California's new Rules of Professional Conduct, effective Nov. 1, will implement a new ethical rule imposing duties of confidentiality and fidelity on attorneys who obtain confidential information from prospective clients. New Rule 1.18 will, in some situations, forbid lawyers and law firms from representing current clients with interests adverse to those of prospective clients. The rule reminds lawyers that conflicts of interest between prospective clients and current clients need to be addressed and guarded against. The new rule allows the State Bar to impose discipline on lawyers who fail to properly comport themselves during consultations with prospective clients.
Rule 1.18 is modeled after ABA Model Rule 1.18 and incorporates portions of California Evidence Code Sections 950-952. The rule defines a "prospective client" as any person who consults with a lawyer for the purposes of either (1) retaining the lawyer or (2) securing legal services or advice from the lawyer in the lawyer's professional capacity. The rule contemplates consultation through a prospective client's authorized representative consistent with Evidence Code Section 951. That section defines a "client," as any "a person who, directly or through an authorized representative, consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from him in his professional capacity."
Rule 1.18 prohibits lawyers from using or revealing confidential information learned as a result of a consultation with a prospective client. Confidential information encompasses much more than the attorney-client privilege; the rule mandates that a lawyer keep secret any information learned as a result of the consultation, including seemingly innocuous information unrelated to the legal representation that may even be a matter of public record.
Rule 1.18 imposes duties of fidelity on lawyers who obtain confidential information from prospective clients. Lawyers who have obtained confidential information from a prospective client -- and the lawyer's law firm -- are prohibited from representing clients with materially adverse interests to those of a prospective client in the same or substantially related matter. The Commission for the Revision of the Rules of Professional Conduct's Report and Recommendation for Rule 1.18 states that there was no "one-size-fits-all" definition of "material adversity" and that the facts and circumstances of a particular matter must be considered to determine whether there is material adversity. Rule 1.18 uses the term "materially adverse" to ensure that a lawyer will be prohibited from representing adverse interests only if the lawyer acquires information that will prejudice the prospective client in the matter in which he or she sought legal advice. The ABA Model Rule differs slightly from California's new rule by requiring the confidential information to be both materially adverse and "significantly harmful" to create a conflict requiring disqualification.
Lawyers are able to avoid disqualification despite obtaining confidential information from a prospective client by obtaining informed written consent of both the prospective client and the affected client. Additionally, the lawyer's firm may continue to represent a client with adverse interests if the lawyer took reasonable methods to avoid exposure to more information than was necessary to determine whether to represent the client and the lawyer is timely screened from participation in the matter. The prospective client must be advised of the ethical screen in a manner that permits the prospective client to ascertain compliance.
"Reasonable methods" are not defined by Rule 1.18. Reasonable methods might include the creation of standards for obtaining information from prospective clients whom lawyers meet either in person or by phone. Lawyers can avoid the imputation of conflicts and create nonconsensual ethical screens only if they maintain procedures to avoid receiving more confidential information than is necessary.
Rule 1.18's comments limit the universe of people who qualify as potential clients. Comment 2 provides that a person who unilaterally communicates information to a lawyer without the reasonable expectation that the lawyer is willing to discuss the possibility of forming a lawyer client relationship is not a prospective client. Similarly, a person who communicates confidential information to a lawyer without a good faith intention to seek legal advice or after the lawyer has advised that person that the lawyer is not interested in forming an attorney-client relationship, is not a prospective client for purposes of new Rule 1.18.
Conversely, lawyers, who respond to inquiries on social media, or who maintain blogs, participate in listservs or chat rooms in which they answer potential client questions -- activities that could be interpreted to show the attorney's desire to form an attorney-client relationship with the inquirer or user -- must be careful to ensure that they are not inadvertently obtaining confidential information from a prospective client that may disqualify them or their firms from existing matters. Lawyers can use prospective disclosures to help avoid the creation of confidential relationships.