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A lawyer plotting a lateral move must get a client’s informed consent before talking turkey with a law firm that represents the client’s adversary, the North Carolina bar’s ethics committee advised Jan. 27 (North Carolina State Bar Ethics Comm., Formal Op. 2016-3, 1/27/17).
Similarly, the hiring law firm can’t launch substantive employment negotiations with opposing counsel unless its own client consents, the opinion says.
The opinion addresses the potential for personal conflicts of interest when lawyers explore the possibility of employment with opposing counsel—a scenario that’s not all that unusual now that lateral moves are commonplace. Lawyers aren’t free to keep their clients in the dark once substantive job talks are on the horizon, the committee made clear.
The committee tackled this question: “May a lawyer negotiate for employment with a law firm that represents a party on the opposite side of a matter in which the lawyer is also representing a party?” The answer is yes, with client consent, the opinion says.
North Carolina Rule of Professional Conduct 1.7 forbids a lawyer to represent a client if the lawyer’s own interests may materially limit the client’s representation, unless the lawyer reasonably believes he can provide competent and diligent representation and the client gives informed consent, confirmed in writing. Comment  to Rule 1.7 says this type of conflict can arise when a lawyer has discussions about possible employment with a client’s opponent or a law firm representing the opponent.
The committee aligned itself with the guidance on conflicts arising from job negotiations in ABA Formal Ethics Op. 96-400 (1996), the Restatement (Third) of the Law Governing Lawyers §125 cmt. d (2000) and Kentucky Ethics Op. E-399 (1998).
“We agree: a job-seeking lawyer who is representing a client, or has confidential information about the client’s matter, may not engage in substantive negotiations for employment with the opposing law firm without the client’s informed consent,” the opinion states.
The committee said substantive discussion means a communication between the lateral and the hiring law firm about the lawyer’s skills, experience and ability to bring clients to the firm.
The opinion describes a two-prong test for substantive discussions—(1) there must be a discussion/negotiation, and (2) it must be substantive. Blindly sending a resume to a law firm is not a “discussion,” and speaking generally with a colleague at a social event isn’t “substantive,” the committee said.
The committee said that to obtain the client’s informed consent, the job-seeking lawyer must explain the current posture of the case, including what additional legal work remains and whether another firm attorney is available to take over the representation if the lawyer wants to withdraw.
If the client won’t consent, the lawyer must either end the job negotiations until the client’s matter is over, or withdraw if that is possible without harming the client’s interests. Another lawyer in the firm may continue representing the client because under Rule 1.10(a) personal conflicts of interest don’t taint lawyers in the firm, the committee said.
Likewise, the hiring firm must not engage in substantive employment negotiations with opposing counsel unless its own client consents, the committee advised. Without that consent, the firm must terminate the job talks or withdraw, which is permissible under Rule 1.16(b)(1) only if it can take place without damaging the client’s interests.
A separate standard ( Rule 1.11(d)(2)(B)) covers government lawyers who are seeking private employment, the opinion notes.
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