California Lawyers Association Ethics Committee Provides Guidance on the Elements of Effective Ethical Screens

Hinshaw has a report on the California Lawyers Association Ethics Committee Formal Opinion 2021-1, which identified the "Elements of Effective Ethical Screens" that comply with the California Rules of Professional Conduct ("California Rules"). The Committee identified six mandatory elements of effective screens, along with several non-mandatory factors. The Committee noted that its opinion applies to circumstances where the ethical screen is implemented without client consent. Ethical screens implemented with client consent are governed by independent agreement rather than the California Rules. Go here to read the opinion or Go here for a summary of the opinion.

Can a paralegal (or other non-lawyer employee) cause a conflict that disqualifies a law firm when the paralegal joins the firm?

This is a question that is addressed in the comments to Model Rule 1.10, but it is not a bad idea to review it once more.  Michael Kennedy, of Ethical Grounds, did so earlier this week here.

Maine is considering revising Rule 1.10 to allow for screening as a solution to imputed conflicts of interest

The Maine Supreme Court is seeking comments on a proposal to revise Rule 1.10 to allow for screening as a solution to imputed conflicts of interest.  The Legal Profession blog has more information here.

Illinois Supreme Court decides People v Cole, holding the Public Defender's office is not a "firm" for purposes of conflicts of interest

Back in September I wrote about a case before the Illinois Supreme Court called People v Cole in which the Public Defender refused to represent a client arguing that accepting the representation would constitute a concurrent conflict of interest.  Go here for that post which includes links to the oral argument.

In my original post, I wrote that based on the position adopted by the US Supreme Court in Holloway v Arkansas, "it would seem like the contempt conviction should be reversed."  But my position assumed that the PD's office would be considered just like any other law firm for purposes of a conflict -- ie, that if one lawyer had a conflict, the conflict would be imputed to other lawyers in the firm.

Well, about a month ago, the Illinois Supreme Court issued its decision and it did not hold as I predicted precisely because it attacked my premise.  It reiterated that in Illinois the PD's office should not be considered to be a law firm for purposes of conflicts of interest. 

You can read the opinion here and a good comment on the case at the Legal Ethics Forum.

D.C. Adopts Screening To Avoid Imputed Disqualification

The Legal Profession blog is reporting that the District of Columbia Court of Appeals has amended its Rules of Professional Conduct to permit screening to avoid imputed disqualification under Rule 1.10.  You can find the language of the new rule in the Legal Profession blog here. I never been a fan of the concept of screening, but that is a lost battle these days since the ABA adopted it for its Model Rules.

Recent case discusses what makes screening "ineffective"

Recently DQed discussed a new case in which the court found that screening mechanisms would not be effective in a case involving the hiring of a paralegal from another firm even though the court found that the firm’s screening measures “mirror and, sometimes exceed, screens approved in other cases.”  The case is called Ullman v Denco and it is available here.

Texas Bar Ethics Opinion finds Texas rule on conflicts is more strict than Model Rule -- then (two years later) changes its mind (UPDATED)

In a recent opinion, the Texas bar's ethics committee found that a law firm must stop representing a litigation client if it hires a lawyer who formerly worked on the case as a law clerk at the firm representing the opposing party. Screening the tainted lawyer to prevent the sharing of any confidential information he learned in his prior employment won't enable the firm to continue representing the client.

UPDATE: 3-22-19:  However, two years later, in 2016, the opinion was withdrawn and replaced with a new one which concludes "Under the Texas Disciplinary Rules of Professional Conduct, a law firm is not required to withdraw from representing a client in a lawsuit if the law firm hires a new lawyer who, before becoming a lawyer, was employed as a law clerk for the law firm representing the opposing party in the lawsuit and in that capacity helped provide services to the opposing party with respect to the lawsuit, so long as the law firm screens the new lawyer from any personal participation in the matter to prevent the new lawyer’s communicating to others in the law firm confidential information that the new lawyer and the law firm have a legal duty to protect."

You can read the new opinion here. 

Under the Model Rules, a firm would be allowed to continue the representation of the current client if it screened the newly hired attorney.

Death Row inmate's lawyers move to disqualify entire Attorney General's office from representing the state in appeal

Last month, the lawyers for New Hampshire’s only inmate on death row filed a motion to disqualify the entire Attorney General’s office from handling the state's reply to his appeal after the office hired a key member of inmate's defense team.  They argued that former public defender Lisa Wolford, who worked full time on the case in 2009, took at least one confidential document with her when she joined the Attorney General’s office last summer as an appellate lawyer.  If this allegation is proven and the AG's office did not have a screen established before Ms.  Wolford joined the office, it is possible the state will have to find someone else to represent its position.  But, I have not seen any reports on the outcome of the motion.  The Boston Globe has the story here.

Thanks to George Conk for the link.

New Mexico rejects screening as a way to avoid conflict when a lawyer joins a new firm

In an opinion released last week, the Supreme Court of New Mexico has interpreted the state rule on imputation of conflicts of interest to hold that a firm may not represent a client if a new lawyer on the firm had played a substantial role in representing an interest adverse to the client in the lawyer's former firm.  If the lawyer played a substantial role, the firm would be disqualified automatically.  Screening, which is now accepted in the ABA Model Rules as an alternative to avoid this type of conflict, is not an option in New Mexico.  The case is called Mercer, LLC. v. Reynolds and it is available here. 

Thanks to the Legal Profession blog for the link.

ABA seeks comments on draft re proposed changes to Model Rule 1.7 (Conflicts of interest)

The ABA Commission on Ethics 20/20 has released a Revised Draft Proposal on Model Rule 1.7: Choice of Rule Agreements for Conflicts of Interest.  Also, go here for the Cover Memo.  Please e-mail your comments by August 15, 2012, to Senior Research Paralegal Natalia Vera at Natalia.Vera@americanbar.org. 

Choice of Laws and Concurrent Conflicts

Assume a firm is asked to represent a client in a jurisdiction against another current client of the firm.  Then assume that this would be allowed under the rules of that jurisdiction but not under the rules of the jurisdiction where the other current client is represented.  Which rules govern?  Should the rules allow a firm to represent an interest adverse to a current client in a different jurisdiction absent client consent?

Here is a comment posted in the Legal Ethics Forum on this question:

The New York office of Law Firm represents Company A on a transactional matter involving parties and commitments in New York and London.  While that matter is pending, Company B (in London) wants to retain a lawyer in the London office of Law Firm to handle a London-based arbitration against Company A.  Assume the arbitration is completely unrelated to the work that the New York office of Law Firm is handling for Company A.

Now consider that the ethics rules in England permit law firms to be adverse to existing clients in unrelated matters.  In other words, under the Rules applicable in England, Law Firm would have no conflict of interest if it represents Company B in the arbitration.  In contrast, the Model Rules (and the New York Rules) do not permit lawyers to be adverse to current clients in unrelated matters.  Thus, Law Firm would have a conflict under the New York Rules.  So does Law Firm have a conflict of interest if it represents Company B?

A review of Rule 8.5 (Choice of Law) yields no clear answer.  For matters pending before a tribunal, Rule 8.5 instructs us to apply the rules of the jurisdiction where the tribunal sits (for the arbitration, that would be England).  But on the other hand, Rule 8.5 strongly implies that the New York Rules should govern the Law Firm's representation of Client A in the transational matter.

The ABA Commission on Ethics 20/20 has just circulated a new draft of a possible proposed amendment to Rule 1.7 that would help to address this choice of law problem.  It would allow, subject to several limitations, lawyers and clients to agree that their relationship will be governed by a particular jurisdiction’s rules of professional conduct relating to conflicts of interest.  For example, given that Law Firm's representation of Company A has a nexus to England, Company A and Law Firm could agree at the outset of the engagement that any future conflicts will be resolved under the Rules in England.  This agreement would be a kind of advance waiver similar to what is already permitted under Rule 1.7, Comment [22].  The idea is that such agreements could address the issue more clearly than is possible under Rule 8.5.

The Commission's draft proposal and report on this topic can be found here.  The cover memo is here. Comments should be submitted to Natalia.vera@americanbar.org by August 15th.  If the Commission decides to pursue this proposal, it would be presented to the ABA House of Delegates in February 2013.

Prospective waivers

A few days ago, I discussed the use of prospective waivers with my students.  Now, here is a link to an article criticizing their use.  Here is an excerpt that summarizes its position:

What started as a trickle has now become a flood, as major law firms have embraced the practice of inserting into every retainer letter, often buried on page 5 in paragraph 16, a wholesale prospective waiver that would permit the law firm to take on any representation against the new client so long as the matters are not substantially related. No limitation as to matters that are not waivable under Rule 1.7(b)(1). No limitation as to time. No limitation as to matters not litigated. No limitation as to the subject matter of the adverse representation. No limitation as to the identity of the adverse party or parties who would be represented adverse to the client that is granting the prospective waiver. Can such a waiver come close to being given with informed consent? Of course not.

You can read the full article here.  The article is by Larry Fox, a former member of the ABA Standing Committee on Professional Responsibility.  For some comments on the article go to the Legal Ethics Forum, here.

Thanks to the LEF for the link to the article.

New California Rule on screening

As reported in The Ethical Quandary Blog, the California State Bar Board of Governors has approved a new rule on imputation of conflicts of interest based on ABA Model Rule 1.10, but, oddly, it has opted to let the issue of ethical screening be decided on a case-by-case basis. The Board’s proposed change is now pending consideration by the California Supreme Court.

I guess I have to think more about this one, but my gut reaction is that it is a bad idea. It seems to me that any time you leave things to be decided "on a case by case basis" you run the risk of ending up with more disputes and litigation, inconsistent results, and, more importantly, less guidance as to how to avoid a problem. Specific rules help know what to expect and, thus, how to prepare for a possible problem.

On the other hand, a case by case approach provides flexibility for instances where applying a hard line rule might be unfair. Also, I assume that as case law develops on the issue more specific answers will emerge. Until that happens, though, some clients may have to become guinea pigs, no?

What do you think?

Court of Appeals for the 5th Circuit has decided important case regarding imputation of conflicts

A few days ago I reported that the Court of Appeals for the 5th circuit was set to decide whether the presumption that a lawyer who joins a new firm comes to the new firm with knowledge of confidential information related to the cases handled by the lawyer's former firm should be irrebutable. See here and here.

Law.com has just reported that the Court decided the case and held the presumption is rebuttable, which as I discussed in my previous posts, is the correct decision. Go here for the full story. Go here for a copy of the opinion.

I am sure there will more commentary tomorrow from other sites, so check back for updates.

More on the 5th Circuit pending case on conflicts

Here is a link to the Legal Ethics Forum's post and comments on the upcoming 5th Circuit decision about imputed conflicts. Again, as the post states, there is only one way to go here. If the Court decides the presumption is irrebutable the result will be terrible.

Court of Appeals for the 5th Circuit to decide important case regarding imputation of conflicts

According to the approach of the ABA Model Rules, when a lawyer joins a new firm there is a presumption that the lawyer comes to the new firm with knowledge of confidential information related to the cases handled by the lawyer's former firm. This presumption, however, is rebuttable.

However, Law.com is reporting today that the Court of Appeals for the 5th circuit has a case before it in which the issue is precisely whether that presumption should be irrebutable.

A finding that the presumption is irrebutable would be terrible in many ways. For individual lawyers, it would make it terribly difficult to find a new job because firms will not be willing to open their doors to lawyers who would then force the firms to give up current clients because of the conflicts the new lawyer's presence in the firm would create. For firms, it would mean that they would be subject to being disqualified just because a new lawyer in the firm is thought to have confidential information about a former client even if, in fact, the lawyer could show he or she did not.

Go here for the full story.

Where have you gone loyalty principle? Our nation turns its lonely eyes to you....

Every now and then, a case (or news item) comes along that makes you question just how strong those "values of the profession" that we love to say we are so proud of really are.

This summer the ABA, and many states, went through lengthy debates on whether allowing firms to use "screening" (in cases where a lawyer moves from one firm to another) goes against the value of loyalty. See blog entries here. As part of that debate, one commentator argued: ". . .it certainly appears that real ethics have given way to the interests of stranded, individual lawyers and surviving firms that want to “cherry pick” from the castaways. . . . Violations will occur and will be covered up. Clients will have to fall back on common law duty of loyalty (and common law principles that impute knowledge within firms) when they suspect their confidences have been purchased with a lateral. . . ."

But, okay, you can make the argument that that question is a close call. You can make an argument to justify the position taken by the ABA. Even after the approval of the new approach to the question, loyalty is still an important value. Right?

Then someone noticed that, as originally drafted, the new rule would have allowed attorneys to use screening to represent clients with competing interests concurrently.

Now, this won't do! So the rule was changed again...

Now enter the well oiled slippery slope.

Law.com is reporting that a Delaware federal judge has OK'd a lawfirm to use of a "screen" between the firm's U.S. lawyers opposing client Wyeth in a U.S. patent case and its European attorneys working with the pharmaceutical company in an unrelated matter.

In other words, the firm is representing Wyeth in one case and opposing it in another over Wyeth's objections.

Note this last piece of information - over the client's objections. So where exactly is the loyalty principle here?

The judge's order reportedly states that the client's opposition "means the firm is technically violating the Delaware court's local rules and the American Bar Association's Model Rules of Professional Conduct."

You have to love the use of the word "technically"! I am sorry, but there is not "technicality" here... The firm's conduct is either a violation or it isn't. And this judge simply admits he has agreed to the firm's attempt to act in a willful violation of the rules.

Why would the judge do that, you wonder? Well, essentially, there are two reasons: it is the client's fault and "globalization."

Yep. Believe it or not, the court allows the firm to willfully act unethically because, according to the judge, it is the client's fault. According to the article, he blamed Wyeth for not clearly indicating to the firm which of its in-house attorneys were working on which matters and for having sloppy legal billing practices. "[These practices] . . . created significant confusion for [the lawfirm] as to which entity or entities it was representing,"

And then, there is the obligatory mention of "globalization." The article quotes one of the partners of the law firm in question as saying: "When you're dealing with increasingly globalized economies, increasingly globalized law firms and different countries . . . . courts will likely look to the use of ethical walls "to reconcile all of these tensions."

Re-enter the aforementioned slippery slope.... Couldn't a firm with separate offices in New York and Chicago make a similar argument?

Maybe the mistake someone found in the new rule 1.10 was really just an omen. Maybe we are not that far away from allowing firms to represent competing interests concurrently after all.

Listen people, if your client objects to your representing a competing interest, do the right thing and respect your client's wishes. Your interest in securing another lucrative client or case should never come before your duty to your current client. That is called your fiduciary duty, in case you forgot.

The latest Gallup poll shows our profession could still go lower in the public opinion of trustworthiness. Let's work to move up, not further down.

Go here and here for the full story.

ABA fixes problems with new Model Rule 1.10

As is well known by now, earlier this year the ABA approved an important amendment to Model Rule 1.10 which recognizes "screening" as an acceptable way to avoid conflicts of interest caused when an attorney joins a new firm. Soon after the amendment was approved, however, it became clear that the rule was drafted in a way that seemed to suggest that screening could be used to avoid conflicts in cases of concurring conflicts - which was never intended. Go here and here for my reports on the approval of the new rule and the problem in drafting. Now comes word that the ABA has approved new changes to the new Rule to correct the mistake. In order to make clear that the rule applies only to laterally hired attorneys, the new rule would read as follows 

 Model Rule 1.10: (a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless (1) the prohibition is based upon a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm; or (2) the prohibition is based upon Rule 1.9(a) or (b), and arises out of the disqualified lawyer’s association with a prior firm, and . . . . 

 Thanks to Legal Ethics Forum for the update.

Court finds concurrent conflict does not justify reversing conviction

The Legal Profession Blog is reporting today that the Idaho Supreme Court has affirmed a defendant's murder conviction even though the defendant claimed that his counsel labored under an imputed conflict of interest because a fellow public defender had represented the deceased wife's mother in a related matter. The court agreed that there was a conflict that would have required the personal disqualification of the other lawyer. However, the court found that the trial court's approval of a screen between the two lawyers was an adequate way to eliminate the problem (which is interesting since Idaho Rule of Professional Conduct 1.10 does not provide for screening as a cure for imputed concurrent conflicts). The court justified its decision concluding that there are unique considerations that apply to public defender offices that militate against a per se disqualification rule. The opinion is available here. I am not sure what to think, although the use of a screen to avert concurrent client conflicts does not sound right to me. But I will reserve my comments until I read the opinion.

Update on problems with the new Model Rule 1.10

About a month ago, I posted a note on the fact that the ABA made a pretty major mistake in drafting the recently approved amendment to Model Rule 1.10. The Legal Ethics Forum is now reporting that the ABA Rules Committee has rejected a request by the ABA's Standing Committee on Ethics and Professional Responsibility for a housekeeping amendment to fix the problem (by making it clear that the screening provision applies only to laterally hired attorneys). That is crazy! The rule can still be fixed but it will have to go back to the ABA's House of Delegates in August, where the correction would have to be formally adopted by the House. If that does not happen, we will end up with a very problematic rule that will allow firms to purposely represent clients with concurrent conflicts of interest.

To see my posts on the process of approval of the new Model Rule 1.10 click here.