When a partner moves to a firm on the other side of pending cases, can a screen let the new firm keep those cases, and can the partner keep a financial interest in his old firm's fees?

Plain-English summary

A partner of Firm A, which represented plaintiffs in product litigation, withdrew and joined Firm B, which represented defendants in some of the cases Firm A had brought. Firm B agreed to wall the partner off from the pending litigation with a screen. The withdrawing partner, however, kept asserting a financial interest in fees Firm A might receive in certain other cases involving the same product. The committee was asked several questions arising from this situation.

The controlling rules were DR 2-105(D) (requirements for dividing fees among lawyers in different firms), DR 5-101(A) (personal-interest conflicts), DR 5-105(D) (a lawyer who represented a client may not later represent another in the same or a substantially related matter adverse to the former client without consent after full disclosure), and DR 5-105(E) (vicarious disqualification of the disqualified lawyer's firm).

The committee concluded that, as to fees from cases Firm A completed before the partner joined Firm B, the partner's financial interest was not a personal interest under DR 5-101(A), so Firm B could continue representing defendants provided its clients consented after full disclosure. As to fees from cases Firm A completed after the partner joined Firm B, it held that DR 2-105(D) and DR 5-101(A) controlled, and that because the partner's new Firm B affiliation prevented him from expressly assuming responsibility to Firm A's clients, his assertion of a financial interest in those fees was improper under DR 2-105(D), which in turn precluded Firm B from representing defendants in those continuing cases (citing LE Op. 1332). On the screen, the committee held that DR 5-105(D)'s consent requirement meant a "Chinese Wall" was not effective: because the partner had worked on the other side of cases that continued in Firm B, absent the former clients' consent after full disclosure it was improper for him to represent plaintiffs and for his new firm to continue, and the only cure was the former clients' consent, not a unilateral internal screen (citing LE Op. 1428).

Currency note

This opinion was issued in 1992, under Virginia's former Code of Professional Responsibility (the disciplinary rules it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. As the opinion's committee note observes, current Rule 1.5(e) does not require a lawyer who shares in a fee also to share responsibility, a change from the assumption-of-responsibility analysis this opinion applied. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a screen let a firm keep cases after hiring a lawyer from the other side?

A: Under this 1992 opinion, no. The committee held that DR 5-105(D) requires the former clients' consent, so a unilateral internal screen could not cure the conflict, and absent consent neither the lawyer nor his new firm could continue the adverse cases.

Q: Can the departing lawyer keep a financial interest in his old firm's fees?

A: It depends on timing. The committee held his interest in fees from cases completed before he left was not a disqualifying personal interest, but his interest in fees from cases that continued after he joined the new firm was improper, because his new affiliation prevented him from assuming responsibility to the old firm's clients.

Q: What is the only way to cure the conflict?

A: The committee held the only cure was the former clients' consent after full disclosure under DR 5-105(D); no cure came from a unilateral agreement within the new firm to exclude the lawyer.

Background and rules framework

The opinion interpreted former Virginia DR 5-105(D) (former-client conflicts), DR 5-105(E) (imputed disqualification), DR 5-101(A) (personal-interest conflicts), and DR 2-105(D) (fee division). The duties to former clients are now in Virginia Rule 1.9, imputation in Rule 1.10, and fee division in Rule 1.5(e), which, as the committee note explains, no longer ties a fee share to shared responsibility.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 5-105(D), (E); DR 5-101(A); DR 2-105(D) (Code of Professional Responsibility)
• ABA Model Rule 1.9 (duties to former clients); Model Rule 1.10 (imputation); Model Rule 1.5 (fees)

Other opinions cited:

• Virginia LE Op. 1332: financial interest in continuing-case fees after a lateral move.
• Virginia LE Op. 1428: a screen does not cure a side-switch conflict absent former-client consent.
• Virginia LE Op. 187, 1097, 1198, 1254: what constitutes full disclosure.

See also

• VA LEO 1478: Former Judicial Law Clerk and Firm Screening
• VA LEO 1810: Guardian ad Litem Conflict and Imputation
• VA LEO 1866: Of-Counsel Relationship, Conflicts, and Imputation

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1459.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Committee Opinion
April 28, 1992
LEGAL ETHICS OPINION 1459

CONFLICT OF INTEREST - FORMER
CLIENT: ATTORNEY JOINING FIRM
WHICH REPRESENTS CLIENTS
ADVERSE TO FORMER FIRM AND
ASSERTING FINANCIAL INTEREST IN
FEES RECEIVED BY FORMER FIRM IN
CASES OTHER THAN THOSE
DEFENDED BY NEW FIRM.

You state that Law Firm A has represented plaintiffs in litigation. A partner of Firm A
who worked on such litigation has withdrawn from Firm A and joined Firm B which
represents the defendants in some of the cases initiated by Firm A. Firm B has agreed to
exclude the withdrawing partner from the pending litigation by use of a Chinese Wall.
The withdrawing partner, however, continues to assert a financial interest in fees which
may be received by Firm A in certain cases other than those defended by Firm B but
which involve the same product.
You have requested that the Committee opine as to the several issues raised by the
above-described factual situation.
The appropriate and controlling Disciplinary Rules related to your inquiry are DR:2105(D), which enumerates the three requirements which must be met in order to properly
make a division of fees between lawyers who are not in the same firm; DR:5-101(A),
which states that a lawyer hall not accept employment if the exercise of his professional
judgment on behalf of his client may be affected by his own financial, business, property,
or personal interests, except with the consent of his client after full and adequate
disclosure under the circumstances; DR:5-105(D), which provides that a lawyer who has
represented a client in a matter shall not thereafter represent another person in the same
or substantially related matter if the interest of that person is adverse in any material
respect to the interest of the former client, unless the former client consents after full
disclosure; and DR:5-105(E) which disqualifies, vicariously, from such employment the
firm of any lawyer who himself is disqualified under DR:5-105.
With this background, the committee responds to your inquiries as follows:
1. You have requested the Committee's opinion as to whether the withdrawing partner's
assertion of a financial interest in plaintiffs' litigation involving the same issues as
litigation defended by Firm B precludes Firm B from continuing to represent defendants
absent the consent of all parties after full disclosure.
The Committee opines that as to fees owing from cases completed before the
withdrawing partner joined Firm B, the assertion of a financial interest by the
withdrawing partner would not constitute a personal interest as articulated in DR:5101(A). Thus, Firm B would not be precluded from continuing to represent defendants as
a result of the attorney's receipt of those fees provided that Firm B's clients consent
after full disclosure.

Committee Opinion
April 28, 1992

As to fees owing from cases completed by Firm A after the withdrawing partner joined
Firm B, the Committee believes that DR:2-105(D) and DR: 5-101(A) are controlling. The
Committee is of the opinion that it would be improper for the withdrawing partner to
assert a financial interest in such cases unless: (1) the lawyer can qualify under DR:2105(D) as, and the clients (of Firm A) consent to the employment of, additional counsel;
(2) both Firm A and the withdrawing partner are in a position to, and expressly assume
responsibility to the clients; and (3) the terms of the divisions of the fee are disclosed to
the clients and the clients consent thereto. The Committee believes, as a practical matter,
that the withdrawing partner is precluded from expressly assuming responsibility to
the clients because of his new affiliation with Firm B. Thus, the Committee believes that
it would be improper, and violative of DR:2-105(D), for the withdrawing partner to assert
a financial interest in fees for legal services provided by Firm A on cases subsequent to
his departure from Firm A. Therefore, the Committee opines that Firm B is also
precluded from representing defendants in those cases which continue following the
attorney's move from Firm A to Firm B. See also LE Op. 1332.
2. As to what constitutes "full disclosure," the committee directs your attention to prior
LEO Nos. 187 [ LE Op. 187], 1097 [ LE Op. 1097], 1198 [ LE Op. 1198], and 1254 [ LE
Op. 1254] which conclude that disclosure is adequate if it is such that the attorney's client
is able to make an informed decision as to whether or not to give consent. The Committee
also opined that all doubts regarding the sufficiency of the disclosure must be resolved in
favor of the client.
3. With regard to your question as to the efficacy of a "Chinese Wall," the Committee
believes that the clear language of DR:5-105(D), which requires the client's consent,
would dictate that such device would not be effective here. The facts presented indicate
that the withdrawing partner worked on continuing litigation on the other side of cases
which continue in Firm B. Under these circumstances, the Committee opines that absent
the consent of the withdrawing partner's former client (various defendants in the
litigation) after full disclosure, it would be improper for the attorney to personally
represent plaintiffs and similarly improper for his new firm to continue any such
representation. Such conduct would be improper whether Firm A currently represented
parties adverse to those represented by Firm B or was subsequently contacted about a
claim against a manufacturer which had been previously represented by the attorney who
has moved from Firm A to Firm B. The Committee opines that the only cure to such
impropriety is the former clients' consent, as described by DR:5- 105(D), and that no cure
would be affected simply by a unilateral agreement within Firm B to exclude the attorney
from the pending litigation by use of a "Chinese Wall." See LE Op. 1428.
Committee Opinion
April 28, 1992
Legal Ethics Committee Notes. – Rule 1.5(e) does not require that a lawyer sharing in
fees also share responsibility.