Meeting the Objective Analysis Standard When Representing Former Clients

Posted: September 5, 2018

Outdated Standards Call for Review

After coming under scrutiny by North Carolina Supreme Court officials, appearance-of-impropriety standards are no longer sufficient in determining when former clients may or may not disqualify counsel. As of last April, judiciary officials declared impropriety standards won’t be recognized by the Rules of Professional Conduct. Instead, they argued lawyers must abide by more objective standards as outlined by Model Rule 1.9 Duties to Former Clients when conducting litigation with former clients.

Objective Analysis is Required

Model Rule 1.9 outlines the necessary steps for representing former clients. Model Rule 1.9(a), in particular, asserts that a lawyer who represents a former client in one matter shall not represent another client in the same or substantially related matter that adversely affects the interest of the former client. However, if the former client gives informed consent in writing, counsel may not be disqualified and the lawyer may, in a proper manner, continue counsel for the current client.

To more clearly define what constitutes a substantially related matter, the ABA House of Delegates offered a definition in 2002. They stated matters are substantially related if the cases revolve around the same transactions or legal disputes. Additionally, if confidential information exchanged between the former client and lawyer advances the current client’s position, litigators are dealing with substantially related material, disqualifying them from counsel.

The lawyer may, however, not be disqualified from representation and use the information to the benefit of the current client if information from the former client is generally known, as outlined by Model Rule 1.9(c)(a).

When Disqualification Isn’t Applicable

lawyers discussing the details of a contractCourts sometimes improperly disqualify counsel by relying on impropriety standards instead of adhering to a more objective set of rules. A good example is Worley v. Moore, a case in which the North Carolina Supreme Court reversed a trial court’s decision to disqualify counsel’s representation of a former client. The trial court improperly leaned on the plaintiff’s subjective reasoning instead of objectively following the Model Rules.

A former corporate employee made claims against the corporation’s parent company after a merger occurred. The plaintiff claimed former officers, directors, and shareholders knew money wouldn’t be legally funded to the proper individuals, cheating him and others out of millions of dollars. The plaintiff then denied counsel by the parent company, claiming he had previously engaged in litigation with the corporation and another company, and he supported his motion to disqualify counsel by recording previous communications with the corporation’s counsel.

Defendants refuted the plaintiff’s motion to disqualify counsel, stating he had previously signed an engagement letter in which he allowed lawyers to disclose information to the corporation and its constituents.

The trial court still sided in favor of the plaintiff, understanding information previously discussed between the plaintiff and corporate counsel would now be used the disadvantage of the plaintiff. In the state’s appeal case, the North Carolina Supreme Court reversed the trial case’s decision on several accounts.

Judicial court officials argued Model Rule 1.9 exists to balance the use of confidential information between former and current clients, and former clients looking to disqualify counsel must have a ‘high burden of proof’. Such a burden, the court argued, was not apparent for the plaintiff client, as he and the trial court didn’t objectively assess matters of representation.

How to Meet Objective Standards

The court argued litigators are wise to consider these factors when determining whether or not to proceed with counsel. They include considering the initial engagement letter, limits on confidentiality, the scope of representation, the facts leading to initial representation, and the amount of time spend with the lawyer.

By objectively taking these factors into consideration, litigators prevent conflict and appeals, saving all parties time and money. The main takeaways are to objectively follow Model Rules 1.9 and to ensure former clients give consent in writing to represent new clients. This ensures litigation moves forward clearly and objectively with no confusion about whether or not current counsel is justified.