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December 14, 2015

Eastern District Addresses Lateral-Hire Screening to Avoid Disqualification

by WSBA

 

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Mark Fucile explains how early screening helps avoid disqualification by conflicts arising from lateral hires in law firms.

new lawyer education business startupThe federal district court in Spokane recently addressed lateral-hire screening to avoid disqualification in Assenberg v. County of Whitman, No. 2:14-CV-0145-TOR, 2015 WL 5178032 (E.D. Wash. Sept. 4, 2015) (unpublished). While the court rejected disqualification in this case, the ruling underscores the importance of early and thorough screening when law firms take on new lateral hires.

The plaintiff in this civil rights case was represented by a Spokane law firm. Early in the litigation, an associate at the plaintiff’s law firm who had worked briefly on the case moved to another Spokane law firm that was representing the defendant county. Although it does not appear that the new firm ran a formal conflict check, the firm did ask the associate if he had worked on the plaintiff’s case before assigning him to work on a procedural motion in that case. The associate evidently forgot about his brief work for the plaintiff at the old firm and prepared the motion, but had no other involvement in the case. Approximately three years later, the plaintiff moved to disqualify the defense firm based on the associate’s conflict. Shortly after the plaintiff filed the motion to disqualify, the defense firm screened the associate from any further involvement in the case.

Despite the passage of time, the District Court denied the motion. The court noted that the associate had a former client conflict under RPC 1.9(a), which prohibits a lawyer from handling a matter for a new client adverse to a former client that is the same or substantially related to a matter the lawyer handled for the former client. Unless screened under RPC 1.10(e) (or the conflict is waived), a lateral-hire’s former client conflict is imputed to the new firm under RPC 1.10(a) — the so-called “firm unit rule.” In this instance, the court found that once the firm became aware of the conflict, it took effective steps to screen the associate and that the associate had not shared any of the plaintiff’s confidential information with the new firm.

The scenario in Assenberg is reminiscent of Daines v. Alcatel, S.A., 194 F.R.D. 678 (E.D. Wash. 2000) in which a hiring firm avoided disqualification even though a screen was not implemented until after a paralegal with a conflict had worked briefly at the new firm. As in Assenberg, the firm in Daines was able to demonstrate in the face of a disqualification motion that the paralegal had not shared any of the opponent’s confidential information with the new firm before she was screened.

Although neither firm was disqualified in Assenberg or Daines, it is important to underscore that both firms were put at risk and had to spend time and resources defending themselves. RPC 1.10(e) provides a straightforward and practical mechanism for firms to manage lateral-hire conflicts through screening. If a firm runs a conflict check on a potential lateral-hire’s clients before the lateral arrives, the hiring firm can proactively implement a screen at or before the new-hire’s arrival and avoid the risk of disqualification.

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