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ABA to Tackle Controversial Conflict-of-Interest Issues
Proposal would ease rules for attorneys who move from one law firm to another
The National Law Journal
August 06, 2008
Who says New York doesn't need any more lawyers? The American Bar Association thinks it does.
Starting this week, some 10,000 attorneys, judges and other legal professionals will flock to the Big Apple for the legal organization's 131st annual meeting.
The six-day event, starting on Thursday, will include the ABA's House of Delegates session, which will take up some controversial issues for the legal profession on Monday and Tuesday.
One contentious proposal slated for a vote by the House of Delegates, the policymaking body of the ABA, would ease the conflict-of-interest rules regarding attorneys who switch jobs from one private law firm to another.
The proposal, known as Recommendation 114, would treat lateral attorneys the same way it addresses attorneys who move from government jobs to private law firms.
It would enable a law firm to "screen" the incoming attorney from the rest of its attorneys and to continue representing its client without the consent of the incoming attorney's former client.
Under the current rule, generally, if an attorney moves to Firm B, and Firm B has a client in conflict with one of the attorney's clients at Firm A, the attorney's conflict of interest infects the other attorneys at Firm B and disqualifies them, absent the old client's waiver of the conflict.
BENEFITTING NEWER ATTORNEYS
The change would particularly benefit newer attorneys, who are more inclined to move from firm to firm but whose value is undermined by what some see as excessive conflict safeguards required when they move.
The proposal strikes a more "appropriate balance" between a former client's interest and the reality of attorney firm-to-firm movement in the legal industry, said Steven C. Krane, a partner at New York's Proskauer Rose.
Krane is chairman of the ABA's Standing Committee on Ethics and Professional Responsibility, which is making the recommendation to the House of Delegates.
Krane said that the change would mirror ethics rules or case law in at least 24 states that already allow firm-to-firm screening.
But Lawrence Fox, a partner at Philadelphia's Drinker Biddle & Reath, said that the proposal is "a classic example of lawyers putting convenience over client loyalty."
Fox also disagrees with the number of jurisdictions that the Standing Committee on Ethics asserts already allows screening for attorneys coming from private law firms without the client's consent. He said that 30 jurisdictions reject screening without client consent, 11 allow for it only if the lawyer did not have significant involvement in the former client's matter and 12 allow for screening without client consent in all former client cases.
"We ought to be embarrassed that we're considering it," he said.
But Deborah Rhode, a legal ethics scholar and professor at Stanford Law School, said the proposal is "a change long overdue."
A modification to the rule would represent some "trade-offs," she said, but would also address the reality of modern private practice.
"To turn someone into a Typhoid Mary early in their careers is unfair," she said.
Individual jurisdictions use the Model Rules of Professional Conduct as a guide to devise their own attorney ethics rules, and all jurisdictions use at least some, if not most, of the model rules for their own rules.
Another controversial proposal before the House of Delegates at this year's meeting involves the registration of in-house counsel. Recommendation 112 would require in-house counsel licensed in one state but working for a company in another to register with the attorney-regulating authority in the state where they work and to pay a registration fee.
IN-HOUSE 'QUALITY CONTROL'
It also would require in-house counsel to fulfill continuing legal education requirements and subject the attorneys to local disciplinary rules.
The rule would make the status of in-house attorneys licensed in other jurisdictions known to the public, said Sidney Eagles Jr. An attorney in the Raleigh, N.C., office of Smith Moore Leatherwood, Eagles is a delegate of the Section of Legal Education and Admissions to the Bar.
"It's a kind of quality-control thing," Eagles said. "It's designed to assure that people are up-front about what they're doing and under what authority."
The proposal does not include a specific amount for a registration fee. Local attorney-regulating authorities are expected to charge the same amount that they charge for annual bar dues.
The Association of Corporate Counsel opposes some of the recommendation's provisions.
"It's kind of a waste of time and energy," said Susan Hackett, general counsel of the ACC, an industry group comprising about 24,000 members.
Hackett said she was concerned that states adopting the registration rule could impose burdens on in-house attorneys such as fingerprinting and background checks.
In a recent letter to the Council of the Section of Legal Education and Admissions to the Bar, the ACC asserted that the model rules already provided the safety checks that proponents of registration are seeking. The ACC asserted that the provision allowing lawyers in good standing who were admitted in other U.S. jurisdictions to provide services to their employers is sufficient.
In addition, the ACC's letter called for a change to the rule that would allow in-house attorneys from foreign jurisdictions to have the same authority to practice as in-house attorneys from other U.S. jurisdictions.
New York University School of Law professor Stephen Gillers agrees that the new rule should include foreign lawyers.
"The law world is becoming flat. It's got major global players," he said. Gillers teaches courses on professional responsibility and the regulation of attorneys.
Another recommendation before the House of Delegates would eliminate an interpretation of a standard for the approval of law schools, which the ABA adopted in 2005.
The interpretation as it stands now allows law schools to offer bar exam preparation courses for credit but does not permit schools to count the credit toward those required for graduation and does not permit schools to require such courses for graduation.
By eliminating the interpretation, schools could require students to take such courses for graduation.
"Law students' expectations are that by the time they graduate, they can sit for the bar examination and pass," said Denise Riebe, a professor at Brooklyn Law School and author of "Pass the Bar!" (Carolina Academic Press 2006). She said the proposed change was "a great step in the right direction."
In all, the House of Delegates is expected to consider 44 recommendations at its two-day session. Recommendations from the ABA's various sections include topics of gun violence, jury instructions, domestic violence, child welfare issues and many more.
The House of Delegates is composed of 546 delegates representing attorneys from each state. The U.S. attorney general and the director of the Administrative Office of U.S. Courts also hold seats. Except for measures related to law school accreditation standards, its resolutions are not binding.
Among the recommendations this year is a call for U.S. senators in each state to appoint bipartisan commissions of diverse lawyers and community leaders to evaluate the qualifications of prospective U.S. district court and appeals court judges. The proposal calls for those commissions to recommend nominees for the senators to suggest for consideration by the president of the United States.
Proposing the recommendation are the Standing Committee on Federal Judicial Improvements and 13 other committees, lawyer groups and public advocacy organizations.
Recommendations are subject to 11th-hour withdrawal prior to the House of Delegates session. In addition, some may be added to the agenda at the last minute. The annual meeting will take place at the Hilton New York and will include the ABA Expo with dozens of vendors featuring legal wares. The opening assembly and the president's reception will be held at the Waldorf Astoria on Friday.
NEW LEADERSHIP
The meeting also marks an end to the leadership of ABA President William H. Neukom, a partner in the Seattle office of K&L Gates, and will usher in H. Thomas Wells Jr., an attorney from Birmingham, Ala., as the new ABA president.
Beginning in October, Neukom will become the managing general partner and chief executive of the San Francisco Giants baseball club. He will take a leave of absence as a partner from K&L Gates.
Neukom is a member of The National Law Journal's editorial board. One of his initiatives as the ABA president was the World Justice Project, a multinational effort to foster the rule of law and human rights. This year, ABA was the launching sponsor of the program, which worked with other countries to help promote justice and human rights.
Wells, the incoming ABA president, is a class action litigation partner at Maynard, Cooper & Gale, a 170-attorney law firm.
The event will also provide dozens of hours of continuing legal education.
