February 14, 2021 (updates at the end)
Last week, the ABA’s Standing Committee on Ethics and Professional Responsibility issued a new Formal Opinion (number 497) on conflicts involving materially adverse interests. Its summary states as follows:
Rules 1.9(a) and 1.18(c) address conflicts involving representing a current client with interests that are “materially adverse” to the interests of a former client or prospective client on the same or a substantially related matter. But neither Rule specifies when the interests of a current client are “materially adverse” to those of a former client or prospective client. Some materially adverse situations are typically clear, such as, negotiating or litigating against a former or prospective client on the same or a substantially related matter, attacking the work done for a former client on behalf of a current client, or, in many but not all instances, cross-examining a former or prospective client. Where a former client is not a party to a current matter, such as proceedings where the lawyer is attacking her prior work for the former client, the adverseness must be assessed to determine if it is material. General economic or financial adverseness alone does not constitute material adverseness.
You can read the opinion here.
UPDATE 3/4/21: Faughnan on Ethics has a short comment here. I agree with his conclusion that the terminology in the rule is a mistake and that the opinion does not really say anything particularly new or interesting. The terminology is a mistake because it is inconsistent with the terminology used in other rules related conflicts of interest. Rule 1.7 defines conflicts as involving either direct adversity or material limitation. Rule 1.9 merged those two terms into "material adversity" and I honestly believe that was by mistake. But it has never been corrected and here we are...
UPDATE 3/21/21: The Louisiana Legal Ethics blog has a comment here.
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