After a firm loses a pitch (beauty contest), can it represent the other side in the same matter?

Plain-English summary

The opinion updates the committee's 2006 Opinion 2006-2 in light of Rule 1.18, adopted in New York in April 2009, which codifies the duties lawyers owe to prospective clients. It explains that a prospective client (a person who discusses the possibility of forming a lawyer-client relationship about a matter) receives some, but not all, of the protection afforded to actual clients. Rule 1.18(a) excludes from the definition someone who communicates unilaterally with no reasonable expectation that the lawyer will discuss representation, or who communicates in order to disqualify the lawyer.

Rule 1.18 imposes two main duties. Under paragraph (b), the lawyer may not use or reveal information learned in the consultation to the extent it is confidential information, applying the Rule 1.9 standard for former clients (so use is barred only if it disadvantages the prospective client, and revelation is barred as for a current client). Under paragraph (c), the lawyer may not represent a materially adverse client in the same or a substantially related matter if the consultation information "could be significantly harmful" to the prospective client; this is narrower than the former-client bar (which is automatic on material adversity and substantial relationship) and the current-client bar. Disqualification under (c) is imputed to the firm, subject to paragraph (d).

Paragraph (d) supplies two exceptions: informed consent confirmed in writing from both the prospective client and the affected client; or, for the firm (not the personally disqualified lawyer), an effective ethical screen plus prompt written notice to the prospective client, available only if the disqualified lawyer took reasonable steps to limit exposure to disqualifying information. The committee reads these means to also satisfy paragraph (b), notes that screens (unlike with current or former clients) are available here, and works through three beauty-contest scenarios, two in litigation and one in a competitive-bid transaction, showing how the analysis turns on whether confidential, significantly harmful information was actually conveyed.

In practice

The opinion holds that, under the New York rules as they stood at the time, a firm's exposure after a pitch turns on what it learned: if no confidential information was conveyed, Rule 1.18(b) and (c) generally do not bar taking the other side; if confidential, significantly harmful information was conveyed, the firm is barred unless it obtains written informed consent from both parties or, for lawyers other than the personally disqualified one, implements an effective ethical screen with prompt written notice to the prospective client. Per the opinion, the "significantly harmful" test, not mere material adversity, is the gate for the representation bar.

Common questions

Q: We pitched a client, didn't get hired, and now the opponent wants us. Can we take it?

A: It depends on what you learned. The opinion concludes that if you received no confidential information, Rule 1.18 generally does not bar you; if you received confidential information that could be significantly harmful to the prospective client in that matter, you are barred unless an exception applies.

Q: How is this different from a former-client conflict?

A: Per the opinion, the Rule 1.18(c) bar is narrower: it applies only when the consultation information could be significantly harmful, whereas the Rule 1.9 former-client bar is automatic once interests are materially adverse and the matters are substantially related.

Q: Can a screen save the firm?

A: Yes. The opinion concludes that, unlike with current or former clients, the firm (though not the personally disqualified lawyer) may take the adverse matter using an effective ethical screen under Rule 1.18(d), with prompt written notice to the prospective client, if the lawyer limited exposure to disqualifying information.

Q: How can we limit our exposure during a pitch?

A: The opinion suggests telling the prospective client that no lawyer-client relationship exists and that they should provide only information necessary for the firm to decide whether to take the matter; the rule requires reasonable measures to limit exposure, not that the information in fact be limited.

Background and rules framework

The opinion interprets New York Rule 1.18 (duties to prospective clients; Model Rule 1.18), incorporating Rule 1.9 (former clients; Model Rule 1.9) and Rule 1.6 (confidentiality; Model Rule 1.6) for the information restriction, and contrasting Rule 1.18(c) with the conflict standards in Rules 1.7 and 1.9. It draws on the Rule's comments and on prior NYC Bar Opinion 2006-2.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.18 / NY RPC 1.18 (duties to prospective clients)
• Model Rule 1.9 / NY RPC 1.9 (former clients; incorporated use/reveal standard)
• Model Rule 1.6 / NY RPC 1.6 (confidentiality)
• Model Rule 1.7 / NY RPC 1.7 (current-client conflicts, by contrast)

Cases:

• Zalewski v. Shelroc Homes, LLC, 856 F. Supp. 2d 426 (N.D.N.Y. 2012), "significantly harmful" disqualification
• Miness v. Ahuja, 762 F. Supp. 2d 465 (E.D.N.Y. 2010), prospective-client disqualification

Other opinions cited:

• NYC Bar Formal Op. 2006-2 (2006): predecessor opinion on duties to prospective clients (superseded in part)

See also

• NYC Bar Ethics Op. 2006-2: Duties to prospective clients; beauty contests
• NYC Bar Ethics Op. 2016-1: Referring a conflicted-out prospective client
• ABA Formal Op. 497: Conflicts involving materially adverse interests

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-2013-01-duties-to-prospective-clients-after-beauty-contests-and-other-preliminary-meetings/
• Original PDF: https://www.nycbar.org/wp-content/uploads/2023/05/20072383-FormalOpinion2013-01DutiestoProspectiveClients.pdf