It may have the appearance of a conflict, but whether it really is a conflict depends on whether attorney "B" ever represented the couple or had any knowledge of their legal and business matters. He should have disclosed to wife the prior partnership with ABC to avoid any appearance of impropriety. Whether there was any actual conflict depends on what he knew while a partner of ABC. It's entirely possible he knew nothing about the couple. He may not even have known they were clients of his firm. My firm has 25 lawyers and I certainly don't know who all of the clients are, much less know their business.
The fact pattern also raises the question of whether A should have been representing the husband after he represented both spouses for so many years. The fact pattern does not exactly scream out a conflict, but thewhole thing makes me uncomfortable. I think wife needs to have a heart to heart with "B" and if she is not satisfied with his explanation, seek independent advice before signing off on the ED agreement.
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