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Asking for Friendly Advice Can Create a Conflict

By Jannis E. Goodnow, Litigation News Contributing Editor – April 29, 2013

 

You represent the plaintiff side in a specialized area of personal injury litigation. A friend from law school just called to ask your advice about defense strategy in such a case. How far do you go to help out your friend? According to the Colorado Supreme Court, free advice to a friend in this circumstance can conflict out your entire firm from later representing the plaintiff. In Re Liebnow v. Boston Enterprises [PDF].


Background
In Liebnow, an attorney defending a case involving food-borne illness called a plaintiff’s attorney with whom she remained friendly after they represented opposing parties in an earlier similar case. The consulted attorney, an associate at a small out-of-state firm focused on representing plaintiffs in food-borne illness cases first ran a conflicts check and determined that his firm was not involved in the case. He then proceeded to discuss with her the theories of the defense, suggesting she change her focus in at least one area and recommending an expert whom she later retained.


Subsequently, another attorney in the consulted attorney’s firm was asked to join in representing the plaintiff and moved for pro hac vice admission in the District Court for Pueblo County, Colorado. The defendant opposed the motion on the basis that defense counsel had provided confidential information about the case to the same law firm in the earlier consultation. The trial court agreed and denied the motion, disqualifying the out-of-state firm.


Conflict-of-Interest Rule Protects Non-Clients
On appeal, the Colorado Supreme Court held that the consultation between defense counsel and out-of-state counsel concerned confidential information regarding defense theories and strategy, which created a non-waivable conflict. The court held that allowing the consulted attorney to represent the plaintiff would undermine the fairness of the trial. The court based its decision on Colo. RPC 1.7, which is identical to ABA Rule 1.7, and provides that “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.”


Relying on Rule 1.7’s provision that a conflict of interest exists when “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person” (emphasis by the court), the court rejected the plaintiff’s argument that Rule 1.7 does not apply in the absence of an attorney-client relationship. The court relied on ABA Formal Opinion 98-411 [PDF], which cautions that consultations between lawyers may trigger a conflict of interest under Rule 1.7 that could restrict the consulted lawyer’s ability to represent a current or future client.


The court further cited Opinion 98-411 to explain that, while “consultations between lawyers are important for testing ideas about complex cases or helping lawyers gather the information necessary to competently represent a client,” they may lead to “unanticipated consequences,” such as conflicts of interest, due to the consulted attorney’s obligation to keep the information confidential.


The court rejected the plaintiff’s argument that the consultation would not materially limit the out-of-state firm’s ability to represent the plaintiff because the defendant’s theory of the case would be disclosed in discovery and the plaintiff could still effectively cross examine the expert. Rather, because the defense attorney had altered her theory of the case and changed her strategy based on the consultation, the consulted attorney had “divided loyalties” that created a non-waivable conflict of interest that would compromise the fairness of the litigation. Moreover, because of the firm’s small size and concentration in one practice area, the conflict was imputed to the entire firm.


Majority Chills Casual Consultations “Vital to the Profession”
A dissenting opinion warned that the majority mistakenly deprived the plaintiff “of her counsel of choice—one of the most prominent food-borne-illness law firms in the country”—by failing to give appropriate weight to plaintiff’s choice of counsel and failing to require a showing that significant prejudice would result from allowing plaintiff that choice. The dissent posited that the decision “has far broader significance for the legal profession” because casual consultations among attorneys, “so vital to the profession, simply will not happen.”


Commentators Believe That Decision Strikes Proper Balance
The majority was “dead-on in its analysis,” says Oran F. Whiting, Chicago, cochair of the ABA Section of Litigation’s Ethics and Professionalism Committee, in that it “properly focused on fairness.” “The court had a real balancing act here,” agrees Stephen T. LaBriola, Atlanta, cochair of the Attorney Advertising Subcommittee of the Section of Litigation’s Ethics and Professionalism Committee. “Common sense has prevailed,” he adds.


The casual consultation at issue here is commonplace and often occurs without conflicts checks. “Nine out of ten cases, this is not a problem,” explains John C. Martin, Chicago, cochair of the Section’s Ethics and Professionalism Committee, but “this is the tenth case.” The problem arose because “too much information was exchanged,” says LaBriola. As the consulted firm was small, “a screen would not work here,” he adds.


Moreover, the dissent “overstates the chilling effect” the majority’s ruling will have on attorney consultations, opines LaBriola. “The sky is not falling,” agrees Whiting.


Can Consultations Ever Be Casual?
“The casual consultation addressed in the dissent should not be casual,” advises Martin. “Conversations between attorneys about cases are not casual; they have rules,” he adds. Section leaders agree that the better practice is for the attorney who is being consulted to run a conflicts check and for the consulting attorney to advise at the outset that the conversation may prevent the consulted attorney from representing the other side. “Attorneys should not be dissuaded from consulting with other attorneys,” says Whiting, adding, “but they should make it official.”


Keywords: conflict of interest, confidentiality, ethics


 
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