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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Page 42 of 75

41 BENCH & BAR | may not represent clients on "opposite sides of the v." (Rule 1.7(b) (3)) but may, with informed consent, represent clients with adverse interests. However, it is impractical and unwise to seek consent when firms are considering merger or a firm is considering a lateral hire. As stated in ABA 09-455: Obtaining clients' informed consent, as defined in Rule 1.0(e), before a lawyer explores a potential move could resolve the tension between the broad scope of Rule 1.6(a) and the need to disclose conflicts information, but there are serious practical difficulties in doing so. Many contemplated moves are never consummated. In the common situation where a lawyer interviews more than one prospective new firm, multiple consents would be required. Consent of all former clients, as well as all current clients, also would be necessary. Further, seeking prior informed consent likely would involve giving notice to the lawyer's current firm, with unpredictable and possibly adverse consequences. Routinely requiring prior informed consent to disclose conflicts infor- mation would give any client or former client the power to prevent a lawyer from seeking a new association with no incentive for a client or former client to give such consent unless the client plans to follow the lawyer to the new firm. 6) If the initial exchange of information reveals a possible conflict with existing clients, the firms might agree to share information under a strict agreement of confidentiality. Another alternative might be to jointly seek advice from a middle man (Rule 1.6(b) (2)). Eli Wald refers to this as the "Middle Counsel Solution.", Eli Wald, Lawyer Mobility and Legal Ethics, 31 J. Legal Prof. 199, 202 (2007): [C]onfidential conflict-checking information disclosed by the moving attorney to Middle Counsel will not be shared with the new law firm, and information revealed by the new firm will not be shared by Middle Counsel with the moving attorney. In fact, Middle Counsel is retained exactly for the purpose of protecting the confidentiality of the respective clients of the moving attorney and the new firm. In exchanging client information, the lawyers must not disclose information that would compromise the attorney client privilege or otherwise prejudice the client. ABA Model Rule, 1.6(b)(7). Restatement section 60. 7) Client consent is required if the merger or lateral hire would result in the firm representing clients with adverse interests. e firm may not drop a client without its consent to cure a conflict. is is referred to as the "hot potato" principle, Restatement section 132, Markham Concepts v. Hasboro Inc., 32 Law.Man.Prof.Conduct 464 (2016), Phila.Ethics Op. 2009-4, 2009 WL 934625. RECOMMENDED BEST PRACTICES 1) Lawyers considering a merger or lateral hire should agree, in writing, to keep confidential all disclosed information. If the merger or a lateral hiring decision is not made then upon such event all of the shared client information should be returned or destroyed. Disclosed information may not be used for any purpose other than the performance of a conflicts check. 2) All client information, including client identity, should not be disclosed until substantive discussions between the merging firms and/or the employment of a lateral have occurred and have been agreed to. 3) Potential lawyer personal conflicts (e.g., boards, ownership inter- ests, business activities, etc.) should be revealed and discussed before the exchange of client information. 4) When substantive discussions take place, lawyers should disclose the identity of current clients and, if necessary for a conflicts' check, the nature of the relationship. In the event of a potential lateral hire, the attorney should identify the clients the attorney believes will accompany the lawyer to the new firm. Clients who will accompany the lawyer are current clients; clients who will not accompany the lawyer to the new firm are former clients. 5) Former clients who might seek future representation by the attorney or the firm should be identified; they are former clients but the firm or attorney might feel a duty of loyalty that warrants treating them as current clients. 6) To the extent practicable, attorneys should identify former clients and the nature of the relationship for inclusion in the new firm's data base to allow the new firm to identify conflicts with former clients and screen affected counsel. 7) In the unlikely event that confidential information beyond identity and the nature of the relationship must be disclosed to determine the feasibility of a merger or lateral hire the parties may do so pursuant to an agreement of confidentiality. NOTE TO READER is ethics opinion has been formally adopted by the Board of Gover- nors of the Kentucky Bar Association under the provisions of Kentucky Supreme Court Rule 3.530. is Rule provides that formal opinions are advisory only. To see a listing of KBA Ethics Opinions visit

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