Earlier this year, the State Bar of California Standing Committee on Professional Responsibility and Conduct issued Formal Opinion No. 2021-205. This opinion provides a deeper explanation on compliance considerations when a law firm or lawyer is contacted by a prospective client (“PC”) and the duties that the attorney or law firm may have to their existing client should there be a potential conflict between the PC and the client. California Rules of Professional Conduct, Rule 1.18 provides guidance on how to navigate conflicts presented by prospective clients, and the attorney’s continuing duties even if the attorney-client relationship does not occur.

Initial contact. Rule 1.18(a) established an attorney’s duties to an individual when they consult with an attorney specifically for legal service or advice. If an attorney-client relationship does not ensue, the lawyer owes the PC a duty of confidentiality under Business and Professions Code section 6068(e) and CRPC Rule 1.6, except where permitted by Rule 1.9. (See Rule 1.18(b).) Additionally, a lawyer shall not represent a client whose interests are materially adverse or substantially related to those of the PC. (See Rule 1.18(c).) A lawyer may take on the representation if they obtained written informed consent from the PC and the client or the firm timely screened the affected lawyer and provided notice to the PC. (See Rule 1.18(d).) Many lawyers and law firms struggle with how to comply with this rule in their practice.

A law firm or lawyer ideally will have a protocol for all initial consultations, or an intake process. No matter the size of the law practice, from solo to large firm, the lawyer or managing lawyers should first determine what information is necessary to determine whether the lawyer or firm has conflicts. For a solo practitioner, this could be as simple as the name of the PC and name of the adverse party — especially when many solo attorneys have focused practice areas, such as criminal defense or personal injury. For a law firm with several practice areas, the information necessary may be the names of parties and the general goals of the PC. Best practices recommend that the lawyer or law firm advise the PC only to share limited information to determine conflicts, and not to share confidential information, documents, or other information that could create conflicts for the law firm. For those practices that use online intake forms, limiting the information shared to name, phone, email address, and word-limited descriptions can help prevent exposure to confidential information. Online forms should also advise the PC to avoid sharing confidential information, and that the online form does not create an attorney-client relationship.

Sometimes the names of the involved parties may not provide enough information for the attorney or law firm to determine whether they do in fact have a conflict or the bandwidth to take on a matter, and a deeper conversation with the PC will be necessary. In this instance, the goal is for the attorney to limit the information to determine whether they have a conflict or can take on the matter. The attorney should advise the client to try to avoid sharing confidential information, and the attorney should attempt to control the flow of information by asking pointed questions. Furthermore, a law firm may wish to have an intake process that will limit the exposure of the PC’s confidential information to the intake attorney or manager, preventing a firm-wide conflict. (See this article for better practices in this area.)

Continued duties to the PC. Of course, not every initial consultation results in an attorney-client relationship. Rule 1.18 establishes that an attorney will have a continued duty of confidentiality and loyalty to the PC. This means that the lawyer and potentially the law firm cannot take on a matter that is either substantially related to the matter that the PC sought consultation for or is materially adverse to the PC’s interest. Rule 1.18 doesn’t outright prohibit a lawyer or law firm from taking on a matter adverse or materially related to a PC, provided that the lawyer or law firm comply by seeking written informed consent or conducting timely screening and written notice. For a solo practitioner, they will need to seek written informed consent from both the PC and the client. If one party doesn’t give written consent, then the attorney may not continue with the representation.

In the case of a small firm, screening the affected attorney may be appropriate. The difficult issue for a small firm is the protocol for an initial consultation and decision to take on a matter. Some small firms operate such that each individual lawyer is solely responsible for their case load and decisions regarding client onboarding. Often this model involves shared resources such as office space, administrative assistance, and technology, but little is shared regarding the individual attorney’s client maters. A small firm using this model might be able to comply with the notice and screening process outlined in Rule 1.18, but the small firm should perform its due diligence prior to embarking on this type of representation.

Other small firms tend to use a more communal approach to the intake process, where more than one attorney meets with a PC and the decision to take on a matter is made by the group, because the firm must consider employee resources and the demands and complexity of the prospective matter. Firms that operate this way most likely will have to seek written informed consent from both the PC and the client.

Should a firm determine that screening and notice is the appropriate approach when confronted with a Rule 1.18 conflict, the “affected attorney” must be timely screened. Case law outlines the elements of an effective screen as (Kirk v. First American Title Ins. Co. (2010) 183 Cal.App.4th 776, 810 [108 Cal.Rptr.3d 620]):

  1. Physical, geographic, and departmental separation of attorneys;
  2. Prohibitions against and sanctions for discussing confidential matters;
  3. Established rules and procedures preventing access to confidential information and files;
  4. Procedures preventing a disqualified attorney from sharing in the profits from the representation; and
  5. Continuing education in professional responsibility.

An effective screen should also consider how the firm stores both physical and electronic documents. Physical documents should be stored in a locked cabinet away from the access of the affected attorney, and electronic documents should be stored with electronic walls preventing the affected attorney from having access. Additionally, a memo to the whole firm should advise staff and associates against discussing the matter with or in front of the screened attorney or attorneys. The disqualified attorney cannot share in the profits from the representation. Better practices advise a firm to send regular reminders about the screened attorney, because new staff or lawyers may not know about the screen or firm members may forget.

Mary Grace Guzmán of Guzmán Legal Solutions advises lawyers, law firms, and law students on their professional responsibilities and risk management needs. She also teaches legal ethics and professional responsibility at JFK Law School. She works with lawyers and law firms regarding legal ethics issues such as conflict of interest issues, fee disputes, and advises lawyers and law firms as outside ethics counsel to manage risk. Ms. Guzmán recognizes that a lawyer’s or law firm’s needs are best met by preventing legal ethical issues before they arise or managing an ethical issue once identified.

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