Carefully evaluate whether issues involving your case are ‘substantially related.’

In a conflict of interest where I represented a person previously, what does “substantially related” mean in terms of disqualification?

The term substantially related is found in Rule of Professional Conduct 1.9, titled, “Duties to Former Clients.” The conflict of interest rules are set forth in Rules 1.7, 1.8, and 1.9 of the Rules of Professional Conduct. Rule 1.7 is the general conflict of interest rule involving concurrent conflict of interest. Rule 1.8 is special conflicts of interest rule. Rule 1.9 is the conflicts of interest rule involving former clients.

The actual language in Rule 1.9 notes as follows: “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 interest of the former client unless the former client gives informed consent.”

Comment 3 to Rule 1.9 discusses substantially related.

“Matters are substantially related for the purpose of this rule if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information, as would normally have been obtained in the prior representation, would materially advance a client’s position in the subsequent matter. For example, a lawyer who has represented a business person and learned extensive financial information about that person may not then represent that person’s spouse in seeking a divorce. Similarly, a lawyer who has previously represented a client in securing environmental permits to build a shopping center would be precluded from representing neighbors seeking to oppose the zoning of the property on the basis of environmental consideration.”

There has been some case law that has developed over the years on the issue of substantially related. One case which is fairly well known is Estate of Pew, 655 A.2d 521 (Pa. Super., 1994). The Pew case cites the earlier seminal case of Maritrans GP v. Pepper Hamilton & Scheetz, 602 A.2d 1277 (Pa., 1992). Maritrans involved representation by a law firm of a competitor of Maritrans, which was similarly or substantially related to the prior representation of Maritrans. In the Estate of Pew, the Maritrans case was referenced. The test was developed as to whether information was obtained that was substantially related to the subsequent litigation. If it involved obtaining confidential information, according to the Pew case, then could result in disqualification and would be considered substantially related.

It does appear from the case law that confidential information is often a sticking point in deciding whether or not the matters are substantially related. A review of the case law seems to also suggest that the cases are decided on the specific facts of a particular case. But, there does not appear to be a bright line. A number of factors could be involved. The length of time between the current representation and the past representation is one. Also, confidential information or lack of it being obtained or whether the representation was directly adverse or not.

The burden in civil suits for disqualification is on the person complaining. Oftentimes, that burden is a difficult one to meet.

Perhaps the best way for a lawyer to evaluate whether or not prior representation of a client would preclude current representation of someone else is really to focus in on the confidential information test, assuming that the representation is not directly adverse to the former client. If the representation is not directly adverse, but just similar facts, that usually is not enough. The key thing is whether or not the lawyer has gotten confidential information that could be used against the former client. That, obviously, is prohibited by the Rules of Conduct. There is nothing more important than protecting the attorney-client privilege and the confidentiality of the attorney-client relationship under Rule 1.6 of the Rules of Professional Conduct. Comment 3 again to Rule 1.9 provides some clarification. In terms of representing a corporation or business defendant, oftentimes a lawyer is asked to be disqualified because they know the general practice of the business. But, the comment notes as follows: “In the case of an organizational client, general knowledge of the client’s policies and practices ordinarily will not preclude a subsequent representation; on the other hand, knowledge of specific facts gained in a prior representation that are relevant to the matter in question ordinarily will preclude such a representation.”

Also, the business of representing a client or representing a competitor of a client can, at times, create potential issues of conflict or disqualification. In this modern world where new business is eagerly sought and a substantial fee can, at times, blind one to their ethical obligations, a lawyer must step back and think about the consequences. As difficult as it may be, clients are entitled to independent representation and also entitled to the fact that their prior lawyer will not be acting in an adverse manner against them in the future if there are similar or substantially related issues or issues of confidentiality. All lawyers should very carefully evaluate that.

Duty to your client should come first.

I am a lawyer and practice in a rather large firm and I am moving to another firm. I am concerned that that firm will be disqualified on cases I’ve worked on at the first firm. What is the appropriate rule?

Again, Rule 1.9, “Duties to Former Clients,” is applicable. Subsection B of 1.9 is the appropriate rule. That, in essence, states a lawyer should not knowingly represent a person in the same or substantially related matter in where a law firm which the former client was associated with and previously represented a client whose interest are materially adverse to the person and about whom the lawyer had acquired knowledge protected by Rule 1.6 and Rule 1.9(c) that is material to the matter. But, there can always be informed consent as noted in Rule 1.9(b).

The language in Rule 1.9(b) is important because it limits the disqualification only if the lawyer had acquired information. In many large firms, there are multiple different types of practice. It is highly unlikely that a lawyer in the white-collar criminal practice is going to be aware of specific information in the commercial litigation practice or patent practice, etc. This is recognized by the Rules of Professional Conduct. Comments 4 through 9 of Rule 1.9 address the issue of lawyers moving between firms. Comment 4 is particularly important. The comment notes that the disqualification rules should “not be so broadly cast to preclude other persons from having a reasonable choice of legal counsel.” The rule also notes that it should not “unreasonably hamper lawyers from forming new associations and taking on new clients after having left a previous association.”

Comment 4 recognizes the modern reality that lawyers many times limit their practice often to just one area, particularly in a firm. The comment also notes the lawyers often move several times in their careers to different firms. The comment notes that if the imputation of conflict rule was employed vigorously that would obviously preclude most people from having opportunities of moving to a different law practice or a different firm.

Comment 5 notes that Rule 1.6(b) only operates to disqualify when the lawyer has actual knowledge or the information is protected by Rule 1.6 of the confidentiality rule and Rule 1.9(c).

Therefore, according to Comment 5, if a lawyer moves to a different firm but has no knowledge of the facts of the case, that doesn’t require disqualification in the new firm. Obviously, when one moves to a different firm there is a potential for screening. Rule 1.10 of the Rules of Professional Conduct require, as set forth in Subsection B, a screening process which includes notification and no sharing in fees. That Rule requires the lawyer to have acquired information that is confidential.

Comment 6 to Rule 1.10 notes that if a lawyer regularly has access to all files and participates in meetings where cases are discussed, that would trigger the disqualification. This is in contrast according to Comment 6 where a lawyer only has limited access to files and there is no real participation in discussions because there are different divisions in the firm. The comment also notes that although the lawyer can’t use information, information that is generally known doesn’t preclude representation in the new setting.

The Rules of Professional Conduct appropriately recognize the modern realities and the often changing jobs from one firm to another. Forty or 50 years ago that was not common. In this modern world, it is very common and it’s very, very rare a lawyer would stay in one place for their entire career.

But, the Rules recognize that. The rules do allow that kind of movement. The rules aren’t going to cause massive disqualifications, which would essentially preclude a lawyer from practicing in certain areas if they leave the firm, unless the lawyer truly has actual knowledge that would be important in the litigation. Even if that’s the case, the screening mechanisms under Rule 1.10(b) often will preclude the disqualification of the lawyer or his or her firm.

The disqualification rule can be the bane of a lawyer’s existence. Particularly if a lawyer practices in a particular area, there are ample opportunities for conflicts or where interests are adverse or substantially related to former clients. Lawyers have to learn to navigate these rules. The rules are not as stringent as they once were, but if a lawyer does not know the rules and does not put up the protections and safeguards then a lawyer could disqualify their new firm.

The guiding principle is what is in the best interest of the client or former client and can the client’s confidentiality be protected? •