Jan. 17, 2018 – A new associate can bring in conflicts with current clients of the associate's new firm. Can those conflicts be undone once that associate is fired from the firm?
Question
A law firm hires a new associate who, at his previous firm, did substantial work for a particular client. The law firm represents clients who are suing the associate’s former client on different, but related, matters.
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Because of the new associate’s previous experience, the law firm assigns the associate to work on matters against his former client. When the firm representing this client learns of the associate’s position at his new law firm, they file disqualification motions.
After the trial court grants the disqualification, the law firm fires the new associate and now argues that it no longer has a conflict.
May the law firm stay on the case?
Answer
The question is a simplified version of the facts of a Florida case, Canta v Phillips Morris1.
A Florida law firm was representing the plaintiffs in one of a series of tobacco liability cases against Phillip Morris. While at his previous law firm, the associate billed over 1,500 hours on matters defending Phillip Morris, including 365 hours on closely related matters.
While the associate claimed that he informed the firm that he had done substantial work representing Phillip Morris, the principal of his new firm claimed that he had no knowledge that the associate had ever represented Phillip Morris in the past. Once the law firms representing Phillip Morris became aware that the associate was now representing the plaintiffs in this matter, they moved to disqualify the firm on the grounds that the associate’s conflict was imputed to the entire firm.
Nine months after being disqualified in one case and four months after an appellate court affirmed a disqualification order in another case, the law firm fired the associate.
Three days later, the firm filed a motion asking for reconsideration of the disqualification orders and citing Florida’s Rule 1.10(c), which provides2:
(c) Representing Interests Adverse to Clients of Formerly Associated Lawyer. When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer unless:
(1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and
(2) any lawyer remaining in the firm has information protected by rules 4-1.6 and 4-1.9(b) and (c) that is material to the matter.
Thus, the firm was arguing that it could remove the imputation of the associate’s conflict by disassociating the source of the conflict from the firm.
Unsurprisingly, the Florida Court of Appeals did not buy that argument:
Not only did the Ferraro Firm fail to initiate an inquiry and a screening process when Lima joined the firm in 2015, there is no indication that the firm removed Lima from work on Engle-progeny cases for a year after PM detailed the kinds of client confidences Lima's work had included before he switched sides. The preamble states that, "In order to be effective, screening measures must be implemented as soon as practicable after a lawyer or law firm knows or reasonably should know that there is a need for screening."
Neither Rule 4-1.10(c) nor the comments to the Rule directly address the firm's ability to continue in a matter "representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer" after the formerly associated lawyer has been terminated precisely because his presence resulted in disqualification in other "substantially related" matters. "Unimputing" a conflict seems as implausible as unringing a bell, unscrambling an omelette, or pushing toothpaste back into the tube.
As the case makes clear, the conflict bell cannot be unrung, which highlights the importance of effective conflicts checking systems and timely and adequate screening measures, when appropriate.
In Case You Missed It: Read Past Ethical Dilemmas
Ethical Dilemmas appears monthly in InsideTrack. Check out these topics from recent issues:
Lawyer Who Swaps Defendant with Look-alike Found in Contempt, Dec. 20, 2017
A defense lawyer successfully tests the ability of a witness to identify a defendant by using a substitute that looks like the defendant. But what were the consequences for the lawyer?
Can I Donate Old Client Files of Historical Significance? Nov. 15, 2017
A lawyer's obligation of client confidentiality has no end, according to a recent ethics opinion. Wisconsin's ethics rules – and those of other states – agree that a lawyer may not voluntarily give closed files of historical significance to a historical society, university, or any third party.
Endnotes
1 2017 BL 462444, Fla. Dist. Ct. App., 3d Dist., No. 3D17-1959, Dec. 27, 2017.
2 Florida’s Rule is substantively identical to Wisconsin’s SCR 20:1.10(b).
