March 29, 2013 Articles

Lawyer Elevator Talk and Conflicts of Interest

When does a consulting lawyer's informal discussions with another lawyer lead to ethical violations and/or disqualification?

By Stephen T. LaBriola

When does a consulting lawyer’s informal discussions with another lawyer, not associated in the matter, lead to ethical violations and/or disqualification?

The natural focus of that question would seem to be on the consulting lawyer and not on the consulted lawyer. Recent case law and an earlier ABA Commission on Ethics & Professional Responsibility formal opinion, however, show that there is risk to both counsel, including the consulted lawyer.

In February 2013, the Colorado Supreme Court addressed when such consultations are impliedly authorized to assist in carrying out the representation and when it creates a conflict of interest resulting in disqualification. In In Re Liebnow v. Boston Enterprises, ___ P.3d ___, 2013 WL 453912 (Colo. 2013), the court affirmed the trial court’s order disqualifying the plaintiff’s motion for pro hac vice admission of out-of-state counsel, where defense counsel had previously consulted out-of-state counsel at the same firm on the same case.

The decision is instructive beyond the state of Colorado for a number of reasons. (The decision must be read with emphasis on the standard of review under which the court considered the dispute: the abuse of discretion standard. Had the trial court ruled the other way and held that the consultations did not rise to the level necessary to disqualify the firm from representing the plaintiff, it is unclear whether the court would have reversed the trial court’s decision and held that the trial court abused its discretion.) First, while the Colorado Supreme Court interprets Rule 1.7, the rule is identical to ABA Model Rule of Professional Conduct 1.7. Second, the lawyer/firm subject to potential disqualification was the recipient of the objecting lawyer’s inquiry. Third, and as a modifier to the preceding sentence, there was no evidence that the attorney initiating the consultation did so for the purpose of disqualifying the other lawyer or his firm from later representing the adverse party. Fourth, there is a stinging dissent. It boldly declares that the majority decision deprives the client (a child) of her counsel of choice and that it “needlessly chills the casual consultations among attorneys that are so vital to the profession.” The above points are addressed in order.

ABA Model Rule of Professional Conduct 1.7
With emphasis added to highlight the language at issue in the Liebnow decision, it reads:

Rule 1.7: Conflict of Interest: Current Clients

  1. Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest 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.

  2. Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
    1. the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
    2. the representation is not prohibited by law;
    3. the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
    4. each affected client gives informed consent, confirmed in writing.

The salient facts are that defense counsel in Colorado was defending a case involving a child who allegedly became ill from E. coli after eating salad at the defendant restaurant in Colorado. Defense counsel called a Seattle lawyer in a small firm that specialized in food-borne-illness cases. The two lawyers had been on the opposite sides of a previous Colorado case and were on cordial terms. Before discussing the case, defense counsel first determined that neither the Seattle lawyer nor his firm was already involved in the instant lawsuit. Over the next few days, they had one telephone conversation and exchanged several emails. Defense counsel did not tell the Seattle lawyer to keep the information confidential. No evidence suggested that defense counsel made the contact to conflict the Seattle lawyer or his firm. During these consultations, three aspects of the instant case were discussed: (1) defense counsel’s planned theory of the case; (2) Seattle counsel’s advice on a trial expert, and (3) Seattle counsel’s recommendation to add a lettuce distributor as a nonparty defendant. Several months later, plaintiff’s counsel contacted a different attorney within the Seattle firm. No conflict was recognized, and the Seattle firm agreed to join plaintiff’s counsel and a motion for pro hac vice was filed. Defense counsel objected. The trial court denied the plaintiff’s motion.

Because Colorado RPC 1.7 is identical to ABA Model Rule of Professional Conduct 1.7, the Colorado Supreme Court made reference to the ABA model rule and to ABA Formal Opinion 98-411 (1998), which analyzed Model Rule of Professional Conduct 1.7, and found the ABA opinion persuasive and applicable to the case at hand.

Lawyer/Firm Subject to Disqualification Was Recipient of  Inquiry
The plaintiffs argued that Rule 1.7 did not apply because there was no attorney-client relationship between the Seattle lawyer and the defendant. Citing to the language, “a third person,” of Rule 1.7(a)(2) and, in part, to Formal Op. 98-411, the court disagreed and noted that a lawyer representing a client is impliedly authorized to make disclosures to another lawyer about a client when appropriate in carrying out the representation and that the lawyer who agrees to consult “could incur a responsibility to protect that information’s confidentiality, which could limit that lawyer’s ability to represent a current or future client.” Liebnow at n. 5.

One might ask, is not the focus on the wrong attorney? The one with the attorney-client relationship initiates the “shout out” for help. The attorney with no attorney-client relationship, fielding the questions and trying to be a good “brother-in-the-law” is the one who is punished. Are there are no consequences to the attorney with the attorney-client relationship?

This latter question was not raised or addressed in Liebnow. The conflict-of-interest issue arose in the context of an objection to a motion for pro hac vice admission by the Seattle firm. There was no motion to disqualify the defense attorney. Additionally, the evidence of record revealed no indication that the defense attorney initiating the consultation did so with the intent of conflicting the other counsel/firm. Dicta, therefore, and the text of Rule 1.7 itself, indicate that the consulting lawyer holding the attorney-client privilege must exercise caution in making disclosures and consulting non-party attorneys for advice.

Formal Op. 98-411 provides guidance to attorneys on both sides of the consultation. It recommends the use of hypothetical or anonymous consultations where possible. The consulting lawyer is not to disclose information that is protected by the attorney-client privilege or that otherwise would prejudice the client. While no client-lawyer relationship arises between the client and the consulted lawyer, the consulted lawyer may become obligated to protect the confidentiality of the information disclosed through express or implied agreement or to the extent such obligation is imposed by law. Such an obligation may limit the consulted lawyer and his or her firm from undertaking or continuing representation of their own clients if the representation will be materially limited by his or her duty to protect the consulting lawyer’s client information. Finally, it recommends that the consulted lawyer ask the consulting lawyer to waive conflicts in the event the consulted lawyer later is asked to represent an adverse party in the same matter. Alternatively, the formal opinion suggests that the consulted lawyer ask the consulting lawyer’s client to agree not to seek disqualification of other members of the consulted lawyer’s firm.

Making Contact for the Purpose of Conflicting Potential Counsel
The Liebnow court noted that there was no evidence that the consulting lawyer contacted the consulted lawyer with bad intent. Had there been such evidence, it appears almost a certainty that the court would not have countenanced such behavior and would have admitted the consulted lawyer pro hac vice. In a footnote, the court wrote, “Consulting with a lawyer likely to represent an adverse party for the deliberate purpose of disqualifying a potential adversary would violate the Rules of Professional Conduct, which prohibit conduct involving dishonesty and fraud.” Id. at n. 7. ABA Model Rule 8.4(c) and (d) prohibit conduct involving dishonesty, fraud, deceit, or misrepresentation, and prohibit conduct prejudicial to the administration of justice.

The Liebnow Dissent
Two justices dissented in Liebnow. The dissent contends that the majority deprived the plaintiff, “a child,” of her counsel of choice and, “moving forward, needlessly chills the casual consultations among attorneys that are so vital to the profession.” Citing to a number of earlier decisions, the dissent stresses the precedent the court had previously placed on a client’s “fundamental tenet” in having counsel of choice and contends that the majority decision gives virtually no weight to this right.

As to the “significant prejudice” language of Rule 1.7, the dissent spends several pages discussing the nature of information disclosed during the consultations and provides avenues for mitigation of the impact of such disclosures during a future trial. In the view of the dissent, the majority vastly overstated the importance of the advice and involvement of the consulted lawyer. It concludes with the broad statement: “[a]fter today’s opinion these sorts of conversations, so vital to the profession, simply will not happen.”

While the nature of future of consultations among lawyers in Colorado will be tested over time, counsel are urged to re-read ABA Formal Op. 98-411, specifically focusing on the advice provided regarding the simple steps counsel engaging in informal consultations should take to avoid the problems that arose in Liebnow. An abbreviated checklist includes:

  1. The consultation should be anonymous or hypothetical.
  2. If actual client information must be revealed, it should be limited to that which is essential so as not to waive the attorney-client privilege.
  3. The consulting lawyer should not consult without first ascertaining that there is no conflict and that the matter is not substantially related with a matter in conflict.
  4. The consulting lawyer should inquire up front whether the consulting lawyer knows of a potential conflict with the consulting lawyer or anyone in the consulting lawyer’s firm.
  5. The consulted lawyer should inquire up front whether any information should be considered confidential.
  6. The consulted lawyer should consider asking for a waiver by the consulting lawyer’s client of any duty of confidentiality or conflict of interest relating to the consultation.
  7. The consulted lawyer should consider advance agreement with the consulting lawyer that, in the case of a conflict of interest, the consulted lawyer’s firm will not be disqualified if the consulted lawyer “screens” himself or herself from any participation in the adverse matter.

Had the above steps been taken between counsel in the Liebnow matter, it is doubtful there would have been a dispute over disqualification. This conclusion is not to be interpreted to downplay the caution lawyers should maintain when engaging in informal consultations, but it is to downplay the “sky is falling” prediction of the dissent. Attorneys should not be discouraged from engaging in informal consultations in light of the Liebnow decision. Rather, they should take the common-sense precautions set forth in ABA Formal Op. 98-411 and continue to advance the quality of legal practice among lawyers of the bar.

Keywords: litigation, ethics, professionalism, Liebnow, Rule 1.7, Model Rules of Professional Conduct

Stephen T. LaBriola is a partner with Fellows LaBriola LLP in Atlanta, Georgia.

Copyright © 2013, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).