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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


South Carolina Legal Ethics

1.9   Rule 1.9 Conflict of Interest: Former Client

1.9:100   Comparative Analysis of SC Rule

Primary SC References: SC Rule 1.9
Background References: ABA Model Rule 1.9, Other Jurisdictions
Commentary:

1.9:101      Model Rule Comparison

South Carolina Rule 1.9 and its comments are identical to Model Rule 1.9.

1.9:102      Model Code Comparison

There was no counterpart in the Code of Professional Responsibility to Model Rule 1.9, although Rule 1.9 is based on the concept of confidentiality found in DR 4-101.

1.9:200   Representation Adverse to Interest of Former Client--In General

Primary SC References: SC Rule 1.9(a)
Background References: ABA Model Rule 1.9(a), Other Jurisdictions
Commentary: ABA/BNA 51:201, ALI-LGL 213, Wolfram 7.4

1.9:210      "Substantial Relationship" Test

The loyalty interest of the client extends beyond the formal end of the professional relationship. A rule, however, that provided absolute and indefinite protection of that interest by forbidding any later representation adverse to a former client might well prove too restrictive by limiting the availability of quality legal services to other parties. Rule 1.9, therefore, balances the former client's expectation of loyalty against other interests. The resulting rule forbids representation of a party with interests adverse to a former client in the same matter or a matter substantially related to the prior representation, unless the former client consents after consultation. Rule 1.9(a). The comment to Rule 1.9 states that "a lawyer who recurrently handled a type of problem for a former client is not precluded from later representing another client in a wholly distinct problem of that type even though the subsequent representation involves a position adverse to the prior client."

Rule 1.9 does include substantial protection to the former client's confidentiality interests, providing that a lawyer may not reveal information relating to the representation of a former client except as specifically permitted under the rules and may not use such information to the disadvantage of the former client, unless the information has become generally known or unless use is permitted specifically by the rules. Rule 1.9(c).

Prior to adoption of Rule 1.9, no specific rule covered the duty owed to former clients, and courts had relied on several different approaches to resolve conflicts as they arose. In State v. Smart, 278 S.C. 515, 299 S.E.2d 686 (1982), the trial court had refused to disqualify an assistant solicitor from participating in a death penalty prosecution even though the lawyer had previously worked on the defendant's case while employed in the public defender's office. On appeal from a conviction, the Supreme Court found no error in refusing to disqualify the lawyer since there was no showing that confidences actually had been breached.

In Madison v. Graffix Fabrix, Inc., 304 S.C. 321, 404 S.E.2d 37 (Ct. App. 1991), a disqualification case, the law firm representing an employee in an action against a company arising out of the employee's termination previously had represented the defendant company in an action against another former employee. In the prior representation, the company had alleged that the former employee in that case was trying to entice away its employees. The Court of Appeals concluded that

an attorney is not prevented from representing a subsequent client against a former client, where the duties required of him do not conflict with those required in the first employment. The test of whether the attorney's employment is inconsistent with his duty to a former client is whether acceptance of the new retainer will require him, in forwarding the interest of the new client, to do anything that will injuriously affect a former client in any matter in which he formerly represented him, and also whether the attorney will be called on, in his new relation, to use against a former client any knowledge or information acquired in the former relationship.

304 S.C. at 325, 404 S.E.2d at 40. In Madison, there was no evidence that the second representation would injure the former client in connection with the prior representation or that counsel would be called upon to use any knowledge acquired in the former relationship. The fact that the plaintiff's lawyer previously had represented the defendant in a dispute with a former employee was alone insufficient to require disqualification.

In a disciplinary decision prior to adoption of the current rules, the court held that a lawyer who represents both the buyer and seller of real estate at closing may not later represent one party against the other in litigation directly related to the sales transaction. In re an Anonymous Member of the South Carolina Bar, 298 S.C. 163, 378 S.E.2d 821 (1989). However, the court also indicated that the lawyer who had previously represented the buyer and seller at closing could represent either party or the lender in a later foreclosure against the property. Id.

The status of these decisions since the adoption of the South Carolina rules is unclear. These cases seem to suggest that a lawyer is only disqualified from undertaking representation against a former client when the lawyer will actually use confidential information against the former client. This approach appears to be less protective of the former client's interest than the substantial relationship test of Rule 1.9 An advisory opinion issued after the adoption of the South Carolina rules concludes that, under current Rule 1.9, a lawyer should not handle a subsequent foreclosure against a former client in circumstances similar to In re an Anonymous Member of the South Carolina Bar, without consent of the former client. See S.C. Bar Ethics Adv. Op. # 90-22.

A lawyer's ethical obligations under Rule 1.9 extend only to former clients. An ABA formal opinion concludes that a lawyer who has represented a party in a joint defense consortium, for example, has no ethical obligation to the other defendants that would prevent the lawyer from later representing a client adverse to them in a related matter. The opinion points out, however, that the lawyer's continued duty of confidentiality to the client actually represented may prevent the subsequent representation and that the lawyer may owe fiduciary duties to the other defendants, even in the absence of any ethical duty that would require disqualification. ABA Formal Op. # 95-395.

1.9:220      Material Adversity of Interest

[The discussion of this topic has not yet been written.]

1.9:230      Relevance of "Appearance of Impropriety" Standard [see also 1.7:230]

Prior to adoption of Rule 1.9, South Carolina had based its analysis of former client conflicts both upon provisions of the Code of Professional Responsibility prohibiting an appearance of impropriety and upon code sections protecting client confidences and secrets. In In re Anonymous Member of the South Carolina Bar, 298 S.C. 163, 378 S.E.2d 821 (1989), the court determined that an impermissible appearance of impropriety would be created if a lawyer who represented both parties to a real estate transaction later represented one of them against the other in an action regarding the transaction. The subsequent representation was barred.

The comment to Rule 1.9 states that "disqualification cannot be properly resolved . . . by the very general concept or appearance of impropriety". However, in In re Craig, 317 S.C. 295, 454 S.E.2d 314 (1995), the court referred to the appearance of impropriety as a basis for imposing discipline against a lawyer who did not terminate his representation of a wife in a domestic case when a lawyer with whom he shared office space had previously represented the husband. See also 1.10:103.

1.9:300   Client of Lawyer's Former Firm

Primary SC References: SC Rule 1.9(b)
Background References: ABA Model Rule 1.9(b), Other Jurisdictions
Commentary: ABA/BNA 51:2001, ALI-LGL 203, 204, 214, Wolfram 7.6

1.9:310      Removing Imputed Conflict of Migratory Lawyer

The increased mobility of lawyers between firms in modern practice necessitates clear rules that balance the interests of clients with the lawyer's interest in being able to join a firm without causing significant hardship to the firm and its existing clients. Rule 1.9 governs whether the lawyer moving between firms should be disqualified from representing a party adverse to a client of the lawyer's old firm. Rule 1.9(a) disqualifies a lawyer from representing a client in a matter that is the same or substantially related to a matter in which the lawyer previously represented an adverse party, without the consent of the former client. Thus, a lawyer who moves between firms should be disqualified from representing Party X at the new firm, if the interests of Party X are adverse to those of Party Y and if the lawyer personally represented Party Y in the same matter while at the old firm. In that circumstance, the entire new firm of the lawyer also would be disqualified from representing Party X under Rule 1.10(a).

Neither a lawyer, nor the lawyer's new firm, however, is disqualified from representing a party adverse to a client of the lawyer's old firm, if the lawyer did not represent the former client personally, unless the lawyer actually acquired material protected information about the client of the old firm. Rule 1.9(b)(2). If the lawyer did acquire material information, thus disqualifying the moving lawyer, the entire new firm of the lawyer would be disqualified by imputation under Rule 1.10(a). Again, however, even in circumstances normally requiring disqualification under Rule 1.9(b), the former client may consent to the representation after consultation.

A 1996 ABA formal opinion suggests significant restrictions upon a lawyer who represents a client and wishes to pursue employment with a law firm representing another party in the matter. If a lawyer has an "active and material role" in representing a client, at such time as that lawyer develops a concrete interest in employment by an adversarial firm, has communicated that interest to the other firm, and the interest has been reciprocated, the lawyer must consult with the client and obtain consent. Withdrawal from the representation may be an alternative to consent. The new law firm also may have a duty at some point to notify its client of the discussions. ABA Formal Op. # 96-400.

1.9:320      Former Government Lawyer or Officer [see 1.11:200]

[The discussion of this topic has not yet been written.]

1.9:400   Use or Disclosure of Former Client's Confidences

Primary SC References: SC Rule 1.9(c)
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

[The discussion of this topic has not yet been written.]