By Joseph Ax
NEW YORK, Jan 30 (Reuters) - An ethics opinion released
Wednesday clarified the duties New York lawyers owe prospective
clients under a 2009 professional conduct rule.
The New York City Bar Association ethics opinion addressed
New York Rule of Professional Conduct 1.18, which imposes two
main duties on lawyers who have had discussions about a matter
with a prospective client.
First, the lawyer cannot use or disclose information learned
during the consultation, just as the lawyer would be restricted
from disclosing information obtained from a former client, the
Second, the lawyer cannot represent a client with
"materially adverse" interests in the same matter or a related
matter if the information received from the prospective client
could be "significantly harmful" to that prospective client.
For example, companies frequently meet with different firms
before deciding which one to hire, in what is known as a "beauty
contest." A firm that is not selected cannot subsequently defend
a company's adversary if it learned confidential information
from the company that would be significantly harmful to it.
The "significantly harmful" standard is less restrictive
than the rule which prevents lawyers from representing a client
whose interests are materially adverse to a former client in the
same or a related matter. In that situation, lawyers are barred
from representing the new client, regardless of whether they
learned any confidential information from the former client.
"A lawyer's discussions with a prospective client usually
are limited in time and depth and leave both the prospective
client and the lawyer free (and sometimes required) to proceed
no further," the opinion said. "Prospective clients should
therefore receive some, but not all, of the protection afforded
The opinion also noted that Rule 1.18 includes some
exceptions. An otherwise prohibited representation can be taken
if the prospective client and the affected client give informed
consent. In addition, a disqualified lawyer's firm can take on
such a representation if the firm takes steps to implement an
"ethical screen" between the disqualified lawyer and the lawyers
handling the case.
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