If someone contacts a New Jersey law firm seeking representation against a company the firm already represents, must the firm tell its corporate client, and can the firm keep representing the company?

Plain-English summary

Opinion 695 answers two questions from a firm that learned one of its corporate client's employees had contacted the firm seeking representation in a lawsuit against the corporation: must the firm tell the corporate client about the contact, and may the firm continue to represent the corporation after receiving unsolicited information from a potential adverse party?

On the first question, the Committee concludes that new RPC 1.18, effective January 1, 2004, applies and prohibits the use or revelation of information from a prospective client, and that even before RPC 1.18 an equivalent duty existed under RPC 1.6(a). The firm therefore owes the inquiring individual a duty of confidentiality that precludes disclosing the individual's identity, the fact of the contact, and any information received. The Committee explains that RPC 1.6(a) states a broad confidentiality duty (broader than the testimonial privilege), citing In re Opinion 544, and that a prospective client has a reasonable expectation that information shared to decide whether to undertake representation will be kept in confidence and not used against the person if representation does not follow. The Committee frames this as an access-to-justice concern, noting that the chilling effect of free disclosure would be substantial, and that the point is especially compelling for limited legal assistance (hotlines, unbundled services, pro se help) provided by nonprofit organizations to people of moderate means.

On the second question, the Committee holds that this duty of confidentiality does not bar the firm from continuing to represent its existing corporate client. New RPC 1.18(b) bars representation adverse to a former prospective client, but that is not this situation: the firm already represented the corporate client before the new prospective client made contact. The corporate representation may continue, assuming all information from the prospective client is kept confidential and completely shielded from any firm personnel engaged in the corporate matter, and the personnel who communicated with the prospective client must be completely screened from it. Because the prospective client never became an actual client, RPC 1.7 is not otherwise implicated, though the Committee notes that once limited legal assistance is actually provided, an attorney-client relationship forms and RPC 1.7 would then apply.

In practice

The opinion holds that, under New Jersey's rules as they stood after the January 1, 2004 adoption of RPC 1.18, a firm that receives an unsolicited inquiry from a prospective client adverse to an existing client owes the inquirer a confidentiality duty under RPC 1.18 and RPC 1.6(a) that covers the inquirer's identity, the fact of contact, and the information received. Per the opinion, the firm may keep representing the existing corporate client only if it keeps the prospective-client information confidential and screens the personnel who received it from the corporate matter. The opinion distinguishes RPC 1.18(b) (which bars representation adverse to a former prospective client) on the ground that the firm's representation of the corporate client predated the contact, and notes that providing actual limited legal assistance forms an attorney-client relationship that then triggers RPC 1.7. Because this opinion is more than five years old, verify the current text of RPC 1.18, RPC 1.6, and RPC 1.7 before relying on the specific provisions it describes.

Common questions

Q: Must the firm warn its corporate client that an employee approached the firm to sue the company?

A: No. The opinion holds that the firm owes the prospective client a duty of confidentiality under RPC 1.18 and RPC 1.6(a) that precludes disclosing the inquirer's identity, the fact of the contact, or the information received.

Q: Does receiving information from a potential adversary disqualify the firm from representing the company?

A: No, not by itself. The opinion concludes the firm may continue the corporate representation if the prospective-client information is kept confidential and the personnel who received it are completely screened from the corporate matter.

Q: Why doesn't RPC 1.18(b) bar the continued representation?

A: Per the opinion, RPC 1.18(b) bars representation adverse to a former prospective client; here the firm already represented the corporate client before the prospective client made contact, so that prohibition does not apply.

Q: Does it matter that the duty arose before the firm agreed to represent the inquirer?

A: No. The opinion holds the confidentiality duty attaches based on the prospective client's reasonable expectations, even though no ongoing attorney-client relationship resulted.

Background and rules framework

The opinion interprets RPC 1.18 (Model Rule 1.18, duties to a prospective client), which New Jersey adopted effective January 1, 2004, together with RPC 1.6(a) (confidentiality of information) and RPC 1.7 (concurrent conflicts). The analysis turns on recognizing a prospective client's reasonable expectation of confidentiality and on screening: the duty protects the inquirer's information, while screening the personnel who received it allows the firm to continue an existing, unrelated representation. The Committee anchors the breadth of the RPC 1.6(a) duty to the Supreme Court's decision in In re Opinion 544.

Citations and references

Rules of Professional Conduct:

• MR 1.18 / NJ RPC 1.18, 1.18(b) (duties to a prospective client; effective January 1, 2004)
• MR 1.6 / NJ RPC 1.6(a) (confidentiality of information)
• MR 1.7 / NJ RPC 1.7 (concurrent conflicts of interest)

Cases:

• In re Opinion 544 of the Advisory Committee on Professional Ethics, 103 N.J. 399 (1986) (breadth of the RPC 1.6(a) duty of confidentiality)

Other opinions cited:

• ACPE Opinion 670, 132 N.J.L.J. 978 (1992): referenced in the Committee's discussion of related questions

See also

• ABA Formal Op. 492: Obligations to Prospective Clients
• NJ ACPE Op. 699: Collaborative Law
• NJ ACPE Op. 713: Unbundled Services and Ghostwriting for Pro Se Litigants

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2005/acp695-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. Minor spacing artifacts from the mirror's text extraction have been normalized; the linked official source controls.

175 N.J.L.J. 1393

March 29, 2004

13 N.J.L. 762

April 5, 2004

Advisory Committee on Professional Ethics

Appointed by the Supreme Court of New Jersey

Opinion 695

Duty to keep information received from prospective client confidential; prospective clients and conflicts.

A New Jersey law firm inquires whether it has an obligation to advise an existing corporate client that one of the corporation's employees contacted the law firm seeking representation in a lawsuit against the corporation. A related question is whether the firm may continue to represent its corporate client after receiving unsolicited information from a potential adverse party who contacted the firm as a prospective client.

First, we conclude that new R.P.C. 1.18, effective January 1, 2004, applies, prohibiting use or revelation of information from a prospective client. Moreover, we find that even prior to new R.P.C. 1.18, a duty of confidentiality equivalent to that set forth in the new rule is applicable. Under R.P.C. 1.6(a) the firm has a duty of confidentiality to the individual who sought its assistance, precluding disclosure of the identity of the inquiring individual, the fact of the individual's contact, and any information received in connection with the contact. R.P.C. 1.6(a) sets forth a broad duty of confidentiality, more extensive than the testimonial attorney-client privilege, extending to any information relating to representation of a client, and then sets out a series of exceptions, none applicable to the current inquiry. For discussion of the breadth of the duty under R.P.C. 1.6(a), see generally In re Opinion 544, 103 N.J. 399 (1986). We recognize that by its express terms the 1.6(a) duty of confidentiality extends only to a client. Nonetheless, we deem it essential to provide the communication of information from a prospective client with the same cloak of protection furnished to actual clients.

As explained below, the first part of the inquiry touches upon important issues concerning access to legal services, and we approach the question in that light. A typical potential client seeking legal assistance has a reasonable expectation that any information provided to a lawyer in order for the lawyer and the client to decide whether representation is to be provided will be kept in confidence, and will not be used in any way against the potential client if representation is not provided. While this precise point has not been explicitly addressed in prior New Jersey ethics opinions, it is well settled nationally that a potential client's reasonable expectations of confidentiality are the determining factor in finding the attachment of the duty.

Brief reflection reveals the importance of preserving confidentiality in this context. The same considerations that underlie the attorney-client privilege and confidentiality in more traditional cases of extended representation - the need for a client to be able to communicate freely with an attorney without fear of later disclosure, retribution or other adverse effect from the communication itself - exist with equal force in the case of a potential client initially seeking or applying for services. If the subject matter of that applicant's communication may be freely disclosed to a third party, simply because no extended or ongoing attorney-client relationship ensued, the chilling effect on such prospective client communications would be substantial, crippling, and an unacceptable hindrance to the public's ability to gain access to attorneys.

These considerations are especially compelling in the context of services, especially limited assistance, provided by non-profit organizations to people of moderate means. Studies nationally and in New Jersey have documented the difficulties such individuals have in obtaining lawyers. See Legal Needs and Civil Justice: A Survey of Americans, American Bar Association (1994); Legal Problems, Legal Needs, Legal Services of New Jersey Poverty Research Institute (2002). Concerns about closing this legal assistance gap have led the American Bar Association and many states, including New Jersey, to encourage development over the past decade of many forms of limited legal assistance, such as hotlines, unbundled legal services and pro se assistance, often accompanied by special rules of court and professional ethics. See generally Handbook on Limited Scope Legal Assistance, American Bar Association Section of Litigation (2003). Protection of the confidentiality of information received from prospective clients, and clients who receive only limited assistance (i.e., one-time advice or very brief service), is a central tenet of such limited assistance initiatives.

This duty of confidentiality, however, does not preclude the inquiring firm from continuing to represent its ongoing corporate client. New R.P.C. 1.18(b) continues a prohibition against representation of a client adverse to a former prospective client, not the case in the present inquiry, where the firm represented a client prior to the contact by a new prospective client. We conclude that, assuming that all information received from the prospective client is kept confidential and completely shielded from any firm personnel engaged in the representation of the corporate client, such corporate representation may continue. Consistent with this conclusion, no firm personnel engaged in the communication with the prospective client may be involved in any corporate representation which relates in any way to that prospective client; such personnel must be completely screened. Since the prospective client never became an actual client of the firm, the conflict principles set forth in R.P.C. 1.7 are not otherwise implicated. We note, however, that for the various limited legal assistance vehicles described above, an attorney-client relationship is formed once such limited legal assistance is provided, and R.P.C. 1.7 would then apply.