Friday, September 9, 2011

Conflicts Management Rule Changes Proposed by ABA Commission

The ABA Commission on Ethics 20/20 has just published proposed modifications to the Model Rules. A summary of outlined updates is available in their summary memo, along with more detailed markups of Model Rules for Admission by Motion, 5.5(d)(3), 1.6 and 1.7.

Proposed changes to Rule 1.7 would give law firms and clients more flexibility to choose specific conflicts rules they wish to operate under based on the jurisdictions in which work relating to matters will occur (even if that's outside the United States):
  • "A matter may require a lawyer to perform work in multiple jurisdictions whose conflict rules differ... the lawyer and client may agree that their relationship concerning the matter will be governed by the conflict rules of a specific United States or foreign jurisdiction..."
The language outlines requirements that the client provide written consent and be suitably advised regarding the implications of such consent (including advice to engage independent counsel), and that: "Client consent under this paragraph is more likely to be effective if the client is an experienced user of legal services," which aligns with recent calls for modifying or relaxing law firm conflicts rules for "sophisticated" clients by some in the United States and other countries.

Proposed changes to Rule 1.6 provide additional guidance regarding when and how lawyers may disclose confidential information about work for past or existing clients when changing firms, in order to support effective conflicts management during the new personnel intake process:
  • The Commission notes that: "The goal is to ensure adequate protection of client confidences while allowing a lawyer and a firm to identify potential conflicts of interest that might arise from the lawyer’s association with that firm."
  • "Paragraph (b)(7) recognizes that, before a lawyer becomes associated with a firm, it may be necessary for the lawyer to reveal limited information about the lawyer’s current and former clients to permit the lawyer and the firm to identify conflicts of interest that would arise from the lawyer’s association with the firm. A lawyer is permitted to reveal this limited information, typically no more than the client’s identity and the general nature of the work that the lawyer performed for that client, but only to the extent reasonably necessary to permit the lawyer and the firm to determine if a conflict of interest would arise from the lawyer’s association with the firm."
  • The complete update spells out several caveats and requirements, including how this information may be used and situations where client consent must be obtained before sharing sensitive information.

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