Hinshaw & Culbertson - Lawyers' Lawyer Newsletter

Prospective Clients – Duty of Confidentiality – Potentially Harmful or Disqualifying Information

ABA Formal Opinion 492 (June 9, 2020)

Risk Management Issue: When dealing with prospective clients, what steps can a lawyer take to insulate against disqualifying conflicts of interest?

The Opinion: The American Bar Association (ABA) Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 492 on June 9, 2020. The Opinion provides guidance on Model Rule 1.18 regarding "Prospective Clients." Specifically, it discusses the following in detail:

  • Rule 1.18(a)'s definition of a "prospective client"
  • The duty of confidentially imposed even if an attorney-client relationship is not formed, as outlined by Rule 1.18(b)
  • The potential for disqualification arising from consultation with a prospective client, provided in Rule 1.18(c)

A "prospective client" is defined in Rule 1.18(a) as "[a] person who consults with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter." The ABA Opinion refers to Comment [2], which identifies the type of conduct constituting a "consultation" that would create an attorney-client relationship and additional duties to the client. Not all contact between an attorney and individual relating to a specific legal matter creates ongoing duties. As Comment [2] explains, a person who engages in unilateral communication to an attorney, "without reasonable expectation that the lawyer is willing to discuss the possibility of former a client-lawyer relationship, [] thus is not a prospective client."

According to the ABA Opinion, Rule 1.18(b) imposes a duty of confidentiality relating to information obtained during the course of a consultation—even if an attorney-client relationship is not formed. The prospective client may, however, consent to disclosure of information shared in the consultation. The ABA opinion refers to Comment [5], which states that "[a] lawyer may condition the consultation with a prospective client on the person's informed consent that no information disclosed during the consultation will prohibit the lawyer from representing a different client in the matter."

Finally, Rule 1.18(c) provides guidance relating to the potential for disqualification when the lawyer receives "significantly harmful" information during the course of a consultation. The Rule states that an attorney should not "represent a client with interests materially adverse to that of a prospective client in the same or substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter."

The ABA Opinion provides some guidance on what might be considered "significantly harmful," including settlement positions, opinions on legal theories, sensitive personal information, and financial information. Further, the ABA Opinion also states that the potentially harmful information need not be utilized by the attorney to trigger Rule 1.18 protection. Rather, the fact that information could be potentially harmful is sufficient to trigger disqualification under Rule 1.18.

In order to guard against a potential disqualifying conflict, the ABA Opinion recommends that attorneys "warn prospective clients against disclosing detailed information." By limiting the consultation to information necessary to determine whether or not the lawyer wishes to take on the representation, it is less likely that the attorney will receive disqualifying "significantly harmful information" from the prospective client.

For attorneys using websites to attract potential clients, the committee suggests that this protection can be achieved by placing an "explicit caution on a website intake link saying that sending information to the firm will not create a client-lawyer relationship and the information may not be kept privileged or confidential." Alternatively, the prospective client and attorney can explicitly agree that information learned during the consultation may subsequently be used by the attorney.

Even if an attorney has received disqualifying information during the consultation with a prospective client, the ABA Opinion outlines protective steps that law firms can take.

If these suggested defenses cannot be implemented, and the prospective client attempts to invoke the protection of Rule 1.18 in a disqualification motion, courts and disciplinary organizations will conduct a fact-specific investigation to determine if "significantly harmful" information was relayed about the new matter. According to the ABA Opinion, that inquiry will consider the "duration of the discussion, the topics discussed, whether the lawyer reviewed documents, and whether the information conveyed is known by other parties, as well as the relationship between the information and the issues in the subsequent matter."

Risk Management Solution: In order to avoid disqualifying conflicts of interest resulting from consultation with prospective clients, law firms should "condition a consultation with a prospective client on the person's informed consent that no information disclosed during the consultation will prohibit the lawyer from representing a different client in the matter." Additionally, attorneys should structure the initial consultation with a prospective client to obtain only the information necessary to determine if a subsequent attorney-client relationship should be formed. Despite these protections, if significantly harmful information is obtained, attorneys may seek the informed written consent of both parties.

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