A common situation faced by law firms – and especially larger law firms – is the potential conflicts and disqualifications posed by Model Rule 1.10(a)’s imputation of one lawyer’s conflicts to all lawyers in the firm.  This can become a substantial issue when different lawyers get initial calls from different parties to an event or transaction seeking counsel.  When different lawyers get confidential information from adverse parties, even without agreeing to be their lawyer, the end result is that the entire Firm can be disqualified from representing anyone

The American Bar Association Standing Committee on Ethics and Professional Responsibility (the “Committee”) in their recent Formal Opinion 510, issued late last month, focuses on how to avoid the imputation of conflicts in the context of prospective client interactions.  The Committee also provides lawyers with guidance on the reasonable measures they must take to avoid imputing conflicts to the entire law firm.

Under Model Rule 1.18, when a prospective client does not retain a lawyer after consultation, that lawyer is disqualified from representing a client adverse to the prospective client in the same or a substantially related matter if the prospective client shared “disqualifying information” with the lawyer. Disqualifying information is information that may be “significantly harmful to the prospective client in the matter.” Under Model Rule 1.10(a), a lawyer’s conflict is typically imputed to all other lawyers in the firm. This is consistent with Model Rule 1.18(c) in the context of prospective clients. However, representation can still be permissible if the conduct falls under Model Rule 1.18(d). There is no imputation when writen consent is provided by both the potential client and affected client, under Model Rule 1.18(d)(1). When consent is not provided, representaton can still be permissible under Model Rule 1.18(d)(2), so long reasonable measures are taken.

Reasonable measures

When consent is not provided, representation can still be permissible under Model Rule 1.18(d)(2) as long as 1) reasonable measures were taken to avoid learning more disqualifying information than reasonably necessary to determine whether to represent the client, 2) the lawyer is timely screened from participation and not apportioned any fees from the representation, and 3) prompt, written notice is provided to the prospective client. What measures are reasonable can depend on a host of facts, including the lawyer’s background and experience, the identity of the client, and the type of engagement.

Information necessary to assess whether to take on the representation

Lawyers may obtain two types of information during an initial consultation to aid in the determination of whether to accept a representation. The first relates to the lawyer’s professional responsibilities, such as the identity of parties needed to assess the permissibility of the representation under the applicable Rules of Professional Conduct.  The lawyer may also obtain information necessary for the lawyer to assess whether they are competent to handle the matter, whether the prospective client intends to use the lawyer’s services to perpetuate a crime or fraud, or to determine if the client’s claim was frivolous.

The second type of information relates to the lawyer’s business decisions—such as whether the lawyer wants to take on such representation. Information that would assist in this determination would include how time intensive the matter would be, how much income could be generated Modfrom taking on the matter, the probability of being fully compensated, the possible expenses associated with the representation, and whether taking on the matter is consistent with the lawyer’s law firm’s internal policies.

Lawyers are cautioned not to take their questioning too far – the Rule contemplates only obtaining the information reasonably necessary.  A line of questioning designed to or going beyond that necessary to obtain only the information truly needed to determine whether to accept the representation will still raise the possibility of disqualification. The Committee gives various examples, including extracting detailed information designed to convince the prospective client to retain the lawyer, offering strategic insight, or taking the opportunity to promote themselves.

Reasonably necessary inquiry

The Committee reminds lawyers that their line of questioning may be for legitimate or permissible purposes, but that does not mean the inquiry is “necessary” to the lawyer’s determination whether to represent the prospective client. For instance, Model Rule 3.1 prohibits lawyers from bringing or defending a frivolous proceeding. But during the initial consultation, a brief inquiry would generally be all that is required for a lawyer to determine whether a proposed lawsuit is frivolous and thus whether to take on the representation, but more than that would not be “reasonably necessary”. The more detailed inquiry into such facts and research of law would be undertaken during the representation to comply with Model Rule 3.1.

The bottom line is that once a lawyer has enough information to determine whether to take on the prospective representation, any further inquiry can no longer be deemed “necessary.” Once the lawyer determines he or she will decline the representation or is required to turn down the representation, stopping the inquiry completely will put the lawyer in the best position to avoid imputing the conflict to the whole firm.