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Illinois Legal Ethics
1.9 Rule 1.9 Conflict of Interest: Former Client
1.9:100 Comparative Analysis of Illinois Rule
¥ Primary Illinois References:
IL Rule 1.9
¥ Background References: ABA
Model Rule 1.9, Other Jurisdictions
¥ Commentary:
Illinois RuleÊ1.9(a)(2)(A) conforms to 1980 RuleÊ4-101(b). Illinois RuleÊ1.9(a)(2)(B) has no parallel in the 1980 Code, and is somewhat inconsistent with Illinois RuleÊ1.6.
The text for RuleÊ1.9 for the Northern District of Illinois is substantially different in its wording from the Illinois Rules . The Northern District adds a subsection requiring the mental state "knowingly" when representing "a person in the same or a substantially related matter in which the firm with which the lawyer formerly was associated had previously represented a client," whose interests are not only materially adverse to the person, but also about whom the lawyer acquired material information protected by RulesÊ1.6 and 1.9(c). The Northern District adds RuleÊ3.3 to the exception about the use of information relating to the representation of the former client. The Northern District also adds an entire subsection dealing with the revelation of information relating to the representation, with exceptions of what is permitted by RulesÊ1.6 or 3.3. Cases addressing RuleÊ1.9 for the Northern District of Illinois will be addressed separately where they differ from cases discussing IRPC RuleÊ1.9.
1.9:101 Model Rule Comparison
IRPC 1.9 is MR 1.9(a) and (c), slightly modified by the use of "disclosure" rather than consultation and by re-ordering in sectionÊ1.9(b).
IRPC 1.9 is MR 1.9(a) and (c), slightly modified by the use of "disclosure" rather than "consultation" and ABA Model RuleÊ1.9(b) and (c), modified by eliminating (b), re-ordering (c)(1), and eliminating (c)(2). The ABA requires the mental state "knowingly" when representing a "person in the same or a substantially related matter in which the firm with which the lawyer formerly was associated had previously represented a client" whose interests are not only materially adverse to the person, but also about whom the lawyer acquired material information protected by Rules 1.6 and 1.9(c). The ABA also adds RuleÊ3.3 to the exception about the use of information relating to the representation of the former client and adds an entire subsection dealing with the revelation of information relating to the representation, with the exceptions of what is permitted by Rules 1.6 or 3.3.
1.9:102 Model Code Comparison
There was no counterpart in the Disciplinary Rules of the Model Code. The problem addressed in paragraph (a)(1) was sometimes dealt with under the rubric of Canon 9 of the Model Code, which provided: "A lawyer should avoid even the appearance of impropriety."
The provision in paragraph (a)(1) for waiver by the former client is similar to DR 5-105(C).
EC 4-6 stated that the "obligation of a lawyer to preserve the confidences and secrets of his client continues after the termination of his employment." The Model Code's protection of "secrets and confidences" appears fulfilled in the provision in RuleÊ1.9(a)(2)(B) which permits a lawyer to use information which has "become generally known."
However, the scope of what is "materially adverse" to the former client's interests in 1.9(a)(1) is much broader and it is necessary to define what falls under that scope in order to define what information the attorney may use after the termination of his relationship with the client.
1.9:200 Representation Adverse to Interest of Former Client--In General
¥ Primary Illinois References:
IL Rule 1.9
¥ Background References: ABA
Model Rule 1.9(a), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:201, ALI-LGL ¤ 213, Wolfram
¤ 7.4
There is no blanket prohibition against an attorney representing a client against a former client. Absent full disclosure to and consent by the former client, however, IRPC 1.9 prohibits an attorney who has represented a client in a matter from representing another person "in the same or a substantially related matter" where the clients' interests in the matter are "materially adverse." IRPC 1.9(a)(1). The rule also prevents the attorney from using any information gained in a former representation against the former client, arguably including information gained outside the attorney-client relationship. IRPC 1.9(a)(2). The exception is where an attorney is forced to defend himself or herself in an action by the former client from accusations of wrongful conduct. See IRPC 1.6. In such a case, the attorney may reveal client confidences, secrets, and other information gleaned through the representation to the extent necessary to present a defense. See, e.g., ISBA Advisory Opinions 92-22 (MayÊ12, 1993) (RuleÊ1.6 prohibits an attorney from using or revealing confidences or secrets likely to be detrimental to the client, unless the client consented after disclosure, but the attorney may use the confidences or secrets without client consent to the extent necessary to defend a malpractice claim), 91-5 (OctoberÊ26, 2991) (RuleÊ1.9 prohibits an attorney from representing an executor with respect to the garnishment of the estate when the attorney formerly represented the judgment creditor of the legatee), 91-11 (NovemberÊ22, 1991) (RuleÊ1.9(a) prohibits an attorney from representing a client in a negotiation of a lease against a former client when the representation is of the same or substantially related matter, unless the former client consents after disclosure), and 91-20 (January 1991) (an attorney may only represent another person in the same matter in which he represented a former client, and in which the other person's interests are materially adverse to the former client's interests, if the former client consents after the attorney makes a full disclosure). See also Bridge Prod. Inc. v. Quantum Chem. Corp., 1990 WL 70857 (N.D. Ill. Apr.Ê30, 1990). But see Hughes v. Paine Webber, 565 F.ÊSupp. 663 (N.D. Ill. 1983). In Illinois, Òonly a party who has been a client of the attorney whose conduct is in question may complain É of the subsequent representation,Ó and that party Òcarries the burden of proving the existence of the former attorney-client relationship.Ó Schwartz v. Cortelloni, et al. 685 N.E.2d 871, 875 (Ill. 1997).
An example of the use of information relating to the representation of a former client to the disadvantage of that former client is In re Teplitz. In re Teplitz, 97 Ill. Atty. Reg.Ê& Disc. Comm. CH 94 June 17, 1998. The Hearing Board of the ARDC recommended a three year suspension for the violation of RuleÊ1.9(a)(2). Id. The attorney disseminated and disclosed privileged, confidential and proprietary information and trade secrets belonging to the company where he formerly served as patent counsel. Id.
In In re Dombrowski, the Hearing Board of the ARDC recommended a one month suspension for the violation of RuleÊ1.9(a). In re Dombrowski, 97 Ill. Atty. Reg.Ê& Disc. Comm. CH 32 JuneÊ11, 1998. An attorney who represented various train passengers in a personal injury claim represented a new client in the same or substantially related matter in which the new client's interests were adverse to the interests of the former client after disclosure. Id. Additionally, he failed to obtain the consent of his client to file a complaint against her as a defendant in the case in which she formerly was a plaintiff. Id.
The Northern District has addressed how a client becomes a former client. A law firm may not withdraw after suing a present client to convert it into a former client. Ransberg Corp. v. Champion Spark Plug Co., 648 F.ÊSupp. 1040, 1044 (N.D. Ill. 1986); but see In re Sandahl, 980 F.2d 1118 (7th Cir. 1992). The issue of whether an occasional client is a "current" or a former one is sometimes difficult. Uncertainty may result in a court's supporting a client's reasonable belief that a lawyer-client relationship persists. See SWS Financial Fund A v. Salomon Bros. Inc., 790 F.ÊSupp. 1392 (N.D. Ill. 1992); but see Abbott Laboratories v. Centaur Chemical Co., 497 F.ÊSupp. 269 (N.D. Ill. 1980).
1.9:210 "Substantial Relationship" Test
The threshold issues under IRPC
1.9 is the question of what constitutes a "substantially related matterÓ
involving a "former client." As an initial matter, the definition of "former
client" is broad. The initial contact between client and attorney, where the
client's purpose was to approach the lawyer "as a lawyer," may establish an
attorney-client relationship even though the relationship ends there and little
or no confidential information was disclosed. See Marriage
of Decker, 606 N.E.2d 1094 (1992); Nuccio v. Chicago
Commodities, Inc., 628 N.E.2d 1134 (Ill. App. 1
Much of the litigation in this area involves the definition
of "substantial relationship." Where no substantial relationship is proven,
no breach of the duty of confidentially can be found. President
Lincoln Hotel Venture v. Bank One, 649 N.E.2d 432 (Ill. App. 1
The party seeking disqualification bears the burden of
proving that the present and past representations are substantially related.
Schwartz v. Cortelloni, et al., 685 N.E.2d 781, 877 (Ill.
1997). There is some conflict in the case law regarding the scope of
the burden, however. One court has held, as a policy matter, that as the power
of disqualification weakens the attorney-client relationship by effectively
preventing a client from freely retaining counsel of choice, disqualification
should remain a drastic and last resort of the court. Id.
The other approach, however, is that any doubt as to whether the present and
former representations are substantially related should be resolved in favor
of disqualification. See Skokie Gold Standard Liquors v.
JosephÊE. SeagramÊ& Sons, 452 N.E.2d 804 (Ill. App.Ê1
The Illinois Supreme Court has adopted the three-part test illumined in LaSalle NatÕl Bank v. County of Lake, 703 F.2d 252 (7th Cir. 1983), for determining whether a substantial relationship exists:
[T]he court first must make a factual reconstruction of the scope of the former representation. Then, it must determine whether it is reasonable to infer that the confidential information allegedly given would have been given to a lawyer representing a client in those matters. Finally, the court must consider whether the information is relevant to the issues raised in the litigation pending against the former client.
LaSalle, 703 F.2d at 256, adopted
in Schwartz, 685 N.E.2d at 878. See also First
NatÕl Bank v. St. Charles NatÕl Bank, 504 N.E.2d 1257 (Ill. App. 2
Upon proof of a substantial relationship, an irrebutable
presumption arises that confidential information relevant to the current dispute
passed from the former client to the attorney. Skokie Gold
Standard, supra; SK Handtool
Corp. v. Dresser Indust., Inc., 619 N.E.2d 1282 (Ill. App. 1
However, the former client can waive the right to assert
the presumption if he fails to timely file a motion to disqualify the former
attorney. In Nuccio v. Chicago Commodities, Inc., 628 N.E.2d
1134 (Ill. App.Ê1
1.9:220 Material Adversity of Interest
Disqualification under IRPC 1.9 requires both a demonstration that the matters are the same or substantially related and that the present client's interests are "materially adverse to the interests of the former client." IRPCÊ1.9. Surveying cases nationally, one has observed that "[a]dversity may be a state that one knows when one sees, but it is not easily susceptible of a concise legal formulation[.]" American Bar Association, Annotated Model Rules of Professional Conduct (3rd ed. 1996), at P.Ê152-53). This is true in Illinois, where courts have not established any well-defined standards by which the interests of a present and former client are deemed to be materially adverse. The inquiry seems subsumed into the question of whether past and present representations are substantially related.
A substantially related matter can occur in different ways. One is a lawyer switching sides in the same matter. See Restatement (Third) of the Law Governing Lawyers: Representation Adverse to Interest of Former Client ¤Ê213 ( Proposed Final Draft No. 1, 1996). The lawyer owes loyalty and protection of confidences to the first client. Another is when a lawyer might attack her own former work. Id. The concept of substantially related applies to later developments in the same matter. For example, a lawyer may not represent a debtor in a bankruptcy case seeking to set aside a security interest of a creditor if the security interest is included in a document that the lawyer previously drafted on behalf of the creditor. Id. In re Williams provides another example of an attorney attempting to nullify the effectiveness of his prior services. In re Williams, 309 N.E.2d 579 (1974). The Illinois Supreme Court censured an attorney for the violation of Canon 6 of the Canons of Professional Ethics, which mirrored the language of 1.9. Id. The attorney's attempts to secure the proceeds of life insurance policies for his current client, Mrs. Lakes, clearly conflicted with the interests of his former client, Dr. Lakes, which he had promoted by his previous attempts to remove Mrs. Lakes as beneficiary. Id. The death of Dr. Lakes in no way discharged his duty of loyalty. Id.
Finally, a lawyer can represent a new client whose interests would be materially advanced by the use of a former client's confidences. See Restatement (Third) of the Law Governing Lawyers: Representation Adverse to Interest of Former Client ¤Ê213 (Proposed Final Draft No.Ê1, 1996). In order to test whether or not the two matters are substantially related, it is unnecessary for either the former or the new client to disclose confidential information. Id. The inquiry into the issues involved in the prior representation may be specific and yet still avoid revealing the confidential information of the former or the new client. Id.
The scope of the work that the lawyer undertook in the former representation will define the scope of the former client's interests. A lawyer might limit the scope of representation of a client in order to involve possible future conflict, or limit the scope of representation of a later client so it is not substantially related to the representation of a previous client. See Restatement (Third) of the Law Governing Lawyers: Representation Adverse to Interest of Former Client ¤Ê213 ( Proposed Final Draft No.Ê1, 1996).
In criminal proceedings, Illinois courts have embraced in some cases a per se test of disqualification in which the element of material adversity is sometime not required. It is seen most clearly in cases where an attorney represents "the People" for a portion of the proceeding and the defendant for another part of the proceeding. People v. Lawson, 644 N.E.2d 1172 (Ill. 1994), which surveys the law in this area, involved an attorney who, as an assistant State's Attorney, participated in the prosecution of a first-degree murder conviction. He appeared, inter alia, on behalf of the state, at the defendant's arraignment at which he served defendant with an arrest warrant and filed two discovery motions. The attorney subsequently was hired by the public defender's office and was appointed by the court as counsel to the defendant. Despite the attorney's modest involvement in the prosecution of the case, the court held that the attorney was disqualified even absent any showing by the defendant of an adverse or potentially adverse effect on his defense. While this appears to revive the "appearance of impropriety" rule, the mere fact that a defendant is represented by a former representative of "the People" is not enough to disqualify the attorney. For example, the per se rule will not be applied to disqualify a fence-jumping attorney in a criminal matter where "the attorney[] . . . did not personally serve in the same criminal proceeding as both the prosecutor and then as the court-appointed defense counsel." See People v. Lawson, 644 N.E.2d 1172; see also People v. Newberry, 302 N.E.2d 34 (1973) (no disqualification where appointed defense counsel had previously served as head of the criminal division of the State's Attorney's office at time client was indicted).
1.9:230 Relevance of "Appearance of Impropriety" Standard [see also 1.7:230]
Under the Illinois Code, an attorney was obliged to avoid
even the "appearance of impropriety." See e.g. LaSalle NatÕl
Bank v. Triumvera Homeowners AssÕn, 440 N.E.2d 1073 (Ill. App. 1
Since 1980, however, Illinois law has moved away from the appearance of impropriety test and toward the more fact-based standard recommended by the ABA Model Rules. Even before adoption of the Illinois Rules in 1990, a party seeking the disqualification of counsel bore the burden of demonstrating precisely how the present and prior representations are connected. Hannan v. Watt, 497 N.E.2d 1307. See also In re Nathan Powell, 533 N.E.2d 831 (1988) (the mere appearance of impropriety does not afford a basis for imposing sanctions independent of an allegation and proof of a violation of one of the disciplinary rules).
The Illinois Rules, however, delete the reference to "appearance," placing a substantial burden on the party moving to disqualify an attorney under IRPC 1.9. In Schwartz v. Cortelloni, 685 N.E.2d 871, the Illinois Supreme Court stated "We adhere to the ABA's recommendation that an attorney should not be disqualified from representing a client whose interests are adverse to a former client solely on the basis that the subsequent representation may create the appearance of impropriety. Such a standard is 'simply too weak and too slender a reed' upon which to order disqualification." Id. at 878.
1.9:300 Client of Lawyer's Former Firm
¥ Primary Illinois References:
IL Rule 1.9
¥ Background References: ABA
Model Rule 1.9(b), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:2001, ALI-LGL ¤¤ 203, 204,
214, Wolfram ¤ 7.6
Significant problems arise when an attorney moves to a
new firm and that firm subsequently appears in litigation against the former
firm. In Illinois, there is a presumption that the attorney has shared, or will
share, confidences about the former client with his new colleagues or with a
new client. See SK Handtool Corp. v. Dresser Indust., Inc.,
619 N.E.2d 1282, 1289 (Ill. App. 1
1.9:310 Removing Imputed Conflict of Migratory Lawyer
Prior to 1983, the effectiveness of screening as a method
for removing the imputed conflict of a migratory lawyer was in dispute in Illinois
state courts. In Weglarz v. Bruck, 470 N.E.2d 21 (Ill. App.
1
The following year, another appellate court subsequently
held that effective screening could completely dissipate the appearance of impropriety
where a judge who had once ruled against a wife's discovery requests in a divorce
action subsequently joined her husband's law firm. Marriage
of Thornton, 486 N.E.2d at 1294-97 (Ill. App. 1
Methods for establishing an effective screen are discussed in 1.10:300.
1.9:320 Former Government Lawyer or Officer [see 1.11:200]
It is not uncommon for a government lawyer to jump the fence to the private sector. When that happens, conflicts can arise where the lawyer, or her law firm, represents a client whose interests are adverse to those of the lawyer's former client, the state (or "the People"). See People v. Lawson, 644 N.E.2d 1172 (Ill. 1994) (surveying the law in this area). In Lawson, a former assistant State's Attorney who participated in the early portion of the prosecution of a first-degree murder case (e.g., by appearing at the defendant's arraignment) moved to the public defender's office, where he was disqualified from representing the defendant in the same case although there was no showing by the defendant of an actual or potentially adverse affect on his defense. However, this per se rule of disqualification will not be applied to disqualify an fence-jumping attorney in a criminal matter where the attorney did not personally serve in the same criminal proceeding as both the prosecutor and then as the court-appointed defense counsel. See Lawson, 644 N.E.2d at 1285-86; see also, People v. Newberry, 302 N.E.2d 34 (Ill. 1973) (no material adversity where appointed defense counsel had previously served as head of the criminal division of the State's Attorney's office at time client was indicted). Nor will the rule be imputed to disqualify the attorney's new firm, so long as the firm effectively screens the attorney from the matter. See Lawson, 644 N.E.2d at 1186 (citing cases).
A judge will be disqualified from representing a new or
present client if the judge was previously involved in the case as a jurist.
In Marriage of Thornton, 486 N.E.2d 1288 (Ill. App. 1
As a rule, there should be less danger that an entire firm
will be disqualified where a judge moves to private practice than where a prosecutor
or other governmental officer makes the same move, although that is difficult
to say, given that the calculus for disqualification of a former judge (or his
firm) is somewhat different than for attorneys. As one court has pointed out,
"the confidentiality as the heart of the attorney-client relationship does not
exist between a judge and the litigants before the judge. On the other hand,
the need to discourage judges from handling matters in a way that would encourage
their future employment and the need to maintain public confidence in the impartiality
of our judiciary are also legitimate and important." SK Handtool
Corp. v. Dresser Indust. Inc., 619 N.E.2d 1282, 1290 (Ill. App. 1
1.9:400 Use or Disclosure of Former Client's Confidences
¥ Primary Illinois References:
IL Rule 1.9
¥ Background References: ABA
Model Rule 1.9(c), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 55:501-55:2001, ALI-LGL ¤
213, Wolfram ¤¤ 6.7 and 7.4
An attorney may not use, reveal, or disclose the confidences of a former client unless (1)Êthe former client consents after full disclosure, (2)Êthe attorney is forced to defend him or herself in an action by the former client against the attorney for wrongful conduct, or (3)Êthe information has become generally known. See IRPC 1.9(a)(2)(A) and (B); IRPC 1.6; see also ISBAÊ92-22 (MayÊ12, 1993).
The material issue here is whether a relevant confidence or secret has become "generally known." There is essentially no Illinois state case law on the scope of this phrase, though two cases suggest some parameters. For example, facts that may have been confidential during a former representation lose that character where the information is subsequently made "public" through a filing in court or with a governmental agency. See Schwartz v. Cortelloni, et al., 685 N.E.2d 871 (information relevant to former representation not confidential once it is made public through filing during a preceding case); see also People v. Brown, 657 N.E.2d 642 (1st Dist. 1995) quoting E. Cleary, McCormick on Evidence, sec. 91, at 333 (4th ed. 1992) ("Wherever the matters communicated to the attorney are intended by the client to be made public or revealed to third persons, obviously the element of confidentiality is wanting.").
In addition, it is clear that the prohibition is limited to confidential information learned by the attorney; the client is not so bound. In Lanigan v. Resolution Trust Corporation, 1992 WL 350688 (N.D. Ill. 1992) (interpreting an Illinois federal rule essentially identical to IRPC 1.9(a)(2)(b)), the court adopted the reasoning of two federal circuit court decisions and concluded that where an attorney represents the ex-CEO of a former client in litigation against the former client, the former client has no expectation that the ex-CEO was not privy to all significant "secrets" and "confidences" of the former client and cannot disqualify the attorney, even if the attorney was also privy to some or all of the same secrets and confidences. See also Allegaert v. Perot, 565 F.2d 246 (2nd Cir. 1977); Christiansen v. United States Dist. Ct. for the Central Dist. of Calif., 844 F.2d 694 (9th Cir. 1988). See First Wisconsin Mortgage Trust v. First Wisconsin Corp., 584 F.2d 201 (7th Cir. 1978) (en banc) for an analysis of the problem of new counsel's use of work product of disqualified counsel.
