The American Bar Association Standing Committee on Ethics and Professional Responsibility released its third Formal Opinion of 2025: Formal Opinion 516, Terminating Client Representation Under MRPC 1.16(b)(1): What “Material Adverse Effects” Prevent Permissive Withdrawal?
This opinion provides guidance on Model Rule 1.16(b)(1), which is parallel to Ohio’s Rule, on permissive withdrawal from representation. In particular, (b)(1) allows an attorney to terminate representation if withdrawal can be done without causing a “material adverse effect on the interests of the client.” The opinion clarifies that a lawyer’s motivation for withdrawal is irrelevant to the ethical analysis under R. 1.16; the focus is solely on whether the withdrawal would materially harm the client’s legal interests. The opinion, however, distinguishes between the ethical analysis and the judicial doctrines and public policy analyses that may also be considered if an attorney is seeking leave from the court to withdraw.
In analyzing the “material adverse effects” clause of 1.16(b)(1), the opinion considers such effects to be present where the withdrawal would result in
- “significant harm to the forward progress of the client’s matter,”
- “significant increase in the cost of the matter,” or
- “significant harm to the client’s ability to achieve legal objectives,”
and these adverse effects were unable to be remediated or mitigated.
The opinion discusses various scenarios that are unlikely to give rise to “material adverse effects” such as an attorney withdrawing shortly after being retained or following completion of any pending matters.
The opinion then discusses the controversial issue of whether the lawyer’s motivation to drop an existing client in order to undertake representation adverse to that client is appropriate. The Standing Committee does identify the concerns related to duties of loyalty, but more or less bifurcates the analysis of permissibility under the Rule and permission by a Court. Isolating the R. 1.16(b)(1) analysis to whether the withdrawal can be done without material adverse effects on the client, the Committee opines that whether the attorney withdraws to undertake representation against that client is immaterial to whether that withdrawal violates the Rules of Professional Conduct and is left to the discretion of the court.
Courts are, of course, free to exercise their supervisory authority over trial lawyers by disqualifying those who drop a client “like a hot potato” to advocate against that client in another case. Courts may elect to do so as a sanction or remedy for the lawyer’s perceived disloyalty or to remove the incentive for lawyers to end representations for what courts regard as inappropriate reasons.
Finally, Formal Opinion 516 includes a rare dissent signed by two members. Expressing concern that the Formal Opinion’s analysis is not helpful to lawyers because it is incomplete, the dissent identifies the “hot potato doctrine” and its ancillary “thrust-upon exception” as requiring greater analysis. The dissent states, “The opinion is incomplete, and thus also incorrect, because it does not directly answer whether terminating a client for the purpose of turning around and filing suit against it for another client could itself qualify as an act inflicting a material adverse effect on the interests of the client being dropped under Rule 1.16(b)(1).”
Ultimately, attorneys need to be attentive to both judicial doctrine and the Rules of Professional Conduct. While withdrawal may be permitted under R. 1.16(b), a court may still determine that an attorney is disqualified from representing a subsequent, adverse client. This is a key situation where a grievance analysis diverges from malpractice liability. For support related to such a scenario, policyholders are encouraged to contact OBLIC for an ethics consultation.
Related articles:
ABA Formal Opinion 515: Lawyer-Victim Can Disclose (March 24, 2025)
Breaking Up is Hard to Do: Terminating Representation (April 9, 2024)
| Gretchen K. Mote, Esq. Director of Loss Prevention Ohio Bar Liability Insurance Co. Direct: 614.572.0620 [email protected] |
Merisa K. Bowers, Esq. Loss Prevention & Outreach Counsel Ohio Bar Liability Insurance Co. Direct: 614.859.2978 [email protected] |
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