February 2021 Ethically Speaking - Ethical Issues Arising From Interviews With Prospective Clients

by Paul A. Stewart

When a lawyer interviews a prospective client, the first thing on the lawyer’s mind is naturally to try to convert the prospective client into an actual client. However, also high on the lawyer’s list of objectives should be to minimize the risk of inadvertently creating conflicts of interest or other ethical problems in the event the prospective client chooses not to hire the lawyer. For decades, California lawyers have had very little guidance on how to minimize this risk. California’s former Rules of Professional Conduct, in effect until just two years ago, did not address the issue at all. But California’s new Rules of Professional Conduct, modeled in large part on the American Bar Association’s Model Rules, include a rule that sets forth the duties of lawyers and law firms to prospective clients, and provides practical guidance regarding how to avoid future conflicts.

Rule 1.18, entitled “Duties to Prospective Client,” imposes two substantive duties on lawyers. First, with very limited exceptions, a lawyer must not use or reveal any confidential information provided by the prospective client, even if the prospective client never retains the lawyer. In essence, the lawyer must treat the prospective client’s confidences as actual client confidences. Second, a lawyer may not represent a party adverse to the prospective client in the matter discussed with the prospective client, or in any substantially related matter. This prohibition is imputed by Rule 1.18 itself to the lawyer’s entire firm. Thus, even an unsuccessful interview with a prospective client potentially exposes the entire law firm to all the conflicts that would flow from retention as a client.

Rule 1.18, however, tempers this rather strict regime with two ways in which a law firm may avoid creating these conflicts. First, the prospective client and the adverse client may give their informed written consent, allowing the law firm to represent the adverse client against the prospective client. Second, the lawyer who receives the prospective client’s confidential information may take “reasonable measures” to avoid exposure to more information than reasonably necessary to determine whether to represent the prospective client. If the interviewing lawyer takes these reasonable measures, the law firm may represent a client adverse to the prospective client if the interviewing lawyer is timely screened from participation in the matter and notice is provided to the prospective client.

To understand the practical impact of Rule 1.18, it is helpful to imagine a typical prospective client interview conducted in light of this Rule. The lawyer and prospective client meet, and the prospective client is anxious to tell his or her story to the lawyer. The lawyer, however, does not yet know whether he will be representing the client in this matter. The lawyer already may have a conflict, such as representing the prospective client’s adversary. The prospective client may be unable to afford to pay the lawyer. Or the prospective client’s case may be so meritless that the lawyer cannot ethically take on the representation.

Mindful of Rule 1.18, the lawyer would like to avoid receiving any confidential information under circumstances that would limit his firm’s ability to accept future work adverse to the prospective client if the prospective client does not hire the lawyer. The first option presented by Rule 1.18 is to obtain informed written consent from the prospective client. However, in the context of an initial interview, the prospective client may be unlikely to grant consent. In essence, the lawyer would be asking the prospective client for written permission to sue the prospective client on the very matter discussed in the event the lawyer and the prospective client do not enter into an attorney-client relationship. That may be just a bridge too far for many prospective clients.

This is not meant to suggest that the consent provision of Rule 1.18 is a nullity. In many cases, sophisticated clients will want to have multiple meetings with potential counsel as part of a “beauty contest” to select their attorneys. The prospective client may ask the attorneys to review its confidential information and provide recommendations on how to proceed with its case—all as part of the process of deciding whether to hire the attorney. In situations like this, it is conceivable that the prospective client will consent to a future adverse representation as the price for the free advice. Of course, even in this situation, many prospective clients may withhold their consent.

If consent is not given, that leaves the lawyer with the second option provided by Rule 1.18. The lawyer first must take “reasonable measures to avoid exposure to more information than was reasonably necessary to determine whether to represent the client.” Neither the Rule nor the Comments provide any information about what measures are “reasonable.” However, the first case to apply Rule 1.18 in California (which was decided shortly before Rule 1.18 officially went into effect) provides some guidance. At a minimum, the attorney must caution the prospective client to provide no more information than reasonably necessary to permit the lawyer to determine whether to accept the representation. Skybell Technologies, Inc. v. Ring, Inc., No. SACV 18-00014 JVS, 2018 WL 6016156 at *7-8 (C.D. Cal. Sept. 18, 2018).

Additional guidance is provided by an Interim Opinion of the California State Bar that has been released for public comment. See State Bar of Cal. Formal Opinion Interim No. 17-0003. The Interim Opinion concurs with Skybell that an attorney must caution prospective clients to disclose only necessary confidential information. The Interim Opinion then goes a step further and helps define what information is in fact necessary to permit an attorney to decide whether to accept the representation. It adopts a pragmatic approach, explaining that an attorney may need several types of information to determine whether to accept a representation, including (1) information needed for a conflict check, (2) information about the client’s financial condition, and (3) information about the merits of the case.

This is necessarily a case-by-case inquiry. For example, in simple cases, the attorney may need only a small amount of information to assess the merits of the case and determine whether it is ethically permissible or desirable to accept the case. In contrast, in complex patent or antitrust litigation, much more information may be needed. Similarly, an attorney ordinarily will need to know more about the potential value of a case if the attorney is considering taking the case on a contingency fee basis. In light of these concerns, the Interim Opinion expressly rejects the position that the prospective client should be cautioned to disclose only information necessary for a conflict check.

After the lawyer has taken the required “reasonable measures,” the next step that Rule 1.18 requires is screening the attorney from the matter. In particular, the lawyer’s firm must timely screen the lawyer from the matter if and when the law firm chooses to represent an adverse party in that matter or a substantially related matter. Rule 1.18 provides that the word “screen” has the same meaning as used throughout the Rules. Accordingly, the nature and extent of the screen should be the same as that used for screens between a current and former client. The requirements for such screens are beyond the scope of this column. With an effective screen in place, the law firm is free under the Rules to represent the adverse party upon providing written notice to the previously interviewed prospective client.

Another concern that may arise from a prospective client interview is the possibility of bad faith on the part of the prospective client. It is not unheard of for a prospective client to interview with numerous leading law firms, disclosing its confidential information, in an effort to disqualify them all from representing its adversary. Rule 1.18 deals with this situation in two ways.

First, Comment 2 to Rule 1.18 provides that a person who “communicates information to a lawyer without a good faith intention to seek legal advice or representation, is not a prospective client,” and therefore is not entitled to the protections of the Rule. This Comment is not present in the ABA Model Rules and may be unique to California. However, proving bad faith may be exceedingly difficult, and this Comment therefore may provide little practical protection.

Second, the mere receipt of unwanted confidential information from a prospective client should not prevent the law firm from invoking the protections of the screening procedures of Rule 1.18. The text of Rule 1.18 makes clear that a law firm is entitled to use the screening provisions of the Rule if the interviewing lawyer takes reasonable measures to prevent the disclosure of unnecessary confidential information. A prospective client who blurts out unwanted confidential information against the advice of the interviewing lawyer cannot later complain that the screening procedures of Rule 1.18 are insufficient to protect that information. This, moreover, is the position taken by the State Bar’s Interim Opinion.

One final point is worth emphasizing. The confidential information disclosed by the prospective client may be very useful to other clients of the lawyer or law firm. For example, the prospective client may disclose during the initial interview that it is planning to sue an entity that turns out to be one of the law firm’s clients. The lawyer receiving this confidential information plainly has a duty under Rule 1.18 not to use or disclose the information. But the lawyer also has a duty of loyalty to inform the law firm’s other client of all material developments.

Most lawyers, I suspect, would resolve this seeming conflict of duties in favor of the duty of confidentiality, and would not disclose the prospective client’s confidential information. There is, however, surprisingly little authority on point. There do not appear to be any California state or federal cases addressing the issue. Nevertheless, the State Bar’s Interim Opinion squarely addresses this issue and concludes with little difficulty that the duty of confidentiality trumps the duty of loyalty under these circumstances. Accordingly, the common-sense conclusion that confidences cannot be disclosed is likely the correct conclusion.


Paul A. Stewart is a partner in the law firm of Knobbe, Martens, Olson & Bear, LLP, based in Irvine, California. Mr. Stewart’s practice focuses on intellectual property litigation. In addition, he serves as Chairman of the firm’s Ethics Committee, and is a member of the Orange County Bar Association Professionalism and Ethics Committee. He can be reached at Paul.Stewart@knobbe.com.