State Bar of Arizona Ethics Opinions

04-04: Conflicts of Interest; Public Defenders; Screening; Disqualification; Imputed Disqualification
6/2004

Under revised Ethical Rule 1.10 a separate “Conflicts Unit” may not be employed to address imputed conflicts involving former clients even if screening is employed as defined under ER 1.0. Two current clients may give a written informed waiver of a conflict under certain circumstances in accordance with ER 1.7. If both clients do not give consent, however, the Public Defender’s office and the proposed Conflicts Unit would constitute one firm for purposes of ER 1.10, such that referral of a case to the Conflicts Unit would not resolve the ethical conflict.

FACTS[1]

In Maricopa County, there are three public defender offices.  When one office has a conflict in a case, such as current or prior representation of a co-defendant, victim or witness, the case is transferred to one of the other offices.  When all three offices have conflicts in a case, the case is assigned to a private attorney who contracts with the county.  Transferring a case to a contract attorney increases the cost to defend it.

To control the cost of death penalty defense, Maricopa County would like one or more of the three public defender offices to create a separate unit to handle cases where all three staffed offices have conflicts.  This unit would be "screened" from all of the office's other cases.  The unit would be housed in a separate location from the office, and neither the unit nor the office would have access to the other's computer records or files.  The attorneys and staff in the Conflicts Unit would be prohibited from discussing cases with attorneys and staff in the Public Defender's office.  Both offices would share a director and administrative staff (payroll), procurement, human resources, etc., but nothing else.

QUESTION PRESENTED

Under the ethics rules adopted by the Arizona Supreme Court effective December 1, 2003, is it permissible for a public defender office to create a separate unit to handle conflict cases if the unit is "screened" from any confidential information in the possession of the office pertaining to the conflicting cases?

RELEVANT ETHICAL RULES
 
ER 1.0     Terminology

(c)     "Firm" or "law firm" denotes a lawyer or lawyers in a law partnership, professional corporation, sole proprietorship or other association; or lawyers employed in a legal services organization or the legal department of a corporation or other organization.  Whether government lawyers should be treated as a firm depends on the particular Rule involved and the specific facts of the situation.

(k)     "Screened" denotes 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.

ER 1.7     Conflict of Interest:  Current Clients

(a)     Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.  A concurrent conflict of interest exists if:

(1)     the representation of one client will be directly adverse to another client; or

(2)     there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

(b)     Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if each affected client gives informed consent, confirmed in writing, and:

(1)     the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2)     the representation is not prohibited by law; and

(3)     the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal.

ER 1.9     Duties to Former Clients

(a)     A lawyer who has formerly represented a client in a matter shall not thereafter 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 gives informed consent, confirmed in writing.

(b)     A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client:

(1)     whose interests are materially adverse to that person; and

(2)     about whom the lawyer had acquired information protected by ERs 1.6 and 1.9(c) that is material to the matter;

unless the former client gives informed consent, confirmed in writing.

(c)     A lawyer who has formerly represented a client in a matter shall not thereafter:

(1)     use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or

(2)     reveal information relating to the representation except as these Rules would permit or require with respect to a client.

ER 1.10     Imputation of Conflicts of Interest:  General Rule

(a)     While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by ERs 1.7 or 1.9 unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.

(b)     When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interest materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless:

(1)     the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and

(2)     any lawyer remaining in the firm has information protected by ERs 1.6 and 1.9(c) that is material to the matter.

(c)     A disqualification prescribed by this Rule may be waived by the affected client under the conditions stated in ER 1.7.

(d)     When a lawyer becomes associated with a firm, no lawyer associated in the firm shall knowingly represent a person in a matter in which that lawyer is disqualified under ER 1.9 unless:

(1)     the matter does not involve a proceeding before a tribunal in which the personally disqualified lawyer had a substantial role;

(2)     the personally disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and

(3)     written notice is promptly given to any affected former client to enable it to ascertain compliance with the provisions of this Rule.

(e)     The disqualification of lawyers associated in a firm with former or current government lawyers is governed by ER 1.11.

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Comment
 
Definition of "Firm"

[1]     For purposes of the Rules of Professional Conduct, the term "firm" denotes lawyers in a law partnership, professional corporation, sole proprietorship or other association; or lawyers employed in the legal department of a corporation or other organization.  See ER 1.0(c).  Whether two or more lawyers constitute a firm within this definition can depend on the specific facts.

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Principles of Imputed Disqualification
 
[5]     ER 1.10(b) operates to permit a law firm, under certain circumstances, to represent a person with interests directly adverse to those of a client represented by a lawyer who formerly was associated with the firm.  The Rule applies regardless of when the formerly associated lawyer represented the client.  However, the law firm may not represent a person with interests adverse to those of a present client of the firm, which would violate ER 1.7.  Moreover, the firm may not represent the person where the matter is the same or substantially related to that in which the formerly associated lawyer represented the client and any other lawyer currently in the firm has material information protected by ERs 1.6 and 1.9(c).

[6]     ER 1.10(c) removes imputation with the informed consent of the affected client or former client under the conditions stated in ER 1.7.  The conditions stated in ER 1.7 require the lawyer to determine that the representation is not prohibited by ER 1.7(b) and that each affected client or former client has given informed consent to the representation, confirmed in writing.  In some cases, the risk may be so severe that the conflict may not be cured by client consent.  For a discussion of the effectiveness of client waivers of conflicts that might arise in the future, see ER 1.7, Comment [21].  For a definition of informed consent, see ER 1.0(e).

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RELEVANT ARIZONA ETHICS OPINIONS
 
89-08     (the Public Defender's Office should be considered a "firm" for purposes of ER 1.10.)

91-12     (contract between County Attorney and City Attorney authorizes the City Attorney to handle some of the County Attorney's misdemeanor criminal cases.  The contract provides that the County Attorney has the power to unilaterally terminate the contract.  To the extent that the exercise of this power requires the County Attorney to review any confidential information relating to the misdemeanor prosecutions performed by the City Attorney, the County Attorney's Office and the City Attorney's Office are one "firm" for purposes of ER 1.10.)

92-06     (ethical propriety of a public defender's continued representation of a client, where the client's defense is to inculpate a co-defendant whom the Public Defender's Office was appointed to represent in the early stages of the same case and also in another proceeding.)

92-07     (screening of Deputy Public Defenders is not an adequate remedy for conflict under ER 1.7)

93-06     (question of whether a public defender's office may split into two divisions in order to avoid imputed disqualification problems is answered in the negative.)

OPINION
 
A virtually identical question was addressed by the Committee before the rule changes to the Rules of Professional Conduct, effective December 1, 2003.  In Opinion 93-06, a Public Defender's office proposed that attorneys, investigators, and secretaries for a new division would maintain an office separate from the main office which, though physically separate, would be administered through the Public Defender.  The Committee addressed whether this resulted in an imputed disqualification under ER 1.10.  In determining that there was an imputed disqualification, this Committee cited Opinion 89-08 and other authority in determining that the Public Defender's office should be considered a "firm" for purposes of ER 1.10.  Opinion 93-06 then analyzed whether screening mechanisms would be adequate to prevent dissemination of confidential information.  Under the then-existing Ethical Rules, the Committee concluded that screening was not an adequate remedy for a conflict of interest under ER 1.7, related to current clients.  See also Opinion 92-07 (screening of deputy public defenders for adverse clients would not be solution for conflict of interest).  The Committee noted that the conflict of interest prohibition of ER 1.7 is to assure clients of the lawyer's undivided loyalty and does not require a showing that confidential information has actually been shared or even that other lawyers in the firm have access to it.  The Committee therefore concluded that the imputed disqualification principles of ER 1.10 would apply unless the County established a separate office with "no ties" to the Public Defender, such that the separate office was sufficiently separate both in operation and management that it would constitute a separate "firm" within the meaning of ER 1.10.

According to the inquiry here, the new "Conflicts Unit" would be screened from the office's other cases such that the "Conflicts Unit" would not have access to the main computer records or files, and would be prohibited from discussing cases with the attorneys and staff of the other offices.  Some have interpreted Revised ER 1.10 as now providing for screening to alleviate conflicts involving former clients.  The operative language of ER 1.10(d) provides that "[w]hen a lawyer becomes associated with a firm, no lawyer associated in the firm shall knowingly represent the person in the matter in which that lawyer is disqualified under ER 1.9 unless . . ."  One interpretation of the "when a lawyer becomes associated with the firm" phrase is that screening is appropriate after or whenever lawyers are associated with a firm.  Under this interpretation, screening would be an appropriate mechanism under ER 1.9 in all cases involving conflicts involving former clients.  The operative language, however, also uses the word "becomes."  This suggests that the screening mechanism is appropriate only in circumstances in which a lawyer representing the former client joins a new "firm."  In this case, the Reporters Explanation of Changes for the ABA's "Ethics 2000" are instructive.  Although the Reporters Explanation is not part of the official comment adopted by the ABA, they reflect that the intent of modified ER 1.10 was to address the situation of a lawyer moving laterally between firms to promote lawyer mobility:

3.     Paragraph (c): Screening of lateral hires

A number of jurisdictions now provide that former-client conflicts of lawyers who have moved laterally are not imputed to the new law firm if the personally disqualified lawyer has been timely screened from participation in the matter and the former client is notified of the screen.  The Commission is recommending that current Rule 1.10 be amended to permit nonconsensual screening of lawyers who have joined a law firm.

Model Rule 1.10 Reporter's Explanation of Changes. 

Consistent with the intent of the drafters and the use of the word "becomes" the Committee concludes that the screening mechanism of ER 1.10 is only appropriate in circumstances in which a new or lateral hire has represented a former client, and may not be employed in circumstances involving a former client when the lawyer was already a member of the "firm."

The other related issue involves current clients under ER 1.7.  Of note, ER 1.7(b) provides that two current clients may waive the existence of a conflict of interest if each client gives informed consent in writing and the additional requirements of ER 1.7(b) are met.[2]  As set forth above, this Committee previously concluded that screening is not an adequate remedy if consent to waive the conflict is not obtained.  Moreover, the amendments to ER 1.10 reflect that screening is appropriate only for cases involving past clients.  Therefore, with respect to current clients who do not provide informed consent, the question becomes whether the separate division is considered the same "firm" for purposes of ER 1.10. 

Moreover, as stated in Opinion 89-08 "a lawyer in a position of ultimate authority and oversight may acquire confidential information about all, or nearly all, of the cases handled by the office during his or her tenure."  Indeed, it would be difficult to imagine how the Public Defender could effectively oversee the "Conflicts Unit" without acquiring some information about individual case files.  In this regard, this Committee stated in Opinion 91-12 that the mere power of the County Attorney's office to review the "workload" of the City Attorney would make the County Attorney's office and the City Attorney's office one firm for purposes of ER 1.10.  Our Opinion 93-06 stressed the need for both offices to be separate in operation and in management for purposes of ER 1.10.

The fact that both the Public Defender's office and the "Conflicts Unit" share a director and administrative staff means that the two should be considered the same "firm" for purposes of ER 1.7 conflicts of interest.  The Committee's Opinion 93-06 indicated that to avoid being considered one "firm" each office would need to have "no ties" to the other office.  As indicated in Opinion 93-06, in the context of indigent criminal defense a client's trust and faith in their attorney is essential to the proper administration of criminal justice.  "Persons charged in crime must have ultimate faith in their attorney and such faith may be slow to develop when the attorney is court-appointed and not retained.  Without faith in counsel, the criminal defendant may not freely communicate information necessary to an adequate defense."  Opinion 93-06 (quoting Rodriguez v. State, 129 Ariz. 67, 73, 74, 628 P.2d 950, 956-57).  This trust and confidence may be undermined if clients, particularly unsophisticated clients, are represented by separate physical offices sharing a director and administrative staff.  See also opinion 91-12 (the ability of the County Attorney to review confidential information pertaining to misdemeanor prosecutions performed by the City Attorney under contract makes the County Attorney's office and City Attorney's office one "firm" for purposes of ER 1.10).  Moreover, even though the screening applicable to lawyers is typically effective, it is not difficult to imagine the inadvertent disclosure of some information protected by ER 1.6 by non-lawyer staff.

CONCLUSION
 
Under revised Ethical Rule 1.10 a separate "Conflicts Unit" may not be employed to address imputed conflicts involving former clients even if screening is employed as defined under ER 1.0.  Two current clients may give a written informed waiver of a conflict under certain circumstances in accordance with ER 1.7.  If both clients do not give consent, however, the Public Defender's office and the proposed Conflicts Unit would constitute one firm for purposes of ER 1.10, such that referral of a case to the Conflicts Unit would not resolve the ethical conflict.

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[1] Formal Opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceedings.  © State Bar of Arizona 2004

[2] We do not address in this opinion the circumstances in which it is appropriate for a client to give or for a lawyer to even suggest a waiver of a conflict.  There are undoubtedly circumstances in which a lawyer should not even request waiver under ER 1.7 or ER 1.9.  Also, as discussed above, there may be circumstances in which, following a knowing waiver confirmed in writing, members of the same firm may institute screening procedures with the consent of the clients.  This opinion does not address that situation, but rather addresses the screening mechanism addressed in ER 1.10 that occurs without client consent.