Does your firm status affect conflict resolution?
It is not uncommon for lawyers to have different associations with a particular firm. For example, the term “of counsel” is often used to designate a role different from the traditional partner or associate positions. This may beg the question of what level of involvement an attorney must have to be “associated with” a particular firm for conflict purposes. A recent case out of the U.S. District Court of New Jersey involving a “seconded” attorney addressed just this issue.
In the underlying suit, Company – a defendant – claimed that one of its former in-house corporate attorneys (“Attorney”) was now employed by the law firm (“Firm”) representing the plaintiff. The company demanded that Law Firm withdraws from the case due to former client conflicts under Professional Conduct Rules. The Law Firm declined and a motion to disqualify ensued.
According to the opinion, Attorney previously worked in-house for Company and handled similar issues to those before the court. Attorney eventually left Company and obtained a job with Law Firm. As soon as Law Firm hired an attorney, she was “seconded” to one of the Firm’s clients. “Secondment” refers to the hiring of a lawyer from a law firm on a full-time, priced-fixed basis for a set period of time. The attorney executed an agreement with the Law Firm, which provided that she shall not continue to work on behalf of the Firm during the term of her secondment.
The company argued that Attorney had a continuing relationship with the Law Firm, so her conflict should be imputed. The district court first determined that Attorney’s was non-temporary. The court then found that the Law Firm repeatedly held out Attorney as an “associate of the firm, with no caveats or provisos concerning her secondment or transient status.” She was listed as an “Associate” on the Firm’s website and was designated to a certain practice group within the Firm. The Firm had also included the Attorney’s biography when pitching work to other potential clients and reported her as an associate to outside organizations.
As a result, the court concluded that the Law Firm could not “now conveniently eschew that relationship for conflicts analysis.” The court disqualified the Firm based upon the imputed conflict.
The case serves as a good reminder that firms need to consider all attorneys associated with the firm when conducting a conflict check before accepting a new matter. Firms need to be mindful of what level of association attorneys in different roles have with the firm and whether they need to be considered in the conflict analysis. When in doubt, it’s best to address the potential conflict head on and notify the appropriate parties at the outset to avoid any issues down the road.