Protecting the Firm

Ordinarily one lawyer's conflict becomes every lawyer's conflict, because colleagues share files, hallways, and a stake in the firm's work. Rule 1.11 follows that pattern. Paragraph (c) bars a firm from undertaking or continuing a representation adverse to a person about whom its lawyer holds confidential government information, if the information could be used to that person's material disadvantage.¹ Paragraph (b) does the same for a lawyer disqualified by personal participation in a matter: no lawyer in the firm may knowingly undertake or continue the representation “unless” stated conditions are met.²

Each paragraph then offers a way out, and paragraph (c) states it in its last sentence. A firm with which the disqualified lawyer is associated “may undertake or continue representation in the matter only if the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom.”³

The relaxation fits the harm that paragraph (c) targets, which is that confidential information about a person will be used against that person. A screen keeps the information away from the lawyers who handle the matter, and the fee limit removes the disqualified lawyer's financial reason to breach the screen. The lawyer stays personally barred throughout, because the relaxation frees only the rest of the firm.⁴

Paragraph (c) therefore gives the firm two conditions: a timely screen and no share of the fee. Paragraph (b), which governs lawyers disqualified by participation in a matter, adds a third, prompt written notice to the appropriate government agency.⁵ The subsections below take the conditions in turn and end with the question whether a firm in a paragraph (c) problem owes anyone notice.

Timely Screening

The screening condition turns on one adverb. A firm may proceed only if the disqualified lawyer is “timely screened from any participation in the matter.”⁶ Paragraph (b)(1) uses the same screen-and-fee words for conflicts that arise from participation, so everything said here applies to both paragraphs.⁷

The Rules define the screen itself. Rule 1.0(k) calls it “the isolation of a lawyer from any participation in a matter through the timely imposition of procedures within a firm that are reasonably adequate under the circumstances to protect information that the isolated lawyer is obligated to protect under these Rules or other law.”⁸ Three ideas sit in that definition. The goal is isolation from any participation, which reaches further than keeping the lawyer off the matter team, because a lawyer who sits in on strategy talks or reads a draft has participated. The means are procedures within the firm, so the firm must build and enforce the screen, and a lawyer's personal assurance of good behavior does not qualify. The standard is reasonableness under the circumstances, which leaves a court room to weigh the setting. And because timely appears inside the definition, a late screen fails the definition as well as the text of paragraph (c).

A screen has one job: to stop information from passing from the disqualified lawyer to the people who handle the matter. Information that has already passed cannot be recalled. The screen must therefore be in place as soon as the need for it is or should be anticipated, and a wall assembled in reaction to a motion to disqualify comes too late.⁹ The timing question asks when the need arose, not when the other side complained. The need arises once a lawyer who holds the confidential information and a matter adverse to the person it concerns are, or foreseeably will be, in the same firm: on the lawyer's arrival if the matter is already in hand, at intake if the lawyer is already there. A stem that says only that the firm “screened” the lawyer leaves the question open until it supplies the date.

The second firm's screen is more than prompt, and a good screen deserves a closer look. The definition's demand for procedures reasonably adequate under the circumstances lets courts examine the whole arrangement, and one court reviewing a screening mechanism described what makes it credible. The mechanism must be designed both to eliminate opportunities for inadvertent disclosure and to give a genuine appearance of a security wall around the subject attorney, and the more comprehensive it is, the more likely it is to do both. The court approved a requirement that violations be reported, with sanctions when they occur, and it thought that putting the mechanism in writing and distributing it office-wide as required reading for all personnel would make it more effective.¹⁰ The same court also required that the details be communicated to the defendant and his counsel, a feature of that case, while paragraph (c) itself contains no such requirement.¹¹ Read the decision as a description of good screening practice and not as a list the Model Rule imposes. Combined with the Rule's idea of isolation, it points to a screen with these features:

Written procedures, so the screen exists as a document that people can follow and a court can read.
Notice to every lawyer and staff member, so that everyone knows the lawyer is walled off and what that forbids.
Restricted access to the matter's paper and electronic files, so the lawyer cannot read what the team holds.
A bar on discussing the matter with the lawyer, since information also travels through conversation.
A duty to report violations and sanctions for committing them, so that the screen is enforced.

No single feature guarantees that a screen will be found adequate, because adequacy is judged under the circumstances. The enforcement feature carries special weight. A screen is only as good as the firm's willingness to enforce it, and the person whose information is at risk cannot police the firm from outside, so reporting and sanctions are the check that operates from within.

The opposite picture appears in Sorci v. District Court. A former Iowa assistant county attorney who had handled intake of child-protection petitions became executive director of a nonprofit legal center whose lawyers represented children, and the center erected no ethical screen. She had open access to files on cases she had worked on for the county, took part in staff conversations about those cases, and was at least once approached for consultation about a matter she had handled in the county attorney's office. The trial court disqualified the center's attorneys from representing children in any pending case in which she had acted as counsel for the state.¹²

The Iowa Supreme Court affirmed. It reasoned that “[a]dvising a client, authoring correspondence or reports, signing a pleading, and appearing at a hearing each involve substantial responsibility,” and that the bar on later representation prevents “the treachery of switching sides,” protects confidential information, and removes any suspicion that a lawyer conducted government work so as to win future employment.¹³ That ground is her substantial responsibility for the matters while in government, a participation-based conflict of the kind paragraph (a) addresses, so the case does not supply the elements of paragraph (c). Its facts still show what an absent screen looks like: the former government lawyer sat beside the files, joined the conversations, and could be asked for advice by the colleagues handling the cases. Each of those channels is one that a real screen would have closed.

Even a flawless and timely screen leaves the lawyer personally barred from the engagement. It frees only the rest of the firm to proceed, and only when the lawyer also receives no part of the fee, the condition taken up next.¹⁴

The second condition is that the disqualified lawyer “is apportioned no part of the fee therefrom.”¹⁶ Paragraph (b)(1) uses the same words for conflicts that grow out of a lawyer's participation in a matter, so what follows applies to both paragraphs.¹⁷ The fee condition stands beside the screening condition and does not replace it, so the firm needs both. A flawless screen cannot rescue a firm that shares the fee with the disqualified lawyer, and a fee wall cannot rescue a firm whose screen went up late.

The condition answers the weak point of any screen. A screen is a set of procedures, and the person best placed to defeat it is the disqualified lawyer, who holds the confidential information and works in the same office as the team handling the matter. The person the information concerns may not know the government holds it and cannot watch the firm's internal conduct, so the lawyer's own incentives are the only force left to set against temptation. A lawyer whose income rises with the fee from the matter has a reason to slip a fact across the wall, because a stronger result means more money. The fee limit removes that direct financial stake, and with it the motive to help the lawyers handling the matter. The two conditions divide the work: the screen blocks the channels through which information could travel, and the fee limit takes away the reason to open one.

The condition stops short of a ban on paying the lawyer at all, and the line it draws turns on what the pay depends on. Comment [6] to Rule 1.11 explains that the Rule does not prohibit a lawyer from receiving a salary or partnership share established by prior independent agreement, but the lawyer may not receive compensation that directly relates the lawyer's pay to the fee in the matter from which the lawyer is disqualified.¹⁸ A rule forbidding any pay would keep a firm from ever employing a former government lawyer, and it would add no protection, because a salary that stays the same whatever the matter earns gives the lawyer nothing to gain by helping. Compensation computed from the matter's fee is different, since it rises with every dollar the team collects. The words prior independent do the sorting: pay fixed by an agreement that predates the matter and does not depend on it is the same whether the firm wins big or loses, while pay that tracks the matter's fee is tied to the outcome.

The same screen paired with different pay passes this condition. A screened lawyer who receives only the fixed salary set in an employment agreement signed when hired, before the client ever approached the firm, is paid the same amount whether the firm wins or loses, so the fee condition is met.¹⁹ A partner's share of firm profits under a partnership agreement that predates the matter is treated the same way, because its formula was set without reference to this matter and does not move with this matter's fee. The label on a payment settles nothing. A payment called a bonus, a special distribution, or a raise fails if it is figured from the fee in the disqualified matter, and a payment called a salary passes only if it is the pay the agreement would have produced without the matter. A stem that says the lawyer continues to receive regular compensation describes a pass, and a stem that adds a percentage, a contingency, or a raise payable if the firm prevails describes a failure.

When the fee condition fails, the firm loses the Rule's relaxation, because the firm may undertake or continue the representation only if both conditions are met. The ordinary spread of the lawyer's disqualification to the firm then governs, and the firm must decline the engagement or withdraw from it. A firm that satisfies both conditions still has a lawyer who is personally barred from the matter, and the remaining question is whether the firm owes anyone notice.

Notice to the Agency

The firm sentence of Rule 1.11(c) lists two conditions and stops: the firm may proceed “only if the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom.”²¹ Nothing in paragraph (c) requires the firm to tell anyone that the screen exists, whether the agency that employed the lawyer or the person the information concerns. The silence is easy to misread because the neighboring paragraph does address notice. When a lawyer is disqualified under paragraph (a) by personal and substantial participation in a matter, paragraph (b) lets the rest of the firm proceed only if, among its other conditions, “written notice is promptly given to the appropriate government agency to enable it to ascertain compliance with the provisions of this Rule.”²² A student who remembers the firm-protection conditions as a package of screen, fee bar, and notice, and then carries the whole package into a paragraph (c) problem, will report a violation that the text of (c) does not contain.

The function of notice under paragraph (b) shows why the paragraphs differ. In a participation matter the lawyer worked for the agency on the very matter now in private hands, so the agency is the former client whose public work might be turned to a private end. It is also the party whose informed consent, confirmed in writing, paragraph (a) makes the key to the lawyer's own return to the matter.²³ A screen cannot be seen from outside the firm, and the notice gives the agency a way to check it, by the Rule's own words “to ascertain compliance.”²⁴ The notice serves a monitoring function. The text of paragraph (b) asks for prompt written notice and does not ask for the agency's approval of the screen, so a firm that sends the notice need not wait for consent. The lawyer personally stays disqualified unless the agency gives its own informed consent under paragraph (a).

Paragraph (c) has no notice condition, and two reasons explain the omission. The first is the tip-off. The person the information concerns is the intended opponent in a matter the client is contemplating or has just begun, and word that the firm has walled off a lawyer in order to act against that person would warn the opponent before the client makes a first move.²⁵ The second is disclosure. The person may not know that the government holds the information at all, and a notice explaining why the firm screened a particular lawyer would reveal that a former government employee carries information about the person from public service. That information is, by definition, something the government is legally barred from disclosing or privileged not to disclose, so a firm that told the person would be giving away what the Rule exists to protect.²⁶

Because no one outside the firm receives routine word that a screen exists, the system depends on the lawyer and the firm themselves. Rule 1.11 sets conflict standards that are enforced through professional discipline, and government ethics statutes, often enforced by criminal penalties, can place similar or additional restraints on former government employees.²⁷ That placement gives the two conditions of paragraph (c) their weight. The timeliness of the screen and the fee limit are all the Rule demands of the firm, and nobody checks them in advance. A court examines them later if the other side moves to disqualify, and a disciplinary authority examines them if misuse comes to light. The lack of a notice duty therefore gives a firm no relief from building a real screen.

Hypothetical Illustration

A firm hires two former lawyers from the same state revenue agency in the same month. Each is screened before the first day and paid a salary fixed by an employment agreement that predates any matter. The first lawyer personally and substantially handled the agency's audit of a manufacturer, and a client now wants the firm to sue that manufacturer over the audit. The firm may proceed only if it also promptly sends written notice to the agency, and without that notice it falls outside paragraph (b), although the agency need not approve anything. The second lawyer never worked on any matter involving a particular taxpayer but holds the taxpayer's confidential, non-public finances, and a different client wants the firm to pursue that taxpayer in a dispute over its assets. Once the screen is timely and the lawyer receives no part of the fee, the firm has met every condition of paragraph (c), and it owes no notice to the agency and none to the taxpayer.

The usual error runs in two directions. A student who reads a paragraph (c) stem with a timely screen, no fee share, and no notice to the agency may add the missing notice as a violation, which applies paragraph (b)'s condition to a paragraph that does not contain it. A student who reads a participation stem and decides that a screen and a fee bar are enough drops the condition that paragraph (b) adds. A fact pattern can also raise both paragraphs, as when a lawyer participated personally and substantially in a matter and also holds confidential information about the adverse person. Each paragraph sets its own conditions for the firm, so the firm in that situation must satisfy the notice condition of (b) as well. The comparison is short enough to hold in mind:

Paragraph (b), where the lawyer is disqualified by personal and substantial participation: a timely screen, no part of the fee, and prompt written notice to the appropriate government agency, with no consent from the agency required.
Paragraph (c), where the lawyer is disqualified by confidential government information about a person: a timely screen and no part of the fee, with no notice to the agency and none to the person the information concerns.