Law firms, especially those in big cities, may be large companies. Hundreds of lawyers, each with a different background, might be working on various stages of hundreds of cases at any given time. In a big firm, issues regarding conflicts of interest are always a big concern. Large corporations like to retain big-name firms for their legal issues – brand names choose other brand names for their legal needs. Since there are a limited number of big-name law firms, the potential for conflict is great.
Conflicts occur for other reasons. Lawyers or other legal professionals sometimes change firms (they are “laterally hired”). If they have previously represented an adversary of their new firm, both the new member and other members of the new firm might be disqualified from representation by imputation if representation is for a substantially related matter. Also, big corporate litigation teams regularly hire temporary employees to review documents to look out for issues such as attorney-client privilege and to spot attorney work product. These temps come and go, often working on litigation teams in numerous firms. They also bring to a firm the potential for conflict.
[ Firms sometimes are supported entirely by their representation of one client on one single case. For example, there are firms whose sole existence can be attributed to a corporation’s need for representation due to the corporation having caused an environmental hazard. In some of these cases, the effects of the environmental hazard are expected to last for decades.
Take asbestos litigation. People who are exposed to asbestos might not develop symptoms of disease for years and years. Corporations have been forced to set up and run trusts to account for the compensation of victims for years to come, and attorneys are hired for indefinite periods of time to help administer settlements. If a prospective attorney-candidate for the law firm is “conflicted out” of representing a corporation for one of these cases, you can be sure the firm on the case would not want that lawyer on its team. The firm could perhaps lose its only source of revenue to a conflict of interest. This is why conflicts are taken seriously not only for ethical reasons, but for hard-core economic reasons. ]
When an attorney changes firms, the attorney’s new firm has to be very careful about conflicts, or it may suffer disqualification. The new firm may not oppose a client of the attorney’s old firm on a substantially related matter where the attorney has confidential information.
Except in cases involving wholly personal conflicts, the prohibition on representing clients because of a conflict of interests extends to persons affiliated with the lawyer. If one lawyer in a practice organization has a conflict of interest, all affiliated lawyers do. See Model Rule 1.10(a).
Likewise, the old firm may not oppose a former client that the attorney has taken with him to the new firm, on a substantially related matter where the old firm has confidential information. See
The ethical rules provide that in these situations, clients are entitled to waive disqualifications. They must be fully informed as to the nature of the conflicts, however, before they make the decision on waiver.
Other imputed disqualification scenarios arise when a firm tries to represent two clients with adverse interests:
Say one lawyer in a firm represents a home buyer. The firm should not assume the representation of the home’s seller, because the interests of a buyer and seller are generally adverse. A seller might want to close a deal quickly to ensure cash flow, but the buyer will not close until she knows precisely what she is buying and what kinds of protections the seller will provide in case the property is defective. Likewise, the seller might hold out until the buyer proves willing to pay top dollar, while the buyer tries to close the deal quickly to exploit low mortgage rates. Whatever the scenario, any dispute between buyer and seller would force the firm to choose sides and would compromise its loyalty.
Imputed disqualifications can also arise when an attorney joins a practice that represents a party against whom there is a witness that the new lawyer used to represent. See
In general, if an attorney has a conflict that would normally disqualify the entire firm, the firm may prevent the disqualification by erecting a “wall” of separation so that the attorney with the conflict plays no part in the case whatsoever and takes no part in developing the strategy for the case and shares no information that would compromise the interest of the party with whom the attorney has the conflict. See