In a sign that lateral movement has become a matter of course among attorneys in private practice, the American Bar Association will consider competing amendments to its ethics rules governing firm-to-firm movement and conflicts of interest.

The 400,000-member attorney group will hold its mid-year meeting starting on Feb. 11 in Boston, when its governing body is expected to take up two recommendations to change its Model Rules of Professional Conduct.

Both recommendations before the ABA House of Delegates deal with attorneys who leave one law firm and go to another, and one of the proposals is far better than the other, depending on whom you ask.

The recommendation calling for the most significant change — Recommendation 109 — eases the conflict of interest rule by allowing a law firm to “screen” an incoming attorney from the rest of its attorneys and to enable the firm 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 from representation, absent the old client’s waiver of the conflict.

Recommendation 109 treats lateral attorneys the same way the ABA Model Rules address attorneys who switch from government jobs to private practice, which is a looser restriction than current conflict rules pertaining to firm-to-firm movement.

More ‘transparent’

Robert Mundheim, of counsel to New York’s Shearman & Sterling, said that Recommendation 109 makes the movement of attorneys and possible conflict issues more “transparent” because it requires the new firm to affirm to the former client that it has properly screened the incoming attorney. Mundheim is chairman of the ABA Standing Committee on Ethics and Professional Responsibility, which is sponsoring the measure.

But Lawrence Fox, a partner at Philadelphia’s Drinker Biddle & Reath, said Recommendation 109 puts the convenience of lawyers ahead of the duty of loyalty to clients. He is the former chairman of the Standing Committee on Ethics and Professional Responsibility and an ABA delegate. Fox supports Recommendation 110, the other measure.

Recommendation 110, sponsored by the ABA Section of Litigation, adds to the existing Model Rule, which does not permit firm-to-firm screening and instead requires client consent. The change would allow a lawyer, whose participation with a client at a previous firm was not significant and who did not learn material confidential information, to work for an adversary law firm without client consent, so long as the transferring lawyer was screened and provided certification of compliance with screening.

Recommendation 110 is a compromise, said Fox, for those who are concerned about restrictions on attorney mobility.

But Mundheim said Recommendation 110 falls short of addressing issues facing law firms and lateral hiring.

“It doesn’t advance the ball,” he said.

In 2007 alone, the latest year for which lateral information is available, some 2,423 partners moved in or out of one of the 200 highest-revenue firms as calculated by The American Lawyer, an affiliate of The National Law Journal. That figure represented a 12.5% increase from 2006, when 2,153 attorneys changed firms.

The proposed changes to the ABA’s Model Rules are a result of more lateral movement among partners as opposed to associates, said Monroe Freedman, an ethics scholar and professor at Hofstra University School of Law. Freedman, who is credited with writing a seminal attorney ethics treatise in 1975, opposes changes to the rules regarding firm-to-firm conflicts.

“There are so many lawyers with big firms who are highly influential and well-represented in the [ABA] House of Delegates,” Freedman said.

The ABA was expected to vote on a measure similar to Recommendation 109 at its annual meeting last summer in New York. By a one-vote margin, the matter was tabled until February’s mid-year meeting.

The ABA Model Rules of Professional Conduct are not binding on individual jurisdictions, but all jurisdictions use at least some, if not most, of the model rules for their own rules. Many states already permit firm-to-firm screening.