Cba Ethics Committee Opinion
| Publication year | 1991 |
| Pages | 1371 |
1991, July, Pg. 1371. CBA Ethics Committee Opinion
DR 5-105(D) of the Code of Professional Responsibility ("CPR") provides:
Rule 1.10(a) of the proposed Model Rules of Professional Conduct ("MRPC")(fn1) similarly providesIf a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner or associate or any other lawyer affiliated with him or his firm may accept or continue such employment.
As written, these ethical precepts are simple and far-reaching. Unfortunately, they have proven to be too far-reaching; and for years courts and ethics commentators have struggled to reconcile the unyielding language quoted above with other societal goals and with the realities of law practice.(fn2)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 Rule 1.7, 1.8(c), 1.9 or 2.2.
In an effort to avoid imputed disqualification, law firms in both public and private settings have attempted to create a screen or "Chinese Wall"(fn3) around one or more attorneys who themselves would be ethically prohibited from working on a given matter. Over the past few years, the CBA Ethics Committee has received an increasing number of inquiries as to when construction of a Chinese Wall is proper and what factors to consider in constructing such a Wall. We attempt by this Formal Opinion to provide some overall guidance on these issues.
At the outset, the Committee notes that these issues implicate a number of important legal and social considerations (which at times may conflict) such as a person's right to counsel of his or her choice, a client's right to confidentiality and loyalty in his or her relationship with legal counsel, and the right of attorneys to move from job to job. E.g., Manning v. Waring, Cox, James, Sklar and Allen, 849 F.2d 222, 224 (6th Cir. 1988); Nemours Foundation v. Gilbane, Aetna, Federal Insurance Co., 632 F.Supp. 418, 425 (D. Del. 1986); Parker v. Volkswagenwerk Aktiengesellschaft, 245 Kan. 580, 781 P.2d 1099, 1104 (1989) (all discussing the various factors to consider in analyzing whether a Chinese Wall can avoid a firm's imputed disqualification). Moreover, these issues oftentimes arise in the context of a contested motion to disqualify an opposing party's law firm, and thus are frequently analyzed in a highly charged setting in which the moving party's motives are just as much a matter for judicial scrutiny as the subject attorney's behavior.(fn4) See, Manning, 849 F.2d at 224 (reporting that motions to disqualify opposing counsel are "becoming an increasingly popular litigation technique."); cf. this Committee's Ethics Opinion 78 (adopted June 18, 1988) (regarding the ethical considerations to bear in mind in seeking to disqualify opposing counsel by listing counsel as a fact witness at trial).
For these reasons, it is difficult to set forth black letter principles in this area. The authorities on point are at times difficult to reconcile, and are in any event quite fact-specific.
Nevertheless, while the law is still developing in this area, the authorities do provide some general ethical guidance. The Committee, like the Colorado Supreme Court, see, Os-born v. District Court, 619 P.2d 41,46 (Colo. 1980), is "aware of the current trends regarding the erection of a so-called 'Chinese Wall'. ..." By its analysis of various informal requests for ethical guidance, the Committee is also aware of a number of areas in which some members of the bar fail to appreciate the limited circumstances in which a Chinese Wall is appropriate. Accordingly, the Committee believes that it is in a position to provide some useful information to the bar by analyzing these authorities and describing where Chinese Walls have been permitted, where they have been found ineffective, and what factors to consider (where a Chinese Wall is otherwise proper) in constructing one effectively.
The following discussion may be summarized as follows:
Chinese Walls have been permitted in limited circumstances only, as a way of minimizing the risk of inadvertent disclosure of a client's confidences and secrets. The main situation in which a Chinese Wall may serve to avoid the otherwise strict rule of imputed disqualification is where an attorney moves from one employer (which represents a certain client) to another employer (representing a different client who might be deemed to have a competing or adverse interest to the client of the first employer). Under proper circum-
stances set forth below, a Chinese Wall may enable the new employer to undertake or continue an engagement which the attorney would not be able to handle on his or her own.
Chinese Walls are not permitted as a way of avoiding an attorney's or law firm's duty of undivided loyalty to a client. Accordingly, subject to § l(b) below, a Chinese Wall may not be constructed within a single law firm --- no matter how large and diffuse that firm may be --- so as to permit that firm simultaneously to represent clients whose interests are adverse in the same or a substantially related matter.
Under those limited circumstances where Chinese Walls are permitted, the Wall must be erected in a way which promptly and meaningfully screens the attorney from any contact with the matter at issue.
The Colorado Appellate Courts have suggested that a Chinese Wall may serve to avoid the imputed disqualification of a public law firm such as a district attorney's or public defender's office. See, McCall v. District Court, 783 P.2d 1223 at 1228, n.6 ("It may be possible for the state public defender to minimize disqualification" by creating a Chinese Wall which will prevent one employee's access to information as to the actions of certain co-employees); Ranum v. Colorado Real Estate Commission, 713 P.2d 418, 420 (Colo.App.1985) (approving a Chinese Wall within the Attorney General's office, separating attorneys who serve as counsel to various regulatory commissions and attorneys who prosecute charges before hearing officers of those commissions). These cases reflect the Colorado courts' willingness (similar in nature to many other courts and ethics authorities which have addressed the issue) to apply the rule of imputed disqualification in a pragmatic (sometimes referred to as a "functional"), rather than a literal, manner. See, e.g., Manning, 849 F.2d at 225 (recognizing, in the context of an imputed disqualification motion under the CPR, the "new realities" of modern law practice, including "law firms employing hundreds of lawyers engaging in a plethora of specialities," "law firm mergers," and the frequent movement of attorneys from firm to firm); Nemours Foundation, 632 F.Supp. at 425 (recognizing the "philosophy of pragmatism" in the MRPC regarding imputed disqualification, "which balances the expectations of confidentiality of a former client against the importance of allowing a client the representation of his choice and promoting the mobility of attorneys, particularly associates, from one private law firm to another").
While McCall and Ranum were limited to lawyers in the public sector, the McCall Court relied on authorities which, in turn, would permit the erection of a Chinese Wall under certain circumstances in private law firm settings.(fn5) Authorities from other states, interpreting the CPR, have extended to private law firms the opportunity under appropriate circumstances to avoid imputed disqualification in certain cases by erecting Chinese Walls.(fn6) The Committee concludes that for at least as long as the CPR remains in force, a similar rule should apply in Colorado.(fn7)
1. The interests that may justify imputed disqualification in a Chinese Wall context.
In order to evaluate whether a Chinese Wall may be effective in avoiding imputed disqualification, it is useful at the outset to identify the concerns that might justify such disqualification in the first place.
Three principal concerns basic to the existence of the attorney-client relationship and the accepted role of lawyers in American society may be implicated by allowing a law firm to represent a given client where one lawyer in that firm is unable to do so.
The first concern is confidentiality. Canon 4 of the CPR states:
A lawyer should preserve the confidences and secrets of a client.
To the same effect, Model Rule 1.6(a) provides:
A lawyer shall not reveal information relating to representation of a client.... and Model Rule 1.8(b) provides:
A lawyer shall not use information relating to representation of a client to the disadvantage of the client....
Confidentiality is a basic tenet of the attorney-client relationship. Unless a client has reasonable assurance that his or her lawyer will not reveal the client's confidences, the client may be unwilling to disclose them to the attorney. This could well affect the attorney's ability to provide proper legal representation.
Chinese Walls have succeeded where they have served to minimize the risk of inadvertent disclosure of certain protected information within a public or private law firm.(fn8) E.g., Grand Jury Subpoena of Ford v. United States, 756 F.2d 249,254 (2d Cir. 1985) (Chinese Wall approved within a U.S. Attorney's office, such that one prosecutor may conduct a grand jury investigation of a target defendant while another, properly screened, prosecutor may question the target defendant's husband about his wife's alleged co-conspirators); Ranum, 713 P.2d at 420 (discussed in a...
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