“Can a lawyer sue the former client of the lawyer’s colleague?” Paradox asked.
“That depends,” Ethox responded. “What’s happening?”
“Wife has retained us to handle her divorce,” Paradox responded. “Nemesis is representing Husband.
“The case started out friendly, but things have become contentious,” Paradox continued. “Then last week we learned that a new lawyer has joined Nemesis’s firm. The new lawyer previously represented Wife in a business dispute a few years ago.
“So,” Paradox hesitated, “Can Nemesis be adverse to Wife in the divorce when Nemesis’s partner previously represented Wife in a business dispute?”
“So what you want to know is whether Nemesis’s colleague has a conflict and whether that conflict would spread to Nemesis. After all, Nemesis is now the one handling the divorce for Husband, not the colleague.”
“Precisely,” Paradox concurred. “But I thought that was easy—a colleague’s conflict is also my conflict.”
“You’re correct, at least in the normal situation,” Ethox smiled. “Under ABA Model Rule of Professional Conduct 1.10(a), a conflict under Rule 1.7 or 1.9 for one lawyer in a firm would disqualify all other lawyers in the firm, unless the conflict is due to a ‘personal interest’ of the conflicted lawyer.
“Rule 1.10 offers little guidance on what a ‘personal interest’ is. I consider it something like a personal financial interest or relationship that other lawyers in the firm wouldn’t share,” Ethox explained. “Where the conflict arises from a regular client-lawyer relationship, it almost certainly would not count as a ‘personal interest’ conflict—and thus would impute or spread to all lawyers in the firm.”
“The business dispute was heavily litigated,” Paradox interceded.
“Well, that sounds like the type of conflict that would impute to other lawyers in the firm,” Ethox agreed.
“So Nemesis would be disqualified?” Paradox asked.
“Not necessarily,” Ethox explained. “You said that Nemesis’s colleague had ‘previously’ represented Wife in the business dispute. Has the business dispute ended?”
“I think so,” Paradox answered. “But why would that matter?”
“Well, under Rule 1.7(a)(1), a lawyer cannot be directly adverse to a current client on any matter, even if the two matters are totally unrelated.” Ethox elaborated: “Clearly, Nemesis’s client Husband is directly adverse to Wife. They are opposing parties in a divorce.”
“And they now hate each other. Definite adversity, ” Paradox agreed.
“So, since the conflict would impute through Nemesis’s firm under Rule 1.10,” Ethox completed the thought, “neither Nemesis nor Nemesis’s colleague could represent a party directly adverse to Wife in the divorce if Wife is a current client.”
Ethox then offered the counterpoint: “If Wife is not a current client, however, Nemesis’s representation of Husband would be analyzed under Rule 1.9. Under Rule 1.9, a lawyer may represent a party whose interests are materially adverse to those of a former client, as long as the two matters are not the same or substantially related.”
“I suspect Wife is a former client,” Paradox offered. “So how would I decide whether the divorce and the business dispute are ‘substantially related’?”
“Different courts use different tests,” Ethox responded. “But the two key questions are set forth in the comment to Rule 1.9: First, do the two matters involve the same transaction or legal dispute? Second, is there a substantial risk confidential information obtained in the prior representation—here, the business dispute—would materially advance the interests of the new client in the new matter—here, Husband’s interest in the divorce?”
“I don’t know much about the business dispute,” Paradox admitted.
“Why don’t you gather some more facts,” Ethox suggested.
Paradox had already disappeared, probably investigating the conflict further.