What type of information received from a prospective client who consults but does not retain a lawyer will disqualify the lawyer?

In my last post, I provided a brief overview of the rule that governs a lawyer’s duties to a prospective client. The rule, V.R.Pr.C 1.18, defines a “prospective client” as a person who, in good faith, discusses with a lawyer the possibility of forming an attorney-client relationship but who does not form the relationship. 

The rule includes two key aspects:

1. If no relationship ensues, the lawyer’s duty of loyalty is relaxed, but the duty of confidentiality is not. That is, the lawyer must maintain the prospective client’s confidences as if the person had retained the lawyer.[1]  However, the lawyer may represent someone whose interests are materially adverse to the prospective client, even in a matter that is the same as or substantially related to the matter that was the subject of the consultation, as long as the lawyer did not receive information that “could be significantly harmful” to the prospective client.[2]  
2. If a lawyer receives disqualifying information during the consultation, the lawyer’s conflict is not imputed to other lawyers in the same firm, but only if the lawyer “took reasonable measures to avoid exposure to more disqualifying information that was reasonably necessary to determine whether to represent the prospective client.”[3]

Today’s post will address #1: the nature & type of information that is considered “significantly harmful.”

In 2020, the ABA’s Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 492: Obligations to Prospective Clients: Confidentiality, Conflicts, and “Significantly Harmful” Information. The opinion is no longer publicly available for free.  As a result, I can’t link to it and, due to copyright protections, I’m not authorized to scan my hard copy and repost here. Instead, I’ll do my best to summarize the Formal Opinion (FO).

Often, lawyers don’t remember what, if anything, they discussed with a prospective client.  Nevertheless, the FO points out that we will not require a prospective client to disclose a confidence to protect it.[4]  However, the FO adds that “[w]ith respect to what must be shown to establish that a person is entitled to the protection of [Rule 1.18], evidence beyond the mere fact of consultation is generally required.”[5] The FO goes on to indicate that this does not mean that a prospective client “must disclose confidential information or detail the substance of the discussions.”  Rather, “the date, duration, and manner of communication . . . and a summary of the topics discussed” will suffice.

Next, the FO cites to a several advisory ethics opinions and cases that discuss the “significantly harmful” test.

One is Formal Opinion 2013-1 from the New York City Bar Association’s Committee on Professional Ethics.  Here’s footnote 9:

• “Several courts in New York have addressed the ‘significantly harmful’ test in Rule 1.18. See Zalewski v. Shelroc Homes, LLC, 856 F. Supp. 2d 426 (N.D.N.Y. Mar 6, 2012) (disqualifying lawyer from representing plaintiff in lawsuit against prospective client that had explained to the lawyer its views on various settlement issues, including price and timing; although subject to change, such information could provide ‘an unfair advantage’ and ‘ultimately control the great stakes ahead’); Miness v. Ahuja, 762 F. Supp. 2d 465 (E.D.N.Y. July 31, 2010) (disqualifying lawyer from representing defendant in a lawsuit by prospective client who, in context of a social relationship, had shared his ‘personal accounts of each relevant event shortly after it happened’ and his ‘strategic thinking concerning how to manage the situation’); Van Acker Constr. Corp. v. Hance, 2011 NY Slip Op. 30092 (N.Y. S. Ct. Jan. 11, 2011) (disqualifying law firm from representing defendant in lawsuit by prospective client where firm, in an 18-minute phone call with the prospective client-plaintiff, had ‘outlined potential claims’ against defendant and ‘discussed specifics as to the amount of money needed to settle the case’).”

Another is this opinion in which the North Dakota Supreme Court stated:

• “Information may be ‘significantly harmful’ if it is sensitive or privileged information that the lawyer would not have received in the ordinary course of due diligence; or if it is information that has long-term significance or continuing relevance to the matter, such as motives, litigation strategies, or potential weaknesses. ‘Significantly harmful’ may also be the premature possession of information that could have a substantial impact on settlement proposals and trial strategy; the personal thoughts and impressions about the facts of the case; or information that is extensive, critical, or of significant use.”

The FO also cites to this decision. It’s one in which the New Jersey Supreme noted that it is not enough that information shared in the consultation “be simply detrimental in general to the former prospective client, but the harm suffered must be prejudicial in fact to the former prospective client within the confines of the specific matter in which disqualification is sought, a determination that is exquisitely fact-sensitive and -specific.”

Finally, the FO quotes from the Restatement Third’s examples of information that will not be considered “significantly harmful.” Including, a thirty-minute consultation in which a lawyer avoided learning details of the matter, and a short consultation that occurred 10 years prior in a “tenuously related matter.”

I hope this provides at least a start as to the nature of information that will be considered “significantly harmful” when analyzing whether Rule 1.18 disqualifies a lawyer. In my next post, I’ll discuss the “reasonable measures” that a lawyer can take to ensure that other lawyers in the firm will be allowed to continue even when the lawyer who handled the consultation with the prospective client is disqualified.

As always, let’s be careful out there.

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[1] V.R.Pr.C. 1.18(b).

[2] V.R.Pr.C. 1.18(c).

[3] V.R.Pr.C. 1.18(d).

[4] I’ve blogged on this exact point, albeit in the context of duties owed to former clients.  See, Don’t Remember? Doesn’t Matter.

[5] In so doing, the FO cites to Thomson v Dueker, S.W.3d 390, 396 (Mo. Ct. App. 2011) and the RESTATEMENT OF THE LAW (THIRD), THE LAW GOVERNING LAWYERS, §15(c).

Other Resources

Ethical Duties to Prospective Clients; David Kluft, Assistant Bar Counsel, Massachusetts Board of Bar Overseers.

Lawyers have Duties to Prospective Clients; Dean Dietrich, The Wisconsin Lawyer, Vol. 95, No. 8, September 2022.

Related Posts

Fish, fowl, and Vermont’s rule on the duties owed to prospective clients

Don’t remember? Doesn’t matter.

Analyzing a potential conflict with former client: important update on “Don’t Switch Sides”