The Risk Tip
An unstuffy miscellany of risk and ethics issues of questionable interest to lawyers, risk managers, and other kindred souls who spend too much time on the internet.
Category: Rule 1.9
DQs in the News
Posted on ​​December 6, 2013	By John Koski
Categories:	Rule 1.9
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"Many work from sun to sun, but a lawyer's work is never done," so reads the needlepoint on a pillow somwhere. After the sun sets on an attorney-client relationship, a lawyer's duties continue thereafter. Confidences must be maintained, for example. However, the duties owed to a former client are not unlimited. Under the model rule and its local variants, lawyers can undertake new matters adverse to a former client, so long as the new engagement is not substantially related to firm's prior representation.
In a spate of recent decisions, well known firms have been on the receiving end of disqualification motions alleging failure to obey those duties:
One well known firm was savaged by a district judge who concluded that the firm "either failed to undertake an appropriate investigation despite its representations to the contrary, or did so in the most cavalier manner, stringing [its former client] along for weeks, and causing its former client to incur significant expense in trying to secure [the Firm's] acknowledgement of what should have been obvious." The firm was ordered to pay the other side's attorneys' fees associated with the effort.
An appellate court affirmed affirmed another law firm's disqualification in a matter adverse to its former client, even though the conflict was not raised "15 months after the admission of [the firm's] attorneys, after production of several million pages of documents and more than 50 depositions, and shortly before the discovery deadline."
An individual sought to disqualify a law firm, even though the alleged formal client lacked any "formal agreement, payment of attorneys' fees, or conversations in which either party made explicit statements about the nature of the alleged relationship." The court denied the motion, but did so "without prejudice," expressly allowing the individual to raise the argument after additional discovery, finding "[i]t is not inconceivable that discovery will provide defendants with evidence that would establish the existence of a prior representation."
A client who retained a firm to advise her about a failed business venture sought to preclude the firm from later representing her partnership in a discrimination claim. In a split decision, the Sixth Circuit disqualified the lawyers without examining the content of any confidential information that was actually disclosed, and instead said that disqualification was appropriate if there was "a substantial risk that confidential information as would normally or typically have been obtained" by the firm.
The decisions are quite interesting. They are factually rich, the questions quite close, and some of the analysis open to criticism. We will refrain opining whether these courts got the issues "right" and will not predict ultimate outcome, as some of these decisions may be the subject of further review and appeal.
For now, though, two immediate lessons. First, there's a reason why a good conflict check examines not just current matters but also past representations. Before undertaking an engagement, lawyers need to be clear they can proceed. Second, where a conflict claim is made, if it hasn't done so already, the lawyer then is clearly "under an obligation to investigate the facts and the law" — and should react promptly. For example, while the firm in the first case started the investigation immediately, conducted it within a few weeks, and agreed to voluntarily withdraw at the end, all of this took far too long in the eyes of the district judge, who found that conduct sanction-worthy.
Just another reason why, in the event of ethical issues, questions, and challenges, you should reach out to your ethics gurus to get counsel and direction. Time is of the essence.
John Koski Phone: +1 312 876 3161 john.koski@dentons.com
Edward Reich Phone: +1 212 768 6989 edward.reich@dentons.com
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