Get Smart: ABA provides guidance on reasonable measures to avoid acquiring potentially disqualifying information from a prospective client.

Welcome to the final installment of my mini-series on Rule 1.18 and the duties that lawyers owe to prospective clients.

Aside:  Who knew that this series would both lead me to revisit a television show from my youth AND cause a worrisome (to me) disturbance in the force?  More on each in the “PS” that follows this post.  First, let’s take care of the business portion of this installment.

Installment 1 outlines the scope of the rule and its history in Vermont.  Installment 2 addresses the nature & type of information that will disqualify the lawyer who met with the prospective client from later representing someone else in the matter.

Today, we address a third critical aspect of the rule: if the lawyer who met with the prospective client is disqualified from later representing someone else in the matter by virtue of having received information that could be “significantly harmful” to the prospective client, will that lawyer’s conflict be imputed to others in the same firm?  Stated differently, what measures can a lawyer take to ensure that, even if disqualified, the firm will not be?

The last line of Rule 1.18(c) states:

• “If a lawyer is disqualified from representation under this paragraph, no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter, except as provided in paragraph (d).”

Here’s paragraph (d):

“When the lawyer has received disqualifying information as defined in paragraph (c), representation is permissible if:

• (1) both the affected client and the prospective client have given informed consent, confirmed in writing, or;
• (2) the lawyer who received the information took reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client; and (i) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (ii) written notice is promptly given to the prospective client.”

Paragraph(d)(1) is self-explanatory.  So, on to paragraph (d)(2).  What does it mean?

The first sentence in Comment [4] provides a bit of guidance:

• “In order to avoid acquiring disqualifying information from a prospective client, a lawyer considering whether or not to undertake a new matter should limit the initial interview to only such information as reasonably appears necessary for that purpose.”

In Formal Opinion 492, the ABA Standing Committee on Ethics and Professional Responsibility suggested that “to avoid receiving ‘significantly harmful information’ from a prospective client, lawyers should warn prospective clients against disclosing detailed information.” Then, after citing to Comment [4], the Committee noted:

• “This caution, however, is not intended to discourage lawyers from engaging in a thorough discussion with prospective clients in order to ascertain whether the lawyer wants to take on the representation. It is simply a reminder that the more information learned in a consultation, the more likely that the lawyer may be precluded from representing other parties in a substantially related matter.”

The Committee issued FO 492 in 2020.  Last month, the Committee followed up with Formal Opinion 510: Avoiding the Imputation of a Conflict of Interest When a Law Firm is Adverse to One of its Lawyer’s Prospective Clients. Per its summary, FO Opinion 510 “addresses the ‘reasonable measures’ necessary to avoid the imputation of conflicts of interest under Rule 1.18.”

Before getting to “reasonable measures,” FO 510 does a nice job directing us to the final phrase of Rule 1.18(d)(2), reminding us that what must be avoided to avoid imputed disqualification is exposure to information beyond what “was reasonably necessary to determine whether to represent the prospective client.”  The opinion advises that determining whether to represent the client likely includes acquiring sufficient information to determine: 

• Whether a conflict exists;
• Whether the lawyer is competent to handle the type of matter;
• Whether the client intends to use the lawyer’s services to commit a fraud;
• Whether the lawyer has enough time to do the work in a competent & diligent fashion; and,
• The range of potential fees & expenses.

In other words, acquiring information necessary to answer these questions won’t serve to disqualify the lawyer or firm down the road. 

Then, the opinion gives an example of what is NOT necessary to determine whether to represent the prospective client.

• “Certain purposes for learning disqualifying information would be unrelated to the lawyer’s determination ‘whether to represent the prospective client.’ For example, a lawyer might elicit detailed information about the matter so the lawyer could persuade the prospective client to retain the lawyer. Details about the prospective client’s litigation or transaction might enable the lawyer to impress the prospective client by offering strategic insight into how to conduct the representation or by relating the matter to the lawyer’s past experience. It is generally permissible for lawyers to promote themselves in this manner (although they must avoid giving incompetent advice or making false statements to the prospective client). However, a legitimate factual inquiry toward this end would not relate to the lawyer’s determination ‘whether to represent the prospective client.’ Rather, the inquiry would relate to the prospective client’s decision whether to retain the lawyer.”

In other words, be careful how much you try to sell yourself – you just might cause the prospective client to provide enough information to disqualify you and your firm from representing someone else in the matter.

Next, FO 510 acknowledges that before agreeing to undertake representation, lawyers typically want to be sure that the client’s claim isn’t frivolous. While recognizing the value such an inquiry, the opinion cautions that not all steps taken “to serve a legitimate purpose . . . [are] necessary to serve that purpose.” In other words, a “lawyer ordinarily – but not necessarily in every instance – can ascertain after modest inquiry whether a proposed lawsuit would likely be frivolous.” 

Rather, FO 510 suggests that lawyers use Rule 1.16(a)(1) as a guide.  It’s the rule that requires lawyers to decline representation if “the representation will result in violation of the rules of professional conduct or other law.” On this point, the Committee advises “[s]uch inquiry is not just permissible, but ‘reasonably necessary to determine whether to represent the prospective client.’”[1]

From there, FO 510 turns to the question of “what constitute ‘reasonable measures’ to limit exposure to more than information was reasonably necessary,” a question “on which there is limited guidance in prior opinions.”  The Committee provides an answer. 

While information will certainly be exchanged in an initial consultation, a “free-flowing conversation is unlikely to involve reasonable measures to limit the information being provided.” Rather, the “‘reasonable measures’ standard means that lawyers must exercise discretion throughout the initial communication.”  Lawyers who fail to place limits on both the information that they seek and the information that they receive, “fall short of [the] standard.” As FO 510 notes, one reasonable measure is a reminder or warning

• “that the lawyer has not yet agreed to take on the matter and that information should be limited only to what is necessary for the lawyer and client to determine whether to move forward with an engagement.”

Finally, it is NOT an ethical violation to receive too much information during the initial consultation. Might the lawyer and firm be disqualified from a future representation for doing so? Yes. However, as FO 510 makes clear, receiving information that might be “significantly harmful” to the prospective client is not misconduct.

As always, let’s be careful out there.

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[1] The Committee immediately follows with this guidance: “Once a lawyer has sufficient information to decide whether to represent the prospective client, further inquiry may be permissible, but it will no longer be ‘necessary.’ That means once a lawyer has decided there is any basis on which the lawyer would or must decline the representation, stopping inquiry on all subjects would place the lawyer in the best position to avoid potential imputation of a conflict to other lawyers in their firm. See Comment [4] to Rule 1.18.”

Post-Script

As a kid, I loved Get Smart. I couldn’t enough of Maxwell Smart, Agent 99, and their high stakes capers that characterized the eternal struggle between CONTROL & KAOS.  

In response to Installment 2 of the prospective client series, a reader commented that one of the recommendations “calls to mind images of Maxwell Smart and The Chief in the Cone of Silence.” For those who don’t know, the Cone of Silence is where Control’s leader, The Chief, discussed the most sensitive matters with his agents.  The reader’s comment led me to reply with this clip, a scene that shows the sophistication of the Cone of Silence. The relevant dialogue begins around the 0:50 mark.

Shortly after I posted my reply, another reader texted me this clip. I’d completely forgotten about the episode, one in which Congressional cuts to CONTROL’S budget resulted in CONTROL leasing the Cone of Silence to the CIA, an arrangement that left CONTROL with nothing but the Closet of Silence.

The trip down memory lane made me wonder if any of the actors were still alive. The first I Googled was Agent 99.  Literally. I couldn’t remember the name of the actress who played Agent 99, so I Googled “Agent 99.”  Turns out, the actress is Barbara Feldon.  And here’s where I experienced a disturbance in the force.

When I went to Barbara Feldon’s Wikipedia page, I was startled to discover that she’d died TODAY.  What are the odds?!?! I immediately searched the news for accounts of her passing.  

Would you believe that I found exactly . . . NONE?

How could that be?

Surely someone would note such an icon’s passing.

So, I looked again at Wikipedia to confirm what I’d seen. Mysteriously, and as you can see for yourself here, Wikipedia no longer lists Barbara Feldon as having died on April 4, 2024.  Indeed, I have no reason to believe that she is anything other than very much alive. Fortunately, I took a screenshot of the entry that listed her as having passed today. Here it is:

I don’t know who conspired me to try to fool me with the old “fake Wiki entry” trick. 

All I can say is that whoever you are, you missed me by that much.

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”

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

Every so often I decide to address a topic that I know will result in a post that most will consider too long to read.  I never know whether to forge ahead and risk the dreaded “TL; DR” in the comments, or whether to break the post into smaller, more palatable parts. 

Today, I choose to go easy on palates. 

I’ve long been interested in the rule that sets out a lawyer’s duties to prospective clients.  Indeed, a common inquiry is “Mike, I met with a potential client who didn’t hire me.  Now the other side wants to retain me. Can I take the case?”  As most of you know, my answer is “it depends.”

Today’s post outlines the history of Vermont’s rule.  Two posts will follow, with each addressing a different part of the analysis that follows my response that “it depends.”

The History of Vermont’s Rule

Long ago, but in our very own Milky Way galaxy, I investigated this disciplinary complaint:

• Person met with Lawyer to discuss potential representation in a matter.
• Person shared a significant amount of information about the matter with Lawyer.
• Person opted not to retain Lawyer.
• Litigation ensued.
• Opposing Party retained Lawyer.
• Lawyer represented Opposing Party in the same matter about which Person had consulted with Lawyer.

Back then, Vermont’s rules addressed conflicts between (1) current clients; (2) lawyer and client; and (3) a current client and a former client. We did not have a rule that set out a lawyer’s duties to the person who meets with, but does not retain, the lawyer.  Indeed, at the time, the general legal principle was that prospective clients were “neither fish nor fowl” for the purposes of the ethics rules. 

Returning to the scenario I investigated, I conceded that Person was not a current or former client of Lawyer.  Nevertheless, I argued that the spirit and intent of the conflicts rules rendered Lawyer’s representation of Opposing Party a violation.

Alas, a hearing panel of the Professional Responsibility Board disagreed. The panel concluded that my decision to charge Lawyer with a violation was not supported by probable cause.  Thus, complaint dismissed.

Not long thereafter we got to work on proposing & promulgating V.R.Pr.C 1.18.  It took effect on September 1, 2009.

Under the rule, a “prospective client” is a person who, in good faith, discusses with a lawyer the possibility of forming client-lawyer relationship. Comment [2] sheds some light on who qualifies as a “prospective client.”

• “Not all persons who communicate information to a lawyer are entitled to protection under this rule. A person who communicates information unilaterally to a lawyer, such as through an unsolicited e-mail or other communication, without any reasonable expectation that the lawyer is willing to discuss the possibility of forming a client-lawyer relationship, is not a ‘’prospective client‘ within the meaning of paragraph (a). A person who participates in an initial consultation, or communicates information, with the intent to disqualify a lawyer from representing a client with materially adverse interests is not acting in good faith and is not ‘a prospective client’ entitled to the protections of paragraph (b) or (c) of this rule. A person’s intent to disqualify may be inferred from the circumstances.”

From there, 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]

The posts that follow will address:

1. The nature & type of information that is considered “significantly harmful;” and,
2. The “reasonable measures” that a lawyer or firm can take “to avoid exposure to more disqualifying information that was reasonably necessary to determine whether to represent the prospective client.”

By the way, having adopted Rule 1.18, I assume that it can no longer be said that prospective clients are “neither fish nor fowl” for purposes of the Vermont Rules of Professional Conduct.  Alas, I don’t know which they’ve become.

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).

A lawyer’s duty to manage their caseload.

Back when I used to blog, I often posted about wellness on Wednesdays.  Thus, if you were to travel back in time and tell Younger Me that a future Wednesday would include a post about excessive workloads, I’d likely respond “that makes sense. I bet I’ll discuss the impact that an uncontrolled workload can have on wellness.” 

Like the defense in My Cousin Vinny, Younger Me would be wrong.

Today, I write to address a lawyer’s duty to control their workload. A duty that flows to clients and that existed long before the profession began to address wellness & well-being.

The impetus for this post is Colorado Bar Association Opinion 146.  I suggest reading the opinion. It goes into more detail than I will.  Here’s my summary.

The opinion begins with a reminder that the Rules of Professional Conduct:

• “create a series of obligations to ensure clients receive competent, diligent, and zealous representation. The keystone of these obligations is the principle that clients are entitled to sufficient attention to their legal matters, as well as sufficient access to their lawyers.” (emphasis added).

The highlighted sentence says it all. In short, when your workload prevents you from paying “sufficient attention” to a client’s matter, or from providing a client with “sufficient access,” it’s likely excessive.

I could stop there.

Especially since Comment [2] to Rule 1.3 of the Vermont Rules of Professional Conduct states that “[a] lawyer’s work load must be controlled so that each matter can be handled competently.”

But I won’t stop yet.  Because I can sense what you’re thinking: “Mike, are you saying that it’s unethical to be too busy?”

No, not really. (Although that’s kind of what Comment 2 to Rule 1.3 says.)

What I’m saying is this: an excessive workload puts a lawyer at risk of violating several duties that the lawyer owes to clients.  For instance, and as the Colorado opinion points out, the duties to provide a client with competent & diligent representation, the duty to communicate to the client sufficient information to allow the client to make informed decisions about the representation, and the duty to avoid conflicts of interest.[1]  Stated differently, it’s problematic when a lawyer is too busy with Clients A, B, and C to provide Client D with competent & diligent representation.

What’s “excessive?”

Good question.

The Colorado opinion stresses that “determining when a workload is excessive under the rules of professional conduct is necessarily fact specific.” Nevertheless, citing to caselaw and advisory opinions from the ABA and other jurisdictions, the Colorado opinion lays out workload “considerations” for public defenders, prosecutors, Legal Aid lawyers, and private practitioners. Rather than regurgitate those considerations here, I refer you to the section of the opinion that applies to you.

Next, the opinion pivots from a lawyer’s duty to manage their own workload to the duties owed by lawyers who supervise others. Here, the opinion reminds supervisors of their “responsibility to ensure that subordinate lawyers’ workloads are adequately regulated so that each client receives competent and diligent legal representation.”  As the opinion points out, this responsibility includes the supervision of people in the firm or office who are not lawyers but who work on client matters.[2]  Similarly, the opinion cautions lawyers who work under the supervision of another that they “may be required to alert their supervisor or managing lawyer if their workload is such that they are unable to handle the matters assigned” competently and diligently.[3]

In sum, remember, at some point, a workload becomes so excessive as to put a lawyer at risk of violating the most basic duties owed to clients.

Oh, and one other thing: while this post isn’t about wellness, I’m a firm believer that an excessive workload negatively affects wellness and, in so doing, puts both lawyers and their clients at risk.

As always, let’s be careful out there.

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[1] Vermont’s rules on competence, diligence, communication, and conflicts of interest are essentially the same as Colorado’s. 

[2] Vermont’s rules on supervising other lawyers and supervising nonlawyers are essentially the same as Colorado’s

[3] Vermont’s rule that sets out the duties of a “subordinate lawyer” is essentially the same as Colorado’s

Ethics tips for lawyers who share office space.

Earlier today I posted on the ethics of witness preparation. I mentioned that it was a topic that I’d only blogged about one other time.

I’m about to outdo myself.

Tonight’s post looks at the ethics issues that arise when lawyers share office space.  While I’ve received a handful of inquiries on office sharing arrangements over the years, I’ve never written about it.  Here goes nothing!

In July, the ABA Standing Committee on Legal Ethics & Professional Responsibility issued Formal Opinion 507: Office Sharing Arrangements with Other Lawyers. As regular readers know, when blogging about advisory ethics opinions, it’s right about now that I urge readers not to rely on what I write but to read the opinion instead. And, having imparted that disclaimer, it’s right about now that I attempt to outline the opinion without resorting to (too many) block quotes.

While perhaps not relevant to the majority of Vermont’s practitioners, office sharing isn’t uncommon within the state. As Formal Opinion 507 points out:

• “Office sharing among lawyers comes in many forms—lawyers with separate law practices sharing office space, support staff, and equipment; law firms renting unused office space to unaffiliated lawyers; or even lawyers sharing an office suite, receptionist, and conference room as part of a virtual law practice or on a temporary basis.”

Indeed, I’m aware of each of the listed types of arrangements existing in Vermont.

In a nutshell, Formal Opinion 507 reminds lawyers to consider 3 of the 7 Cs of Legal Ethics when sharing office space: confidentiality, communication, and conflicts of interest.

Confidentiality

This one should be obvious. 

V.R.Pr.C. 1.6 prohibits a lawyer from disclosing information relating to the representation of a client.  While the rule contains several exceptions, “but I share office space with that person” is not one of them. Thus, whatever the arrangement, a lawyer must take care not to “expose client information to other office-sharing lawyers and their staff.”[1]  Formal Opinion 507 shares several commonsense tips that will assist lawyers to maintain confidentiality in a shared space.

Communication

This one might not be as obvious. 

In Vermont, Rule 7.5(d) authorizes lawyers to “state or imply that they practice in a partnership or other organization only when that is the fact.”  Further, Rule 7.1 prohibits lawyers from making false or misleading communications about their services. Thus, Formal Opinion 507 concludes that:

• “office-sharing lawyers must ensure that the public is not misled about the nature of their relationship, such as confusion about whether the lawyers are part of a law firm, partnership, or professional corporation when no such affiliation exists.”[2]

In short, take care to avoid suggesting that the lawyers who share office space practice together as a firm.  Formal Opinion 507 includes helpful tips.

Conflicts of Interest

My sense is that some of you might be wondering how sharing office space might create a conflict.  Here’s how.

As Formal Opinion 507 indicates, whether intentionally or unintentionally, if lawyers who share office space create a reasonable impression that they are practicing as a firm, they just might be deemed to be exactly that: a firm.  If so, Rule 1.10 would impute one lawyer’s conflicts to the others in “the firm.”  The opinion states:

• “Office sharing lawyers who do not protect the confidentiality of their respective clients, regularly consult with each other on matters, share staff who have access to client information, mislead the public about their identity and services, or otherwise fail to keep their practices separate, are more likely to be treated as “associated in a firm” for conflict imputation purposes.”[3]

Moreover, the opinions suggests that even when lawyers who share space clearly communicate that they are not a single firm, there might be situations in which it makes sense to avoid representing a client who is directly adverse to a client represented by another lawyer in the shared space.  Per the opinion,

• “Potential pitfalls range from inadvertent disclosures of client information in a shared office to opposing parties coincidentally scheduling meetings at the same time. Before entering an office sharing arrangement, it is prudent for a lawyer to examine the nature of the other lawyers’ practices to determine whether conflicts of interest are likely to arise.”[4]

Finally, the opinion reminds lawyers that while it’s okay to share administrative staff, there will be instances when the staff member’s knowledge of a matter being handled by one lawyer requires another lawyer to screen the staff member from involvement in work that the second lawyer is doing on the same matter.  As regular quiz takers likely recall, while Vermont’s rule on imputed conflicts is strict, it does not impute conflicts of non-lawyers.[5]

As always, let’s be careful out there.

PS:  Sadly, unlike the opinion that I blogged about earlier today, Formal Opinion 507 doesn’t include a pop culture reference.  So, I’ll close with this.  If you share office space but don’t go in all that often, here’s what might happen when you do:

• Bob:  Looks like you’ve been missing a lot of work lately.
• You:  I wouldn’t say I’ve been missing it, Bob.

And if you share space with this dude, he wants his stapler back.

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[1]ABA Formal Opinion 507, § II.A, p. 2.

[2] ABA Formal Opinion 507, § II.B, p. 3 (citation omitted.)

[3] ABA Formal Opinion 507, § II.C.1, pp. 4-5 (citation omitted.)  Related, the opinion also concludes that while it might be “natural for lawyers in office sharing arrangements to informally consult one another about their respective client matters, [those] consultations between office sharing lawyers can also trigger unanticipated conflicts of interest.” Id., § II.C.3, p. 6.

[4] ABA Formal Opinion 507, § II.C.2, p. 6 (citation omitted.)

[5] V.R.Pr.C. 1.10(a), cmt. [4].

Arkansas lawyer suspended for 6-months for misconduct while representing a cannabis client.

Today’s story doesn’t surprise me.

It involves one of the first cases I’ve heard of in which a lawyer was sanctioned for misconduct while representing a client in the cannabis industry. 

What doesn’t surprise me is that the misconduct had nothing to do with a lawyer violating federal law or assisting a client to do so.

By way of background, I’ve often cautioned Vermont lawyers against dabbling in cannabis law.  Not out of concern that they might assist cannabis clients to violate federal law.[1]  Rather, because I worry that some lawyers equate “I know a bit about marijuana” with “I’m equipped to provide competent advice to businesses that are participating in a complex and highly regulated industry.”  These businesses, like any other client, are entitled to competent representation.[2] 

They’re also entitled to conflict-free representation.  Indeed, at seminars and in blog posts, I’ve posed this question:

• “Can you represent multiple applicants for the same type of license?  What if the clients agree to waive the conflict?  Then, what if one mentions to you a ‘trick of the trade’ that makes the application ‘more appealing’?”

I’m not aware of this situation arising [yet] in Vermont.  Which gets me back to today’s story.

Two weeks ago, a panel of the Arkansas Committee on Professional Conduct issued this order suspending a lawyer’s law license for 6 months.[3] The suspension followed the panel’s conclusion that the lawyer violated the confidentiality and conflict rules by representing two clients who were each seeking one of a limited number of cultivation licenses.[4]  Here’s what happened.

In November 2016, the company Courageous Ann applied for a license to cultivate medical marijuana in Arkansas.  Courageous Ann retained the firm at which Lawyer worked.  Soon thereafter, Courageous Ann also retained Canna, a consulting firm, to assist with the application process.  Throughout, Canna made documents available to Courageous Ann via Dropbox.  In turn, Courageous Ann provided Dropbox access to Lawyer.

In early July 2017, Lawyer left his firm.  The Arkansas disciplinary decision indicates that while Courageous Ann remained a client of the firm, Lawyer advised the company “that he remained their attorney.”  One of the owners understood that Lawyer continued to represent Courageous Ann in the application process, throughout which Lawyer continued to have access to the files in Dropbox.

In late July 2017, without informing Courageous Ann, Lawyer agreed to represent Delta Cannabis Company (Delta), a competitor of Courageous Ann that was also seeking an Arkansas license to cultivate medical marijuana.

In August 2017, Courageous Ann filed an application for a cultivation license. 

In September 2017, Delta filed an application for a cultivation license. 

In 2018, the Arkansas Medical Marijuana Commission issued five licenses. 

As you might have guessed, Delta received a license, but Courageous Ann did not. 

The application process included ranking the applicants.  According to the disciplinary decision:

• “Shortly after information became public regarding rankings and licenses awarded, Courageous Ann discovered, from information they obtained from many sources, that Delta’s application mirror Courage Ann’s application in several sections.”

A few months later, the Arkansas Democrat-Gazette published Parts of application from firm awarded medical-pot growing license nearly identical to rival group’s material.  The article states:

• “Electronic fingerprints on Delta Medical’s internal documents and company emails — provided by sources — show how the contents of Courageous Ann’s application funneled into Delta Medical’s hands through accounts linked to its previous attorney, [Lawyer].”

The article goes on to highlight the similarities between the two applications.[5]  Then, it reports that:

• “The Democrat-Gazette obtained a copy of the Microsoft Word document that Delta Medical Cannabis used to complete its cultivation license application. The newspaper used the metadata buried in the document file to trace its apparent edit history. The data show that someone using the sign-on of [Lawyer] replaced Courageous Ann’s name and biographical information with the same information for Delta Medical Cannabis Co.”

The article continues:

• “For instance, the Microsoft document data reveal that the person using Lawyer’s sign-on deleted Courageous Ann’s information from the section detailing its business plan and replaced it with Delta Medical Cannabis’ name while keeping the wording roughly the same.”

In the end, the Arkansas disciplinary panel concluded that Lawyer violated Arkansas’s rules on confidentiality[6] and concurrent conflict interests.[7] The 6-month suspension will be followed by 18 months of disciplinary probation.

Again, I’m not surprised.

The case serves as a reminder of what should be obvious: cannabis clients are no different than other clients. 

Does the area of law have its own complexities? 

Yes. 

Do the other rules continue to apply?

Yes.  Just as they would when a lawyer represents a client in any other area of the law.

As always, let’s be careful out there.

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[1] Rule 1.2(d) of the Vermont Rules of Professional Conduct states that a “lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.”  The rule draws no distinction between state and federal law, or between laws that are more vigorously enforced than others.  And, for now, marijuana and THC remain Schedule 1 drugs under the Controlled Substances Act.  However, Comment [14] to Rule 1.2 makes clear that a lawyer does not violate Rule 1.2(d) by advising clients on matters that are legal under Vermont’s regulatory scheme.

[2] Thus, the questions I ask of lawyers who I suspect are interested in dabbling in cannabis law include:

• Do you know the different types of licenses available in Vermont?
• Do you know whether there are any requirements for the buildings in which a licensee locates a business? 
• If your client is a cultivator or manufacturer, does the THC level remain the same throughout the process?  Does it even matter?
• Whether in Vermont or a state to which your client will ship product, do the food laws apply.
• Oh, and speaking of interstate transportation, does your client intend to accept payment by credit card?
• What if your client’s labels or advertisements over or understate a product’s potency? 
• What if your cultivator client wants to trademark a name for a new ‘product?
• What’s your client going to do with revenue (cash) generated from the business?

[3] H/T David Kluft for sharing the order here via LinkedIn.

[4] The panel also concluded that the lawyer committed misconduct by agreeing to pay $10,000 to an expert consultant without the client’s consent.  The money was returned to the client.  Today’s post focuses on the confidentiality and conflict rules, not this failure to communicate with the client.

[5] Despite the similarities, the Commission ranked Delta’s application 5^th and Courageous Ann’s 46^th.  To compare, the Arkansas Democrat-Gazette published the applications here.

[6]  Like Vermont’s, Arkansas’s confidentiality rule prohibits a lawyer from disclosing information relating to the representation of a client without the client’s consent. The panel concluded that Lawyer violated the rule by sharing information related to Courageous Ann’s application with Delta without Courageous Ann’s consent.  Among other things, the panel found that as Delta was preparing its application, one of its constituents sent an internal email advising others associated with Delta that Lawyer had agreed to “provide assistance with [the application] by providing a dispensary summary from an application he has already turned in.”

[7] The panel concluded that Lawyer violated the conflict rule by representing Delta without Courageous Ann’s consent in a matter in which the two were in “direct competition” for a cultivation license.  Again, the Arkansas rule mirrors Vermont’s. Both state that a concurrent conflict exists if “(1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.”

RELATED POSTS

• A 4/20 Update: Considering Cannabis Clients? Competence can be Complicated
• Was that Wrong? Cannabis (In)Competence
• Legal Ethics & Cannabis Clients’ Money

Conflicts of Interest Involving Former Clients

Conflicts lie at the core of many inquiries of bar counsel. They can be difficult to assess.  A particular area of difficulty is whether duties to a former client create a conflict that prohibits representation in a new matter.

Let’s use the following as our baseline:

• Lawyer represented Former Client in Matter 1.  The representation has concluded and there is no doubt that Former Client is, as the name suggests, a former client.
• New Client would like to hire Lawyer in Matter 2.

We begin with V.R.Pr.C. 1.9(a):

• “A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.”

So, the key questions are:

• Is Matter 2 the same as or substantially related to Matter 1?
• If so, are New Client’s interests in Matter 2 materially adverse to Former Client’s?

It’s not always productive to get stuck on the rule’s language. It can be easier to remember that the Supreme Court long ago described the rule as prohibiting lawyers from “switching sides.”[1]

Still, let’s go through the analysis. 

Are the two matters the same or substantially related?

While the answer to the former is often obvious, the answer to the latter frequently isn’t.  It’s critical to remember that the answer doesn’t turn only on the nature of the matters themselves. Rather, we must consider the nature of the information that the lawyer obtained in the first representation. As Comment [3] states:

• “Matters are ‘substantially related’’ for purposes of this rule if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.” (emphasis added).

This scenario arises in many contexts. One is when a lawyer represents a client in a matter in which a former client is a witness for the other side. Often, the lawyer will have received confidential information from the former client that would materially advance the new client’s defense by undermining the former client’s credibility as a witness. Thus, while the two matters might appear on the surface to have nothing to do with each other, under the rule, they might be substantially related.[2]

One last point on the “substantially related” question: if two matters are substantially related, it’s irrelevant that the lawyer doesn’t remember anything about the first.  Knowledge of information as would ordinarily have been disclosed in the course of the representation is presumed and we will not force the former client to disclose it to protect it.[3]

Okay, so let’s assume that the two matters are the same or substantially related.  The next question is whether the new client’s interests are materially adverse to the former’s. 

Material Adversity

Last year, the ABA Standing Committee on Ethics & Professional Responsibility published Formal Opinion 497 – Conflicts Involving Materially Adverse Interests.  I blogged about it here.

Per the opinion, there are 2 situations in which material adversity is clear:

1. Suing, litigating, or negotiating with a former client. I like the Committee’s use of two questions: in litigation, are you on the other side of the “v”? Or, in a transaction, are you sitting on the other side of the table?
2. Attacking your own prior work or legal advice.

Next, the opinion advises that material adversity often, but not always, exists when competent representation will require a lawyer to cross-examine a former or prospective client.[4] 

Finally, the Committee notes that material adversity can exist even in the absence of direct adversity.  For instance, it

• “may exist when the former client is not a party or a witness in the current matter if the former client can identify some specific material legal, financial, or other identifiable concrete detriment that would be caused by the current representation. However, neither generalized financial harm nor a claimed detriment that is not accompanied by demonstrable and material harm or risk of such harm to the former or prospective client’s interests suffices.”

No Conflict? Continue to Exercise Caution,

Let’s assume that the new matter is not the same as or substantially related to the former matter, and the new client’s interest are not materially adverse to the former client’s interests.  In my judgment, that’s not the end of the lawyer’s analysis.  To me, competent representation includes asking “self, do client and I want to deal with this?”  That is, conflict or not, people are (naturally) upset to find their lawyer on the other side of the v or the table.  A motion to disqualify will cost the new client time and money.  Moreover, the former client might file a disciplinary complaint.  Even if it is dismissed, it will weigh on the lawyer while pending.  Sometimes close enough is, in fact, close enough.

In closing, I remain of the opinion that when potential conflicts arise, it’s important to trust your gut. That said, I hope that today’s post provides a bit more insight into the rules.

As always, let’s be careful out there.

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[1] The opinion is here.  See also, this blog post, this video, and this update to the video.

[2] Even if they aren’t substantially related, the lawyer might still have a conflict.  Rule 1.9(c) prohibits the lawyer from revealing information related to the representation of the former client, as well as from using information related to the representation to the former client’s disadvantage. If complying with that duty creates of significant risk of materially limiting the representation of the new client, the lawyer has a conflict under Rule 1.7(a)(2). 

[3] See this blog post and this video. 

[4] Here, don’t spend too long trying to convince yourself “but the conviction, testimony, or conduct relevant to my former representation is public record.”  That is NOT the standard.  As regular readers know, the fact that information relating to the representation of a former client is “public record” doesn’t necessarily mean that it’s “generally known.”  Says who?  This blogger.

Back to Basics: The 7Cs never go out of style.

I meant to do this last week but forgot.  At least that’s my initial argument.  A fair and reasonable examination of the evidence might reveal that “I didn’t feel like blogging” is more accurate than “I forgot.”

Anyhow, it’s back to school season.  Per usual, I’m marking the occasion with a post that, really, is more “back to the basics” than “back to school.” And, when it comes the basics of legal ethics and professional responsibility, some things never go out of style.[1] Those things being the 7 Cs:

• Competence
• Communication
• Confidentiality
• Conflicts
• Candor
• Commingling
• Civility.

Here’s a 15-minute video in which I share thoughts on each of the 7 Cs of legal ethics & professional responsibility.

Welcome back!

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[1] Maybe my goal for the year should be to include a Taylor Swift reference in every blog post. Don’t worry, if I do, I promise I won’t include footnotes highlighting each reference.

A quick recap of the 7 Cs of Legal Ethics

Welcome to Friday!

I’m taking a week off from the quiz. Still, I don’t want to leave anyone without their weekly refresher in legal ethics & professional responsibility!  So, motivated by last night’s huge win by the Cs, I’m sharing a video in which I provide a brief (9:39) overview of the 7 Cs of Legal Ethics.

• Competence
• Communication
• Confidentiality
• Conflicts
• Candor
• Commingling
• Civility

Enjoy the weekend!

Important Update on “Don’t Switch Sides” and Analyzing Former Client Conflicts.

Last week I posted a video in which I urged lawyers not to get lost in the language of V.R.Pr.C. 1.9(a).  Rather, when analyzing whether a conflict of interest exists between a prospective client and a former client, remember a simple concept:  don’t switch sides.

In both the video and a presentation that I did earlier this week at Vermont Law School, I argued that the idea “don’t switch sides” is, and long has been, the rule.

For example, with emphasis added, here’s the final sentence of Comment [2] to the current version of Rule 1.9:

• “The underlying question is whether the lawyer was so involved in the matter that the subsequent representation can be justly regarded as a changing of sides in the matter in question.”

And, stated more eloquently than “don’t switch sides,” here’s Resolution #8 of David Hoffman’s 50 Resolutions for Professional Deportment. Issued in 1836, Hoffman’s resolutions are among the earliest evidence of rules applied to lawyers’ conduct.

• “It is a poor apology for being found on the opposite side that the present cause is but the ghost of the former cause.”

Indeed, it is!

Anyhow, in the video, I used something that had happened at that day’s basketball practice to explain why I think Rule 1.9 can be summarized as “don’t switch sides.”  I forgot to include an important component of the analysis.

It’s not uncommon for lawyers to ask: “Mike, is it okay to switch sides if I don’t remember anything about the former client or their matter?”

Short answer: no.  If the new matter is substantially related to the prior matter, we will presume that the lawyer received confidential information while representing the former client and we will not put the former client to the “Hobson’s Choice” of having to disclose confidences to protect them.

For a bit more, here’s a video update.