be disqualified from — or decline to accept a legal matter — due to a conflict of interest?

The Indiana Capital Chronicle reported earlier this year that numerous elected lawmakers have established consultancies to provide professional advice and guidance to private businesses outside of the Statehouse. In addition, a number of lawyers are in the General Assembly.

Legislators emphasized their duty to disclose potential conflicts of interest when they arise, and to recuse themselves from voting on bills that could cause pecuniary gain, but some outside the Statehouse say the self-policing model needs to be reformed and that economic interest disclosure forms should require more detailed disclosures about private work.

The non-binding advisory opinion acknowledges that — as with every attorney-client relationship — the “duty of loyalty” demands that information related to the representation of a client be protected.

But because the work of government employees “implicates public interest in a way that private practice usually does not,” the commission emphasized that there are special nuances when weighing conflicts of interest.

What is a conflict of interest?

The commission referred to conflicts of interest in previous guidance as instances when attorneys must decline to represent a client — or withdraw from a current matter — because their work will be bound to or limited by any duties owed to someone or by their own self-interest.

In cases where lawyers can reasonably provide fair representation despite a conflict, they should obtain a written conflict waiver from all affected clients.

The latest opinion, issued in March, goes more in-depth. The commission said it comes as a response “to a prospective or hypothetical question” regarding ethics rules for Indiana judges and lawyers. But the opinion also extends to government employees and elected officials.

“It is important that a proper balance is struck between governmental integrity and the ability of government agencies to hire willing and capable attorneys,” the disciplinary commission wrote in the advisory opinion. “Former government employees can be valuable assets in the private sector, but care must be taken to screen for potential conflicts to avoid the law firm’s disqualification from matters.”

Ultimately, the disciplinary commission said a lawyer should recuse themselves when:

The lawyer was previously “personally and substantially” involved in the matter in their prior government role, and the lawyer has not received informed consent from the agency to provide representation. The same applies to a lawyer’s former client if moving from the private to public sector.

The lawyer, while a government employee, “learned damaging confidential information” about a person who has interests adverse to the lawyer’s new client “that will be materially damaging to that person in the new matter.”

The lawyer’s representation “would involve the revelation of information that all attorneys are prohibited from disclosing” under Indiana Rules of Professional Conduct.

Still, the commission said it’s “mindful” of the “importance of having qualified attorneys available to work in the public sector” and of promoting “their ability to move freely between government and private sector employment.”

Deciding what’s OK — and how to avoid conflicts

Lawyers who are former government employees must ask themselves if their work for a government agency is “personally” and “substantially” and specific to their new work.

They should also be aware of whether the same parties are involved. That rule applies “regardless of whether the private client’s interests align with or are in opposition to the government’s interest.”

The lawyer should additionally examine whether they learned confidential governmental information about a person that could be used to inflict “damage” in a private sector setting.

If the answer to all of those questions is “no,” the former government employee is likely free to represent the client.

The same assessment should be used for lawyers who are moving from — or between — private to public work, according to the advisory opinion.

The commission specifically writes that “current government employees shall not participate in matters in which they were personally and substantially involved while in the private sector.”

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