Conflicts, Confidentiality and Contingencies — Freelance Lawyers: Conflicts & Confidentiality, “Lured” Clients Leads to Legal Action

“The Ethics of Freelance Lawyering, Part 2: Conflicts of Interest and Duty to Preserve Client Confidences” —

• “If a freelance attorney temporarily works on a matter, that firm’s client is the temporary attorney’s client for purposes of conflicts of interest. Because temporary attorneys often work for multiple firms simultaneously, it is crucial that both the temporary attorney and the firm routinely monitor conflicts.”
• “Every freelance attorney is required to maintain accurate records of their actual conflicts so they can properly clear conflicts for every new matter. COPRAC 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 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. While temporary attorneys typically do not 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 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.”
• “Firms and freelance attorneys must take special care to avoid imputed conflicts of interest, which create an obligation to clear all conflicts, including those beyond the freelance attorney’s assignments with the firm. 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.’”
• “A lawyer who is ‘of counsel’ at a law firm must pay special attention to the ethical implications that the ‘of counsel’ designation creates—specifically with respect to imputed conflicts. Unlike the case-specific conflict analysis for an independent contractor, an ‘of counsel’ lawyer in California is deemed part of the law firm for conflict purposes.”
• “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. Therefore, when accepting new projects from other law firms, a lawyer who has an ‘counsel’ relationship with Firm A must run each new matter for Firm B through Firm A’s conflict system. Many freelance lawyers avoid the ‘of counsel’ designation in order to avoid imputed conflicts.”
• “When a law firm hires a freelance attorney, it may need to disclose a client’s confidential information for the freelance attorney to adequately assist with the matter. The freelance attorney bears the burden of non-disclosure regarding secrets learned during her involvement with the representation, while the law firm has the obligation to screen the freelance attorney from client secrets unrelated or unnecessary to a particular project.”

“Nixon Peabody sues law firm for allegedly luring away its clients without cut of contingency fee” —

• “Nixon Peabody has filed a lawsuit alleging that its clients were improperly lured away by personal injury law firm Shaheen & Gordon through use of ‘scare tactics’ and false promises.”
• “The two firms allege that Shaheen & Gordon ‘improperly enticed’ their clients to switch firms before submitting their claims to a settlement fund, according to Law.com. The clients were survivors of abuse at the Sununu Youth Services Center.”
• “Thirty-five clients jumped to Shaheen & Gordon between February 2023 and June, the suit says.”
• “Nixon Peabody and Rilee & Associates say they spent thousands of hours representing victims and setting up a settlement fund with state legislators. Their original fee agreement called for attorney fees amounting to 40% of gross recoveries along with costs. The two firms say they have been cut out of Shaheen & Gordon’s client recoveries.”
• “Shaheen & Gordon allegedly told survivors that the firm could obtain the highest damages award to which they are entitled by submitting their claims to the settlement fund, according to Law.com’s description of the suit allegations. That is not necessarily the case, the suit says.”
• “Shaheen & Gordon gave this statement to the ABA Journal: ‘Shaheen & Gordon has reviewed the complaint and denies the allegations. Clients are not the property of their lawyers, and they are free to hire counsel of their own choosing. Shaheen & Gordon has attempted to cooperate with Nixon Peabody but has not received any specific demands or proposals. We are truly surprised by this lawsuit and do not intend to litigate it in the press.’”