New York State Bar Association
Topic: Conflicts of Interest; imputation of
conflicts to co-counsel
Digest: Separate law firms that act as co-counsel in discrete matters are not
associated in the same firm for purpose of imputing all conflicts of each firm
to the other.
Rules: 1.0; 1.6, 1.7, 1.8, 1.9, 1.10, 6.1, 7.2.
inquiring attorney, who is admitted in New York, teaches at an accredited law
school in New York. The attorney is
involved in the law school’s clinical education program, which considers itself
a large law firm with different divisions working on particular types of
matters. The inquirer supervises one of
these divisions, which handles only one type of matter: engaged, pro bono publico, in pursuing
claims on behalf of indigent clients at hearings before an administrative
agency. The inquirer wishes to have the
students in the inquirer’s clinic division collaborate as co-counsel with a New
York not-for-profit legal services organization. The clinic and the legal services
organization are financially separate, operate out of different offices,
maintain their own files, do not share any overlapping personnel, and represent
numerous clients other than those in which they serve as co-counsel. Although the faculty supervisors’ positions
are constant, the students who participate in the clinic do so for only a semester
or two, and thus turnover of student personnel is a characteristic of the
inquirer is concerned that, if the legal clinic and legal service organization
collaborate as co-counsel, then the N.Y. Rules of Professional Conduct (the
“Rules”) may treat the law school’s entire clinical program and the legal
services organization as a single firm for conflicts purposes. Specifically, the inquirer seeks guidance on
whether the clinic must clear all its clients with the legal service organization
(and vice versa), or must instead check only those clients in matters in
which the two serve as co-counsel.
3. When a law school clinic acts as co-counsel
with a legal services organization in particular matters involving the same
types of claims, must the clinic clear conflicts for all of its clients with
those of the legal services organization, or only those clients involved in the
matters in which the two serve as co-counsel?
1.0(h) defines a law firm to include, among other things, any “association
authorized to practice law” and “lawyers employed in a qualified legal
assistance organization.” Rule 1.0(p)
defines a “qualified legal assistance organization” to mean one of the
organizations listed in Rule 7.2(b)(1)-(4), the first of which is a legal aid
office “operated or sponsored by a duly accredited law school.” Under the forerunner of the Rules – the New
York Code of Professional Responsibility (the “Code”) – we said that a law school
legal clinic qualifies as a “law firm,” N.Y. State 794 ¶ 8 (2006) ("the rules governing law firms are equally applicable to the law
school's legal clinic”), and that the clinic must be considered a single law
firm for purposes of conflict imputation, despite separate divisions, if the
students in the clinic share common offices, files, work areas, and
information, N.Y. State 794 ¶ 16. No changes in the Rules from the
Code alter this conclusion. See N.Y.
State 876 ¶ 6 (2011) (when the provisions of the Code and the Rules are
similar or identical to each other on matters relevant to the inquiry, opinions
under the Code apply with equal force).
Accordingly, the question is whether two separate law firms acting as
co-counsel on a series of matters implicates Rule 1.10, governing the imputation
of conflicts when lawyers are “associated” in a law firm, specifically
conflicts arising under Rules 1.7 (governing concurrent conflicts of interest
in general), Rule 1.8, (addressing conflicts in specific circumstances), and
Rule 1.9 (outlining duties to former clients).
the circumstances presented, the answer is no.
briefly stated, Rule 1.7(a) prohibits a lawyer from representing a client if “a
reasonable lawyer would conclude either” that the representation “will involve
the lawyer in representing differing interests” or if a “significant risk”
exists that a “lawyer’s professional judgment on behalf of a client will be
adversely affected by the lawyer’s own financial, business, property or other
personal interests.” This prohibition
is subject to exceptions outlined in Rule 1.7(b), among them where the affected
client gives informed consent confirmed in writing, Rule 1.8 is a litany of standards in specific
conflict situations, none of which this inquiry raises. Rule 1.9 prohibits a lawyer to be “materially
adverse” to a former client in “the same or substantially related matter”
without informed consent confirmed in writing.
Rule 1.10 says that, while “lawyers are associated in a firm, none of
them shall knowingly represent a client when any one of them would be
prohibited from doing so” by Rules 1.7, 1.8, or 1.9. Thus, the imputation standard in Rule 1.10
extends the conflicts provisions of the foregoing Rules only when lawyers are
“associated” in the same law firm.
Rules do not define the term “associated.”
In general, however, to be “associated in a firm” means to be a member
of, employed by, “of counsel” to, or “affiliated” with the law firm, in each
instance reflecting a close and continuing relationship with the firm to
warrant imputation of the conflicts of any one lawyer in the firm to the other
lawyers there. See N.Y. State 876
¶ 13 (2011) (when “two law firms are both associated with
lawyers at a third firm, the conflicts of each firm are imputed to the lawyers
in all three firms as if they were a single law firm”); NY State 793 (2006) (“of
counsel” relationship gives rise to imputation); N.Y. State 773 (2004) (same);
ABA 90-357 (1990) (same); N.Y.C. 2000-4 (2000) (use of the term “affiliated”
denotes relationship that is “close and regular, continuing and semi-permanent”
requiring imputation of conflicts).
Substance, not form, controls; merely maintaining separate practices,
free of connective titles, does not invariably elude the concerns animating
Rule 1.10’s imputation provisions. Consolidated
Theatres v. Warner Bros. Cir. Man. Corp., 216 F.2d 920, 927 (2d Cir. 1954) (“we have never believed that
labels alone – partner, clerk, co-counsel – should control our decisions in so
sensitive an area [as imputation of conflicts]”).
for instance, an office sharing arrangement between two separate practitioners
could give rise to imputing the conflicts of each practice to the other. Compare N.Y. City 80-63 (1980) (solo
practitioners sharing an office in which each has ready access to information
of the other’s practice imputes the conflicts of each to the other) with N.Y.
State 881 ¶ 12 (2011) (the “occasional use of” telephone lines or
conference space “does not, by itself render the inquirer ‘associated in’”
another lawyer’s firm “for purposes of the rule on imputation of
conflicts”). See Rule 1.10, Cmt.
 (“two practitioners who share office space and occasionally consult or
advise each other would not ordinarily be regarded as constituting a firm,”
unless they “present themselves to the public in a way that suggests that they
are a firm or conduct themselves as a firm”).
to disqualify law firms based on some form of association with counsel of
record, though legal issues beyond our jurisdictional charter, afford some
insight into the imputation rule. Some
of these courts refer to their analysis as a “functional” approach, which is
analytically indistinguishable from the ethics opinions of this and other
Committees that stress the nature of the relationship not the names that the
firms choose to characterize that relationship. Illustrations include: Cinema 5, Ltd. v. Cinerama, Inc.,
528 F.2d 1384 (2d Cir. 1975) (disqualifying two law firms representing adverse
interests while sharing a common partner such that shared confidences are
presumed); The Fund of Funds, Ltd. v. Arthur Andersen & Co., 567
F.2d 225 (2d Cir. 1977) (disqualifying successor back-up counsel with which
conflicted counsel had ongoing communications about the matter); Homestead
Video, Inc. v. Village of Valley Stream, 409 F.3d 127 (2005)
(denying disqualification where there was an “attenuated and remote” “of
counsel” relationship between the lawyer and counsel acting for the adversary
and holding that “no presumption of confidence sharing” arises between a firm
receiving confidential information and “a separate firm serving as co-counsel,”
absent evidence to the contrary); Benevida Foods, LLC v. Advance
Magazine Publishers, Inc., 2016 U.S Dist. LEXIS 81186 (June 15, 2016)
(disqualifying co-counsel who conferred with a prospective client about a
matter but did not comply with Rule 1.18 on protecting confidential information
received in such consultation but denying disqualification of co-counsel who
conferred with, but received no confidential information from, disqualified
counsel about the matter); Dietrich v. Dietrich, 136 A.D.3d 461
(1st Dept. 2016) (denying disqualification when counsel of record is co-counsel
with a potentially disqualified lawyer on an unrelated matter).
predominant theme of these cases and ethics opinions is the protection of
client confidential information within the meaning of Rule 1.6. The term “co-counsel” ordinarily means
attorneys or firms jointly representing a client or clients with respect to a
particular litigation or transaction.
The relationship is episodic rather than enduring. Exchange of confidential information between
co-counsel is a necessary incident to serving the interests of their mutual
client(s). We see nothing in the
proposed relationship to justify the merger of the two entities for all
of the criteria typically seen in merging firms for conflicts purposes – common
personnel or finances, shared office space, ready access to client files,
regular and substantial overlap of clients – is present in the co-counsel
relationship contemplated here. That the
legal clinic plans to bring in the legal services organization as co-counsel in
only discrete types of matters does not change this result; in private
for-profit practice, it is not at all unusual for a law firm litigating in a
foreign forum regularly to choose the same local law firm to act as its local
co-counsel in that forum, without fear that all the conflicts of one firm would
be imputed to the other firm. See ALI,
RESTATEMENT OF THE LAW GOVERNING LAWYERS (THIRD), §123, Cmt. c(iii)
(co-counsel who associate for purposes of handling a particular matter are not
subject to vicarious disqualification).
In light of the Rules’ strong encouragement of voluntary pro bono legal
services, codified in Rule 6.1, it cannot be said that the arrangement proposed
here requires stricter standards.
as co-counsel in particular matters does not mean that a law firm legal clinic
is “associated in” the same firm as a legal services organization for purpose
of the imputation provisions of Rule 1.10.
Consequently, when the clinic and organization serve as co-counsel in a
matter, the Rules require the clinic and
organization to clear conflicts
individually and separately, only in matters in which the two serve as