Client relationships have
limited shelf life
By Diane Karpman
Maybe we should blame television
for planting these weird ideas in clients’ minds. Sometimes those pesky clients
think that they own you forever, even after they terminate the relationship
(even after decades have gone by). In future litigation, not at all related to
the original case, they will try to play a "disqualification card" to
get a great lawyer (you) out of the case.
Let’s consider some important
criteria for disqualification motions. The first and probably the most
important consideration is whether you are dealing with a current or former
client. Current clients are owed a duty of loyalty and a duty of
confidentiality. Former clients are owed only a duty of confidentiality.
When addressing former client
conflicts (or successive representations), the courts are required to engage in
a fact‑specific analysis, including the application of the substantial
relationship test. Recent cases demonstrate that the courts are narrowing that
doctrine. It’s no longer a knee-jerk reaction.
These cases are following a
natural evolution. It is inherent in the profession that lawyers initially go
to work for one side, and then sometimes (often because of their increased
knowledge in a specific field) cross over to the other side. If the substantial
relationship test is applied in a hard-and-fast manner, it would be very
difficult for attorneys to ever be able to work in legal areas where they have
special knowledge and expertise (nobody would).
In Khani v. Ford Motor Company, Judge Norman Epstein clearly explained how the test
is applied. In Khani, the lawyer worked for Ford between 2004 and 2007,
defending Ford in 150 cases, and a Ford dealer under the Song-Beverly Consumer
Warranty Act (aka lemon law). When he moved to private practice, he represented
plaintiffs suing Ford for lemon law violations.
Ford moved for
disqualification because the lawyer was "privy to confidential client
communications and information relating to the defense of" such cases, and
was exposed to "pre-litigation strategies, tactics and case handling
procedures." This is known as "playbook," which California courts routinely reject, but nevertheless
consider.
A major factor that was not
relevant in Khani was the quality of the relationship with the client.
If it is a direct relationship, the client need not prove that the lawyer
possesses confidential information. However, if the lawyer was only briefly
involved on the periphery, no presumptions arise. This is known as the
Peripheral Representation Exception.
In Khani, the trial
court presumed that all lemon law cases raise the same issues and granted the
motion. (Kudos to the lawyer for taking this one up on appeal.) The substantial
relationship theory requires a consideration of the subject matter, facts, and
issues. They must be related in some material manner to the new case. General
generic information about a former client’s overall structure and policies
would not require disqualification, unless it was material – i.e., directly at issue
or of critical importance in the second case. Farris v. Fireman’s Fund Ins.
Co. (2004) 119 Cal. App. 4th 671, 680.
There are probably thousands
of lawyers who defend lemon law claims against Ford. Ford failed to show any
policies, practices or procedures that would be at issue in this case.
Conclusionary general declarations were simply insufficient.
Further, clients cannot have
a "lifetime prohibition against representation adverse to a former
client" (Farris, at p. 680). Those would run afoul of State Bar Rule
1-500, which prohibits restrictions on a member’s practice. That principle is
almost universally adopted in the United States. If this mythic lifetime
prohibition existed, we would have but one major or primary client in our
entire career. Obviously, that’s not going to work, so this balancing process
is important.
Now, on a completely
different subject. There is some talk in the ethics sphere that LinkedIn, with
endorsements that are similar to testimonials, raises some ethics
considerations. I am not a user, but I am suddenly being inundated with invitations.
Other lawyers are reporting a recent change. They claim the program has obtained
their entire contact list and is unilaterally sending messages to their
contacts.
LinkedIn has also been the
victim of meddlers. Someone pretending to be John Sculley, the former CEO of
Apple, sent out hundreds of contact requests. An
advertising copywriter created a profile for George Bluth Sr. (a fictional
character on the television show “Arrested Development”). Obviously,
your "endorsement" becomes meaningless if you support fictional
personalities. As a lawyer, your contact list may be one of your most valuable
possessions. Don't be cavalier and recommend "characters."
Legal ethics expert Diane Karpman can be reached at 310-887-3900 or at karpethics@aol.com