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Ethics—Duties to Prospective Clients: A New Rule Forbids Using or Revealing Information Learned in Consultation

by David I. Grunfeld and Evie Cogan

Spring 2005, Vol. 68, No. 1

When does the lawyer-client relationship begin? A brief telephone or cocktail party conversation? A review of papers? A response to an e-mail? What if there was no fee charged? When does any ethical obligation arise? To some extent, general principles of contract and agency law answer these questions rather than those of professional ethics. It has long been said, however, that such a relationship is found if intent can be implied from the conduct of the client who reasonably expects that the attorney might be engaged, and information is exchanged.

The inference is that the information disclosed was confidential; hence, it is presumed that the attorney is duty-bound to protect it from that point forward. Once such an initial contact takes place, whether or not a fee is charged, the lawyer becomes subject to the full panoply of ethical duties toward that client, including conflicts.

To avoid a conflict with a present client, under Rule of Professional Conduct 1.7, or with a former client, under Rule 1.9, it is recommended, as a matter of ethics, professionalism and risk management, that an attorney does the following:

Maintain and Consult and Index
Keep an index of all clients and prospective clients represented and interviewed, even if only telephonically. Update it continuously, and refer to it immediately upon introduction to a new client.

Limit Information Taken
Ask only identifying information of the prospective client, i.e., names and employment of parties and their present significant others, and attorneys presently involved, if any. Do this on the telephone if you get a call, or call back if your office has made an appointment for you. This way you can do a conflicts check without getting confidential information, in order to avoid a possible inability to represent either party.

Obtain a Waiver of Confidentiality
Ask for this especially if you suspect that the prospective client is merely interviewing lawyers in a “beauty contest,” or purposely trying to conflict-out various offices.
It is necessary to keep in mind that, under Rule 1.10, all lawyers in an office might be disqualified if one has a conflict, as the conflict is said to be “imputed” to the others.

Now the Supreme Court of Pennsylvania has given notice that the Disciplinary Board has recommended an amendment to the Pennsylvania Rules of Professional Conduct, adding a new Rule 1.18, titled “Duties to Prospective Clients.” It begins by defining “prospective client” as “a person who discusses with a lawyer the possibility of forming a client-lawyer relationship with respect to a matter.”

The new rule then forbids using or revealing information learned in the consultation, even when no client-lawyer relationship ensues, that may be significantly harmful to the person. It further prohibits representation in those circumstances of another client “with interests materially adverse to those of a prospective client in the same or substantially related matter.”

It goes on to remind us that if a lawyer is disqualified under this rule, no lawyer in that firm may undertake or continue representation, unless:

  1. “Both the affected client and the prospective client have given informed consent,” or

  2. “The lawyer got limited information, and is screened from participation in the matter and receives no part of the fee, and written notice is promptly given to the prospective client.”
The screening measures appear in present Rule 1.10 when one lawyer joins a firm and a conflict is created. The new rule appears to extend that ability to avoid disqualification to the situation dealing with a prospective client.

Other than that, the new rule seems to codify existing committees’ ethics opinions and commentators’ advice in this murky subject matter, which until now has not been addressed directly by the rules. As such, it offers straightforward and understandable guidance to the practitioner. Watch for it!