Wisconsin Lawyer: Ethics: Knowing How Company “Thinks” May Pose Conflict for Former In-House Counsel:

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    Ethics: Knowing How Company “Thinks” May Pose Conflict for Former In-House Counsel

    The depth and breadth of a lawyer’s knowledge about the legal decision-making processes of a former employer might bar the lawyer from later bringing suit, on a client’s behalf, against the company.

    Dean R. Dietrich

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    I represent an insurance company that is being sued by a former in-house attorney for the company. Isn’t that a conflict of interest?


    Determining whether a conflict of interest exists is a very fact-based analysis. Much depends on the nature of the claim against the insurance company and the role that the former in-house counsel served with the company. Your question does, however, raise the general issue of the playbook conflict of interest.

    A “playbook conflict of interest” arises when a lawyer has a relationship with an individual or entity and learns information about how the individual or entity makes decisions in a legal context. That information (often called playbook information) is then used by the lawyer to the advantage of his or her new client in a claim against the individual or entity. Wisconsin does not have a specific court decision on the playbook conflict of interest, but the concept is well recognized.

    Dean R. Dietrichcom ddietrich ruderware Dean R. Dietrich, Marquette 1977, of Ruder Ware, Wausau, is past chair of the State Bar Professional Ethics Committee.

    "A 'playbook conflict of interest' arises when a lawyer has a relationship with individuals or entities and learns information about how they make decisions in a legal context."

    A recent California Court of Appeals case, however, provided some clarifying information about the playbook conflict. In Khani v. Ford Motor Co., No. B239611 (Cal. Ct. App. April 25, 2013), the court of appeals held that a lawyer who previously defended a car manufacturer against lemon law claims and worked with the manufacturer’s corporate counsel is not automatically disqualified from representing a plaintiff in a lemon law suit against the manufacturer. The court questioned whether the pending case was substantially related to the prior cases for which the attorney provided representation to the manufacturer.

    The court of appeals concluded that the trial court failed to fully analyze both the legal issues and the factual issues involved in the new representation to determine whether the factual issues were similar to the types of cases the lawyer previously handled for the manufacturer.

    The court of appeals also found that the lower court needed to make a specific investigation and conclusion concerning the lawyer’s prior representation of the manufacturer and the knowledge and understanding of playbook information he thereby gained. That is, the trial court must determine whether the lawyer, when representing the new client, would be using previously acquired knowledge and understanding of the manufacturer’s thought processes such that the lawyer would be able to use the information to benefit the new client and give the client a distinct advantage over the manufacturer. This requires some analysis of the type of representation provided by the lawyer to the manufacturer and the degree of the lawyer’s involvement in determining the policies and principles that the manufacturer used to make litigation decisions.

    This California case does not change the analysis that must occur when a playbook conflict is alleged but shows that there must be a deliberate determination that the lawyer with the alleged conflict 1) has provided past representation that is substantially related to the new representation, and 2) had sufficient contact and interaction with the former client and obtained information about and understanding of the former client’s decision-making processes. Playbook conflicts of interest do not arise very often, but the increasing job mobility of lawyers suggests they will become a more common consideration.