Amendments to North Dakota Rules as Adopted- 20050353

Amendments to North Dakota Rules as Adopted - 20050353

RULE 1.10 IMPUTED DISQUALIFICATION: GENERAL RULE

(a) Lawyers associated in a firm may not knowingly represent a client when any one of them practicing alone would be prohibited from doing so by these rules, except as provided by Rule 1.11 or, ~~Rule~~ 1.12, 1.18, or 6.5, unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm. For purposes of this paragraph, a personal interest disqualification is one created by a lawyer's interests other than those arising from the representation of other clients or the owing of fiduciary duties to some third party.

(b) When a lawyer becomes associated with a firm, ~~the firm may not knowingly represent a person when~~ and the lawyer is prohibited from representing a client pursuant to Rule 1.9, other lawyers in the firm may not thereafter represent the client unless:

(1) ~~The~~ ~~lawyer had previously represented a non-governmental client whose interests are materially adverse to that person~~ any confidential information communicated to the lawyer is unlikely to be significant in the matter;

(2) ~~The matter is the same or is substantially related to that in which the lawyer represented the client~~ there is no reasonably apparent risk that any use of confidential information of the former client will have a material adverse effect on the client;

(3) ~~The lawyer had acquired material information protected by Rule 1.6 while associated with a prior firm~~ the lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and

(4) written notice is promptly given to all affected clients.

(c) When a lawyer has terminated an association with a firm, the firm may not thereafter knowingly represent a person when:

(1) ~~The~~ the person has interests materially adverse to those of a non-governmental client represented by the formerly associated lawyer;

(2) ~~The~~ the matter is the same or is substantially related to that in which the formerly associated lawyer represented the client; and

(3) ~~Any~~ any lawyer remaining in the firm has or has had access to material information protected by Rule 1.6.

(d) A disqualification prescribed by this rule may be waived by the affected client's consent after consultation, so long as the representation does not involve the assertion of a claim by one client against another client represented by the same firm in the same litigation or other proceedings before the tribunal.

Comment

Client Consent

[1] Paragraph (d) requires client consent before disqualification under this Rule can be waived. Obtaining the client's consent in writing is the preferred practice. Lack of a writing may make it difficult to prove client consent if a dispute arises later.

Definition of "Firm"

[2] For purposes of ~~the~~ these Rules ~~of Professional Conduct~~, the term "firm" ~~includes~~ denotes lawyers in a ~~private firm, and~~ law partnership, professional corporation, sole proprietorship or other association authorized to practice law; or lawyers employed in ~~the~~ a legal services organization or the legal department of a corporation or other organization~~, or in a legal services organization~~. See, Rule 1.0(d). Whether two or more lawyers constitute a firm within this definition can depend on the specific facts. See, Rule 1.0, Comments [2] [4]. For example, two practitioners who share office space and occasionally consult or assist each other ordinarily would not be regarded as constituting a firm. However, if they present themselves to the public in a way suggesting that they are a firm or conduct themselves as a firm, they should be regarded as a firm for purposes of the Rules. The terms of any formal agreement between associated lawyers are relevant in determining whether they are a firm, as is the fact that they have mutual access to confidential information concerning the clients they serve. Furthermore, it is relevant in doubtful cases to consider the underlying purpose of the rule that is involved. A group of lawyers could be regarded as a firm for purposes of the rule that the same lawyer should not represent opposing parties in litigation, while it might not be so regarded for purposes of the rule that information acquired by one lawyer is attributed to another.

[2] With respect to the law department of an organization, there is ordinarily no question that the members of the department constitute a firm within the meaning of the Rules of Professional Conduct. However, there can be uncertainty as to the identity of the client. For example, it may not be clear whether the law department of a corporation represents a subsidiary or an affiliated corporation, as well as the corporation by which the members of the department are directly employed. A similar question can arise concerning an unincorporated association and its local affiliates.

[3] Similar questions can also arise with respect to lawyers in legal aid. Lawyers employed in the same unit of a legal service organization constitute a firm, but not necessarily those employed in separate units. As in the case of independent practitioners, whether the lawyers should be treated as associated with each other can depend on the particular rule that is involved, and on the specific facts of the situation.

[3] When a lawyer has joined a private firm after having represented the government, the situation is governed by Rule 1.11(a) and (b); where a lawyer represented the government after having served private clients, the situation is governed by Rule 1.11(d). The individual lawyer involved is bound by the ~~Rules~~ rules generally, including Rules 1.6, 1.7, and 1.9.

[4] Different provisions are thus made for movement of a lawyer from one private firm to another and for movement of a lawyer between a private firm and the government. The government is entitled to protection of its client confidences, and therefore to the protections provided in Rules 1.6, 1.9, and 1.11. However, if the more extensive disqualification in Rule 1.10 were applied to former government lawyers, the potential effect on the government would be unduly burdensome. The government deals with all private citizens and organizations, and thus has a much wider circle of adverse legal interests than does any private law firm. In these circumstances, the government's recruitment of lawyers would be seriously impaired if Rule 1.10 were applied to the government. On balance, therefore, the government is better served in the long run by the protections stated in Rule 1.11.

Principles of Imputed Disqualification

[5] The rule of imputed disqualification stated in paragraph (a) gives effect to the principle of loyalty to the client as it applies to lawyers who practice in a law firm. Such situations can be considered from the premise that a firm of lawyers is essentially one lawyer for purposes of the rules governing loyalty to the client, or from the premise that each lawyer is vicariously bound by the obligation of loyalty owed by each lawyer with whom the lawyer is associated. Paragraph (a) operates only among the lawyers currently associated in a firm. When a lawyer moves from one firm to another, the situation is governed by paragraphs (b) and (c).

Personal Interest

[6] A conflict of interest based upon a lawyer's personal interest will not impute to the lawyer's law firm provided the personal interest falls within the definition included in this Rule and to the extent usual concerns justifying imputation are not present. This exception applies only where the prohibited lawyer does not personally represent the client in the matter and no other circumstances suggest the conflict of the prohibited lawyer is likely to influence the work of others in the firm.

~~Lawyers Moving Between Firms~~

~~When lawyers have been associated in a firm but then end their association, however, the problem is more complicated. The fiction that the law firm is the same as a single lawyer is no longer~~ wholly realistic. There are several competing considerations. First, the client previously represented must be reasonably assured that the principle of loyalty to the client is not compromised. Second, the rule of disqualification should not be so broadly cast as to preclude other persons from having reasonable choice of legal counsel. Third, the rule of disqualification should not unreasonably hamper lawyers from forming new associations and taking on new clients after having left a previous association. In this connection, it should be recognized that today many lawyers practice in firms, that many to some degree limit their practice to one field or another, and that many move from one association to another several times in their careers. If the concept of imputed disqualification were defined with unqualified rigor, the result would be radical curtailment of the opportunity of lawyers to move from one practice setting to another and of the opportunity of clients to change counsel.

Reconciliation of these competing principles in the past has been attempted under two rubrics. One approach has been to seek per se rules of disqualification. For example, it has been held that a partner in a law firm is conclusively presumed to have access to all confidences concerning all clients of the firm. Under this analysis, if a lawyer has been a partner in one law firm and then becomes a partner in another law firm, there is a presumption that all confidences known by a partner in the first firm are known to all partners in the second firm. The presumption might properly be applied in some circumstances, especially where the client has been extensively represented, but may be unrealistic where the client was represented only for limited purposes. Furthermore, such a rigid rule exaggerates the difference between a partner and an associate in modern law firms.

The other rubric formerly used for dealing with vicarious disqualification is the appearance of impropriety proscribed in Canon 9 of the ABA Model Code of Professional Responsibility. This rubric has a twofold problem. First, the appearance of impropriety can be taken to include any new client-lawyer relationship that might make a former client feel anxious. If that meaning were adopted, disqualification would become little more than a question of subjective judgment by the former client. Second, since "impropriety" is undefined, the term "appearance of impropriety" is question-begging. It therefore has to be recognized that the problem of imputed disqualification cannot be properly resolved either by simple analogy to a lawyer practicing alone or by the very general concept of appearance of impropriety.

A rule based on a functional analysis is more appropriate for determining the question of vicarious disqualification. Two functions are involved: preserving confidentiality and avoiding positions adverse to a client.

Confidentiality

[7] Preserving confidentiality is a question of access to information. Access to information, in turn, is essentially a question of fact in particular circumstances, aided by inferences, deductions, or working presumptions that reasonably may be made about the way in which lawyers work together. A lawyer may have general access to files of all clients of a law firm and may regularly participate in discussions of their affairs; it should be inferred that such a lawyer in fact is privy to all information about all the firm's clients. In contrast, another lawyer may have access to the files of only a limited number of clients and participate in discussion of the affairs of no other clients; in the absence of information to the contrary, it should be inferred that such a lawyer in fact is privy to information about the clients actually served but not those of other clients.

[8] Application of paragraphs (b) and (c) depends on a situation's particular facts. In any such inquiry, the burden of proof should rest upon the firm whose disqualification is sought.

[9] Paragraphs (b) and (c) operate to disqualify the firm only when the lawyer involved has ~~acquired~~ , or has had access to, material information protected by Rule 1.6. Thus, if a lawyer while with one firm ~~acquired no~~ did not have access to material information relating to a particular non-governmental client of the firm, and that lawyer later joined another firm, neither the lawyer individually nor the second firm is disqualified from representing another client in the same or a substantially related matter even though the interests of the two clients conflict. Situations involving lawyers who represent governmental clients and those involving former judges or other adjudicative officers are covered by Rule 1.11 and Rule 1.12, respectively.

[10] Independent of the question of disqualification of a firm, a lawyer changing professional association has a continuing duty to preserve confidentiality of information about a client formerly represented. See Rules 1.6 and 1.9.

Adverse Positions

[11] The second aspect of loyalty to client is the lawyer's obligation to decline subsequent representations involving positions adverse to a former client arising in the same or substantially related matters. This obligation requires abstention from adverse representation by the individual lawyer involved, but does not necessarily entail abstention of other lawyers through imputed disqualification. Hence, this aspect of the problem is governed by Rule 1.9(a) and (b). Thus, if a lawyer left one firm for another, the new affiliation would not preclude the firms involved from continuing to represent clients with adverse interests in the same or substantially related matters, so long as the conditions of Rule 1.10(b) and (c) concerning confidentiality have been met.

~~Definition of "Matter"~~

~~For the purposes of this Rule, the term "matter" is defined by Rule 1.7(e).~~

Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 12/14/84, 04/26/85, 09/20/85 and 01/31/86; Minutes of the Joint Committee on Attorney Standards on 04/16/04, 08/06/04, 11/19/04, 06/14/05, 09/09/05.