After termination of a lawyer-client relationship, the lawyer owes the former client two duties: not to take actions that will injure the client in the former matter, and not to use information acquired in confidence against the former client.
The former rule, Rule 3-310(e), precluded a lawyer from accepting employment adverse to a former client where, because of the representation of the former client, the lawyer had obtained confidential information material to the employment. Case law developed a “substantial relationship” test to implement the rule.
New Rule 1.9 codifies the substantial relationship standard. Absent informed written consent, a lawyer who has represented a client cannot represent a new client in the same or a substantially related matter in which the new client’s interests are materially adverse to the former client’s.
A comment to the new rule guides the substantial relationship standard. Comment 3 states two matters are “the same or substantially related” for Rule 1.9 if they involve a substantial risk of violating one of the two duties described above. Comment 3 also provides examples of when this could occur: (1) if the matters involve the same transaction or legal dispute or other work performed by the lawyer for the former client; or (2) if the lawyer normally would have obtained confidential information and logically the lawyer would be expected to use that information in the later representation.
Rule 1.9 (c) also addresses the use of a former client’s confidential information. An attorney cannot use a prior client’s confidential information to the disadvantage of the former client except as the State Bar Act permits or when the information has become generally known. Although this is a substantive change from Business and Profession Code section 6068(e), which does not contain such an exception, attorneys should exercise caution in concluding information is “generally known.” The comment to the rule notes the fact information can be discovered in a public record does not, by itself, render that information generally known.
Handling a matter adverse to a former client is not prohibited, but involves some risk. Attorneys faced with the decision to accept or continue representation adverse to a former client should closely examine whether the matters are substantially related and whether the lawyer would be expected to use information the lawyer has a duty not to disclose.
About the author:
John Sullivan is the Vice Chair of BASF’s Legal Malpractice Section. He is a partner at Long & Levit, and a contributor to Long & Levit’s Lawyers and Judge’s Blog, www.longlevit.com/blog/, which is searchable by topic and case name.