Can effective screening procedures avoid imputed disqualification of an entire law firm when a lawyer, paralegal, or other staff member who worked on a matter at a former firm joins a firm now opposing that matter?

Plain-English summary

The opinion revisited two prior opinions on imputed disqualification under DR 5-105(D). Opinion 81-F-5 had held that when a lawyer moves from a firm representing plaintiffs to a firm defending the same cases, the new firm is disqualified from the cases the lawyer had worked on, with the entire firm barred whenever the moving lawyer is barred. Opinion 87-F-110 had asked whether screening could avoid disqualification when a firm hired a paralegal who had worked on pending cases for adverse counsel; relying on the Tenth Circuit's decision in Smith v. Whatcott, the Board in that opinion had specifically disapproved screening as a method of avoiding vicarious disqualification.

This opinion changed course, following the Sixth Circuit's intervening decision in Manning v. Waring, Cox, James, Sklar and Allen, which held that the presumption that a moving lawyer acquired client confidences, and the further presumption that the lawyer shared them with the new firm, are both rebuttable, and that effective screening can rebut the second presumption. The Board adopted the Seventh Circuit's three-step framework from Schiessle v. Stephens: whether a substantial relationship exists between the former and present matters; if so, whether the presumption of shared confidences is rebutted as to the former representation; and whether that presumption is rebutted as to the present firm. The opinion drew on its own Formal Ethics Opinion 86-F-104 for how to assess a substantial relationship, and on the comment to ABA Model Rule 1.9 for the same inquiry.

The opinion approved screening as a viable method to avoid imputed disqualification under DR 5-105(D) and held the rule applies to lawyers, law clerks, paralegals, and legal secretaries alike. It listed factors relevant to whether screening mechanisms have effectively insulated against the flow of confidential information, drawn from Manning and Schiessle: the firm's structural organization, the likelihood of contact between the screened person and those handling the present matter, and rules barring the screened person from access to relevant files or from sharing in fees from the matter. The opinion stated that, at minimum, screening should prohibit discussion of sensitive matters, limit circulation of sensitive documents, and restrict file access, and noted that a strong written policy with sanctions, measures preventing the screened person from sharing in related fees, and physical or organizational separation could also be considered. It required full disclosure of the screened person's presence and the potential conflict to the affected client, citing the importance of avoiding even the appearance of impropriety under DR 9-101, and stated the Board's strong recommendation that any resulting client consent be in writing and contingent on adequate screening being in place. To the extent prior opinions conflicted with this one, they were overruled.

Currency note

This opinion was issued in 1989, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a law firm avoid imputed disqualification by screening a lawyer or staff member who worked on a matter at a former firm?

A: Yes. The opinion approved screening as a viable method to avoid imputed disqualification under DR 5-105(D), overruling the Board's earlier categorical rejection of screening in Opinion 87-F-110.

Q: What test did the opinion use to decide whether disqualification applies?

A: The opinion adopted a three-step analysis: whether a substantial relationship exists between the former and present matters, whether the presumption of shared confidences is rebutted as to the former representation, and whether that presumption is rebutted as to the present firm.

Q: Did the screening rule apply only to lawyers?

A: No. The opinion held that the disqualification rules and screening procedures apply to lawyers, law clerks, paralegals, and legal secretaries.

Q: What did the opinion require regarding the client's knowledge of the screening arrangement?

A: The opinion required full disclosure of the screened person's presence and the potential conflict to the affected client, and stated the Board's strong recommendation that any resulting consent be in writing and contingent on adequate screening being in place.

Background and rules framework

The opinion interpreted former DR 5-105(D) (imputed or vicarious disqualification) and DR 9-101 (avoiding the appearance of impropriety), drawing on the comment to ABA Model Rule 1.9 for the substantial-relationship inquiry. The modern analogs are Model Rule 1.10 / Tennessee RPC 1.10 (imputation of conflicts of interest, including screening) and Model Rule 1.9 / Tennessee RPC 1.9 (duties to former clients).

Citations and references

Rules of Professional Conduct (former Code):

• DR 5-105(D) (imputed or vicarious disqualification). Modern analog: Model Rule 1.10 / Tennessee RPC 1.10
• DR 9-101 (avoiding the appearance of impropriety)
• Comment to ABA Model Rule 1.9 (substantial-relationship inquiry)

Cases:

• Smith v. Whatcott, 757 F.2d 1098 (10th Cir. 1985), firm-wide disqualification where no institutional screening mechanisms were in place
• Manning v. Waring, Cox, James, Sklar and Allen, 849 F.2d 222 (6th Cir. 1988), presumptions of shared confidences are rebuttable, including through effective screening
• Schiessle v. Stephens, 717 F.2d 417 (7th Cir. 1983), three-step framework for disqualification motions and screening factors
• LaSalle Nat'l Bank v. County of Lake, 703 F.2d 252 (7th Cir. 1983), screening factors

Other opinions cited:

• Tennessee Formal Ethics Opinion 81-F-5 (imputed disqualification on a lawyer's firm change)
• Tennessee Formal Ethics Opinion 87-F-110 (prior categorical rejection of screening, overruled in part by this opinion)
• Tennessee Formal Ethics Opinion 86-F-104 (assessing whether a substantial relationship exists between two matters)

See also

• Tenn. Ethics Op. 87-F-110: Paralegal Screening Disapproved (overruled in part by this opinion)
• Tenn. Ethics Op. 86-F-104: The Substantial-Relationship Test for Former-Client Conflicts (source of this opinion's substantial-relationship inquiry)
• ABA Formal Op. 510: Avoiding Imputation of a Prospective-Client Conflict
• DC Ethics Op. 279: Screening as a Cure for Imputed Disqualification
• Tenn. Ethics Op. 2003-F-147: Imputed Disqualification (RPC 1.10) and Screening of Non-Lawyer Staff

Source

• Landing page: https://www.tbpr.org/ethic_opinions/89-F-118

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

89-F-118 - Screening Procedures to avoid imputed disqualification

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 89-F-118

Inquiry is made concerning clarification of Formal Ethics Opinions 81-F-5 and 87-F-110 and the application of screening procedures as a viable method to avoid the imputed disqualification provisions of DR 5-105(D) of the Code of Professional Responsibility.

Formal Ethics Opinion 81-F-5 states that if an attorney practicing with a firm representing numerous plaintiffs transfers to another firm engaged in defending the same cases, the attorney's new firm will be disqualified "from any further participation in any of the cases in which the attorney had been representing the opposite side prior to the move." The opinion states that "when an attorney is barred from representation on the grounds of knowledge actually or presumably acquired from a former representation, then his entire firm is similarly barred."

In Formal Ethics Opinion 87-F-110, the question to be resolved was whether screening was a "viable and permissible means of avoiding the ethical disqualification of an attorney upon employment of a paralegal who had duties involving pending cases while formerly employed by adverse counsel."

In that opinion the Board cited the case of Smith v. Whatcott, 757 F.2d 1098 (10th Cir. 1985), in which the court found that a lawyer's move from one firm to another doomed the new firm's chance to oppose one of the attorney's former clients, despite the fact that the attorney had been totally uninvolved in the case in his new firm.

The Smith court stated that

disqualification [is required if] a substantial relationship exists between the pending suit and the matter in which the challenged attorney previously represented the client. "Substantiality is present if the factual contexts of the two representations are similar or related."

...

Once a substantial relationship has been found, a presumption arises that a client has indeed revealed facts to the attorney that require his disqualification. The majority of circuits that have considered the issue have held this presumption to be irrebuttable ...

The conclusion that two matters are substantially related also gives rise to a second presumption that the attorney shared information with his partners, thereby requiring the disqualification of the entire firm. Several courts have recognized a limited exception to this firm wide disqualification where the firm can prove that the attorney involved in the first matter has been effectively screened from financial interest and participation in the second case.

...

... The firm must have in place "specific institutional mechanisms" to block the flow of confidential information.

Smith, 757 F.2d at 1100-01 (citations omitted).

Although the attorneys in Smith had kept their files in their offices and did not allow access to the other attorneys in the firm and the tainted lawyer did not discuss his former representation or allow access to his files, the Tenth Circuit, nevertheless, upheld the disqualification of the firm. The court stated that "no specific institutional mechanisms designed to prevent inadvertent disclosure were in place when the firm accepted the case." Id. at 1101 (emphasis added).

The Board, after quoting Smith in Formal Ethics Opinion 87-F-110, specifically disapproved the screening exception "as a method of preventing vicarious disqualification wherein there is a potential for harm." Recently, the Sixth Circuit Court of Appeals joined in the Tenth Circuit in recognizing the factors which the Seventh Circuit had listed in Schiessle v. Stephens, 717 F.2d 417 (7th Cir. 1983) and LaSalle Nat'l Bank v. County of Lake, 703 F.2d 252 (7th Cir. 1983), as appropriate for consideration by the trial court in determining whether "specific institutional screening mechanisms" had been implemented "to effectively insulate against any flow of confidential information from the quarantined attorney to other members of his present firm." Manning v. Waring, Cox, James, Sklar and Allen, 849 F.2d 222, 225 (6th Cir. 1988).

The Manning court, quoting Schiessle, stated that these factors included, but were not limited to

the size and structural divisions of the law firm involved, the likelihood of contact between the "infected" attorney and the specific attorneys responsible for the present representation, the existence of rules which prevent the "infected" attorney from access to relevant files or other information pertaining to the present litigation or which prevent him from sharing in the fees derived from such litigation.

Manning, 849 F.2d at 226.

Determination of whether screening procedures had been implemented would be based on "objective and verifiable evidence" presented at trial and would be made by the trial court "on a case-by-case basis." Id. at 225-26.

In Manning, the facts considered by the district court presented the question of whether the entire law firm should be disqualified by a conflict of interest because a member of the firm had represented a certain client prior to his joining the firm. Under these facts the district court held that the presumption of shared confidences was irrebuttable. However, the Sixth Circuit Court of Appeals concluded that the presumption was rebuttable.

In determining that one method of rebutting the presumption was the use of effective screening mechanisms, the Sixth Circuit stated that "courts must be sensitive to the competing public policy interests of preserving client confidences and of permitting a party to retain counsel of his choice." Id. at 224. The court further noted that it saw "no reason why the consideration which led the American Bar Association to approve appropriate screening for former government attorneys should not apply in the case of private attorneys who change their association." Id. at 226.

The Board has determined that both the presumption that an attorney has acquired confidences from a former client or from his or her former firm's client and the presumption that the attorney has shared those confidences with the attorneys in his or her new firm are rebuttable.

The Board adopts the Seventh Circuit's three-step analysis, outlined in Schiessle v. Stephens, 717 F.2d at 420-21, concerning motions to disqualify counsel. That analysis requires a determination of

• whether a substantial relationship exists between the subject matter of the former and present representations.

• whether the presumption of shared confidences which arises from its determination that the representations are substantially related has been rebutted with respect to the former representation.

• whether the presumption of shared confidences has been rebutted with respect to the present representation.

The Board in Formal Ethics Opinion 86-F-104 has stated that in determining whether a substantial relationship exists between two legal matters, "the scope and subject matter of the

former and present representations must be examined. It must be determined whether the subsequent representation is adverse to the matters at issue in the previous relationship."

The comment to Rule 1.9 of the ABA Model Rules of Professional Conduct suggests that the "underlying question [in determining whether a substantial relationship exists] is whether the lawyer was so involved in the matter that the subject representation can be justly regarded as a changing of sides in he matter in question."

Screening mechanisms should be aimed at confining disqualification to the person who was involved in the substantially related matter and therefore infected with or tainted by privileged information which is the source of the ethical problem. Isolation of the infected person would allow the other lawyers and support personnel in the firm or office to assist in or conduct the questioned representation free from any taint of misuse of client confidences.

The Board approves the use of screening procedures as a viable method to avoid the imputed or vicarious disqualification provisions of DR 5-105(D). The Board has further determined that the disqualification rules and screening procedures are applicable to lawyer, law clerk, paralegal, and legal secretary. All questions as to the sufficiency of the screening process are factual issues to be resolved by "objective and verifiable evidence presented to the trial court" and determined "on a case-by-case basis."

Those factors which the Board approves as appropriate for consideration in determining whether "specific institutional screening mechanisms" have been implemented "to effectively insulate against any flow of confidential information from the quarantined [person]" to other members of his or her new firm include the following:

(1) the structural organization of the law firm or office involved,

(2) the likelihood of contact between the "infected" person and the specific attorneys and support personnel involved in the present representation,

(3) the existence of law firm or office rules which prevent the "infected" person

a) from access to relevant files or other information pertaining to the present litigation and

b) from sharing in the fees derived from such litigation.

Law firms or offices are not limited to only these factors since they may design or institute other procedures which would effectively reduce the potential for disclosure or use of confidences. At a minimum, screening mechanisms should prohibit discussion of sensitive matters, limit the circulation of sensitive documents, and restrict access to files. A strong office policy which includes a threat of sanctions for breaching the established screening mechanisms; measures to prevent the disqualified attorney from receiving any compensation attributable to the representation; and physical, organizational, and geographic separation are some, but not all, factors which may be considered in implementing screening procedures. In weighing any factors, the question to be asked is whether the screening mechanisms reduce to an acceptable level the potential for prejudicial misuse of client confidences.

The Board reiterates that protection of the client and client confidences is of the utmost importance. Protection of the image of the profession from "even the appearance of impropriety" (DR 9-101) is also vitally important. Therefore, the presence of the "infected" person and the potential conflicts should be fully disclosed to the client. Full disclosure will give the client the opportunity to seek other counsel or to consent to continued representation. This consent should be contingent upon screening procedures being in place and adequate, and the Board highly recommends that the consent be in writing.

To the extent that the prior opinions cited herein conflict with this opinion, they are overruled.

This 10th day of March, 1989.

ETHICS COMMITTEE:

Cecil D. Branstetter

Cornelia A. Clark

Jerry C. Colley

APPROVED AND ADOPTED BY THE BOARD