Navigating prospective client obligations under Rule 1.18.

Few attorneys realize that consultation with a prospective client can create a disqualifying conflict, even where the attorney is not ultimately retained. California Rule of Professional Conduct 1.18 ("Rule 1.18" or "Rule") made attorney-client privilege protections for prospective clients explicit. Despite the 2018 adoption of the Rule, there are still no published California cases precisely outlining the duties it imposes on attorneys. How can you avoid creating disqualifying conflicts in consultations with prospective clients? The following practical tips may help attorneys avoid ethical conflicts based on Rule 1.18.

Before Rule 1.18, there were no explicit protections for prospective clients, referring to "[a] person who ... consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from the lawyer in the lawyer's professional capacity," in the California Rules of Professional Conduct. CA Rule Prof'l Conduct Rule 1.18(a). Consequently, Rule 1.18 is a rule "with no corresponding prior counterpart." Ocean Thermal Energy Corp. v. Coe, 2020 WL 5237276 at *6 (C.D. Cal. July 29, 2020). The fact that "a [prospective client's] information is protected ... the same as that of a client" under the Rule necessitates a careful approach to initial client consultations in order to avoid being conflicted out of a later case despite not having been hired. Rule 1.18, Comment 1. Because attorneys cannot immediately ascertain whether information is confidential or material, they must be cautious in what they advise prospective clients to say and what questions they ask.

Construction

Rule 1.18 prohibits: (1) lawyers revealing confidential information learned from prospective clients except as allowed by Rule 1.9 (Rule 1.18(b)); and (2) lawyers taking on representation adverse to "a prospective client in ... a substantially related matter if the lawyer received" confidential information "material to [that] matter." Rule 1.18(c). However, if (1) the lawyer has received informed written consent to the representation from the prospective and now-adverse client, or (2) "the lawyer ... took reasonable measures to avoid exposure to more information than was reasonably necessary to determine whether to represent the [prospective client]," the lawyer was timely screened, and the lawyer's firm provided written notice to the prospective client of the adverse representation, then the latter prohibition does not apply. Rule 1.18(d).

Set expectations

Attorneys must establish expectations with prospective clients about the purpose of, and necessary disclosures in an initial consultation. This guidance is explicit in Rule 1.18(d)'s exception, and Rule 1.18, Comment 3's imperative that lawyers "must" limit initial interviews to reasonably necessary information to avoid being conflicted out later by Rule 1.18(c).

The California State Bar offers some instruction on handling these situations through Formal Opinion No. 2021-205 ("SBO"). The SBO, in its iterative scenarios of prospective client consultations, lays out the kind of preliminary expectation-setting lawyers need to perform, including informing a prospective client that: (1) representation has not been agreed to and that the initial interview is for determining whether the lawyer has a conflict of interest (SBO at 2); (2) the prospective client should limit any factual description to only the information needed to determine whether there is a conflict, "such as the identity of the parties and the nature of the claim" (id. at 3); and (3) the prospective client should avoid disclosing confidential information that is unnecessary for determining whether a conflict exists. Id.

Attorneys should advise clients accordingly regardless of the client's sophistication or presumed knowledge. In SkyBell Technologies, Inc. v. Ring, Inc., 2018 WL 6016156 (C.D. Cal. Sept. 18, 2018), the United States District Court for the Central District of California rejected the argument that lawyers could reasonably assume that a prospective client had been advised on the appropriate scope of disclosures when soliciting pitches from firms for patent infringement representation. Instead, there needed to be "some type of ... affirmative act ... carried out by the attorney to limit the disclosure." SkyBell Technologies at *7.

For an initial conflicts check, prospective clients should be advised to provide information solely about potential parties and basic subject matter. The SBO correctly notes that "information 'reasonably necessary to determine whether to represent the [prospective client]'" is not solely relegated to information relevant to whether the representation is ethically permissible, "reach[ing] all types of information relevant to the decision whether [sic] to represent a client." SBO at 9-10. This might include "information about the [prospective client] and its business, the nature of any proposed transaction, or the merits of the case." Id. at 10. However, information exceeding what is necessary to determine ethical permissibility is only permissible "in appropriate circumstances." Id. While Rule 1.18 might allow a lot of information to be categorized as reasonably necessary for determining whether to represent the prospective client, the SBO's scenarios endorse a cautious approach: in Scenario 2a, which does not violate the Rule, the prospective client only informed the lawyer of the adverse party's identity and the subject matter of the lawsuit. SBO at 3. The lawyer acquired additional information in later Scenarios, but only after the prospective client had cleared a conflicts check. SBO at 4. Attorneys cannot know whether appropriate circumstances exist for a client to disclose further information, necessitating conservative guidance on what prospective clients should say.

Avoid eliciting unnecessary information

Attorneys must also be careful to avoid eliciting unnecessary material confidences during initial consultations. Do not ask "open-ended questions" about matters like the merits of the case. SBO at 2. Restricting the kinds of questions asked is important because the consequences of failing to are severe: an attorney that receives material confidences will be conflicted out even if that information is later disclosed publicly. See SkyBell Technologies at *6.

Conclusion

The lack of clear guidance from a California state court warrants caution in initial consultations with prospective clients to avoid Rule 1.18's obligations. Attorneys must affirmatively avoid acquiring confidential, material information from clients prior to clearing conflicts by guiding the client to make appropriate disclosures and limiting initial questions to only those targeted at ensuring no conflict exists. Any more risks a disqualifying conflict.

Alex Weingarten is managing partner at Willkie Farr & Gallagher LLP, and chair of the firm's Entertainment Litigation Practice. David Wright is a litigation associate at Willkie Farr & Gallagher LLP.