11.7 Transferring Between Law Firms
There are also rules governing the transfer of lawyers between firms – see Rules 3.4-7 to Rule 3.4-10 in the Code of Conduct. These rules are also primarily concerned with the protection of a former client’s confidential information. Lawyers are of course at liberty to move to new firms, but client confidentiality must be preserved.
If you are transferring to a new firm or operate a firm and have a new lawyer joining you, you must be aware of the conflict rules regarding the transfer of lawyers between firms. Rule 3.4-10 also contains rules regarding communication by the transferring lawyer and the former firm to clients with respect to whether the client and particular files stay with the firm or transfer with the lawyer.
The duty to maintain confidentiality and the duty to avoid conflicts apply to all lawyers, regardless of practice setting. The definition of “law firm” in the opening section of the Code is broad and includes space-sharing lawyers as well as partnerships and sole proprietorships. It also includes one or more lawyers practicing
- In a clinic operated by Legal Aid Alberta, or
- In a government, crown corporation, public body, corporation or other organization.
Note as well that the Code’s definition of “lawyer” includes a student-at-law. In fact, even hiring support staff from another law firm can create a potential conflict, and all staff transitions between firms must be properly managed.
When a lawyer joins a new law firm, the “transferring lawyer” and the new law firm must address the duty of confidentiality the transferring lawyer owes to clients of the former firm. Rules 3.4-8, -9 and -10 of the Code outline the procedures to be followed by transferring lawyers and their new firms.
Also consider Rule 3.3-7 when considering the hiring of a new lawyer. When considering lateral transfers or firm mergers, lawyers may share confidential client information to the extent necessary to detect and resolve conflicts of interest. A transferring lawyer may provide client information to the new prospective employer, including the names of the clients, a brief summary of the general issues involved, and the status of the representation. The disclosure will be made to as few lawyers at the new law firm as possible, ideally to a designated conflicts lawyer. These disclosures should be made on the understanding that the new law firm will limit access to the disclosed information and not use it for any purpose other than detecting and resolving conflicts. All information should be returned, destroyed, or securely stored once appropriate confidentiality screens are established to facilitate the lawyer’s transfer. Special considerations apply when disclosure may compromise solicitor-client privilege or may otherwise prejudice a client, due to the disclosure of sensitive information. Examples include a corporate client seeking advice in a corporate takeover that has not been publicly announced, or circumstances in which an individual has consulted a lawyer about the possibility of a divorce before such intentions are known to the other spouse.
The new law firm must ultimately establish whether it represents a client in a matter that is the same as or related to a matter in which the transferring lawyer’s former firm represents or represented a client, and whether the interests of the clients in that matter conflict.
If the transferring lawyer has confidential information about the former firm’s client that could prejudice that client if disclosed to the new firm, the new firm may have to cease representing its client.
Rule 3.4-9 of the Code applies to this scenario. If the new firm wants to continue to represent its client, the new firm must either:
- Obtain consent from the former client, or
- Establish that it is in the interests of justice that the New Firm continue to act for the New Firm Client in the matter, having regard to
- The adequacy and timing of the measures taken to ensure that confidential information of the Former Client is not disclosed to any member of the New Law Firm.
- The extent of prejudice to any party.
- The good faith of the parties.
- The availability of suitable alternative counsel.
If the transferring lawyer does not have confidential information that could prejudice the former firm’s client, Rule 3.4-10 states that the transferring lawyer cannot, without the consent of the former firm’s client:
- Participate in the new firm’s representation of its client or disclose any information respecting the former firm’s client.
- Discuss the new firm’s representation of its client or the former firm’s representation of the former firm’s client, other than to detect and resolve conflicts in accordance with Rule 3.3-7 of the Code.