Quandaries & Quagmires: Developing intake procedures to avoid firm imputation

ABA Formal Opinion 510, issued in March 2024, addresses Model Rule 1.18, duties to prospective clients, which mirrors Minnesota’s Rule 1.18. The Opinion highlights intake procedures and limiting information received from prospective clients to ensure that lawyers’ conflicts of interests are not imputed to their law firms.

When lawyers practice in a law firm, one lawyer’s conflicts are, with limited exceptions, imputed to other lawyers of the firm.¹ Prospective client conflicts are also imputed to the firm except when, (1) the affected client provides informed consent² or (2) when the personally disqualified lawyer took “reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client,” the personally disqualified lawyer is timely screened from any participation in the matter and receives no fee, and written notice is promptly given to the prospective client.³ In Minnesota, “written” and “screened” are defined terms.⁴

While ABA Opinion 510 is helpful in understanding “reasonable measures,” in the context of Rule 1.18(d)(2), it is necessary to analyze several related terms and concepts, starting with the basics. Prospective clients include “A person who consults with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client.”⁵ A person who communicates with the purpose of disqualifying the lawyer is not a prospective client.⁶ Prospective clients enjoy confidentiality protections like those of a former client even if no representation ensues. Under Rule 1.18, a lawyer is prohibited from accepting a new matter if the lawyer received information from the prospective client that could be significantly harmful to the that person in the new matter.

ABA Formal Opinion 492 (2020) offered guidance on what information is significantly harmful. Whether information learned is significantly harmful depends on facts such as: (1) length of the consultation; (2) nature of topics discussed; (3) whether settlement issues such as settlement amount and timing were discussed; (4) whether strategy matters were discussed.⁷ The ABA also identified information likely to be harmful in particular types of representations: (a) “sensitive personal information in a divorce case; (b) a prospective client’s financial information; (c) a prospective client’s personal thoughts and impressions regarding the facts of the case and possible litigation strategies; and (d) the possible terms and structure of a proposed bid by one corporation to acquire another.”⁸

Ethically assessing a potential representation.

ABA Formal Opinion 510 divides the data lawyers should seek from prospective clients into two categories. The first is information that relates to a lawyer’s professional responsibilities to allow assessment of whether the lawyer will be able to accept engagement. This category includes an assessment of conflicts, the lawyer’s competence in the proposed area of representation, whether the client or prospective client seeks to use the lawyer’s services to commit or further a crime or fraud (Rules 1.2(d) and 1.16(a)(4)), whether the lawyer would be able to communicate effectively with the prospective client (Rule 1.4), and whether all of the prospective client’s potential claims would be frivolous (Rule 3.1).⁹

The second category of information relates to the lawyer’s more general business decisions. This type of information includes how much time the engagement will take, information needed to assess compensation and expenses and any other business policies or considerations of the firm related to the proposed engagement.

Examples of information that are unrelated to a lawyer’s determination of whether to represent the client include detailed inquiries into the litigation or transaction to offer strategic insight in an effort to market the lawyer’s services or to promote the lawyer’s retention. The ABA cautions that this type of inquiry does not relate to the lawyer’s determination “whether to represent the client.” Instead, this type of inquiry is designed to target the client’s decision making in retaining the lawyer.¹⁰

Reasonable measures.

Reasonable measures to limit exposure to more information than is reasonably necessary are a cornerstone of ABA Opinion 510. The Committee makes clear in that even if disqualifying information received from the prospective client was no more than reasonably necessary to inform the representation decision, “the lawyer’s conflict will be imputed to the firm if the lawyer failed to take the prescribed ‘reasonable measures.’”¹¹ While the Opinion uses the language “prescribed reasonable measures,” the Opinion falls short on the actual prescription.

Creating intake procedures to limit firm’s conflict imputation.

Lawyers’ and law firms’ intake practices should include establishing boundaries in intake processes. Establish a process for cold calls. Consider seeking information needed to perform conflict checks before engaging in any conversation with the prospective client. If the matter is litigated, review pleadings for associated parties. Once you have determined that conflicts are clear and you are ready to engage in an intake discussion, be aware that free flowing conversations in prospective client consultations may lead to more information than what is “reasonably necessary,” resulting in imputation of conflicts for the entire firm. One boundary that is easily implemented is immediately telling prospective clients to not volunteer any information beyond what is requested. Be clear with prospective clients that if a decision is made that representation can proceed and terms of engagement are reached, more detailed information will be gathered. If at any point during an intake conversation, a lawyer decides, representation must or should be declined, any further inquiry should end. Do not ask detailed investigatory questions to assess your likelihood of recovery, that may, for example, impact your fee recovery. Questions like this may be permissible to assess your business decisions about accepting representations, however, the ABA opines that these questions are not “reasonably necessary.”

How is compliance proven?

If a conflict is alleged, a court or disciplinary authority will seek to assess the facts. The credibility of the consulting lawyer and the person invoking Rule 1.18 will be examined. It will be important to also refer to the Restatement because its definition of “reasonably necessary” in at least two examples could be interpreted as broader than ABA opinion 510.¹² As in all matters, ensure it is your practice to maintain intake materials and notify your ethics partner or engage ethics counsel if a disqualification motion is made or a disciplinary complaint filed. An important takeaway from ABA Formal Opinion 510 is that a lawyer who fails to take reasonable measures to avoid receiving disqualifying information does not thereby violate the rules. Instead, exposure to disqualifying information will have consequences for the lawyer’s law firm by resulting in imputation of the conflict.¹³

Jennifer Bovitz is a trial lawyer at Burke & Thomas PLLP where she handles medical and legal professional liability matters. Jennifer is an experienced trial and appellate lawyer who has served as a Managing Attorney at the Minnesota Office of Lawyers Professional Responsibility and has also served the public as a prosecutor.

Notes

1. Rule 1.10(a), Minnesota Rule of Professional Conduct (MRPC)
2. Rule 1.18(d)(1) and 1.0(f), MRPC
3. Rule 1.18 (d)(2)
4. See Rule 1.0 (l) and (o)
5. Rule 1.18(a) (MRPC)
6. Comment 2, Rule 1.18, MRPC
7. ABA Formal Opinion 492 at 6
8. Id.
9. ABA Formal Op. at 4
10. ABA Formal Op. 510 at 5
11. ABA Formal Op. 512 at 7, n.12
12. Restatement Third, The Law Governing Lawyers §15
13. ABA Formal Op. 510 at 3