Aug 8 (Reuters) - The American Bar Association House of
Delegates this week approved an amended model rule that for the
first time recognizes as ethical the disclosure of client
information when lawyers are seeking to move from one firm to
Previously, ABA ethics rules did not address the issue of
whether lawyers involved in job or firm merger talks could
disclose the identities of their clients or how much business
these clients generate.
Under the new model rule, the ABA is advising that such
disclosures are permitted in order to determine whether client
conflicts exist between the lawyer and a prospective firm. But
the model rule says these disclosures should be limited to the
identities of clients and should not include detailed billing or
other financial information.
The rule is advisory only, though state bars typically adopt
the ABA model rules. Currently many state bar associations,
including those in California, New York and Illinois, do not
have rules covering whether client information can be disclosed
during lateral partner hiring or law firm merger discussions.
Some state and city bars that do have rules covering this
issue, including Colorado and Boston, mirror the new ABA rule
and hold that client disclosures should be done on a limited
basis only, to check conflicts of interest.
"Our hope is that with clear rules there will be less
disclosure of client information that shouldn't be disclosed,"
said Jamie Gorelick, the co-chair of the ABA Commission on
Ethics 20/20, which recommended the rule. Gorelick said the rule
would bring "more certainty by both lawyers and clients as to
what can be said."
Michael Traynor, another co-chair of the commission, said
the change was made to ensure a law firm can't use a lawyer's
client information as an "insidious device to open the door to
any trade secrets."
David Eisen, a Los Angeles lawyer who specializes in
disputes between lawyers and law firms, acknowledged the need
for a rule regarding client disclosures. He said he has handled
a number of cases in recent years involving disputes between
lawyers and law firms focused on disclosure of clients.
While Eisen declined to discuss specific matters, he said he
has recently handled cases in which law firms end discussions
with a prospective hire and then use client information the
lawyer disclosed to poach business.
"It's a real issue," Eisen said.
At the ABA meeting, held in Chicago, the proposed model rule
drew opposition from the ABA litigation section. Critics said
the rule should require lawyers to receive consent from clients
before disclosing their information.
But the ABA House of Delegates, in a voice vote Monday,
rejected that approach.
Now it's up to the state bar associations to either adopt
the rule or not. The process can take some time.
"It's a complicated change and we haven't begun to study
whether to advance it in New York," said Lise Bang-Jensen, a
spokeswoman for the New York State Bar Association.
(Reporting By Casey Sullivan)
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