Ohio Board Advisory Opinion Op 92-006

The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804
OFFICE OF SECRETARY
OPINION 92-6
Issued February 14, 1992
[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility which is superseded by the Ohio
Rules of Professional Conduct, eff. 2/1/2007.]
SYLLABUS: An attorney engaged in the general practice of law with an emphasis on criminal
practice may acquire an ownership interest in a corporation that sells and provides house arrest
programs for various courts in Ohio, including courts in which an attorney represents criminal
defendants whose sentences might include house arrest as an alternative to incarceration. However,
since a lawyer's independent professional judgment on behalf of a client could be affected by such
business interest, the attorney must obtain the consent of the client after full disclosure as required
by Disciplinary Rule 5-101 (A).
OPINION: The question presented is whether an attorney engaged in the general practice of law
with an emphasis on criminal practice may acquire an ownership interest in a corporation that sells
and provides house arrest programs for various courts in Ohio, including courts in which the
attorney represents criminal defendants whose sentences might include house arrest as an
alternative to incarceration.
The house arrest program provides electronic monitoring as an alternative to formal incarceration
for convicted offenders. An ankle bracelet worn by a convicted offender emits an electronic signal
which is picked up by a receiving device in the offender's home. The receiving device transmits an
electronic signal to a central monitoring station during the times when the offender is required to be
home under house arrest, notations are made, and the sentencing court is notified.
The Code of Professional Responsibility places restraints on a lawyer's representation of a client
when the lawyer has an interest that could affect the lawyer's exercise of professional judgment on
behalf of the client. This restraint is found within Disciplinary Rule 5-101 (A) of the Code of
Professional Responsibility which provides that "[e]xcept with the consent of his [her] client after
full disclosure, a lawyer shall not accept employment if the exercise of his [her] professional
judgment on behalf of his [her] client will be or reasonably may be affected by his [her] own
financial, business, property, or personal interests."
Op. 92-6 2

The ethical concern behind Disciplinary Rule 5-101 (A) is that “[w]hen the interests of a lawyer
and a client cross, loyalties are confused, and the lawyer's effectiveness is diminished.” ABA/BNA
Lawyers' Manual on Professional Conduct § 51:404 (1990). Another concern is that when interests
conflict, a lawyer might use the confidences and secrets of a client to the advantage of the lawyer.
Id.
Disciplinary Rule 5-101 (A) is peculiar in several respects. As written, “[e]ven if the attorney's
judgment may be so impaired, DR 5-101 (A) permits employment if the client consents after full
disclosure." Annotated Code of Professional Responsibility 193 (1979). Further, the rule makes no
reference to the appropriate conduct when such a conflict of interest arises after the attorney
accepts employment. Id. at194.
However, there are several ethical considerations within the Code of Professional Responsibility
that provide guidance. Ethical Consideration 5-1 states that
[t]he professional judgment of a lawyer should be exercised, within the bounds of
the law, solely for the benefit of his [her] client and free of compromising influences
and loyalties. Neither his [her] personal interests, the interests of other clients, nor
the desires of third persons should be permitted to dilute his [her] loyalty to his [her]
client.
Under Ethical Consideration 5-2
[a] lawyer should not accept proffered employment if his [her] personal interests or
desires will, or there is a reasonable probability that they will, affect adversely the
advice to be given or services to be rendered the prospective client. After accepting
employment, a lawyer carefully should refrain from acquiring a property right or
assuming a position that would tend to make his [her] judgment less protective of
the interests of his [her] client.
According to Ethical Consideration 5-3
[e]ven if the property interests of a lawyer do not presently interfere with the
exercise of his [her] independent judgment, but the likelihood of interference can
reasonably be foreseen by him [her], a lawyer should explain the situation to his
[her] client and should decline employment or withdraw unless the client consents to
the continuance of the relationship after full disclosure.
Op. 92-6 3

Notably, "[t]he consent provision of DR 5-101 (A) has been questioned (1) as having an
undermining effect on the aspirational suggestions and underlying policies expressed in EC 5-1 and
EC 5-2 and (2) as placing an undue burden on the client to make a decision about the exercise of
professional judgment which properly belongs to the attorney." ABA, Annotated Code of
Professional Responsibility 196 (1979) (citing Comment, Full Consent: An Invitation to Conflicts
of Interests in the Attorney-Client Relationship, 1972 Law & Soc. Ord. 435, 441, 445 (1972).
Nevertheless, the bottom line is that a lawyer should not allow related business interests to affect
representation; further, client consent is required when a lawyer's independent professional
judgment will be or reasonably may be affected by a financial, business, property, or personal
interest.
The Board found no opinions from Ohio or other states addressing the precise issue of whether it is
proper for a lawyer who represents criminal defendants to acquire an ownership interest in a
corporation that provides house arrest programs used by courts as sentencing alternatives. The
Standing Committee on Legal Ethics of the Virginia State Bar considered a related question of
whether a prosecutor or a criminal defense lawyer may serve on boards that were set up for the
purpose of providing the judicial system with sentencing alternatives for non-violent offenders and
did not find such membership to be per se improper. Virginia State Bar, Op. 1268 (1989) .
However, when serving on a policy making body, the lawyer was advised to be mindful of the
potential perception of gaining unfair advantage for a client. When serving on a quasi-adjudicatory
board, the lawyer was advised not to participate in diversion decisions pertaining to any individual
whom the lawyer prosecuted or represented in the underlying charge. Id.
Several committees have addressed the issue of lawyer with an ownership interest in a business
referring a client to the business. These committees have advised that there be client disclosure and
consent. See Virginia State Bar, Op. 1198 (1989) (ownership in court reporting service); Maryland
State Bar Ass'n, Op. 88-80 (1988) (interest in medical clinic); Philadelphia Bar Ass'n, Op. 87-8
(1987) (partnership in company that supplies medical equipment); Ohio State Bar Ass'n, Informal
Op. 90-1 (1990) (ownership in a health care facility); South Carolina Bar, Op. 83-13 (undated)
(ownership in a reporting service rendering services in connection with discovery matters).
Op. 92-6 4

Even though lawyers are not prohibited from acquiring business and financial interests, they should
carefully consider the nature of the interest and the relationship if any to their law practice.
Anytime a lawyer's financial or property interests could be affected by advice the
lawyer gives a client, the lawyer had better watch out.
While lawyers, either individually or in groups, are certainly not barred from
entering into personal business deals, the further removed these deals are from the
lawyers' legal practices the better. Whenever a client gets near to a lawyer's
business interest, red flags ought to start going up in the lawyer's mind.
ABA/BNA Lawyers' Manual on Professional Conduct §51:405 (1990) (citations omitted).
An attorney with ownership in a house arrest program has a personal interest in the success of the
program, which in part is dependent upon having participants in the program. During the
representation of a criminal defendant, a lawyer may advise a client as to the appropriate plea and
may make recommendations to the court as to an appropriate sentence. Thus, a relationship does
exist between a lawyer's business interest in a house arrest program for criminal offenders and a
lawyer's representation of criminal defendants.
Although a lawyer's interest in a house arrest program could be viewed as being consistent with a
criminal defendant's interest in obtaining the most lenient sentence, there is also the potential that
the interest could affect a lawyer's judgment on behalf of a client. It is conceivable that an attorney
could encourage a client to plead guilty when not appropriate and be less zealous in representation
because of the attorney's potential financial gain from the client's conviction and sentencing to a
house arrest program. If ownership interest in a house arrest program could influence an attorney’s
independent judgment on behalf of a client, then there must be compliance with Disciplinary Rule
5-101(A).
Op. 92-6 5

In conclusion, it is the Board's opinion that an attorney engaged in the general practice of law with
an emphasis on criminal practice may acquire an ownership interest in a corporation that sells and
provides house arrest programs for various courts in Ohio, including courts in which the attorney
represents criminal defendants whose sentences might include house arrest as an alternative to
incarceration. However, since a lawyer's independent professional judgment on behalf of a client
could be affected by such business interest, the attorney must obtain the consent of the client after
full disclosure as required by Disciplinary Rule 5-101 (A).
Advisory Opinions of the Board of Commissioners on Grievances and Discipline are
informal, nonbinding opinions in response to prospective or hypothetical questions regarding
the application of the Supreme Court Rules for the Government of the Bar of Ohio, the
Supreme Court Rules for the Government of the Judiciary, the Code of Professional
Responsibility, the Code of Judicial Conduct, and the Attorney's Oath of Office.