Attorney Ethics Counsel

May 31, 2022

Using “Conflict Counsel” In Vetting Lateral Transitions

With the ever-increasing mobility of lawyers, accurately assessing conflicts of interest in any lateral transition is more important than ever. The consequences of getting it wrong are significant, ranging from potential disqualification and client liability issues to discipline.

Law firms are generally aware of the need to clear conflicts in advance of a lawyer’s transition and of a transitioning lawyer’s duty of confidentiality to his or her current and former clients. But what happens when a preliminary exchange of limited information regarding client names and matters “inconclusively” establishes only the “possibility” of a potential conflict?

A law firm in this situation may have invested significant time and resources in considering or courting a lateral hire, and not want to forego the potential hire if there is, in fact, no conflict. Similarly, a conflict may exist, but it may be one that can be dealt with through an ethical wall or screen, and thus not preclude the transition.

California law surrounding conflicts of interest lends itself to such uncertainties since a conflict can exist without the “same matter” being involved. Former client conflicts, for example, can exist if there is a “substantial relationship” between a former client matter of the transitioning lawyer and a client matter of the new firm. Whether there is a substantial relationship between two matters is a fact-specific inquiry. The viability of an ethical wall can also be highly factual. Under California’s Rule 1.10 involving “imputation,” for example, whether a transitioning lawyer can be screened from a former client conflict related to her old firm may depend on whether the lawyer “substantially participated” in the former matter. Rule 1.10(a)(2)(i).

Firms must tread carefully when faced with these types of situations. Additional information beyond the simple exchange of client and matter names may be warranted and may indeed reveal the absence of any conflict or the ability to use an ethical screen to cure a conflict. At the same time, the “potential” for a conflict may exist and, therefore, an increased risk that further information might confirm the existence of a real conflict or the inability to cure a conflict. There is also an increased risk that further disclosure or exchange of information, if not conducted properly, might violate the transitioning lawyer’s duty of confidentiality to the former client and “taint” the new firm with relevant confidential information.

Firms in these situations understandably want to try to minimize the risk that, in the process of vetting a possible conflict or determining whether an ethical wall can be used, they become privy to disqualifying information or create a potential argument (even if not meritorious) that another party might utilize to try and suggest they have obtained such information.

When faced with the “possibility” or “uncertainty” of a transition-related conflict, a firm should consider retaining “conflict counsel” to assist in any further assessment of whether an actual conflict exists and/or whether an ethical screen can be appropriately implemented. Conflicts counsel cannot invade the transitioning lawyer’s duty of confidentiality to a former client. But counsel with experience in conflict analysis can ask questions of the transitioning lawyer that do not require disclosure of confidential information that can help facilitate a more accurate determination of whether an actual conflict exists or whether an ethical screen can be used. That discourse can take place between conflict counsel and the transitioning lawyer without the direct involvement of the new law firm. This can help decrease the risk that the new firm is actually exposed to confidential information and weaken any tactical effort to try and disqualify the new firm based on the exchange of information during the vetting process.

Andrew Dilworth
O’Rielly & Roche LLP

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