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The job market has never been better for talented associates. Headhunters will tell you that well-trained associates at prestigious firms can write their own tickets, especially in the overheated areas of intellectual property and e-commerce. What they do not tell you, however, is that ethical issues can arise whenever you go job hunting. Consider the situation of Sarah, a mid-level litigation associate who has been in the hunt for a while. Sarah has met with headhunters and had exploratory interviews with numerous prospective employers. She has narrowed her search to two firms that have expressed serious interest in her. Then it happens. Sarah and a partner in her current firm have been representing Client A in a fast-paced trademark litigation. Her firm has just filed a complaint against Client B and, with the consent of Client B’s general counsel, scheduled a hearing on Client A’s all-important preliminary injunction motion for two weeks hence. Now Sarah finds out that Client B’s litigation counsel is going to be one of the firms from which she seeks and expects a job offer. Does Sarah have an ethical problem and, if so, what can she do? CONFLICT OF INTEREST In New York, at least, Sarah has a problem. Under New York’s Code of Professional Responsibility, (1) she has a conflict of interest: Her personal interest in securing a job with the law firm representing Client B reasonably may interfere with her representation of Client A in the trademark litigation. DR 5-101(A) of the code provides that, except with client consent after full disclosure, “[a] lawyer shall not accept or continue employment if the exercise of professional judgment on behalf of the client will be or reasonably may be affected by the lawyer’s own financial, business, property or personal interests � ” Under certain circumstances, a lawyer’s interest in obtaining future employment is a cognizable “ financial, business, property or personal interest” that “will or reasonably may” affect a lawyer’s independent professional judgment on behalf of a client in violation of DR 5-101(A). (2) Because Sarah’s interest in a job with Client B’s law firm has been expressed and to some degree reciprocated, that interest reasonably may interfere with her representation of Client A. Sarah might be “tempted to act or to appear to act so as to benefit [her] future employer rather than [Client A] � as a means of attempting to secure the future position.” (3) “[C]onscious of the potential for evaluation, [she] may become more aggressive, litigious or argumentative, on the one hand, or passive, cooperative, or forthcoming, on the other, than � she otherwise might be � . In all such events, the conscious or unconscious deviation in behavior could be to the detriment of the client.” (4) This potential for interference with Sarah’s obligations to Client A is enough to constitute a conflict of interest: “DR 5-101(A) does not require a showing that the lawyer’s exercise of professional judgment will be affected; it requires only that the judgment ‘reasonably may be.’ ” (5) Sarah’s conflict of interest can be resolved in three ways: 1. Client A’s consent to the conflict of interest; 2. Sarah’s withdrawal from the trademark matter; (6) or 3. Sarah’s termination of her job discussions with Client B’s law firm. (7) Sarah can continue both her representation of Client A and her discussions with Client B’s law firm only if that conflict is fully disclosed to Client A and Client A consents. Such disclosure to Client A necessarily assumes that Sarah will have disclosed her job search to the partner with whom she is working on the trademark litigation and others in her current firm. If Sarah has not already made that disclosure and if she does not want to do so after the conflict develops, then it will be impossible to obtain Client A’s consent. Disclosing her job search to her current firm is the minimum price of being able to continue both her representation of Client A and her discussions with Client B’s law firm. But, as described below, even that might not be enough. What if Sarah’s current firm knows about her job search or Sarah is prepared to disclose it, but Client A does not consent once it is informed of the situation? It seems virtually impossible that Sarah’s current firm will choose to withdraw from representing Client A in order to allow Sarah to continue her discussions with Client B’s firm. Moreover, withdrawal by her current firm may not even be possible: Client A might object to such withdrawal because of its adverse effect, given the proximity of the preliminary injunction hearing, or the court itself might object to the withdrawal. (8) If Client A does not consent, Sarah will probably will lose control over her employment situation. For example, Client A may be willing to continue to be represented by Sarah’s firm, but only on condition that she not work on the case. Sarah’s current firm surely would accept that condition rather than lose the trademark case or Client A entirely. Or, Client A may pressure Sarah’s firm to insist that she immediately terminate her discussions with Client B’s firm. (9) If Sarah does not want to tell her current firm about her job search, or if she does not want to lose control of her job situation, her only option is to terminate job discussions with Client B’s law firm, at least until her litigation against Client B is completed. If Client B’s firm extends an offer of employment when she informs it that further discussions must be terminated, Sarah must decline the offer unless she immediately accepts it and simultaneously resigns from her firm. The conflict inherent in job negotiations with an opposing party’s law firm happens with surprising frequency, even in a city with as large and diverse a lawyers’ job market as New York. Associates find out about attractive job prospects when they encounter their counterparts representing clients in a lawsuit. The highly specialized legal marketplace increases those possibilities. Intellectual property firms, for example, are relatively few in number, so when an associate in such a firm seeks a job in that field some of the likely prospects are the very firms who are representing opposing parties in the associate’s cases. Similarly, government prosecutors look for jobs at criminal defense firms and young criminal defense attorneys look for jobs with a prosecutor. (10) NOT PECULIAR TO LITIGATORS Moreover, that conflict is not peculiar to litigators. (11) Indeed, while writing this column, I was consulted by a transactional lawyer who had been advising a client about structuring a complicated commercial transaction for a substantial period of time when he learned, for the first time, that the opposing party was going to be represented in the ensuring contractual negotiations by a firm with which he had been seriously discussing a partnership position. A conflict of interest does not immediately arise whenever an associate considers future employment with an opposing party’s law firm. Preliminary fact-finding, mailing a letter of inquiry, and even exploratory interviews with such a firm are unreciprocated and probably too speculative to constitute a conflicting interest under DR 5-101(A). An attorney’s interest in securing a job with an opposing party’s law firm must be sufficiently crystallized to pose a genuine threat to that attorney’s representation of a current client. A lawyer’s interest usually becomes “sufficiently focused and concrete � (i) where the lawyer has made affirmative application for a new position or (ii) where the lawyer is in fact actively considering whether to pursue such position in light of an expression of interest by a prospective employer � [but] in all circumstances no later than when an offer of conflicting employment has been extended to the lawyer and has not been promptly declined.” (12) Finally, “[t]he likelihood that a lawyer’s job search will adversely affect his [judgment] is far greater when the lawyer has an active and material role in representing the client.” (13) Thus, job discussions with the opposing party’s law firm are unlikely to create a conflict of interest when an associate is part of a group reviewing documents, is researching a discrete legal issue, or otherwise lacks significant contact with the lawyers for the opposing party. FOOTNOTES (1) The Code’s Disciplinary Rules (DR) have been promulgated as joint rules of the Appellate Divisions of the Supreme Court at 22 NYCRR Part 1200. (2) See N.Y. City 1991-1 (April 30, 1991). Compare ABA Formal Op. 96-400, Jan. 26, 1996, which analyzes the conflict of interest posed by job negotiations with an adverse party’s law firm in terms of Model Rule 1.7(b). (3) N.Y. City 1991-1. Accord ABA Formal Op. 96-400 (“The judgment of a lawyer who is exploring job prospects with an opposing law firm may be affected by the lawyer’s desire to curry favor with, or at least not antagonize, the prospective employer.”). (4) N.Y. City 1991-1. See also ABA Formal Op. 96-400. (5) N.Y. City 1991-1 (emphasis added). (6) Sarah’s withdrawal would not enable her current firm to continue to represent Client A in the trademark matter if her individual conflict of interest were imputed to the other lawyers in her current firm. In New York City 1991-1, the City Bar’s Committee on Professional and Judicial Ethics concluded that such automatic imputation made no sense. Recognizing, however, that the literal language of DR 5-105(D) required such imputation, that Committee recommended an amendment to DR 5-105(D) to eliminate such imputation. But, when the Appellate Divisions amended the Code in 1999, DR 5-105(D) was not so amended. Thus, there remains a conflict in New York between the automatic imputation envisioned by DR 5-105(D)’s terms and the better reasoned view that automatic imputation should not apply. Compare ABA Formal Op. 96-400 (rejecting automatic imputation required by a literal reading of Model Rule 1.10 and concluding that there is no reasoned basis that a conflict of interest faced by a lawyer seeking a job with an opposing party’s law firm should automatically be imputed to the other lawyers in the job-seeking lawyer’s firm). This column assumes that the better reasoned view would prevail. (7) See N.Y. City 1991-1 and ABA Formal Op. 96-400 (suggesting that postponement of further job discussions with Client B’s law firm during the pendency of her representation of Client A would suffice). (8) See DR 2-110 (describing the limited circumstances when a lawyer may withdraw from a representation). (9) Client B’s law firm has its own ethical obligation to discuss the situation with Client B. See ABA Formal Op. 96-400. (10) The Code contains a specific conflict of interest prohibition for government lawyers seeking employment in the private sector: “A lawyer serving as a public officer or employee shall not � negotiate for private employment with any person who is involved as a party or as attorney for a party in a matter in which the lawyer is participating personally and substantially.” DR 9-101(B)(3)(b). (11) See N.Y. City 1991-1. (12) N.Y. City 1991-1. (13) ABA Formal Opinion 96-400. James M. Altman, a member of the New York State Bar Association Committee on Professional Ethics, is a litigation partner at Robinson Silverman Pearce Aronsohn & Berman. Timothy M. Rusche, an associate of the firm, assisted with the article.

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