Bench & Bar

JAN 2018

The Bench & Bar magazine is published to provide members of the KBA with information that will increase their knowledge of the law, improve the practice of law, and assist in improving the quality of legal services for the citizenry.

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| JANUARY/FEBRUARY 2018 40 material interest of a client. e lawyer may not reveal client identity or the nature of the representation if the lawyer knows or should know that the client might object to disclosure. AUTHORITY: KRPC rules and comments designed to further lawyer mobility: Rule 1.9 and comment 4, comment 3 to Rule 1.7, Rule 1.10(d), comment 7 to Rule 1.17; ABA Formal Op. 09-455, ABA Rule 1.6(7) and comment 13, Restatement of the Law Gov- erning Lawyers, sec.60, Large Law Firm Lateral Hire Conflicts Checking: Professional Duty Meets Actual Practice, James Fisher, 36 J. Legal Prof. 167 (2011). QUESTION 3: When an exchange of basic information reveals a possible conflict, how may firms determine if merger is feasible? ANSWER: If necessary to determine the feasibility of a merger, firms may agree on a procedure that identifies conflicts while safeguarding client confidences. Possible procedures include: 1) lawyers from each firm exchanging information under a confidentiality agree- ment; and 2) jointly seeking advice from a lawyer not affiliated with either firm under a confidentiality agreement. e person selected must agree that all information is confidential and opine only on the feasibility of merger and what is necessary to merge the firms (client consent for example). AUTHORITY: Rule 1.6(b)(4) and comment 7, comment 31 to Rule 1.7, Lawyer Mobility and Legal Ethics: Resolving the Tension between Confidentiality Requirements and Contemporary Lawyers' Career Paths, Eli Wald, 31 J. Legal Prof. 199, 244 (2007). DISCUSSION 1) e Model Rules and Kentucky Rules send mixed signals about disclosing information "relating to the representation of a client." (Rule 1.6(a). e language of 1.6(a) is broader than "confidences and secrets" (the language of the Code of Professional Responsibility), and the rule does not contain an exception for information "gener- ally known" (although Rule 1.9(c) does provide such an exception). Comment [4] to Rule 1.6 opines that client identity is protected by Rule 1.6, and Ky. Op. E-253 opines that client identity may not be revealed without the client's consent. On the other hand, the Model and Kentucky Rules are designed to further lawyer mobility. "T]he rule should not unreasonably hamper lawyers from forming new associations and taking on new clients after having left a previous association . . . . It should be recognized that many move from one association to another several times during their careers." Comment [4] to Rule 1.9. e Model and Kentucky Rules reject "double imputation" in lateral moves (Rule 1.9(b). For a conflict to exist the moving lawyer must have information protected by Rule 1.6 that is material and adverse to the former client. Under Rule 1.9, the focus is on the moving lawyer's possession of client confidential information; the former firm's conflicts are no longer imputed to the moving lawyer. e Rules further facilitate lawyer mobility by providing for screen- ing (1.10 (d)), so that the moving lawyer's conflicts are not imputed to the other lawyers in the firm. Screening requires conflict checking (comment [3] to Rule 1.7), and conflict checking requires disclosure of enough information "relating to the representation of the prior client" to enable the new firm to screen effectively. Fisher at 209. 2) In ABA Formal Opinion 09-455, as a matter of necessity, the ABA Committee construed Rule 1.6 to allow disclosure of confi- dential information for conflicts checks and screens. In 2012 the ABA codified the opinion in Rule 1.6(b)(7) and new comments 13 and 14. e Restatement states the "law of lawyering" as follows [T]he lawyer may not use or disclose confidential informa- tion as defined in section 59 if there is a reasonable prospect that doing so will adversely affect a material interest of the client or if the client has instructed the lawyer not to use or disclose the information. (section 60). is definition is similar to the definition of "secret" in the Code of Professional Responsibility: "other information gained in the pro- fessional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client. "ABA Model Rule 1.6(b)(7) is similar to the Restatement: in law firm mergers and changes of employ- ment information may be exchanged, "if the revealed information would not compromise the attorney client privilege or otherwise prejudice the client." In a survey of large law firms, Fisher found that all firms required potential lateral hires to fill out a questionnaire with basic client information to be run through a conflicts' check. e firms would consult their files to clear hits (false conflicts), perhaps seek addi- tional information, and flag their files to create screens as needed. Fisher found no cases in which clients had been harmed by lawyers' disclosures and concluded, "the reasonable touchstone here is harm to the client. is study found no evidence that lateral disclosures to facilitate conflicts checking put real clients at risk." Fisher at 223. 3) e Rules of Professional Conduct are rules of reason. ey should be interpreted with reference to the purposes of legal repre- sentation and of the law itself." Scope [XV ]. ABA 09-445 interprets Rule 1.6 to reach a reasonable result and one in accord with reality. "If we accept that we are dealing with good ends here, the proper focus is not to create a hierarchy in which one good (lawyer mobil- ity) must necessarily give way due to hypothetical risks to another good (client loyalty and confidentiality)." Fisher at 223." 4) Conflicts created by lateral hires without attendant clients may be cured by screening on the basis of information provided by the lateral hire. e firm will need to have this information in its data base to identify conflicts created by the lateral's prior representa- tions. Some disclosure of client information will be necessary to establish the screen and notify the former client (as required by Rule 1.10(d)(2). 5) Mergers and lateral hires with attendant clients may potentially cause the firm to represent clients with conflicting claims. e firm FORMAL ETHICS OPINION E-443

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