Tuesday, April 24, 2012

Mergers, Laterals, Conflicts & Confidential Information


With law firm mergers (and potential mergers) in the news, it's important to consider the very sensitive information that may often be shared during the "dating" process and beyond. Bill Frievogel notes a recent appellate decision in New York: Albert Jacobs, LLP v. Parker, 2012 N.Y. App. Div. LEXIS 2807 (N.Y. App. Div. April 17, 2012):
  • "In this opinion the appellate court affirmed.  Plaintiff, evidently a law firm, had previously discussed merging with Law Firm.  The disqualification was based upon the fact that Plaintiff had discussed with Law Firm Plaintiff's earlier representation of one of the defendants in this case, now being represented by Law Firm."
On related note, in the contex of lateral movement, the Connecticut Law Tribune weighs in with an editorial on proposed changes to ABA Model Rule 1.6:
  • "The proposed exception would permit the disclosure of information about current or former clients when a lawyer seeks to move to a new law firm.  The stated purpose of the proposed exception is to facilitate lawyer mobility by providing a way to determine if a conflict of interest would arise were the lawyer to associate with the firm. The client’s informed consent to such disclosure would not be required unless the job-switching lawyer believed that disclosure could prejudice a client or former client."
They do not approve:
  • "The 20/20 Ethics Commission has proposed this new confidentiality exception solely for the benefit of lawyers seeking to change jobs, and not at all for the benefit of the lawyer’s current or former clients... The proposed exception would sacrifice client confidentiality on the altar of a lawyer’s self-interest without the client even knowing that his confidentiality right had been violated. And if the client never finds out that the disclosure has been made, even after the fact, how can the client enforce the prejudice standard?"

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