Prospective Clients and the Conflicts They Bring

//Prospective Clients and the Conflicts They Bring

Prospective Clients and the Conflicts They Bring

Consider the following. A lawyer was approached by a family who owned and operated a daycare center. They needed a lawyer because their son was facing criminal charges alleging he inappropriately touched several of the children at the center. Although this lawyer ultimately declined the matter, during the initial consultation he did learn what their defense strategy would be. In part, they claimed their son never had an opportunity to be alone with any of the children. Now let’s fast forward eighteen months. This same lawyer has just received a call from another prospective client, who happens to be the parent of one of the kids inappropriately touched. This individual is wanting to sue the daycare center. Unsure of his options, this lawyer sits down with his two partners to discuss the situation. During the discussion he shares the brief history of his limited involvement thus far, to include the information he had learned about the daycare center owner’s defense strategy. Can this lawyer accept the civil matter?

It’s tempting to immediately say “of course he can” based upon a rationalization that an attorney-client relationship was never created with the daycare center. Unfortunately, such a decision would contravene ABA Model Rule 1.18 Duties to Prospective Client, which states in part that a lawyer “shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter.” Thus, the lawyer in the above hypo has a disqualifying conflict. He learned information from the owners of the daycare that could be significantly harmful to them in the civil suit, which is a substantially related matter.

That said, do any options remain given the conflict? Possibly. Rule 1.18(d) sets forth two. This conflict is one that is waivable if the owners of the daycare and the parent wanting to bring the civil suit both give informed consent in writing. Realistically, however, I suspect actually obtaining consent from the owners of the daycare center to waive a conflict like this would be problematic at best.

The more interesting question is this. Could one of the other partners in the firm take the civil matter on? This is the second option set forth under Rule 1.18(d). It might be possible if the lawyer in our hypo took reasonable steps during the initial consultation with the owners of the daycare center to avoid learning more disqualifying information than was necessary in order for him to determine if he wanted to take the representation on. Assuming that was the case, in a perfect world another partner could take the civil matter on if the disqualified lawyer is timely screened from any participation in the matter, is apportioned no part of the fee, and written notice is promptly given to the owners of the daycare center.

Unfortunately, in this situation the perfect world outcome isn’t possible because all of the attorneys at this firm are disqualified. Remember in the hypo we learned that as these attorneys tried to work the problem, the prospective client confidence was shared with all. That’s a bell that can’t be unrung.

There are two important takeaways here, at least for me. First, if a prospective client shares confidential information during an initial consultation, those confidences must be kept. Loyalty is now in play even in the absence of an attorney-client relationship. Second, although the intake attorney is now tainted, the firm needn’t be. For example, establishing a firm-wide policy that mandates the timely entry of relevant information from these types of declined matters into the firm’s conflict database (to include notice that the intake attorney is privy to disqualifying information) coupled with a policy that any attorney learning a confidence from a prospective client is to take whatever steps are necessary to make certain no one else at the firm has access to that information (which also means mum’s the word) might just keep future options in play.

Since 1998, Mark Bassingthwaighte, Esq. has been a Risk Manager with ALPS, an attorney’s professional liability insurance carrier. In his tenure with the company, Mr. Bassingthwaighte has conducted over 1200 law firm risk management assessment visits, presented over 400 continuing legal education seminars throughout the United States, and written extensively on risk management, ethics, and technology. Mr. Bassingthwaighte is a member of the State Bar of Montana as well as the American Bar Association where he currently sits on the ABA Center for Professional Responsibility’s Conference Planning Committee. He received his J.D. from Drake University Law School.