The Screening Debate Continues
LACBA Update, November 2008
By Robert K. Sall, The Sall Law Firm, APC, Laguna Beach, and member, LACBA Professional Responsibility and Ethics Committee. Sall’s practice focuses on business litigation, legal malpractice litigation, and attorney-client fee disputes. He can be reached at rsall@Sall-Lawoffice.com. The opinions expressed are his own.
These days, lawyer migration from one firm to another is a fact of life, yet law firms still struggle with the ethics of recognizing and resolving the resulting conflicts of interest. As recently noted at the State Bar’s 2008 Conference of Delegates, “Gone are the days when attorneys work for one firm their entire career.”
Can the migrating lawyer be “screened off” so as to prevent the imputation of a conflict of interest to every other lawyer within the firm? So far, no California state court decision has recognized screening as an ethically permissible method of allowing “infected” lawyers to migrate without vicariously disqualifying the entire firm.1
California courts have recognized screening in limited instances for government lawyers. See, for example, City of Santa Barbara v. Superior Court, 122 Cal. App. 4th 17 (2004). Will screening also be permitted in civil cases? Nearly a decade ago, the supreme court implied that screening might be a proper method of insulating a law firm from conflicts but did not rule on that basis because in that case no attempt had actually been made to impose a screen. People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc., 20 Cal. 4th 1135 (1999).
The ethical issue raised by screening is rooted in the lawyer’s duties of loyalty and confidentiality. Partners and associates talk to each other. Not every firm maintains such a high level of security over its paper and electronic files so as to prevent the possibility of screened lawyers snooping around in a file they should not see. Lunchroom conversations may impart confidential information to a screened lawyer. Screens have holes, and sometimes the flies get in—or out.
As recently noted by Louisiana ethics lawyer Elizabeth Alston, many firms believe that the imputed disqualification rules have been “too strict and did not provide sufficient flexibility to accommodate the realities of present day law practice and the mobility of all, but especially more junior, members of the bar.”
California’s Rules of Professional Conduct do not specifically address either vicarious disqualification or screening. Instead, a rich body of law pertaining to disqualification has emanated in California from court decisions. Conversely, the American Bar Association’s Model Rule of Professional Conduct 1.10(a) expressly imputes the disqualification of one lawyer in a firm to all other members of the firm except where the disqualification is based upon a personal interest of the lawyer that would not limit the ability of other lawyers within the firm to represent the client. There are limited exceptions to this imputed disqualification rule for the hiring of former government lawyers (MR 1.11) or a former judge, clerk, or third party neutral (MR 1.12).
In 2002, the ABA rejected proposed revisions that would have expressly allowed screening as an approved method of dealing with issues of imputed disqualification. And as recently as two months ago, the drama emerged again when the ABA’s Standing Committee on Ethics and Professional Responsibility proposed that the concept of screening be permitted, especially considering that 21 other states (but not California) have adopted some form of permissive screening. The ABA Committee suggested that a rule permitting screening would disavow the apparent distrust of lawyers as well as the erroneous assumption that a personally disqualified lawyer would cheat to gain access to confidential information. The committee also argued that there was no merit to concerns voiced by some ethics lawyers who advocate that the efficacy of screens cannot be objectively verified to the satisfaction of private clients.
The recent ABA proposal would have allowed that when a personally disqualified lawyer joins a law firm, no lawyer within that firm would be disqualified simply by virtue of the lateral move so long as (1) the disqualified lawyer is timely screened from any participation in the matter and apportioned no part of the fee, and (2) written notice is promptly given to any affected former client to enable that client to ascertain compliance with the rule. An amendment was offered, with substantial contribution from the LACBA Professional Responsibility and Ethics Committee’s own Diane Karpman, that screening be allowed only if the screened lawyer had no substantial involvement in the handling of the matter from which he or she would be screened at his or her former firm.
A stirring debate resulted, raising a host of issues, including whether the affected clients should have in effect a veto power by withholding informed written consent. Other issues included concern over exactly how an affected client could ever be able to ascertain the effectiveness of the screen. This latest screening proposal came to a vote of the ABA House of Delegates on August 12, 2008, where, by a margin of 192 to 191, the delegates voted to postpone, allowing more time for consideration.
At our own State Bar’s annual meeting in Monterey last September, the Conference of Delegates rejected an Orange County proposal to amend the Rules of Professional Conduct to prohibit screening as a means of avoiding disqualification unless the affected present and former clients provide informed written consent. The conference concluded that the courts should not be hampered by a firm rule of disqualification, leaving flexibility to exercise equitable powers to both to protect clients and ensure efficient administration of justice. Thus, for the moment, vicarious disqualification in California remains a creature of decisional law, yet it seems inevitable that a court will eventually hold that screening is permitted.
California’s Rules Revision Commission also struggles with this issue—whether to craft a rule of vicarious disqualification that would recognize screening. This divisive debate will undoubtedly continue into the foreseeable future. In the interim, firms may impose screens in the hopes of avoiding conflicts, but there is no safe harbor. A screen may be an effective tool to offer as a means of obtaining informed consent to an otherwise conflicted representation. It seems far more likely that a screen implemented with the approval and informed consent of affected clients will provide a better measure of protection than a screen implemented in the hopes that the clients will never find out.
1 Some federal decisions, such as In re County of Los Angeles, 223 F. 3d 990, 996 (9th Cir., 2000), have suggested that when properly implemented, an ethical wall may rebut the presumption of vicarious disqualification.