How Matrimonial Lawyers Avoid Disqualification Due to Conflicts of Interest
Few things can be more damaging, both to the matrimonial lawyer and the client, than for the lawyer to be disqualified from the case due to a conflict of interest. While in some instances such conflicts may be unavoidable, it is helpful to be aware of the potential legal ramifications of accepting employment in certain situations.
In most or all states, the current ethical rules track with the American Bar Association’s model rules. To be certain, however, the actual state rules should be checked. The rules and cases discussed in this article reflect Illinois law, which closely tracks the ABA’s rules.
The standard analysis applied in cases involving attorney disqualification was set forth in Schwartz v. Cortelloni, 685 N.E.2d 871, 876 (1997), wherein the Illinois Supreme Court held that the disqualification issue should be determined based on a three-part inquiry:
(1) Based on a factual reconstruction, what was the scope of the former representation;
(2) Is it reasonable to infer that the confidential information allegedly given would have been given to a lawyer representing a client in those matters; and
(3) Is the information relevant to the issues raised in the litigation pending against the former client.
Although under previous law, disqualifications were authorized for the purpose of avoiding the appearance of impropriety, it was noted in the Schwartz case that “[t]he ABA comment to Model Rule 1.9 specifically rejects the ‘appearance of impropriety standard’ in Canon 9 as the basis for disqualifying counsel. The ABA comment instead advocates a fact-based evaluation of the two representations to determine whether duties to a former client would be compromised by a subsequent representation. Annotated Model Rules of Professional Conduct R.1.9, at 165 (2d Ed. 1992).” § 685 N.E.2d at 878.
Required Degree of Contact
Courts are very strict in assessing what degree of contact is necessary to require disqualification. An attorney-client relationship need not be explicit or expressed and is not dependent on the amount of time the client spends with the attorney, the payment of fees or execution of a contract, the consent of the attorney or the actual employment of the attorney. Rather, the relationship can be established during the initial contact. See, eg., Herbes v. Graham, 536 N.E.2d 164, 167 (Ill. App. Ct., 2d Dist. 1989). In King v. King, 369 N.E.2d 1358 (Ill. App. Ct., 4th Dist. 1977), for example, the husband visited an attorney to discuss marital problems. The consultation lasted less than thirty minutes. Two years later, the same attorney attempted to represent the wife in a divorce proceeding. It was held that although there had been no retainer given, an attorney-client relationship existed between the husband and the lawyer and therefore, it was improper for the attorney to now attempt to represent the wife.
Once a substantial relationship is shown to exist between the initial matter and the subsequent matter, it is irrebuttably presumed that confidential information was disclosed. See, e.g., SK Handtool Corp. v. Dresser Industries Inc., 619 N.E.2d 1282, 1289 (Ill. App. Ct., 1st Dist. 1993).
The rules of legal ethics are aimed at protecting attorney-client relationships, maintaining public confidence in the legal profession and ensuring the integrity of the judicial proceedings. Accordingly, any doubts as to existence of a conflict should be resolved in favor of disqualification. S.K. Handtool Corp., 619 N.E.2d at 1289.
It is important for matrimonial practitioners to become familiar with the key rules governing disqualification. Illinois Rules of Professional Conduct, Rule 1.7 provides as follows:
(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after disclosure.
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interest, unless:
(1) The lawyer reasonably believes the representation will not be adversely affected; and
(2) The client consents after disclosure.
(c) When representation of multiple clients in a single matter is undertaken, the disclosure shall include an explanation of the implications of the common representation and the advantages and risks involved.
Rule 1.9 provides as follows:
(a) A lawyer who has formerly represented a client in a matter shall not thereafter:
(1) represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client, unless the former client consents after disclosure; or
(2) use information relating to the representation to the disadvantage of the former client, unless:
(A) such use is permitted by Rule 1.6; or
(B) the information has become generally known.
Rule 1.6(a) provides as follows:
Except when required under Rule 1.6(b) or permitted under Rule 1.6(c), a lawyer shall not, during or after termination of the professional relationship with the client, use or reveal a confidence or secret of the client known to the lawyer unless the client consents after disclosure.
The ‘Chinese Wall’
In S. K. Handtool, the court held that the presumption of shared confidences at the new firm may be rebutted by effective screening of a newly associated attorney. This is known as the”Chinese Wall” arrangement. Typical screening procedures include prohibiting the attorney in question from any contact with the case by restricting access to files and, sometimes, by actually physically separating the attorney in question from other persons who are handling the case. The attorney in question should not receive a share of the fees from this litigation, which might run contrary to partnership arrangements. Note, however, that the Chinese Wall defense can only be utilized when the attorney can clearly and effectively show that he had no knowledge of the confidences and secrets of the client. See, e.g., Weglarz v. Bruck, 470 N.E.2d 21 (Ill. App. Ct., 1st Dist. 1984). Thus, as a practical matter, it would seem difficult or impossible to employ a Chinese Wall defense in a small firm, which is the size of most matrimonial law firms. Finally, it seems that to be able to use a Chinese Wall defense effectively, written procedures might be needed to document such utilization.
A case in which the Chinese Wall was successfully implemented was In re Marriage of Thornton, 486 N.E.2d 1288 (Ill. App. Ct., 1st Dist. 1985). In that case, a matrimonial law firm was found to have effectively screened its new partner (who was a former judge who had made rulings on the same case) and his disqualification was held not to extend to his entire firm. One factor considered was that the husband would have to change counsel who have represented him for some period of time. Also, introduced into evidence was an office memorandum directing that the former judge was not to be consulted on the case and that his access to the case files was prohibited. However, it bears noting that in that case, the wife did not challenge the adequacy of the screening procedures. Conversely, in LaSalle National Bank v. County of Lake, 703 F.2d 252 (7th Cir. 1983), the U.S. Court of Appeals for the Seventh Circuit affirmed the disqualification order where the new firm had not instituted the screening procedures until the disqualification motion had been filed, which was six months after the newly associated attorney had joined the firm. Again, this case illustrates the difficulty in using the Chinese Wall defense.
Lawyers as Witnesses
Disciplinary Rule 3.7 governs the disqualification of an individual lawyer when that lawyer may be called as a witness in the case. The actual rule is set forth as follows:
(a) A lawyer shall not accept or continue employment in contemplated or pending litigation if the lawyer knows or reasonably should know that the lawyer may be called as a witness on behalf of the client, except that the lawyer may undertake the employment and may testify:
(1) if the testimony will relate to an uncontested matter;
(2) if the testimony will relate to a matter of formality and the lawyer reasonably believes that no substantial evidence will be offered in opposition to the testimony;
(3) if the testimony will relate to the nature and value of legal services rendered in the case by the lawyer or the firm to the client; or
(4) as to any other matter, if refusal to accept or continue the employment would work a substantial hardship on the client.
(b) If a lawyer knows or reasonably should know that the lawyer may be called as a witness other than on behalf of the client, the lawyer may accept or continue the representation until the lawyer knows or reasonably should know that the lawyer’s testimony is or may be prejudicial to the client.
(c) Except as prohibited by Rule 1.7 or Rule 1.9, a lawyer may act as advocate in a trial in which another lawyer in the lawyer’s firm may be called as a witness.
Some examples of circumstances in which this rule may come into play are (i) an attorney involved in the drafting of a prenuptial contract becomes a material witness when one spouse claims he/she was coerced into signing, or received an inadequate disclosure; (ii) an attorney is an escrowee of property when compliance with a court order becomes an issue; (iii) a marital settlement agreement is sought to be vacated; or (iv) an attorney is witness to a purported oral agreement. These situations should be avoided, if at all possible.
Practice Tip: If a situation arises that you believe might involve a potential conflict of interest, your state bar association might provide a vehicle for obtaining an advisory opinion before you go forward. You should discuss this with your client, and obtain written waivers of conflict.
If it is a serious enough matter, you might consider retaining counsel with expertise in disciplinary and ethical matters to give you an opinion letter on your situation. And finally, you must have adequate conflict-screening procedures within your own firm. If, like many sole practitioners you maintain an office in a suite with other such practitioners, you must be wary of potential conflicts there. For example, if your access to the other lawyers’ files is not restricted, there is a possibility for a conflict issue.
Paul L. Feinstein, a Chicago practitioner with over four decades of experience, practices family law with an emphasis on divorce litigation, consulting, and appeals. Paul is often hired by trial lawyers to handle appeals and to assist them with determining legal strategies and preserving a sufficient record at trial. He has belonged to the American Academy of Matrimonial Lawyers since 1991 and the Appellate Lawyers Association since 2010. He can be reached at (312) 346-6392. View his Divorce Magazine profile.