Former and prospective clients - Former client conflicts

Learning Outcomes

After reading this article, you will be able to identify when a former client conflict arises, apply the “substantially related” test, and explain a lawyer’s duties of loyalty and confidentiality to former clients. You will also understand the requirements for waiving conflicts, the use of information from prior representations, and the rules for imputed disqualification, preparing you to answer MPRE questions on this topic.

MPRE Syllabus

For the MPRE, you are required to understand the ethical rules governing conflicts of interest involving former clients. This includes recognizing when a lawyer is prohibited from representing a new client due to prior representation, the scope of the “substantially related” test, and the obligations regarding confidential information. You should be prepared to:

• Distinguish between current and former client conflicts.
• Apply the “substantially related” matter test to determine if a conflict exists.
• Identify when representation is “materially adverse” to a former client.
• Explain the lawyer’s duty not to use or reveal former client information.
• Recognize how conflicts may be waived by informed consent, confirmed in writing.
• Understand when conflicts are imputed to other lawyers in a firm and the requirements for screening.
• Analyze exceptions for government lawyers and special rules for prospective clients.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. A lawyer previously represented Client A in a contract dispute. Client B now seeks representation from the same lawyer in a new case against Client A involving a different contract. What must the lawyer consider before accepting?
   1. Whether Client A consents in writing
   2. Whether the matters are substantially related and interests are adverse
   3. Whether Client B is aware of the prior representation
   4. Whether the lawyer remembers confidential information
2. Which of the following best describes the “substantially related” test?
   1. The two matters involve the same parties
   2. The two matters involve the same legal issue
   3. There is a substantial risk that confidential information from the prior matter would materially advance the new client’s position
   4. The lawyer actually recalls confidential information from the prior matter
3. A lawyer moves to a new firm. When is the new firm barred from representing a client adverse to the lawyer’s former client?
   1. Always
   2. Only if the lawyer actually shares confidential information
   3. If the matters are substantially related and the lawyer acquired material confidential information
   4. Never
4. Can a lawyer use information from a former client’s representation to benefit a new client?
   1. Yes, if the information is not privileged
   2. Yes, if the former client does not object
   3. No, unless the information is generally known or the former client consents in writing
   4. Yes, if the new client’s interests are not adverse

Introduction

A lawyer’s duty of loyalty and confidentiality does not end when a client relationship concludes. The rules on former client conflicts prevent lawyers from representing new clients in matters that are adverse to former clients if there is a risk that confidential information could be used to the former client’s disadvantage. These rules protect client trust and the integrity of the legal profession.

Key Term: Former Client Conflict
A situation where a lawyer’s representation of a new client may be materially adverse to a former client in the same or a substantially related matter, raising ethical concerns under the rules of professional conduct.

FORMER CLIENT CONFLICTS: THE GENERAL RULE

A lawyer who has formerly represented a client in a matter must not later represent another person in the same or a substantially related matter if that person’s interests are materially adverse to the former client, unless the former client gives informed consent, confirmed in writing.

Key Term: Substantially Related Matter
Two matters are substantially related if they involve the same transaction or legal dispute, or if there is a substantial risk that confidential factual information from the prior representation would materially advance the new client’s position.

Key Term: Material Adversity
A situation in which the interests of the new client are directly opposed to those of the former client, such as representing a new client against a former client in litigation or negotiation.

The “Substantially Related” Test

The “substantially related” test is objective. It asks whether a lawyer, given the scope of the prior representation, would normally have obtained confidential information that could be used in the new matter. The lawyer’s actual memory is irrelevant; the risk of misuse is sufficient.

• If the two matters involve the same facts, transaction, or legal dispute, they are substantially related.
• If the lawyer would have learned confidential information in the prior matter that could materially advance the new client’s position, the matters are substantially related.

Material Adversity

Material adversity exists when the new client’s interests are directly opposed to the former client’s interests in the same or a substantially related matter. This includes representing a new client in litigation against a former client, or attacking work done for a former client (such as challenging a contract or will the lawyer drafted).

Waiver by Informed Consent

A lawyer may represent a new client in a matter adverse to a former client if the former client gives informed consent, confirmed in writing. The consent must be voluntary and based on adequate information about the risks.

Use or Disclosure of Former Client Information

A lawyer must not use or reveal information relating to the representation of a former client except as permitted or required by the rules, or if the information has become generally known.

Key Term: Duty of Confidentiality to Former Client
The obligation not to use or disclose information relating to a former client’s representation to the disadvantage of the former client, unless permitted by the rules or the information is generally known.

IMPUTED DISQUALIFICATION AND SCREENING

If a lawyer is disqualified from representing a client due to a former client conflict, the disqualification is generally imputed to all lawyers in the same firm. However, if the conflict arises from a lawyer joining a new firm, the new firm may avoid disqualification by timely screening the lawyer from participation in the matter, ensuring the lawyer receives no part of the fee, and providing written notice to the affected former client.

Key Term: Imputed Disqualification
The rule that a conflict of interest for one lawyer in a firm is attributed to all lawyers in that firm, subject to exceptions such as effective screening.

Key Term: Screening
Procedures that isolate a disqualified lawyer from any participation in a matter to protect confidential information and allow the firm to continue representation.

SPECIAL RULES FOR GOVERNMENT LAWYERS

A former government lawyer may not represent a client in a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency gives informed, written consent. The same screening and notice requirements apply to the lawyer’s new firm.

PROSPECTIVE CLIENTS

A lawyer who receives information from a prospective client must not use or reveal that information if it could be significantly harmful to the prospective client in the same or a substantially related matter. The lawyer and the firm are disqualified unless the prospective client gives informed written consent, or the lawyer is timely screened and written notice is provided.

Key Term: Prospective Client
A person who consults with a lawyer about the possibility of forming a client-lawyer relationship regarding a specific matter.

EXCEPTIONS AND PRACTICAL APPLICATIONS

• If the information from the former client has become generally known, the lawyer may use it.
• If the former client consents in writing after full disclosure, the conflict is waived.
• The rule does not prohibit a lawyer from representing a new client in a matter unrelated to the former client’s matter, even if the new client’s interests are adverse, unless confidential information would be at risk.

Worked Example 1.1

A lawyer previously represented Company X in drafting a lease agreement. Years later, Tenant Y asks the same lawyer to represent her in a dispute with Company X over the meaning of a clause in that lease. Can the lawyer accept the representation?

Answer:
No. The matters are substantially related (the same lease), and the new representation is materially adverse to the former client. The lawyer may not represent Tenant Y against Company X without Company X’s informed written consent.

Worked Example 1.2

A lawyer formerly represented Client A in a business acquisition. Now, Client B seeks to hire the lawyer to sue Client A for breach of a different contract, unrelated to the acquisition. The lawyer did not learn any information about the new contract during the prior representation. Is there a conflict?

Answer:
No. If the matters are not substantially related and the lawyer did not obtain confidential information relevant to the new dispute, the lawyer may represent Client B against former Client A.

Worked Example 1.3

A lawyer interviews a prospective client about a potential lawsuit but is not retained. Later, the lawyer is asked to represent the opposing party in the same matter. Can the lawyer accept?

Answer:
No, if the lawyer received information from the prospective client that could be significantly harmful in the matter, the lawyer and the firm are disqualified unless the prospective client gives informed written consent or the lawyer is properly screened.

Exam Warning

Be careful: The “substantially related” test does not require actual use of confidential information—risk of use is enough. Even if the lawyer does not remember details, the conflict may still exist. Always ask: Would a reasonable lawyer have obtained confidential information in the prior matter that could help the new client? If yes, a conflict likely exists.

Key Point Checklist

This article has covered the following key knowledge points:

• A lawyer cannot represent a new client against a former client in the same or a substantially related matter if interests are materially adverse, unless the former client consents in writing.
• The “substantially related” test is objective and focuses on the risk of misuse of confidential information.
• Material adversity includes representing a new client against a former client or attacking the lawyer’s prior work.
• A lawyer must not use or reveal former client information to the disadvantage of the former client, unless permitted or the information is generally known.
• Conflicts are generally imputed to the lawyer’s firm, but screening and notice can allow continued representation in some cases.
• Special rules apply to former government lawyers and prospective clients.
• Waiver is possible with informed written consent from the former client.

Key Terms and Concepts

• Former Client Conflict
• Substantially Related Matter
• Material Adversity
• Duty of Confidentiality to Former Client
• Imputed Disqualification
• Screening
• Prospective Client