§2.3 ethical issues in recruiting and being recruited§2.3 ethical issues in recruiting and being...

Law firm goodwill, discussed in a later section, Economicsof Partner Breakups, is another pertinent consideration in val-idating the sale of a law firm.

§2.3 Ethical Issues in Recruiting and BeingRecruited

The process of recruitment has changed dramatically in the eraof lawyermobility. Lateral hiring is a central element ofmany lawfirm business plans and aggressive, smart recruiting is considereda key to success. Recruiting professionals have become astandard in the industry and drive the manner and directionof many partner moves. From a risk management perspective,recruiting can also be a dangerous activity for a law firm. Poorlyvetted lateral candidates can bring not only business disappoint-ment, but claims for unfinished business against future fees (dis-cussed in chapter 4), distracting entanglement in disputes orlitigation between a lateral and her former firm, and conflictsof interest that either undermine the purpose of the recruitmentor expose the firm to claims and disqualification motions.Awareness and careful management of the ethical issues associ-ated with lateral recruiting is an important consideration, rang-ing fromwhat can and cannot be disclosed to understanding andmanaging conflicts before a lateral walks in the door.

sum payment and may be contingent on future fees paid for services ren-dered after date of sale, subject to conditions outlined in the opinion); Pa.Bar Ass’n Comm. on Legal Ethics & Prof’l Resp., Formal Op. 2010-100 (noting that Pennsylvania rules depart from the Model Rules in allow-ing greater disclosures of client information to a prospective purchaserwithout first notifying clients). See generally Discussion Draft, ProposedAmendments to the Rules of Prof’l Conduct of the State Bar of California,Rule 1.17 (April 2010) (although the proposed rules were rejected in2014, the discussion draft contains a useful chart setting out variationsamong jurisdictions in adoption of ABA Model Rule 1.17).

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§2.3.1 Ethical and Contractual ObligationsRegarding Confidentiality

Model Rules 1.6 and the attorney client privilege imposeclear obligations on lawyers to keep confidential all informa-tion related to the representation of clients, even, as in thewords of the California rule, at the lawyer’s own peril.1 It isoxymoronic that in light of these duties lawyers frequentlydisclose massive amounts of data about their client mattersto other law firms in an effort to come to a business dealthat suits the lawyers. Practically speaking, however, businessmust get done. These realities do not give way to the freeexchange of client information and some ethical guidelinesare called for.

The confidentiality obligation is typically implicated inthe recruiting stage when law firms are performing due dili-gence on potential lateral hires. The duty of confidentialitydoes not allow a lawyer to openly reveal confidential clientinformation. In some practice areas, client information is par-ticularly sensitive and even basic information should not beshared. For example, a lawyer with a criminal defense,domestic relations, sexual harassment, or hostile takeover cli-ent base may need to provide due diligence using pseudonymsor other methods that protect confidentiality. Law firmsshould be thoughtful about the information they seek inlateral due diligence to assure that they are not asking theirpotential new partner to violate his or her client duties, andlawyers who are too willing to disclose that which they shouldnot are arguably not good hires. It is inconvenient, but cer-tainly not impossible, to articulate a book of business withoutunnecessarily exposing client confidential information.

In 2015, the New York Bar supplied guidance about theapplication of Rule 1.6 when an attorney is making a lateraltransition or when law firms are merging. Unless the lawyer

§2.3 1 See Cal. Bus. & Prof. Code 6068(e)(1).

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obtains client consent, the Commentary recommends limitingdisclosure to:

[B]asic information such as: (i) the identities of clients or otherparties involved in the matter; (ii) a brief summary of the statusand nature of a particular matter, including the general issuesinvolved; (iii) information that is publicly available; (iv) thelawyer’s total book of business; (v) the financial terms ofeach lawyer-client relationship; and (vi) information aboutaggregate current and historical payment of fees (such as real-ization rates, average receivables, and aggregate timeliness ofpayments).1.1

As stated in the Commentary, only the most basic infor-mation about the client and matter may be disclosed, and thisinformation should only be used to screen for conflicts andaddress administrative needs.1.2 The categories of informationthat may never be disclosed without client consent are fairlyobvious, including information that is attorney-clientprivileged, potentially ‘‘detrimental or embarrassing to the cli-ent,’’ or that the client has requested remain confidential.1.3

The Commentary of the New York Rules goes on to sug-gest procedural steps for minimizing the risk of unauthorizeddisclosures when sharing necessary information to facilitate alateral transfer or law firm merger.

These stepsmight include suchmeasures as: (1) disclosingclient information in stages; initially identifying only certainclients and providing only limited information, and providinga complete list of clients and more detailed financial informa-tion only at subsequent stages; (2) limiting disclosure to thoseat the firm, or even a single person at the firm, directly involvedin clearing conflicts and making the business decision whetherto move forward to the next stage regarding the lateral hire or

1.1 N.Y. Rules of Prof’l Conduct R. 1.6 cmt. 18B (2015).1.2 Id. R. 1.6 cmt. 18A.1.3 Id. R. 1.6 cmt. 18C.

Chapter 2 The Ethics of Lawyer Mobility §2.3.1


law firm merger; and/or (3) agreeing not to disclose financialor conflict information outside the firm(s) during and after thelateral hiring negotiations or merger process.1.4 The ‘‘book ofbusiness’’ discussion is distinct from the critical step of man-aging conflicts of interests. Ideally, a lawyer who changes firmswill take to the new firm complete information on the clientspresently and previously represented by the former firm.2

Practical considerations, however, limit the usefulness of thissuggestion. The acrimony surrounding the departure of a law-yer may render this form of cooperation difficult, and even ifthe information is made available, confidentiality considera-tions and the overwhelming burden of evaluating and process-ing the information may prove a significant obstacles toidentifying conflict problems prior to the filing of motionsto disqualify.3

Potential new hires must submit comprehensive clientlists to acquiring law firms in order to complete a conflictscheck whether the former firm wishes to cooperate or not.In 2009, the American Bar Association issued an ethics

1.4 Id. R. 1.6 cmt. 18F.2 See Laurel S. Terry, Ethical Pitfalls andMalpractice Consequences of

Law Firm Breakups, 61 Temp. L. Rev. 1055, 1103-1104 (1988).3 See Charles W. Wolfram, Restatement of the Law Governing Law-

yers: Former Client Conflicts, supra, at 691-694 (noting that computerprograms are ill-equipped to screen for conflict problems due to the fact-specific nature of the substantial relation standard); Charles W. Wolfram,The Vaporous and the Real In Former-Client Conflicts, 1 J. Inst. for StudyLegal Ethics 133, 135 (1996) (‘‘I don’t think you can program a computerto do what the courts are doing . . . in the use of the substantial relation-ship test.’’). But cf. James I. Keane,Microcomputers Can Resolve Conflictsof Interest, Legal Times, June 10, 1985 (with extensive manual prepara-tion, ‘‘[l]awyers involved in litigation can use microcomputers to identify,record, monitor and resolve potential conflicts of interest’’). See also PaulR. Tremblay, Migrating Lawyers and the Ethics of Conflict Checking,19 Geo. J. Legal Ethics 489 (2006) (suggesting a number of reforms,including the use of ‘‘middle counsel’’ to facilitate conflicts checks).



opinion noting the tension between confidentiality and con-flicts analysis in the context of screening, but concluding:

Conflicts analysis cannot be accomplished without sharingconflicts information generally about the persons and issuesinvolved in a matter. Because conflicts information is neededto detect and resolve conflicts of interest when lawyers movebetween firms, as a general matter . . . disclosure of conflictsinformation otherwise protected by Rule 1.6 should be con-sidered permissible as necessary to comply with the Rules.4

The opinion adds that disclosures normally should belimited to the identity of clients and issues involved in therelevant matter; when more detailed information of the typenecessary to resolve ‘‘substantial relationship’’ issues underRule 1.9 is required, it may be necessary to seek client consentbefore disclosure of information occurs.

In 2012, the ABA codified its views in the amendedModel Rule 1.6, addressing disclosure of client informationfor the purpose of evaluating potential conflicts of interest inthe lawyer mobility context. The amended rule allows disclo-sure of client information, to the extent the lawyer reasonablybelieves necessary, ‘‘to detect and resolve conflicts of interestarising from the lawyer’s change of employment or fromchanges in the composition or ownership of a firm, but onlyif the revealed information would not compromise theattorney-client privilege or otherwise prejudice the client.’’5

4 ABA Comm. on Prof’l Ethics, Disclosure of Conflicts InformationWhen Lawyers Move Between Law Firms, Formal Op. 09-455 (Oct. 8,2009).

5 Model Rules, Rule 1.6(b)(7), cmt. 13. See also Philadelphia BarAss’n Prof’l Guidance Comm., Op. 2014-1 (Apr. 4, 2014) (noting acorresponding rule change under the Pennsylvania rules). Whether achange in rule is necessary to allow limited disclosures for a conflictscheck is doubtful. See, e.g., Samson Habte, New Hire’s Prior Work forHostile Witness Prevents Firm from Representing Defendant, 30 Law.



The comment to the rule notes that disclosures occasioned bya lawyer’s possible movement to a new firm are proper onlyafter ‘‘substantive discussions regarding the new relationshiphave occurred’’ and normally should be limited to the identityof the client, a brief summary of the general issues involved,and information about whether the matter has terminated.6

The 2012 revisions to Model Rule 1.6 arguably imposenew limits on what lawyers can and should be providing as partof the due diligence process with potential acquiring firms.

§2.3.2 Conflicts of Interest

Conflicts of interest is the most complex of regulatorymatters in legal ethics. By extension, understanding and man-aging conflicts of interest is a key component to the ethics oflawyer mobility. Moving an entire client base from one exist-ing law firm to another is fraught with opportunity for mis-handling, poor judgment, simple clerical mistakes, andoversight. Two broad principles underlie the conflict rulesgoverning lawyers: lawyers owe a duty of loyalty to their cli-ents, and lawyers must maintain in confidence informationacquired in the course of representing their clients.7 Balanced

Man. Prof. Conduct 268 (Apr. 2014), citing Nathan M. Crystal, So YouAre Thinking About Moving—A Primer on Ethical Obligations ofDeparting Lawyers and Their Firms (Part I), 24 S.C. Law. no. 5 (Mar.2013) (limited disclosure is permissible because necessary to comply withexisting rules); William Wernz, ‘‘Minnesota Ethics Update’’ in MinnesotaLawyering (Sept. 4, 2012) (noting this type of disclosure is commonpractice in Minnesota and elsewhere).

6 For additional discussion of disclosures of confidential client infor-mation by lawyers changing firms, see infra §4.8.6.

7 See, e.g., Roy D. Mercer LLC v. Reynolds, 292 P.3d 466 (N.M.2012) (‘‘When an attorney leaves one law firm and joins another, theattorney continues to owe a duty of confidentiality and undivided loyaltyto his or her clients. . . . Therefore, associates who change law firms carrywith them the potential of a conflict of interest that attaches not only to the



against these client interests are the lawyers’ interests in careermobility and building a stable and diverse portfolio of clients.8

In the law firm breakups setting, conflict rules may limitthe mobility of lawyers by restricting the clients that they, andtheir new firms, may represent.9 An obvious problem ariseswhen a lawyer withdraws from a firm and takes to a newfirm a client with interests materially adverse to those ofanother client at the new firm. A more subtle but equally seri-ous conflict problem develops when the client stays with thefirst firm. In this case, conflict of interest considerations maydisable not only the lawyer but also the new firm from repre-senting a client with interests adverse to those of client in thelawyer’s former firm.10

attorney personally but also to the new firm. A firm hiring a new associatehas a duty to identify any such conflicts before consummating the hiringprocess.’’). On additional complexities raised by representing affiliates, seeMartin I. Kaminsky, Legal and Ethical Issues Involved in RepresentingAffiliates or Principals of Clients, 37 J. Legal Prof. 153 (2013).

8 But cf. id (acknowledging that its ruling disallowing use of a screento negate imputed disqualification may make lateral movement by lawyersmore difficult but noting the result is necessary to preserve the public trustin the role of a lawyer). See also Martha Neil, Check, Please, ABA J., May2006 at 50 (describing the conflicts check as the most crucial step in takingon a new client); Susan P. Shapiro, Bushwhacking the Ethical High Road:Conflict of Interest in the Practice of Law and Real Life, 28 Law & Soc.Inquiry 87, 268 (2003) (survey of Illinois firms) (‘‘[S]ome [firms] turnaway a third to half of all new cases because of conflicts of interest, worthmany millions of dollars every year.’’).

An Ames&Gough 2011 survey of senior claims examiners at six of theleading insurance firms reported that conflict of interest was identified byall but one of the respondents as the first or second leading cause of mal-practice claims.

9 See generally John Ritsick, Note, Conflict of Interest: Ethical Con-cerns in Law Firm Breakups: Solicitation, Restrictive Covenants, and Con-flict Issues, 11 Geo. J. Legal Ethics 355, 363-370 (1998) (discussingconflict issues arising from firm breakups).

10 Less frequently, conflict rules may promote the breakups of lawfirms by making it difficult for lawyers with different practices to remainin the same firm. See, e.g., Inadmissible, The Legal Times, Feb. 12, 1990,



§2.3.2.1 Personal Interest Conflicts andRecruitment by Opposing Counsel

Model Rule 1.7 prohibits a lawyer from representing aclient whenever there is a significant risk that the representa-tion will be materially limited by the lawyer’s personal interest.Negotiating a favorable business relationship with the law firmon the other side of the client’s matter is such an interest.ABA Formal Opinion 96-400, Job Negotiations with AdverseFirm or Party, addresses the operation of this rule in the con-text of a job-seeking lawyer. The opinion notes that ‘‘depend-ing on the state of the discussions,’’ the desire to ingratiateherself with the potential new employer may ‘‘materially limitthe lawyers’ representation of the client.’’11 Continued repre-sentation in the affected matter would require the informedconsent of the clients on both sides of the negotiation, which isa practical deal killer.

The personal interest conflict renders negotiations withperspective employer firms particularly difficult for lawyerswishing to ‘‘side switch’’ in an industry, such as movingfrom the defense side of securities litigation to the plaintiff’sside. The lawyers and those that wish to acquire them must bediligent in the start of the recruiting and due diligence processto screen for existing shared matters and to avoid new onesduring the process.

at 3, col. 2 (‘‘Because of client conflicts within D.C.’s Hogan & Hartson,one of the firm’s rising-star environmental lawyers, David Hayes, hasswitched to the D.C. office of Los Angeles’ Latham & Watkins. . . . ‘My clients often want to collect from insurance companies or evensue them, and Hogan represents insurance companies in defending againstenvironmental claims,’ explains Hayes.’’). See also N.Y. State Bar Ass’nComm. on Prof’l Ethics, Op. 720 (Aug. 27, 1999) (discussing disclosureof firm and client information in conflicts check).

11 ABA Formal Ethics Op. 99-414 (1999).



§2.3.2.2 Conflicts With New Firm Clients

For obvious reasons, lawyers are barred from simulta-neously representing parties with interests that conflict. Normay they represent parties with interests adverse to those offormer clients if the present and previous subjects of represen-tation are substantially related.11.1 Concerns over confidentiality

11.1 The standard was set forth in T.C. Theatre Corp. v. Warner Bros.Pictures, Inc., 113 F. Supp. 265, 268 (S.D.N.Y. 1953):

[W]here any substantial relationship can be shown between thesubject matter of a former representation and that of a subsequentadverse representation, the later will be prohibited . . . [T]he formerclient need show no more than that the matters embraced within thepending suit wherein his former attorney appears on behalf of hisadversary are substantially related to the matter or cause of actionwherein the attorney previously represented him, the former client.

The literature on the substantial relationship test and the related subjectof imputed disqualification of law firms is case. See, e.g., Ronald D. Rotunda,Resolving Client Conflicts by Hiring ‘‘Conflicts Counsel,’’ 63 Hasting L. J.677 (2011); Paul R. Tremblay,Migrating Lawyers and the Ethics of ConflictChecking, 19 Geo. J. Legal Ethics 489 (2006); Richard H. Underwood &WilliamH. Fortune, Trial Ethics §3.8 (1988); Charles W.Wolfram,ModernLegal Ethics §§7.4 and 7.6 (1986); Charles W.Wolfram, Restatement of theLaw Governing Lawyers: Former Client Conflicts, 10 Geo. J. Legal Ethics677 (1997) (‘‘[T]he . . . ‘substantial relationship’ standard or something verymuch like it is used in every jurisdiction in the United States.’’); Laurel S.Terry, Ethical Pitfalls and Malpractice Consequences of Law Firm Breakups,61 Temp. L. Rev. 1055, 1101-04 (1988); Eli Wald, Lawyer Mobility andLegal Ethics: Resolving the Tension Between Confidentiality Requirementsand Contemporary Lawyers’ Career Paths, 31 J. Legal Prof. 199 (2007).

The former-client conflict problem may arise even if an explicitattorney-client relationship never existed between the ‘‘client’’ and thefirm. In Bridge Prods., Inc. v. Quantum Chem. Corp., No. 88 C10734, 1990 U.S. Dist. LEXIS 5019 (N.D. Ill. Apr. 27, 1990), Sidley &Austin was one of several firms interviewed in connection with a BridgeProducts’ plan to replace counsel in a litigation matter. Various confi-dences were divulged to Sidley. The firm did not bill for its time, andBridge Products ultimately retained another firm. Sidley was retained bythe opposing party in the litigation. Bridge Products’ motion to disqualify



and loyalty underlie these restrictions.11.2 Clients would bereluctant to share information with their lawyers if they knewitmight be used against them later.Moreover, the adverse use ofa former client’s confidential information is a form of ‘‘treach-ery’’ repugnant to the notion that lawyers owe a duty of loyaltyto those whom they serve.11.3

Disqualification cases involving law firms resulting fromlateral hires are countless, comprising what is likely themajority of disqualification case law in the U.S.11.4

§2.3.2.3 The Imputation of Conflicts Between LawFirms

The imputed disqualification doctrine extends the dis-qualification of one member of a firm to all members of thefirm.12 In an era of lawyer mobility, this is a matter of some

Sidley was granted on the ground that there existed an ‘‘implicit attorney/client relationship which derived from the nature of the parties’ interview.’’The court suggested, however, that disqualification of Sidley might nothave been in order if, at the time of the interview, the firm had put theprospective client on notice ‘‘that there is no attorney/client relationship asyet.’’

11.2 See In re Am. Airlines, 972 F.2d 605 (5th Cir. 1992) (the‘‘substantial relationship’’ standard generally encompasses both a protec-tion of client confidences and loyalty to the client). But cf. Charles W.Wolfram, Restatement of the Law Governing Lawyers: Form Client Con-flicts, supra, at 691-94 (discussing duty to maintain client confidences asfoundation of ‘‘substantial relationship’’ analysis, and duty of loyalty asseparate concern limited to specific factual settings. ‘‘[American Airlines]ignores the universe of adverse representations that former-client conflictlaw has always accepted.’’); 2 Geoffrey C. Hazard & W. William Hodes,The Law of Lawyering §13.3 at 13-7 (3d ed. 2005) (‘‘thus, even disloyaltyis often permitted, if it does not involved adverse use of confidentialinformation.’’).

11.3 Charles W. Wolfram, Modern Legal Ethics §7.4.2 at 361 (1986).11.4 See generally Ronald E. Mallen with Allison Martin Rhodes, Legal

Malpractice §18:19, 20 (2015 ed.).12 ABA Model Rule 1.10; Wolfram at 362 (1986).



importance both to lawyers who change firms and to the firmsthey join.13 Imputation in the context of lawyer mobility isexpressly covered in the Model Rules 1.9 (former client con-flicts) and 1.10 (imputation of conflicts to the entire firm).In the context of lawyers leaving firms, it is important toread the two rules together. Consider conflicts of interest asitems in a briefcase. To the extent a lawyer takes the entire‘‘briefcase’’ from firm A to firm B, firm A is no longer taintedby that conflict but firm B is fully tainted and that conflictimputes to all of firmB. If, on the other hand, the lateral lawyerleaves law firm A with no contents in the briefcase, having notworked on the matter, not learned confidential information,and not taken the matter with her to the new firm, the conflictremains entirely at firm A and firm B is free from any con-straints of that old matter.

As a result of imputation and the operations of ModelRule 1.10, a lawyer may only move to a law firm that is freeof conflicts. Failure to identify and avoid porting a conflict to anew firm will result in disqualification of the firm from any

13 A leading commentator has described the imputed disqualificationpresumption as follows:

The presumption is the legal mechanism by which an imputeddisqualification is customarily imposed by courts. Once the movingparty makes the necessary showing of primary conflict on the part of afirm lawyer and demonstrates the conditions for the imputed disqual-ification, it is presumed that all the firm’s lawyers are secondarilydisqualified.

Wolfram at 398 (1986). Some courts make the presumption of sharedconfidences irrebuttable, at least when prior to the change of firms thelawyer was actively involved in the litigation matter. See, e.g., State exrel. Freezer Servs., Inc. v. Mullen, 235 Neb. 981, 458 N.W. 2d 245,252-253 (1990) (‘‘[W]hen an attorney who was intimately involvedwith the particular litigation, and who has obtained confidential informa-tion pertinent to that litigation, terminates the relationship and becomesassociated with a firm which is representing an adverse party in the samelitigation, there arises an irrebuttable presumption of shared confidences,and the entire firm must be disqualified from further representation.’’)



matters tainted by that lawyer. This result can be avoided inthose states that allow screening (discussed in more detailbelow) and only where tainted matters are identified duringthe recruiting process.

An important early case illustrates the potential breadth ofthe doctrine. In Laskey Brothers v. Warner Brothers Pictures,14

Isacson, while employed by his previous firm, obtained confi-dential information about Warner Brothers. He left andformed a partnership with Malkan. The firm of Malkan andIsacson was then retained to pursue an antitrust action againstthe motion picture industry, and Warner Brothers was one ofthe defendants. Although Isacson left the firm, the defendantsmoved to disqualify the Malkan firm. The district courtgranted the motion, and the Second Circuit affirmed, noting‘‘all authorities agree that all members of a partnership arebarred from participating in a case from which one partneris disqualified.’’15 In short, the presumption that Isacsonshared information with his partner was irrebuttable.16

A strict application of the irrebuttable presumption ofshared confidential information eventually would eithersharply restrict the ability of lawyers to move between firmsor require massive disgorgements of clients by their firms.17

14 224 F.2d 824 (2d Cir. 1955), cert. denied, 350 U.S. 932 (1956).15 Id. at 826.16 Fearing the chain of disqualification would never end, the court did

not disqualify Malkan from a second and identical case accepted by his firmafter Isacson left. Most jurisdictions seek to limit the scope of imputeddisqualification by disallowing double-imputation. See, e.g., EssexChem. Corp. v. Hartford Accident & Indem. Co., 993 F. Supp. 241,248 (D.N.J. 1998) (‘‘[W]here knowledge is not actual but imputedbased on the presumption that members of a firm share confidences,subsequent re-imputation of that same knowledge to another attorneyand a firm with which he becomes associated is inappropriate.’’).

17 Cf. Adams v. Aerojet-General Corp., 86 Cal. App. 4th 1324, 1336,104 Cal. Rptr. 2d 116, 124 (2001):

Disqualification based on a conclusive presumption of imputedknowledge derived from a lawyer’s past association with a law firm is out



Fortunately, some courts take a ‘‘realistic’’ view of theproblem. Silver Chrysler Plymouth, Inc. v. Chrysler Motors Cor-porations Corp.18 is a leading case in which a firm was notdisqualified even though one of its lawyers had, while atanother firm, represented a party it was suing. While a juniorassociate at a large corporate firm, the lawyer had worked onseveral matters for Chrysler Motors. He then became a partnerat another firm. A client of his new firm filed a claim againstChrysler much like the type of claim the lawyer’s previous firmregularly defended. The Second Circuit held that the lawyerhad made a sufficient showing that the work he had done forChrysler at the first firm was not substantially related to thepresent litigation and that there was no ‘‘realistic chance’’ dis-qualification was necessary to protect the confidence of aclient.19 After that showing, the burden shifted to Chryslerto prove that the lawyer had had access to confidentialinformation.

Silver Chrysler’s attempt to deal with imputed disqualifi-cation in a ‘‘realistic’’ fashion was prompted by the court’s

of touch with the present-day practice of law. Gone are the days whenattorneys (like star athletes) typically stayed with one organizationthroughout their entire careers. Partners with one law firm may join acompeting firm or splinter off and form their own rival firm; former defenselawyers may become plaintiffs’ specialists and vice versa; law firms (likemarriages) dissolve, often acrimoniously, with members striking off ontheir own and taking divergent paths. We have seen the dawn of the eraof the ‘‘mega-firm.’’ Large law firms (like banks) are becoming ever larger,opening branch offices nationwide or internationally, and merging withother large firms. Individual attorneys today can work for a law firm andnot even know, let alone have contact with, members of the same firmworking in a different department of the same firm. . . . A rule underwhich a nonrebuttable presumption of imputed knowledge from an attor-ney’s former firm follows him to whichever firm he subsequently joinswould also pose insurmountable practical problems in screening forconflicts.

18 518 F.2d 751 (2d Cir. 1975), overruled on other grounds,Armstrong v. McAlpin, 625 F.2d 433 (2d Cir. 1980).

19 518 F.2d at 757.



view of the ‘‘importance of not unnecessarily constricting thecareers of lawyers who started their practice of law at largefirms.’’20 Most courts follow Silver Chrysler’s lead and permitan associate who changes firms to rebut the presumption thatconfidential information was acquired while at the formerfirm.21 The decision, while undeniably important,22 doesnot represent a major assault on the imputed disqualificationdoctrine as it is applied to lawyers changing firms, because ifthe associate’s firm had been smaller, or if the associate had

20 Id. at 754.21 See, e.g., Kennedy v. MindPrint (In re ProEducation Int’l Inc.),

587 F.3d 296 (5th Cir. 2009) (an associate who does not represent oracquire confidential information about a client while employed at a firm isnot deemed to have imputed information when changing firms and is freeto then represent a party whose interests are adverse to his former firm’sclient); Arista Records LLC v. Lime Group LLC, No. 06 CV5936 (KMW), 2011 U.S. Dist. LEXIS 17434 (S.D.N.Y. Feb. 22, 2011)(unpublished) (relying on affidavit of challenged lawyer that he had notrevealed confidential information to anyone).

Silver Chrysler established, and most jurisdictions agree, that even if a‘‘substantial relationship’’ exists an attorney may rebut the presumption ofshared confidences if the attorney’s involvement in the case was merelyperipheral (‘‘peripheral representation’’ exception). See, e.g., Dieter v.Regents of Univ. of Cal., 963 F. Supp. 908, 912 (E.D. Cal. 1997) (holdingthat counsel’s peripheral involvement with the case was not sufficient tojustify disqualification). See also Cromley v. Bd. of Educ. of LockportTownship High Sch. Dist., 17 F.3d 1059, 1064 (7th Cir. 1994);Freeman v. Chicago Musical Instrument Co., 689 F.2d 715, 723 (7thCir. 1982); Gas-A-Tron v. Union Oil Co., 534 F.2d 1322, 1324 (9thCir. 1976), cert. denied, 429 U.S. 861 (1976); S.D. Warren Co. v.Duff-Norton, 302 F. Supp. 2d 762 (W.D.Mich. 2004); Arifi v. De Transp.Du Cocher, Inc., 290 F. Supp. 2d 344 (E.D.N.Y. 2003); Essex Chem.Corp. v. Hartford Accident & Indem. Co., 993 F. Supp. 241, 251 (D.N.J.1998); Kassis v. Teacher’s Ins. & Annuity Ass’n, 93 N.Y.2d 611,717 N.E.2d 674, 695 N.Y.S.2d 515 (1999) (all applying Silver Chrysler’spragmatic approach to imputed disqualification).

22 Silver Chrysler has been cited in several hundred federal and statereported opinions.



played a more significant role at the firm, the outcome wouldlikely have been different.23

Courts have also recognized practical differences betweensmall and large firms, concerning the presumption of sharedconfidences.24 In 1994, New York’s Court of Appeals estab-lished a ‘‘large firm’’ exception in Solow v. W.R. Grace &Co.25

The then 372-lawyer firm of Stroock & Stroock & Lavan sueda manufacturer it had previously represented as co-counsel ona substantially related matter for asbestos contamination.

23 See Charles W. Wolfram, Modern Legal Ethics §7.6.3 at396 (1986) (‘‘Certainly partners are normally assumed to share confiden-tial information about all of a firm’s clients, subject to possible rebuttal in aparticularly strong case.Associates in large firms, on the other hand, are lesslikely to be exposed to confidential information about clients for whomthey perform nowork.’’) (emphasis in original). See also Kassis v. Teacher’sIns. & Annuity Ass’n, 93 N.Y.2d 611, 617-618, 717 N.E.2d 674, 678,695 N.Y.S.2d 515, 519 (1999) (‘‘Where, for example, a disqualified attor-ney formerly worked in a small law firm characterized by a certain infor-mality conducive to ‘‘ ‘constant cross-pollination’ ’’ and a ‘‘ ‘cross currentof discussion and ideas’ among all attorneys on all matters which the firmhandled,’’ there will be a greater likelihood of acquiring material clientconfidences.’’); Adams v. Aerojet-General Corp, 86 Cal. App. 4th 1324,104 Cal. Rptr. 2d 116 (2001) (noting ‘‘the undeniable realities regardingtoday’s practice of law’’ and concluding that the key inquiry when disqual-ification is sought based on previous membership in a firm is ‘‘whetherconfidential information material to the current representation would nor-mally have been imparted to the attorney during his tenure at the oldfirm.’’); Lampert, Hausler & Rodman, PC v. Gallant, 16 Mass. L. Rep.195 (Mass. Super. Ct. 2003) (observing that partners have vicarious asso-ciation with all of the firm’s clients); Engineered Prods. Co. v. DonaldsonCo., Inc., 290 F. Supp. 2d 974, 985 (N.D. Iowa 2003) (deciding that thepresumption of shared confidences is not rebuttable in the Eighth Circuit).

24 E.g., Essex Equity Holdings USA, LLA v. Lehman Bros., Inc.,29 Misc. 3d 371, 909 N.Y.S.2d (N.Y. Sup. Ct. 2010); Kassis v. Teacher’sIns. & Annuity Ass’n, 93 N.Y.2d 611, 695 N.Y.S.2d 515, 717 N.E.2d674 (1999); Heringer v. Haskell, 536 N.W.2d (N.D. 1995); Cardinale v.Golinello, 43 N.Y.2d 288, 401 N.Y.S. 2d 191, 372 N.E.2d 26 (1977).

25 Solow v. W.R. Grace & Co., 83 N.Y.2d 303, 610 N.Y.S.2d 128,632 N.E.2d 437 (1994).



A partner who had left the firm handled the earlier matter.That retention was limited to preparing an expert witnessfor deposition. The partner was assisted by a first-year asso-ciate, who billed 30 minutes of time based on the review ofpublished articles. He denied receiving any confidential infor-mation. He was, however, handling the present litigation anddeposing the former client’s expert witnesses.

Acknowledging that the former partner would have beendisqualified for adverse representation, the court allowed thefirm to rebut the inference that the remaining lawyers receivedconfidential information. The court drew a distinction betweenits decision in an earlier case involving a small firm, and a large,departmentalized firm, such as Stroock.26 The court said that,since many attorneys spend much of their careers with largefirms, the irrebuttable presumption ‘‘seriously disadvantagesthem and their clients who wish to retain them.’’27

§2.3.2.4 Avoiding Imputation Through the HotPotato Doctrine

Conflicts of interest involving two current clients of alawyer or firm are far more restrictive than conflicts involvingformer clients. Not all current client conflicts can be waivedand the matters need not be related to each other for theconflict to be disqualifying. Former client conflicts, on theother hand, are almost always waiveable and, more impor-tantly, only present a conflict when the two matters are sub-stantially related to one another. This means that a law firm isfree to represent a client adverse to a former client (or formerclient of one of its acquired lawyers) so long as the matters areunrelated. This distinction highlights a second potential

26 Cardinale v. Golinello, 43 N.Y.2d 288, 401 N.Y.S.2d 191,372 N.E.2d 26 (1977).

27 83 N.Y.2d at 313-314, 610 N.Y.S.2d at 133-134, 632 N.E.2d at442-443.



hurdle to lawyer mobility imposed by modern ethics rules, thehot potato doctrine.

Simply stated, the hot potato doctrine prohibits a lawyerfrom dropping a client ‘‘like a hot potato’’ in order for thelawyer to undertake the representation of a new, more lucra-tive client, who is adverse to the first client.28 Stated anotherway, the lawyer may not make a client a former client in orderto be in a position to represent a client adverse to that oldclient on unrelated matters. This rule is discussed in the con-text of lawyer mobility when a lawyer withdraws from a clientin order to join a firm that is adverse to that client on someunrelated matter. This withdrawal, together with the impu-tation rule, is the dropping of one client so that the lawyermay join a firm that is adverse— thus dropping a client like‘‘a hot potato.’’

Although the vast majority of hot potato cases do notinvolve lawyers in motion, the term ‘‘hot potato’’ was coinedin Picker International, Inc. v. Varian Associates, Inc., which isa lawyer mobility case. The conflict arose when McDougall,Hersh & Scott (‘‘MHS’’) merged with Jones Day. A client ofMHS had plans to sue a wealthy client of Jones Day and wouldnot consent to the conflict. MHS advised its client that itwould withdraw as that client’s counsel, and merged withJones Day the next day. When the litigation between the cli-ents commenced, Jones Day sought consent from both clientsto represent the Jones Day client, but the MHS client wouldnot consent, and a motion to disqualify followed. The courtexplained that ‘‘[a] firmmay not drop a client like a hot potato,especially if it is in order to keep happy a far more lucrativeclient.’’29 Stating that ‘‘in situations of conflict, the presump-tion is in favor of disqualification[,]’’ the court disqualifiedJones Day as counsel for its client.

28 Picker Int’l, Inc. v. Varian Assocs., Inc., 670 F. Supp. 1362,1365 (N.D. Ohio 1987).

29 Id.



The court in Gould, Inc. v. Mitsui Mining & SmeltingCo.,30 took a different approach to a similar conflict thatresulted from the same merger of Jones Day and MHS, distin-guishing a hot potato event from a ‘‘thrust upon’’ conflict.Although Jones Day’s role in the case had changed somewhatsince the consent had been obtained, the court held that JonesDay’s increased role in the case did not require a new consent,given its active role when the consent was obtained. The courtalso considered a second conflict in the case that arose as a resultof a merger by the client. Acknowledging ‘‘[t]he explosion ofmerger activity by corporations during the past fifteen years,and the corresponding increase in the possibility that attorneyconflicts of interest may arise unexpectedly,’’ the court took abalancing approach in its analysis of the second conflict.31 Afterconsidering prejudice to the parties, the likelihood of delay, andthe fact that the conflict was created by the client’s merger, andnot JonesDay, the court denied themotion for disqualification,but ordered Jones Day to cure the conflict by discontinuing itsrepresentation of one of the conflicted parties.32

The ‘‘hot potato’’ doctrine makes some sense in long-standing client relationships and small law firms where relation-ships are more personal and information is shared among all ofthe lawyers in the firm. But in the world of larger firms withcomplex client bases, the doctrine is a classic example of elevat-ing form over function. Courts seem willing to balance theinterests at stake in a way that is supportive of lawyermobility.33

30 738 F. Supp. 1121 (N.D. Ohio 1990).31 Id. at 1126.32 Id. at 1126-27.33 See Vincent v. Essent Healthcare of Conn., 465 F. Supp. 2d 142 (D.

Conn. 2006) (disqualification denied because conflicted lawyer’s past workwas not substantially related to the current litigation; also finding that thebalancing of the parties’ interests weighed against disqualification); ResearchCorp. Techs., Inc. v. Hewlett-Packard Co., 936 F. Supp. 697 (D. Ariz.1996) (although a conflict occurred, the non-egregious nature of the ethicalviolation, lack of prejudice to the partied, and lack of reduced effectiveness ofcounsel in light of the violations all weighed in favor of denying motion todisqualify).



But such inquiries are fact intensive, and the outcomes can bedifficult to predict.34

Consequently, conflicts of this nature can and do torpedolateralmoves among large law firms every day. Clients often takevery seriously the loyalty implications of ‘‘its law firm’’ hiring thescoundrel that sued it from another firm. In jurisdictions wherethe application of the hot potato doctrine in the context oflawyer mobility is uncertain, lateral lawyers and the firms thatwish to acquire them are on very uneasy footing. No acquiringfirm invites disqualification motions and unhappy clients in thename of a lateral partner unless that lateral partner brings asubstantial replacement practice.

§2.3.2.5 The Restatement

The American Law Institute’s Restatement of the LawGoverning Lawyers addresses to some extent conflicts-of-interest problems raised by lawyer mobility.35 Not surpris-ingly, the Restatement precludes, absent the consent ofaffected clients, a lawyer from representing in civil litigationeither (1)multiple clients if there is a ‘‘substantial risk’’ that therepresentation of one of the clients would adversely affect rep-resentation of the other,36 or (2) one client in asserting ordefending a claim against another client (even if the mattersare not related).37 As to former clients, a lawyer may not rep-resent a client with interests ‘‘materially adverse’’ to the inter-ests of a former client ‘‘in the same or a substantially related

34 See Coke v. Equity Residential Props. Trust, 440 Mass. 511, 516,800 N.E.2d 280, 284 (2003) (‘‘motions to disqualify by their nature areintensely fact specific’’ and consequently, reviewing courts can only offerlimited guidance for future cases).

35 For a critical assessment of the Restatement, see Paul R. Tremblay,Migrating Lawyers and the Ethics of Conflict Checking, 19 Geo. J. LegalEthics 489, 520-24 (2006).

36 See Restatement Third, The Law Governing Lawyers §128(1)(2000).

37 Id. §128(2).



matter.’’38 Importantly, the conflicts restrictions extend tolawyers who are associated with the lawyer subject to therestrictions through a law partnership or similar professionalassociation,39 a position consistent with existing law.

The Restatement also addresses the much more difficultproblem of limiting imputed disqualification arising from rep-resentation of a former client. It allows removal of the impu-tation when there is ‘‘no reasonably apparent risk thatconfidential information of the former client will be usedwith material adverse effect on the former client.’’40 This, inturn, will be deemed the case if:

(1) any confidential client information communicatedto the personally prohibited lawyer is unlikely to besignificant in the subsequent matter;

(2) the personally prohibited lawyer is subject toscreening measures adequate to eliminate involve-ment by that lawyer in the representation; and

(3) timely and adequate notice of the screening hasbeen provided to all affected clients.41

38 Id. §132. A ‘‘substantially related matter’’ is defined as a currentmatter that involves the work the lawyer performed for the former client orthe existence of a substantial risk that representation of the present clientwill involve use of confidential information acquired in the course of repre-senting the former client. Id. See also Koch v. Koch Indus., Inc.,798 F. Supp. 1525, 1538 (D. Kan. 1992) (citing Restatement (Third),The Law Governing Lawyers §213 (Tentative Draft No. 4) (now §132));Charles W. Wolfram, Restatement of the Law Governing Lawyers: FormerClient Conflicts, supra, at 713-714 (recognizing that the Restatementadopted a ‘‘factual-reconstruction’’ test to establish a substantial relation-ship; the test consists of analyzing the facts specific to a case and determin-ing whether a lawyer received actual confidential information substantiallyrelated to the present litigation).

39 See Restatement Third, The Law Governing Lawyers §123.40 Id. §124(2).41 Id. (emphasis added). The Restatement does support the use of

ethical walls as a means of avoiding imputed disqualification. See Restate-ment (Third), The Law Governing Lawyers §124 (2000). See also



Apart from conflict problems arising within the firm towhich the lawyer moves, the imputed disqualification princi-ples have created great difficulties for (1) firms from whichlawyers have withdrawn, taking with them clients they haverepresented, and (2) lawyers who withdraw from firms, leavingbehind clients whose ‘‘taint’’ may extend to new colleagues ofthe lawyer. As noted, existing case law is bothmuddled and, onthe whole, aggressive in its application of imputed disqualifi-cation principles to both of these situations. The Restatementadds some liberalization and much clarity by providing thatthe restrictions upon affiliated lawyers do not apply if the‘‘affiliation between the affiliated lawyer and the personallyprohibited lawyer that required the imputation has been ter-minated, and no material confidential information of the cli-ent, relevant to the matter, has been communicated by thepersonally prohibited lawyer to the affiliated lawyer or thatlawyer’s firm.’’42 The Restatement thus addresses and expandssomewhat the Silver Chrysler approach striking a balancebetween the interests of clients and lawyers who wish tochange firms.43 Particularly important in this regard are theRestatement’s lack of a distinction between partners andassociates and its rejection of a line of cases effectively estab-lishing an irrebuttable presumption that affiliated lawyers haveshared confidences.44 The liberalization reflected in the

Roberts & Schaefer Co. v. San-Con, Inc., 898 F. Supp. 356, 362-363 (S.D.W. Va. 1995) (discussing the Restatement’s liberalization ofthe Model Rules, but also noting the court’s hesitancy to ‘‘dispose ofcenturies-old confidentiality rules solely for the convenience of modernlawyers who move from one association to another several times in theircareers.’’); Kassis v. Teacher’s Ins. & Annuity Ass’n, 93 N.Y.2d 611, 617,717 N.E.2d 674, 678 (1999) (citing the Restatement and noting that anethical wall around the disqualified lawyer would be sufficient to avoid firmdisqualification).

42 Restatement Third, The Law Governing Lawyers §124.43 See supra §2.7.2.44 See, e.g., Henriksen v. Great Am. Sav. & Loan, 14 Cal. Rptr. 2d

184 (Cal. Ct. App. 1992).



Restatement, however, is tempered somewhat by its assign-ment to the lawyer seeking to avoid imputation the burdenof persuasion that confidential information has not beenreceived. As the comments to an early draft conceded, carryingsuch a burden ‘‘may be difficult.’’45

§2.3.2.6 Squires Patton Boggs and theConsequences of Merger-Related ConflictManagement

The risks associated with conflict management in lateralhiring are acute in the merger context where hundreds, if notthousands, of conflicts are analyzed. In 2014, a highly publi-cized law firmmerger resulted in the disqualification of the firmfrom a large case. Facing potential failure, the long-standingfirm Patton Boggs LLP sought a merger partner in order tostabilize. It ultimately reached an agreement with SquireSanders and merged to form Squire Patton Boggs. Duringthe pre-merger conflicts check, a paralegal inadvertently omit-ted a Patton Boggs client, Tate&Lyle, which was, at the time, aparty to litigation against Squire Sanders clients. Because PattonBoggs represented Tate & Lyle in unrelated matters, the con-flict went unnoticed for over two months until the clientbrought it to their attention. Squire Patton Boggs askedTate & Lyle to waive the conflict. Tate & Lyle refused, andSquire Patton Boggs withdrew from representation in an effortto make Tate & Lyle a former client for the conflicts analysis.46

Counsel for Tate & Lyle and co-defendant Ingredion(also a former Patton Boggs client) moved for disqualificationof Squire Patton Boggs from the litigation. The court analyzedthe conflicts with Tate & Lyle and Ingredion separately in the

45 See Restatement Third, The Law Governing Lawyers §204(1)comment c (Tentative Draft No. 4, 1991).

46 W. Sugar Coop. v. Archer-Daniels-Midland Co., No. CV 11-3473 CBM (MANx), 2015 U.S. Dist. LEXIS 21448 (C.D. Cal. Feb. 13,2015).



same opinion. First, it determined that Tate & Lyle was acurrent client under the ‘‘hot potato rule,’’ thereby automat-ically disqualifying Squire Patton Boggs.

The ‘‘hot potato rule’’ bars an attorney and law firm fromcuring the dual representation of clients by expediently sever-ing the relationship with the pre-existing client. Accordingly,the automatic disqualification rule applicable to concurrentrepresentations cannot be avoided by unilaterally convertinga present client into a former client.47

. . .The ‘‘hot potato rule’’ does not distinguish circumstances inwhich counsel drops a client to represent a new client, from thecircumstances present here. Rather, the doctrine is groundedin an attorney’s undivided duty of loyalty, which was unques-tionably breached by [Squire Patton Boggs] simultaneouslyrepresenting adverse clients.48

Squire Patton Boggs argued that the Patton BoggsEngagement Letters with both clients contained a conflictwaiver. However, the court found that the lack of specificityabout the ‘‘nature of the conflict and the material risks of[Squire Patton Boggs]’s ongoing representation of [both cli-ents]’’ failed to adequately inform the client, and thus thewaiver was deemed inadequate to waive the current conflict.49

47 Id. at *23 (internal citations omitted).48 Id. at *24-25.49 Id. at *22 (internal citations and footnotes omitted).Whether full disclosure was made and the client made an informed

waiver is a fact-specific inquiry that considers the following factors: (1) thebreadth of the waiver; (2) the temporal scope of the waiver (whether itwaived a current conflict or was intended to waive all conflicts in thefuture); (3) the quality of the conflicts discussion between the attorneyand the client; (4) the specificity of the waiver; (5) the nature of the actualconflict (whether the attorney sought to represent both sides in the samedispute or in unrelated disputes); (6) the sophistication of the client; and(7) the interests of justice.

Id. at *18-19.



The second conflict, with Ingredion, also disqualifiedSquire Patton Boggs from the matter. The court held thatIngredion was a former client; but since the matters were sub-stantially related, Squire Patton Boggs was still disqualified.Squire Patton Boggs argued that the attorneys who workedwith Ingredion on the substantially related matter were nolonger with the firm. However, the court found there is stilla conclusive presumption that the firm possessed confidentialinformation that could harm the client.49.1

Squire Sanders, and then Squire Patton Boggs, hadworked on the matter for four years: billing over 20,000hours and $12 million in legal fees. The court was sympatheticto the law firm and explored alternatives to disqualification.Ultimately however, the court found that there was not a suf-ficient alternative because the duty of loyalty is an ‘‘ethicalconsideration[] that affect[s] the fundamental principles ofour judicial process.’’49.2

49.1 Id. at *35-36 (emphasis added). Patton Boggs had advised Ingre-dion on how to interpret a letter from the FDA. That letter was a piece ofkey evidence in the underlying matter thus rendering the matters substan-tially related.

49.2 Id. at *48. SPB offered an alternative to disqualification with sixsteps it would take as remedial measures.

(1) SPB agrees to reimburse Tate & Lyle and Ingredion for feesincurred in connection to the instant Motions;

(2) SPB implemented formal ethical walls by the time of theNovember 2014 hearing but after the Motion to Disqualify were filed;

(3) SPB will deposit all physical and electronic Patton Boggs’ recordsto a third party for safekeeping, and no legacy Squire Sanders lawyer orlegacy Patton Boggs’ lawyer would have access to the records withoutwritten permission from Tate & Lyle, Ingredion or court order;

(4) SPB offered to provide its attorney Dan Waltz’s services withoutcharge to Tate & Lyle to ease its transition with new counsel and agrees toreimburse it for reasonable transition expenses incurred;

(5) Plaintiffs will stipulate [certain factual allegations in the case]; and(6) SPB agrees that at trial, no SPB lawyer will examine any Tate &

Lyle or Ingredion witnesses or make arguments or address documents thatcame from Tate & Lyle or Ingredion.



The Squire Patton Boggs disqualification illustratesseveral important concepts for firms preparing to merge.First, carefully screen for potential conflicts. Second, the‘‘hot potato rule’’ will likely be applied, so dropping a currentclient in favor of another client will likely not solve a conflict.Third, a broad release of future conflicts in the engagementletter will not be upheld— the letter must have a certain levelof specificity or a second letter is required to inform the clientof the conflict and ask for a waiver. Finally, and most impor-tantly, the duties of loyalty and confidentiality outweigh hard-ship to the firm and existing clients.

§2.3.2.7 Screening

In an attempt to avoid imputed disqualification becauseof the taint of a single lawyer, some firms employ a screeningdevice commonly referred to as the ‘‘ethical wall.’’50 Thenotion behind this stratagem is that if the disqualified lawyeris screened from all discussion and information about a case as

Id. at *36-37. The court was unpersuaded by the proffered alterna-tives, implying that SPB should be doing most of these things regardless ofwhether they are ultimately disqualified.

Mindful that the paramount concern must be to preserve public trustin the scrupulous administration of justice and the integrity of the bar andthat the duty of loyalty is fundamental to the attorney-client relationship,SPB’s proposal is not sufficient to overcome a rule of automatic disqual-ification resulting from its concurrent representation of Tate & Lyle andthe Sugar Plaintiffs.

Id. at *43. The court also found that theMotion to Disqualify was nota strategic ploy by opposing counsel and that the Sugar Companies’ rightto counsel of their choice did not outweigh the ethical considerations.

50 See, e.g., Robert A. Creamer, Three Myths About Lateral Screen-ing, 13 Prof. Law. 20 (2002); Amanda Kay Morgan, Screening out Con-flict-of-Interests Issues Involving Former Clients: Effectuating ClientChoice and Lawyer Autonomy While Protecting Client Confidences,28 J. Legal Prof. 187 (2003-04); Erik Wittman, A Discussion of Noncon-sensual Screens as the ABA Votes to Amend Model Rule 1.10, 22 Geo. J.Legal Ethics 1211 (2009).



well as any profits generated by the case, there is no need toemploy the radical measure of disqualifying the entire firm.Courts are divided as to whether firms may erect ethicalwalls and how firms should construct those walls to protectclients adequately.51

51 See, e.g., In re Cnty. of Los Angeles, 223 F.3d 990, 994 (9th Cir.2000) (referring to the Ninth Circuit, ‘‘Our court has not yet decidedwhether a law firm can rebut the presumption of shared confidences bytaking prophylactic measures, such as . . . an ethical wall, to prevent thepassing of information from the tainted layer to other members of thefirm.’’); La Salle Nat’l Bank v. Cnty. of Lake, 703 F.2d 252, 259 (7thCir. 1983) (finding that ethical wall constructed after motion to disqualifywas filed was not built early enough to rebut presumption); AdvancedMfg.Techs. v. Motorola, Inc., No. CIV 99-01219 PHX-MHM (LOA),2002 U.S. Dist. LEXIS 12055 (D. Ariz. July 3, 2002) (recognizing federalcourt’s reluctance to implement ethical walls); Beltran v. Avon Prods.,867 F. Supp. 2d 1068 (C.D. Cal. 2012) (even assuming the problematicconclusion that a screen is effective under California law, the screen at issuewas inadequate given the small size of the office and the lateness of itsimplementation); Roy D. Mercer, LLC v. Reynolds, 292 P.3d466 (N.M. 2012) (law firm may not use screening to avoid imputed dis-qualification from an incoming lawyer’s conflict of interest if the lawyerpreviously played a substantial role in the matter). But cf. Manning v. War-ing, Cox, James, Sklar & Allen, 849 F.2d 222, 225 (6th Cir. 1988) (notingSeventhCircuit’s acceptance of ethical walls and asserting that ‘‘onemethodof rebutting the presumption is by demonstrating that specific mechanismshave been implemented to effectively insulate against any flow of confiden-tial information from the quarantined attorney to other members of hispresent firm.’’); Visa U.S.A., Inc. v. First Data Corp., 241 F. Supp. 2d1100, 1110 (N.D. Cal. 2003) (accepting ethical walls as a method torebut the presumption of shared confidences and noting that ethicalwalls are used to protect an attorney’s duty of confidentiality); Kirk v.First Am. Ins. Title Co., 183 Cal. App. 4th 776, 801, 108 Cal. Rptr. 3d620, 633 (2010) (noting that California law on the effectiveness of screensis unsettled but adding, ‘‘We do not doubt that vicarious disqualification isthe general rule, and that we should presume knowledge is imputed to allmembers of a tainted attorney’s law firm.However, we conclude that, in theproper circumstances, the presumption is a rebuttable one, which can berefuted by evidence that ethical screening will effectively prevent the sharingof confidences in a particular case.’’). See also Legal Ethics Comm. of the



Screening has become amatter of common law, with somecourts considering the issue in the disqualification context dis-regarding the lack of authorization in the Model Rules.The risk, however, remains in the conflicts analysis of a disci-plinary proceeding. A controversial 2009 amendment toRule 1.10 of the Model Rules allows imposition of an ethicsscreen for an incoming lawyer to avoid imputed disqualification;client consent is not necessary, but notification is required.52

D.C. Bar, Op. 349 (Sept. 2009) (discussing use of screens for lawyers whopreviously participated in joint defense groups); Ill. State Bar Ass’n AdvisoryOp. on Prof’l Conduct, Op. 88-2 (1988) (noting that vicarious disqualifi-cation does not occur if an attorney possessing a conflict is, upon joining anew office, appropriately ‘‘screened’’ from contact; opinion states that theBoard of Governors in 2010 affirmed the opinion ‘‘based on its generalconsistency with the 2010 rules’’).

For an interesting and erudite Canadian opinion supporting the use ofa screen when subsequent to a lawyer’s change of firms his new firm wasretained by a client with interests adverse to those of a client of the old firm,see Dow Chem. Canada Inc. v. Nova Chems. Corp., (2011) No. 922,2011 ABQB 509, 2011 AB.C. LEXIS 2055 (Can. Calg. Q.B.).

For a good discussion of use of electronic barriers to implementscreening, see Devika Kewalramani, Ethical Screens: Building ElectronicBarriers, Aug. 23, 2011 (available on the Moses & Singer LLP website).

For one of the better discussions of how not to construct a screen, seeMartin v. AtlantiCare, No. 10-6793 (JHR/JS), 2011 U.S. Dist. LEXIS122987 (D.N.J. Oct. 25, 2011) (noting the failure to have written pro-cedures and the lack of notice to opposing party, and observing morebroadly, ‘‘There is no indication that the [client’s] file was physically sep-arated from CM’s other files. In addition, the file was not specially securedor ‘kept under lock and key,’ the [attorney] and CM’s employees did notacknowledge in writing CM’s procedures, and [the attorney] was not‘locked out’ of the [client] file on CM’s computer system. These are thesorts of procedures that are put in place in instances where courts havefound screens to be adequate.’’).

52 The screening rules provide:(a) While lawyers are associated in a firm, none of them shall know-

ingly represent a client when any one of them practicing alone would beprohibited from doing so by Rules 1.7 or 1.9, unless



Screening under theModel Rules has not been adopted in everystate but is gaining acceptance.53

Although the Model Rules did not adopt screening until2009, it had existed as a matter of state rule in a limitednumber of jurisdictions for many years. Screening is consid-ered very controversial in some circles, and the absolute normin others.

The availability of screening is an important considerationin the lawyer mobility context. The variations among state law

(1) the prohibition is based on a personal interest of the disqualifiedlawyer and does not present a significant risk of materially limiting therepresentation 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 outof the disqualified lawyer’s association with a prior firm, and

(i) the disqualified lawyer is timely screened from any participa-tion in the matter and is apportioned no part of the fee therefrom;

(ii) written notice is promptly given to any affected former clientto enable the former client to ascertain compliance with the provi-sions of this Rule, which shall include a description of the screeningprocedures employed; a statement of the firm’s and of the screenedlawyer’s compliance with these Rules; a statement that review may beavailable before a tribunal; and an agreement by the firm to respondpromptly to any written inquiries or objections by the former clientabout the screening procedures; and

(iii) certifications of compliance with these Rules and with thescreening procedures are provided to the former client by thescreened lawyer and by a partner of the firm, at reasonable intervalsupon the former client’s written request and upon termination of thescreening procedures.The amendment was approved by the House of Delegates by a vote of

226 to 191. In 2008, a similar amendment had failed passage by a singlevote. For a critical analysis, see Ted Enarson, Lateral Screening: Why YourState Should Not Adopt Amended Rule of Professional Conduct 1.10,37 J. Legal Prof. 1 (2012).

53 For a comprehensive review of the state of screening state by state,see Bill Freivogel’s blog, Freivogel on Conflicts, the most current collec-tion of conflict related law available. Specifically, the blog is available athttp://www.freivogelonconflicts.com/changingfirmsscreeningparti.html(last accessed Jan. 28, 2015).



require careful consideration of choice of law principleswhenever a lawyer with a potentially disqualifying conflictjoins a national firm. Will the lawyer be officed in a statethat permits screening? Is there litigation that might be gov-erned by a particular state’s law? The answers to these ques-tions can end otherwise promising recruitment.

§2.3.2.7.1 Practical Issues in Screening

The purpose of erecting an ethical screen is to protect aformer client’s confidences and to minimize the perception ofan appearance of impropriety in the firm being adverse to theformer client. In those states where screening is allowed as amatter of right under the applicable ethics rules, a correctlyimplemented screen will prevent disqualification anddiscipline. In states that do not allow screening as a matterof right, the quality of the screen is essential to rebuttingthe presumption of shared confidences and potentially avoid-ing disqualification. An ethical screen is effective when it per-suasively shows that the tainted lawyer is precluded frominvolvement in the tainted representation and that measureshave been taken to prevent even inadvertent disclosure of con-fidential information. A screen imposed too late or that is formover substance defeats its purpose. Whether relying on a state-specific version of Model Rule 1.10 or common law disqual-ification standards, care in designing and maintaining a screenis imperative to its usefulness.54

Although case law has provided guidance, there is nocomprehensive model ethical screen. Whether a screening

54 See e.g., In re Guar. Ins. Servs., Inc., 343 S.W.3d 130 (Tex. 2011).In a 2011 decision, the Texas Supreme Court ordered the disqualificationof the law firm representing a plaintiff. The court determined that a firmcannot merely erect an informal screen and warn a conflict-taintedemployee not to work on a file. The firm must instead adopt ‘‘formal,institutionalized screening measures that render the possibility of the [con-flict-tainted person] having contact with the file less likely.’’



mechanism can be effective depends on the circumstances.Thus, a factor that may be important or decisive in one casemay not be significant in another. Nevertheless, it is possible todevelop a checklist of considerations. Preliminarily, certainfundamental factors should be implemented.

First, the screening procedures should be set up beforethe tainted representation is undertaken or before the taintedlawyer joins the firm.55 The failure to implement a screenpromptly and, ideally before any lateral moves, can result indisqualification.

Second, the fundamentals of the screen must be designedto actually prevent the exchange of any information across the

55 ABA Model Rule 1.0, Comment [10]: ‘‘In order to be effective,screening measures must be implemented as soon as practical after a lawyeror law firm knows or reasonably should know that there is a need forscreening.’’ See also, e.g., Essex Equity Holdings USA, LLC v. LehmanBros., Inc., 29 Misc. 3d 371, 909 N.Y.S.2d 285 (Sup. Ct. 2010); Kirk v.First Am. Title Ins. Co., 183 Cal. App. 4th 776, 108 Cal. Rptr. 3d620 (2010), as modified, (May 6, 2010), review denied,No. S182775 (Cal. June 23, 2010) (author was amicus counsel); AlliedSound, Inc. v. Neely, 58 S.W.3d 119 (Tenn. Ct. App. 2001); Kala v.Aluminum Smelting & Ref. Co., Inc., 81 Ohio St. 3d 1, 1998-Ohio-439, 688 N.E.2d 258 (1998); Asyst Techs., Inc. v. Empak, Inc.,962 F. Supp. 1241 (N.D. Cal. 1997); Dworkin v. Gen. Motors Corp.,906 F. Supp. 273 (E.D. Pa. 1995); In re Mortgage & Realty Trust,195 B.R. 740, 29 Bankr. Ct. Dec. (CRR) 8 (Bankr. C.D. Cal. 1996);Cobb Pub., Inc. v. Hearst Corp., 891 F. Supp. 388 (E.D. Mich. 1995);Cromley v. Bd. of Educ. of Lockport Tp. High School Dist. 205, 17 F.3d1059, 89 Ed. Law Rep. 772 (7th Cir. 1994); Penn Mut. Life Ins. Co. v.ClevelandMall Assocs., 841 F. Supp. 815 (E.D. Tenn. 1993) (five monthstoo late); Hunter Douglas, Inc. v. Home Fashions, Inc., 811 F. Supp. 566,26 U.S.P.Q.2d 1875 (D. Colo. 1992); In re Complex Asbestos Litig.,232 Cal. App. 3d 572, 283 Cal. Rptr. 732 (1991) (quoting text); LaSalleNat’l Bank v. Lake Cnty., 703 F.2d 252 (7th Cir. 1983); NFC, Inc. v. Gen.Nutrition, Inc., 562 F. Supp. 332 (D. Mass. 1983); Sierra Vista Hosp.,Inc. v. U. S., 226 Ct. Cl. 223, 639 F.2d 749, 226 (Ct. Cl. 1981) (formerDepartment of Health Education and Welfare attorneys); Kesselhaut v. U.S., 214 Ct. Cl. 124, 555 F.2d 791, 214 (Ct. Cl. 1977) (former FederalHousing Authority General Counsel).



wall in either direction. The tainted attorney should be pre-cluded from any involvement in or communication about thechallenged representation and should be obligated to remainsilent about any information learned at the prior firm. Imple-menting this requirement is generally accomplished throughacknowledged memos to the entire firm or work area, com-puter assisted firewalls to prevent access to document manage-ment systems and emails and notations on physical files. Theseefforts should be well documented and are as much foreffective screening as they are for demonstrating good faithand diligence in the event of challenge.

Some circumstances will also require precluding financialbenefit to the attorney from the representation. This is partic-ularly important to consider in a smaller partnership where thefinancial benefits from a single case are more personal andsignificant. In a large partnership, the result is likely sominimalas to be irrelevant. Comment 6 to Rule 1.10, however, statesthat the lawyer is not prohibited from receiving a previouslyestablished salary or partnership share that does not directlyrelate to the fee in the matter in which the lawyer isdisqualified.

It may also be appropriate or required for the affectedparty to be provided notice of the representation and thescreen. A form of notice is a requirement set forth in ModelRule 1.10 (a)(2). Although notice to the affected party isimportant, and should always be considered, the failure todo so may not render the screen ineffective.56

Finally, monitoring compliance is also important. Anacquiring firm should appoint a partner or manager to imple-ment and oversee the screen. That person should be identifiedto receive any reports of violations, advertent or otherwise, andshould be responsible for overseeing any notificationrequirements.

56 Kirk v. First Am. Title Ins. Co., 183 Cal. App. 4th 776, 891,108 Cal. Rptr. 3d 620 (2010), modified, (May 6, 2010) review denied,No. S182775 (Cal. June 23, 2010).


2016 Supplement 2:156-1

§2.4 Duties to Clients During Transition

As noted earlier, there are a number of ethical duties thatinfluence the process of lawyer mobility. The obligation tokeep the client informed of anything relevant to the matterdrives the lawyer’s duty to be candid and timely about inten-tions to depart a law firm and the capacity of the new firm tohandle the matter. Similarly, that same obligation extends tothe old law firm, obligating it to permit such communicationand to engage in similar open and honest communication withthe client. Together with the duty to provide information andin turn allow the client to exercise choice is the duty underModel Rule 1.16 to affect an orderly transition of the clientsmatter either to the new firm or away from the mobile lawyerto a new lawyer at the old firm. The transition of client mattermust occur without prejudice to the client. These dutiesshould overshadow any efforts by the lawyers to gain businessadvantage over one another.

§2.4.1 Client Communication and ABA 99-414

In 1999, the American Bar Association’s Standing Com-mittee on Ethics and Professional Responsibility issued FormalOpinion 99-414 addressing ethics issues surrounding notifi-cation of clients.

The opinion includes the following guidelines: (1) a law-yer who is departing one law firm for another may be under‘‘an ethical obligation, along with responsible members ofthe firm who remain, to assure that clients [for whom thelawyer plays a principal role in the firm’s delivery of legalservices] are informed that she is leaving the firm’’; (2) awithdrawing lawyer does not violate Rule 7.3 by notifyingclients with whom she has a present professional relationshipof her departure plans; (3) ideally, the firm and the departing

§2.4 Chapter 2 The Ethics of Lawyer Mobility

2016 Supplement2:156-2

§2.3 ethical issues in recruiting and being recruited§2.3 ethical issues in recruiting and being...

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