You are a partner in a mid-sized firm. A conflicts check clears before your meeting with prospective client Alice. The meeting is productive and you agree to represent Alice in litigation. During a partner meeting a few weeks later, you ask your partners for their take on a discrete issue in Alice’s case. One partner comments that the case facts sound familiar to a fact pattern she heard from a different prospective client, Dan, who she chose not to represent before you met with Alice. You then discover that Dan is Alice’s adversary. Further complicating matters – your partner learned confidential information from Dan before declining Dan’s case, but failed to enter Dan’s information into the conflicts database.
These facts raise significant ethical issues, implicating new Rule 1.18 of the Rules of Professional Conduct, effective November 1, 2018.
Rule 1.18 (Duties to a Prospective Client) governs a lawyer’s duty to maintain the confidences of prospective clients.
Rule 1.18, subsection (a):
A person* who, directly or through an authorized representative, consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from the lawyer in the lawyer’s professional capacity, is a prospective client.
Rule 1.18, subsection (b):
Even when no lawyer-client relationship ensues, a lawyer who has communicated with a prospective client shall not use or reveal information protected by Business and Professions Code section 6068, subdivision (e) and rule 1.6 that the lawyer learned as a result of the consultation, except as rule 1.9 would permit with respect to information of a former client.
Thus, when a lawyer learns confidential information from a prospective client, Rule 1.18(b) is triggered even if the lawyer declines to take the case. Comment  states that in limited circumstances a law firm “is permitted to accept or continue representation of a client with interests adverse to the prospective client,” with written informed consent of the affected client and prospective client.
The rule reinforces duties based on existing case law. See, e.g. People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc., 20 Cal.4th 1135, 1147-1148 (1999) [“The fiduciary relationship existing between lawyer and client extends to preliminary consultations by a prospective client with a view to retention of the lawyer, although actual employment does not result”]. See also State Bar Formal Opinion 2005-168 and San Diego Ethics Opinion 2006-1, which discuss the ethical implications of receiving electronic communications containing confidential information from prospective clients and strangers.
Returning to the case study, Alice cannot be represented by the firm unless informed, written consent is obtained from both Alice and Dan. The key takeaway: before 11/1/18, refresh your conflicts procedures to address Rule 1.18 and mandate that prospective clients are added to the firm’s conflicts database.
About the author:
Joanna Storey is an attorney with Hinshaw & Culbertson where she focuses her practice on defending a variety of litigation matters, including professional liability, business disputes, product liability and catastrophic personal injury. A member of BASF’s Legal Ethics Committee, Joanna actively follows privacy, security and ethics developments.