How should a law firm best manage conflicts of interest when outsourcing legal work to a freelance attorney, contract lawyer, or temporary lawyer service?
For many firms, the most concerning part of hiring a temporary attorney is the potential for conflicts of interest, and the numerous ethical rules pertaining to conflicts which may or may not apply to a temporary lawyer/firm relationship. While law firms and temporary attorneys are required to manage conflicts appropriately, conflicts of interest rules should not be a significant hurdle to getting outside help.
California Rule of Professional Conduct 3-310 governs attorney conflicts regardless of whether a lawyer is a partner, associate, or a temporary contract attorney, and prohibits an attorney from accepting or continuing representation of a client if there is a conflict or potential conflict affecting the member’s representation. If a freelance attorney temporarily works for a firm, that firm’s client is the temporary attorney’s client for purposes of conflicts of interest. Because temporary attorneys often work for different firms simultaneously, it is crucial that both the temporary attorney and the firm routinely monitor for conflicts. Every freelance attorney is required to maintain accurate records of their actual conflicts so they can properly clear conflicts for every matter. State Bar of California Standing Committee on Professional Responsibility and Conduct (“COPRAC”), Formal Opinion 1992-126 states, “To facilitate identification of conflicts, the contract attorney should maintain a personal record of clients and firms for whom he/she has worked, in addition to a general description of the work performed for the clients. The firm engaging a contract attorney has the most direct obligation to maintain an accurate record of the contract attorney’s work for each of its clients and to monitor for conflicts on a routine basis.”
COPRAC Opinion 1992-126 indicates that there is potential for a conflict if the attorney had a “substantial relationship” and obtained “confidential” information during the course of his or her representation of that client. As set forth below, every attorney has a duty to protect client confidences.
While temporary attorneys do not typically obtain confidential client information to amount to a “substantial relationship,” all attorneys must take care to avoid engagements adverse to a current or former client’s interests, especially if a prior relationship presumes knowledge of that client’s confidential information. A better rule is simply for freelance contract attorneys to maintain accurate records of matters and clients, and to take care to avoid working on any other matter adverse to current and former clients.
The most difficult conflict of interest questions involving temporary attorneys arise under the imputed disqualification provisions. The key question is whether the law firm’s conflicts are imputed to the temporary attorney, and vice versa. The answer generally depends on the closeness of the relationship, and under ABA Formal Opinion No. 88-356, whether the temporary attorney is “deemed associated” with the firm such that knowledge of and access to the firm’s clients’ confidential information is presumed. If the attorney is “deemed associated” with the firm, then the firm’s conflicts are imputed to the temporary attorney and vice versa. If the relationship is more distant such that the temporary freelance attorney does not have access to confidential client information beyond the temporary attorney’s specific tasks for the firm, then the temporary attorney will not be deemed associated with the firm for purposes of imputed conflicts of interest.
Relationships between temporary attorneys and firms vary widely, from a short discrete project to relationships that involve follow-up work. The temporary attorney’s knowledge and access to the firm’s clients’ information will also vary widely – in the case of a discrete project, the temporary attorney may only have information regarding a general research question with no knowledge of or access to the clients’ information. But if the relationship is more ongoing and includes follow-up work, the temporary freelance attorney may have access to the firm’s document database and client files. Conflicts of interest rules for temporary attorneys therefore depend on the closeness of the relationship between the temporary attorney and the firm, and the temporary attorney’s access to the firm clients’ confidential information. Under ABA Formal Opinion No. 88-356, “If the contract attorney works only on a single matter for the firm and has no access to information concerning other clients, then the contract attorney would not be deemed associated for imputed disqualification purposes.”
A lawyer who is “of counsel” at a particular law firm must pay special attention to the ethical implications that the “of counsel” designation creates – most especially the conflicts of interest rules. The definition of “of counsel” under California Rule of Professional Conduct 1-400(E)(8) is a “close, personal, continuous and regular relationship” with a named firm. State Bar Ethics Opinion 1993-129 makes clear it is acceptable under the Rules of Professional Responsibility to hold an “of counsel” designation while maintaining a separate source of work, so long as conflicts and other ethical implications do not arise. Unlike the case-specific conflict analysis for an independent contractor, however, an “of counsel” lawyer in California is deemed part of the law firm for conflict purposes, including imputed conflicts of interest. Under this single de facto firm analysis, current and former clients of every firm lawyer and the “of counsel” attorney become relevant to all the lawyers’ respective ethical obligations and potential disqualifications. Opinion 1993-129 states that “if the ‘of counsel’ is precluded from a representation by reason of rule 3-310 of the California Rules of Professional Conduct, the principal is presumptively precluded as well, and vice-versa.” Therefore, when accepting new projects from other law firms, a lawyer who has an “of counsel” relationship with Firm A must run each new matter through Firm A’s conflict system. Before entering into “of counsel” relationships, a contract attorney must make sure he or she is has studied all ethical rules pertaining to the relationship, and must be willing to take extra steps to clear conflicts.
Firms and temporary attorneys should also take every precaution to limit the temporary attorney’s access to confidential client information. Firms should avoid granting passwords to document management systems or general access to client files to temporary attorneys unless absolutely necessary. COPRAC Opinion No. 1992-126 suggests, “To minimize the chance of the contract attorney unnecessarily learning confidential information, the firm must make a concerted effort to screen the contract attorney from confidential information that is unnecessary to the attorney’s assignment at the firm. The firm should limit the contract attorney’s access to office files unrelated to the assignment and the contract attorney should not attend meetings at which unrelated cases are discussed.”
For more information on legal ethics as they relate to freelance/contract lawyering, please see The Ethics of Contract Lawering, published in the Recorder/Law.com.