RI-97
September 4, 1991
SYLLABUS
A lawyer who joins a law firm may ethically continue to represent a client the lawyer brings to the new firm in a matter in which the client's interests are substantially adverse to the interests of a former client of the new law firm and where the former client does not consent, provided that:
- the lawyer was not associated with the new law firm at the time of the law firm's representation of the former client;
- the lawyer was representing his/her client at the time the lawyer became associated with the law firm; and
- adequate and timely procedures are in place which screen the new law firm from the representation of the lawyer's client for the duration of the matter.
References: MRPC 1.9, 1.10; R-4.
TEXT
A presiding judge asks whether a lawyer may ethically represent a client in a matter in which the client's interests are substantially adverse to the interests of a former client, where the lawyer handling the matter was not associated with the firm at the time of the former client's representation, and where the lawyer handling the matter was representing the client at the time the lawyer became associated with the firm, if adequate screening devices are in place as required by MRPC 1.10(b), and the lawyer was not associated with the firm at the time that it represented the former client. The facts of the particular matter are as follows.
In 1977, the law firm represented a plaintiff in complex commercial litigation. In 1979, the plaintiff obtained substitute counsel. Over the next twelve years until today, the nature of that firm changed appreciably, as has its personnel roster. In 1988, a new lawyer joined the law firm bringing with him a client whose interests were directly and materially adverse to the client the firm represented in 1977. At that time, an elaborate screen was already in place prohibiting communications between this new lawyer and the remainder of the firm involving any of plaintiff's cases (from the 1977-1979 period of representation). Even though the firm had not represented the former client since 1977, all of the former client's files were clearly marked and segregated in accordance with "Chinese Wall" requirements; access to the former client's files was prohibited to this new counsel.
The current Michigan Rules of Professional Conduct do not specifically address the fact situation as presented. The relevant rules are MRPC 1.9 and 1.10 which state in pertinent part:
"Rule 1.9(a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation.
"(b) Unless the former client consents after consultation, a lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated has previously represented a client
"(1) whose interests are materially adverse to that person, and
"(2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter . . . ."
"Rule 1.10(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7, 1.8(c), 1.9(a) or (c), or 2.2.
"(b) When a lawyer becomes associated with a firm, the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, is disqualified under Rule 1.9(b) unless:
"(1) the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom; and
"(2) written notice is promptly given to the appropriate tribunal to enable it to ascertain compliance with the provisions of this rule."
The interaction of MRPC 1.9(b) and 1.10(b) reveal that special concern was taken in the promulgation of the rules for the situation where one lawyer moves from a firm and joins a new firm. MRPC 1.9(a) and 1.10(a) delineate circumstances whereby the new firm which the lawyer joins can avoid disqualification from existing cases, when the new lawyer brings a "taint" which would ordinarily disqualify the entire firm. MRPC 1.10(b) delineates circumstances whereby the firm the lawyer left can avoid disqualification which would normally be required because of the former firm member's clients. The ABA Model Rules of Professional Conduct, from which the Michigan rules are derived, are more strict than the Michigan ethics rules, and do not allow screening to avoid disqualification. In viewing the situation presented in this inquiry, therefore, it is important to note the Michigan Supreme Court's appreciation of the viability of screening. For detailed discussion of adequate screening, see R-4.
Under the facts of this case, MRPC 1.9(c) does not apply since the lawyer currently performing the representation did not personally ever represent the plaintiff, and no firm with which the lawyer was formerly associated represented the plaintiff. MRPC 1.9(b) does not apply, since the lawyer was not formerly associated with a firm who assisted the plaintiff in a substantially related matter; rather, the lawyer is now associated with a firm which formerly assisted the plaintiff on a substantially related matter. MRPC 1.10(b) does not apply, since the lawyer and the lawyer's former firms are not disqualified from representing interests adverse to the plaintiff, having never undertaken any duties to the plaintiff. MRPC 1.10(c) does not apply, since it is directed to the lawyer's former firm, and not to the lawyer's new firm. This leaves MRPC 1.10(a).
There are situations where experienced lawyers are persuaded to make career changes on condition that they be able to personally continue to handle certain existing clients, which clients will be considered the lawyer's clients and not clients of the firm. As long as all steps of the representation of the lawyer's personal clients show the representation is by the lawyer, and not by the firm, we see no reason why this distinction cannot be deemed a valid one which removes the matter from MRPC 1.10(a). If, for instance, the distinction between "firm clients" and the lawyer's "personal clients" is merely a matter of how fees and compensation are handled between the firm and the lawyer, however, that is not a sufficient separation and MRPC 1.10(a) would be triggered.
Therefore the only remaining question is whether it is proper to analogize from MRPC 1.10(b) and allow a new lawyer who brings existing representation files to the new firm to screen the new firm from those cases, and thereby avoid the new lawyer's disqualification from matters which the new firm would be prevented from undertaking directly.
The Michigan Rules of Professional Conduct are not to be applied with unqualified rigor. Manning v. Waring Cox James Sklar and Allen, 849 F2d 222 (CA 6 1988). More particularly, the disqualification of a lawyer is a drastic measure which the court should hesitate to impose, except where absolutely necessary. Schiessle v. Stephens, 717 F2d 417 (CA 7 1983).
MRPC 1.10(b) allows the new firm to continue representation of a client whose interests conflict with those of a former client of the new lawyer, or a former client of the new lawyer's former firm. We see no reason to disallow a similar result when the players are reversed, with the new lawyer continuing to represent a current client whose interests are adverse to those of the new law firm's former clients, as long as screening is adequate and timely. The Chinese Wall protection is designed to quarantine the new lawyer from exposure to confidences of the plaintiff while that plaintiff was a former client of the law firm. The new lawyer is prevented from obtaining confidential information available when plaintiff was the law firm's client nearly 14 years ago, and the law firm is prevented from participating in the representation of a client whose interests conflict with the firm's duties to a former client. Analytica v. NPD Research, 708 F2d 1263 (CA 7, 1983). The Chinese Wall substantially ensures that the lawyer in question will have no access to or knowledge of the information, confidences, and/or secrets related by plaintiff in the 1977-1979 representation. Schiessle v. Stephens, 717 F2d 417 (CA 7, 1983).
We note that whether a lawyer who is counsel of record in litigation may withdraw is subject to the discretion of the tribunal, MRPC 1.16(c). The court must balance the integrity of the adversary process and the client's right to be represented by counsel of that client's own choosing. Dalrymple v. National Bank and Trust Co of Traverse City, 615 F Supp 979 (WD Mich 1985). In the interests of the administration of justice, and when weighing any hardship to the client, delay, and any other relevant factor, a presiding adjudicator may deny a motion for withdrawal or disqualification. Demis v. Demis, 564 NYS2d 515 (AD 3 Dept. 1990); Manning v. Waring Cox James Sklar and Allen, 849 F2d 222 (CA 6, 1988).
It is not unethical to continue in a representation where the tribunal has declined to allow withdrawal.