Consider this Scenario: You want to hire a lawyer with great experience in your practice areas. Knowing that lawyers switching firms can bring conflicts of interest that can “infect” their new firms, you run the names of her previous clients through your conflicts software. You discover she worked briefly for a client in a case in which your firm is representing the adverse party. The client she formerly represented will not waive the conflict.
Fortunately, under certain circumstances Arizona permits the use of “ethical walls” to screen lawyers from sharing confidential client information in such ongoing matters at their new firm. A timely, effective ethical wall can avoid disqualification of the firm.
The key to getting the protection of ethical walls is setting them up effectively.
Under the doctrine of imputed disqualification, if one lawyer is disqualified from representing a client in a matter, the entire firm is disqualified. Before the concept of ethical screening arose, only the informed written consent of the affected client could prevent imputed disqualification of the firm.
However, under Arizona Rule of Professional Conduct ER 1.10(d), imputed disqualification will not apply where: (1) the disqualified lawyer did not have primary responsibility for the matter; (2) that lawyer is timely screened from any participation in the matter and receives none of the fee (other than a salary or previously agreed partnership share); (3) the affected former client is promptly given written notice, including a description of the screening procedures; when they were adopted; a statement that the former client’s material confidential information has not been disclosed or used; and an agreement the firms will respond promptly to written inquiries or objections by the former client; and (4) the screened lawyer and new firm reasonably believe the steps taken will effectively prevent the former client’s confidential information from being disclosed.
The Rule does not specify what precisely must be done to create an effective ethical wall. However, the following steps will help protect the former client’s confidences and create an ethical wall that a court would more likely find sufficient:
- Put the wall in place as soon as possible and before the conflict of interest arises, for example, before the “tainted” attorney joins the firm, or before work begins on the new matter.
- Give written notice to all screened persons and to the firm as a whole – particularly those working on the matter – that the screen is in place and what it entails, including follow-up reminders that the screen remains in effect.
- Prohibit any communication about the matter between the screened person and those working it (lawyers and staff), prohibiting any access to files or any other information about the matter.
- Create as much physical separation as possible between those working on the matter and the screened person.
- Use the best technology available to you to limit access to physical and electronic files for the matter (including document management software to limit access to electronic files and, for physical files, segregating and labelling them to prohibit access by the screened person).
- Prepare, send, and maintain a copy of a notice to the affected client that meets ER 1.10(d)(3).
- Train all personnel on conflicts of interest and ethical screening procedures (and the penalties for breaching an ethical wall).
- Have a trained person in charge of creating and maintaining all ethical walls.
- Maintain and preserve detailed records establishing all steps taken and when.
By timely taking and documenting these steps, you can greatly reduce your firm’s risk of disqualification.