March/April 2021

Ethics: The Least-Known Ethics Rule

Lucian T. Pera

It’s not that often that ethics rules change dramatically. But let’s talk about one change that hit the ABA Model Rules in 2002 and the majority of jurisdictions soon after.

In the last 19 years, about 46 jurisdictions have adopted a version. But many lawyers know nothing about it. And it might be the most useful ethics rule you’ve never heard of.

The Classic Case

You practice divorce law.

Wife comes to see you about hiring you to file for divorce. You talk. You empathize. You quote a fee. You don’t get hired. (Or you decide not to take her case on. Whatever.)

Time passes.

Husband comes to see you about defending the divorce action Wife just filed. You talk. You empathize. You quote a fee. He wants to hire you. Can you take his side of the case?

The Old Rule

Before Model Rule 1.18 was adopted by the ABA in 2002, the answer was generally simple: If you had received any confidential information from Wife, you could not represent Husband. With the broad Model Rules definition of “confidential” information, it would have been hard to not get some confidential information from Wife.

Further, if you had gotten confidential information and were personally disqualified, no lawyer who practiced with you could have taken Husband’s defense either.

Model Rule 1.18 changed that result.

The "New" Rule

The Rule was an attempt to set out in one place for the first time all our duties to “prospective” clients—defined in section (a) as those people who attempt to, but do not, become our clients.

Do we owe a prospective client a duty of confidentiality? Yes, but only one as broad as the duty we owe a former client.

But wait, there’s much more.

New Rule for The Classic Case

Under Rule 1.18, you can represent Husband if you didn’t learn anything from Wife that was both confidential and “significantly harmful” to Wife if used against her. Now that’s a very different result.

What’s “significantly harmful”? New ABA Formal Opinion 492 helps explain. For that and other reasons, it’s a great introduction to a very helpful rule.

What's "Significantly Harmful"?

The standard focuses on the potential use of the information shared with the lawyer.

“Significantly harmful” information might include a prospective client’s views on settlement, including amount and timing. It might include sensitive personal information in a divorce case, premature possession of the prospective client’s financial information or possible terms and structure of a proposed bid by one corporation to acquire another.

Would Wife’s admission of an affair (or details of one) not known to Husband fit into that category and be significantly harmful and thus disqualifying? Probably so. What about basic financial information that procedural rules require to be disclosed to Husband very soon after filing for divorce? Maybe not, if quick disclosure is inevitable.

As the ABA opinion noted, quoting a New Jersey court, the question is “exquisitely fact-sensitive and -specific.”

The opinion also notes that it helps the lawyer’s later argument that the information was not significantly harmful if the lawyer cautioned the prospective client not to share details, or if the prospective client and the lawyer agree that the information provided is not confidential. That latter approach is sometimes (wisely) taken in “beauty contests” where the client is openly shopping for the best lawyer.

Still, if you did get significantly harmful information from Wife, you are personally disqualified from representing Husband.

But what about your firm? Is it disqualified? Not necessarily.

The Firm Might Stay In

If you did get significantly harmful information from Wife, another novelty in Rule 1.18 is that it authorizes other lawyers in your firm to accept the Husband’s side in the divorce on several conditions. (Of course, consent from Wife and Husband would still allow your colleagues to represent Husband.)

First, you must be screened from all information about Husband’s case and from sharing any information obtained from Wife.

Second, notice must be promptly given to Wife of the firm’s representation of Husband.

The Danger of Hearing Too Much

Third, and sometimes most difficult, you must not have “heard too much” from Wife. More precisely, you must have taken “reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client.”

How much is too much?

Clearly, this provision does not require that a lawyer get only enough information to run conflicts and have no other conversation with the prospective client. (Though that’s the correct first step to avoid conflicts.) After all, in the language of the Rule itself, “to determine whether to represent the prospective client,” a lawyer needs to know enough about the case—for example, to quote a fee and to find out if she has the necessary experience to handle it. Often, that’s not a five-minute conversation; sometimes, it takes five hours.

Courts have used this requirement to disqualify firms whose first-consulted lawyer spent hours learning everything she could about Wife’s case, seemingly well beyond what might be needed to decide whether to take the case.

The recent ABA Formal Opinion provides the best current summary of some of the treatment of this issue by the leading cases since 2002.

Morals For The Practitioner

Any prudent lawyer can learn a lot from the Rule. That’s especially true for a lawyer with a practice where there’s a decent likelihood that she or her partners may be approached by multiple players in one case or deal. (Consider a small-town practitioner or a lawyer with a highly specialized practice.)

The key point: Keep your powder dry. Discipline yourself to ease into a representation in stages. Get enough information to run conflicts. Pause and run conflicts. Then get enough information to figure out if you can—and want to—take the matter. But slow-walk the entire data-dump until the client is fully signed up.

You and your partners may later be glad you did when Husband comes calling.

Sidebar

A Great Introduction to ABA Model Rule of Professional Conduct 1.18:

ABA Formal Opinion 492, Obligations to Prospective Clients: Confidentiality, Conflicts and “Significantly Harmful” Information (June 9, 2020), available here.

Lucian T. Pera

Partner

Lucian T. Pera is a partner in the Memphis, Tennessee, office of Adams and Reese LLP. He counsels lawyers, law firms, clients and those who do business with lawyers and law firms on ethics and professional responsibility issues. He is a past president of the Tennessee Bar Association and a past ABA treasurer. Lucian.Pera@arlaw.com