Wednesday, November 11, 2009

What duty does your firm have to protect client confidential information that creates conflicts?

Hinshaw & Culbterson publishes an excellent risk newsletter called “The Lawyers’ Lawyer.” The November issue includes an article on confidentiality issues: "Duty to Protect Confidential Information – Duty to Keep Client Informed of Developments Relating to Representation – Resolution of Conflict Between Duties Owed to Different Clients Regarding the Same Information." Highlights from the full article:
  • “Risk Management Issue: What are the duties of a lawyer when he learns a fact in connection with the representation of a client that, although confidential in connection with that engagement, may be material to the lawyer’s representation of a second client in an entirely separate and distinct matter?”
  • “This situation is by no means unique. For example, it frequently arises when firms regularly represent clients who bid on publicly finance projects, where several clients may wish to bid against one another.”
  • “Risk Management Solution: The solution that some firms routinely adopt in order to deal with these situations is to insert a provision in every client’s engagement letter that states that the firm’s lawyers have no obligation to share information, even information material to the representation, if that information was learned while representing other clients and is confidential to those other clients.”

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