What conflict-checking records and systems must a New York law firm keep to comply with DR 5-105(e)?

Plain-English summary

The opinion interprets DR 5-105(e), a recordkeeping rule the Appellate Divisions adopted in 1996 that is unique to New York. The rule requires every law firm to keep records of prior engagements made at or near the time of the engagement, and to have a policy implementing a system for checking proposed engagements against current and previous engagements, so as to render effective assistance to the firm's lawyers in complying with the imputed-conflicts rule, DR 5-105(d). The opinion reads "law firm" broadly to include solo practices, corporate and government legal departments, and "constructive" firms such as office-sharing or "of counsel" arrangements that must check conflicts as a single unit.

On recordkeeping, the opinion concludes that "records" means written or electronic information that can be systematically and accurately searched; information only in a lawyer's head does not qualify, so even solo practitioners must keep searchable records. The minimum records every firm must keep are the full client name, the names of materially adverse parties, and a brief description of each engagement. The records must be made at or near the time the engagement commences (the opinion reads this as within days, not weeks) and need not be reconstructed for engagements predating the rule's 1996 effective date.

On systems, the opinion concludes that a "system" within the meaning of DR 5-105(e) must include systematically consulting the required records; informal methods like relying on memory or asking around the firm do not by themselves qualify. Larger or more complex firms may need software and additional communication methods to provide effective assistance. The opinion discusses special situations, including corporate-family conflicts, corporate constituents, trade-association members, conflicts with former clients, and the former clients of lateral hires, while noting it does not address every category of conflict. It cautions that keeping the required records is not itself a defense to a disqualification motion, and that disqualification does not by itself establish a DR 5-105(e) violation.

In practice

Under the New York Code as it stood at the time, the opinion holds that every firm must keep searchable records of client names, adverse-party names, and engagement descriptions, and must maintain a system that consults those records when screening new matters. The required level of detail and the sophistication of the system scale with the firm's size, number and relationship of offices, and the nature of its practice; the opinion sets a floor that applies to all firms and expects larger firms to do more.

This opinion applies the former New York Code (DR numbering). New York replaced the Code with the Rules of Professional Conduct effective April 1, 2009; the imputed-conflict provision of DR 5-105(d) now corresponds to Rule 1.10 and the former-client provision of DR 5-108 to Rule 1.9. The recordkeeping and conflict-checking command of DR 5-105(e) was carried forward into the current New York rules; verify the current rule text before relying on any specific requirement described here.

Common questions

Q: Does the New York conflict-checking rule apply to solo practitioners?

A: Yes. The opinion concludes that a solo practice is a "law firm" under DR 5-105(e), so even solos must keep searchable written or electronic records rather than relying on memory.

Q: What is the minimum a firm must record for each matter?

A: The opinion identifies three minimum records: the full and precise client name, the names of materially adverse parties, and a brief description of each engagement or prospective engagement.

Q: Is relying on memory or asking colleagues an acceptable "system"?

A: No. The opinion concludes that an adequate system must include systematically consulting the firm's records; informal checks may supplement that, but cannot replace it.

Q: Does keeping the required records protect a firm from disqualification?

A: No. The opinion states that compliance with DR 5-105(e) is not itself a defense to a disqualification motion, and that being disqualified does not by itself prove a DR 5-105(e) violation.

Q: How far back must a firm's conflict records reach?

A: The opinion concludes that firms were not required to reconstruct engagements predating the rule's May 22, 1996 effective date; the rule contemplated keeping records of engagements going forward from that date.

Background and rules framework

The opinion interprets DR 5-105(e) of the former New York Code, a recordkeeping and conflict-checking rule with no counterpart in the Model Rules or other states, together with the imputed-conflicts rule DR 5-105(d) (the analog of Model Rule 1.10) and the former-client rule DR 5-108 (the analog of Model Rule 1.9). It also touches on entity representation under DR 5-109(a). The opinion notes that little formal guidance existed on DR 5-105(e), citing N.Y. State Opinion 720 (1999) as the only prior ethics opinion to discuss the rule at length.

Citations and references

Rules of Professional Conduct:

• NY DR 5-105(e) (recordkeeping and conflict-checking system; unique to New York)
• MR 1.10 (imputation of conflicts) / NY DR 5-105(d)
• MR 1.9 (duties to former clients) / NY DR 5-108(a), (b)
• MR 1.7 (concurrent conflicts of interest)

Cases:

• Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976), bar on opposing a current client absent consent
• Kassis v. Teachers Ins. & Annuity Ass'n, 93 N.Y.2d 611 (1999), disqualification arising from a lateral hire

Other opinions cited:

• N.Y. State Op. 720 (1999): the leading prior discussion of DR 5-105(e)
• ABA Formal Op. 95-390 (1995): no automatic disqualification when opposing a corporate client's affiliate
• ABA Formal Op. 92-365 (1992): whether a trade-association lawyer also represents members is a fact question

See also

• NYC Bar Ethics Op. 2008-02: Corporate Legal Departments and Conflicts
• NY State Bar Op. 1085: Conflict Checks for Parties Known by Street Name
• NY State Bar Op. 720: Conflict Checks for a Lawyer Moving Firms

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-2003-03-checking-for-conflicts-of-interest/