Changing Firms: Is our rule too strict?

Lawyers often change jobs, moving from one firm to another.  These so-called “lateral transfers” can raise concerns about conflicts-of-interest, particularly when the new firm represents a client with interests adverse to a client represented by the former firm.  Many lawyers assume that the new firm can simply “wall off”, or screen, the new lawyer.  Under our current rules, that is not an accurate assumption.

Caveat: this column applies only to transfers from private firm to private firm.  Transfers to an from government work, including agency to agency, are governed by Rule 1.11(d) and are a topic for another day.

Here in 2017 I present the scenario:

  • Attorney works for New Firm
  • Attorney used to work for Old Firm
  • In the matter of Michael v. Corporate, Old Firm represents Michael and New Firm represents Corporate
  • Does Attorney’s lateral transfer disqualify New Firm?

In my view, the answer is “it depends.”  I’ll go through 2 possibilities.

Possibility 1:  Attorney Participated Personally & Substantially in the Representation of Michael while working at Old Firm.

As I interpret the rules, if Attorney participated personally & substantially in the representation of Michael while at Old Firm, Attorney has a conflict that is imputed to New Firm, and that cannot be cured by screening Attorney.

Start with Rule 1.9.  Section(b) indicates that Attorney has a conflict. I don’t think there’s any doubt that Attorney is prohibited from switching sides and representing Corporate in the same matter in which Attorney used to represent Michael.

Now, go to Rule 1.10. It’s the rule on the imputation of conflicts. Rule 1.10 was amended in 2012.  Depending on which copy of the green book you have, the current rule might be in the pocket part. Or, the rule is HERE.

Attorney’s conflict is based on Rule 1.9(b).  Thus, Rule 1.10(a) imputes the conflict to New Firm, unless one of the exceptions applies.

The exception in Rule 1.10(a)(1) does not apply.  Attorney’s conflict is not personal. It is a former client conflict that arises under Rule 1.9.

The exception in Rule 1.10(a)(2) does not apply.  Rule 1.10(a)(2) allows New Firm to screen Attorney if:

    1. Attorney’s prohibition is based on Rule 1.9(a) or (b); and
    2. Arises out of Attorney’s association with a prior firm; and
    3. In a matter in which Attorney “did NOT participate personally or substantially.”

Comment 7 hammers home the point: with lateral transfers, new firms can screen transfers, but only if the new lawyer is “one who ‘did not participate personally and substantially’ in the matter giving rise to the conflict.” (emphasis added).

In this version of the hypothetical, Attorney’s prohibition is:

  • based on Rule 1.9(b); and
  • arises out of Attorney’s association with a prior firm; and
  • arises out of a matter in which Attorney participated personally & substantially

Thus, Rule 1.10(a) imputes Attorney’s conflict to New Firm and prohibits New Firm from screening Attorney.  Of course, New Firm would not be disqualified if Michael provided informed consent, confirmed in writing.  See, Rule 1.9(a).

Possibility 2:  Attorney did not Participate Personally & Substantially in the Representation of Michael while working at Old Firm.

If Attorney did not participate personally & substantially in the representation of Michael, then it appears permissible for New Firm to screen Attorney.

If Attorney did not participate in the representation of Michael, Attorney likely does not have a conflict under Rule 1.9(a).  Of course, it is possible that Attorney acquired information about Michael, even without participating in Michael’s representation. If so, Attorney is bound to protect the information, but Attorney has a conflict under Rule 1.9(b).

However, in this scenario, the third prong of Rule 1.10(a)(2) is not present.  Let’s look at each prong again:

  • Rule 1.9(b) prohibits Attorney from representing Corporate; and
  • the prohibition arises out Attorney’s association with a prior firm; BUT
  • Attorney did not participate personally & substantially in the representation of Michael.

Therefore, Rule 1.10(a)(2) permits New Firm to screen Michael.  Subsections i, ii, and iii set out the specific screening procedures with which New Firm must comply.

ABA Model Rule 1.10 is not as strict as Vermont’s Version of Rule 1.10

In 2009, the ABA amended Model Rule 1.10(a)(2).  As amended, the Model Rule does not include the phrase “in a matter in which the disqualified lawyer did not participate personally and substantially.”  In other words, under the Model Rule, a new firm is permitted to screen a lateral transfer even if the new lawyer participated personally and substantially in the matter while at the old firm.

Question for Vermont

Should we follow the ABA’s lead and drop the ” participated personally & substantially” language?  That is, should we permit firms to screen new lawyers — no matter how substantial the lawyer’s involvement with a matter at a previous firm?

An argument for “no”:  the new lawyer has so much information that it would be patently unfair to allow new firm to remain in the case even if new lawyer is screened from participation.”

An argument for “yes”: Vermont is a small state with many potential conflicts.  We should not have a rule that restricts lawyers from leaving for new opportunities.

Go Cats Go!



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