Ethics Spotlight: Establishing an Effective Ethical Screen

May 2021

By David M. Majchrzak

Every lawyer understands the importance of addressing conflicts. They potentially implicate loyalty and confidentiality issues, and are therefore an important part of addressing fiduciary duties. But even when lawyers are able to identify the existence of a conflict, they sometimes have difficulty in determining how to address it. One common way of doing so is through the establishment of an ethical wall. Sometimes, this is done to obtain consent to proceed with a representation or with concurrent representations. But other times, it is to comply with conditions in one of California’s Rules of Professional Conduct that would permit the representation without consent.

The California Lawyers Association Ethics Committee has issued Formal Opinion 2021-1, its first formal opinion, to address this latter circumstance. And, the opinion itself is a little unusual from the approach that the majority of ethics opinions take. Many address questions about whether ethical obligations permit lawyers to engage in certain conduct. By comparison, this opinion addresses how to properly incorporate an aspect of lawyering that is unquestionably permitted. 

As a preliminary matter, a number of California Rules of Professional Conduct permit lawyers to establish ethical screens to address conflicts that clients have not consented to. California Lawyers Association Ethics Committee has issued Formal Opinion 2021-1 to address what elements an ethical screen should have in such circumstances. Importantly, the opinion notes that there may be a distinction between what is ethically required to comply with professional obligations under the Rules and what a court may view as necessary to avoid disqualification, which sometimes a court may order even when the law firm has complied with the rule. The most critical factors are those expressly set forth in the rules. 

The screen must be timely, such that the confidential information of the former or potential client being protected by the screen is not shared with others in the firm. There is no hard deadline, but a situational one that looks at a combination of whether confidential information has been shared, how much time has passed since the new matter began, how much work had been done, and whether the firm had sufficient information to identify the conflict earlier.

There are two factors that really require little explanation. There should be no communications related to any matter being protected in either direction across the screen. And the lawyers whose conflict results in them being screened off should not receive any portion of the fees from the matters they are screened from. 

Finally, the affected potential or former clients must receive notice of the fact of the screen and its terms. Although consent is not required, the notice should make those clients aware that there is a potential risk of their confidential information being compromised and the measures being taken to safeguard against that risk. This gives the clients an opportunity to comment on the actions being taken and to suggest additional measures that the firm could reasonably take under the circumstances.

Beyond the above, additional factors may help the efficacy of the screen in preventing the sharing of confidential information. But whether they should be implemented largely depends on the circumstances. For example, sometimes specific forms of separation—especially in larger firms—makes sense. In such situations, the screen may separate lawyers by departments, floors, or even office locations. In a firm with two lawyers, that is probably unrealistic. In larger firms, there is probably a greater need to make sure all in the firm are properly informed about the parameters of the screens and to monitor compliance. That is simply because the greater number of people both makes it more difficult to ensure awareness and increases the odds that somebody will err.

An important caveat to the above is that these issues address the efficacy of non-consented-to screens, those that would be formed in conjunction with an imputed conflict under rule 1.10 from a former representation that arises when the prohibited lawyer has switched firms, a special conflict for former or current government officials or employees pursuant to rule 1.11, a conflict for a former judge, arbitrator, mediator, or other third-party neutral under rule 1.12, or conflicts with a prospective client under rule 1.18. It is not unusual for clients to provide consent subject to the implementation of an ethical screen. In such cases, the terms of the consent, rather than the rules, will control what elements the screen must have.

The way that an effective ethical screen will look will differ from firm to firm. But the bottom line is that the screen should be designed to protect the confidentiality owed to the clients in both the matter that requires a lawyer to be screened from one of the firm’s current matters and the matter the firm is working on. For a full discussion of this issue, please review this inaugural opinion of the Ethics Committee, Formal Opinion 2021-1. 

David Majchrzak is a Shareholder and Deputy General Counsel with Klinedinst PC, where his practice focuses on advising clients regarding legal ethics and risk management, defending disciplinary matters and legal malpractice claims, and related expert work. He serves as Co-Chair of the California Lawyers Association Ethics Committee. The statements included above do not necessarily reflect the views of any firm or organization that Mr. Majchrzak is affiliated with.