By Melissa Lafsky

Lateral moves are like all-nighters at the office: You can expect at least a few of them in the typical law firm career. And now, the American Bar Association has taken action to make moving from one law firm to another significantly easier for attorneys, by easing rules on conflicts of interest.

In February of this year, the ABA’s House of Delegates voted to amend its Model Rule of Professional Conduct governing conflicts stemming from lateral hiring. Specifically, the new amendment, known as Recommendation 109, lessens long-held ethics standards, so firms that once had to diligently obtain waivers may now hire lawyers with conflicts of interest without a waiver from the client. In addition, any conflicts that potential laterals might have would not necessarily transfer to other lawyers in the hiring firm—effectively creating a screen that lets firms continue to represent a conflicting client without the standards applied in the past.

Rec. 109 vs. Rec. 110

In a heated vote during the ABA’s midyear meeting in Boston, the 555-member ABA House of Delegates voted 226 to 191 in favor of passing Rec. 109. The issue had been initially introduced last summer, during the ABA’s annual meeting in New York. At that time, the House of Delegates voted to table the issue. Seven months later, the debate came to a head with the proposition of two competing amendments: Rec. 109, and the alternative, Rec. 110. The latter would have required that the lateral’s involvement with the client not be substantial, or have involved material client information. The proposed rule also would have demanded client consent for the attorney’s move.

Despite a heated discussion, Rec. 109 eventually ruled the day. Under the amendment, a hiring firm must give the incoming lawyer's former client written notice of the screening procedures used to determine a conflict. The firm must also let the client know that it may seek judicial review. The new rule also bars screened lawyers from directly sharing pay that was collected from matters they have been disqualified from due to the conflict. And while it lessens guidelines surrounding conflicts, Rec. 109 does not change a lawyer's duty to maintain client confidences.

States forge ahead of ABA

Carolyn B. Lamm, ABA's president-elect and a Washington, D.C.-based international arbitration and litigation partner at White & Case, strongly supported Rec. 109 during the floor debate, reportedly arguing that the ABA "simply cannot ignore the mobility of lawyers." She also pointed out that eleven states had already passed "what is essentially 109," on top of 13 other states that have long followed their own rules and regulations regarding ethics screening.

"Twenty-four states have acted without the ABA's leadership in an area where the ABA should be offering the model rule," Lamm said. "We should be restoring historic leadership by putting forward a balanced screening proposal for our states to adopt.”

Increased client mobility

Lamm also raised the point that just as lawyers are moving among firms with greater frequency, clients’ needs, and payrolls, are changing rapidly. "Whether it [has] increased because of an evolution in the way we practice law or because of economic necessity, we also must recognize [that there is more] client mobility," Lamm said.

"On both sides of the equation, life is different. Report 109 appropriately balances the interests of the moving lawyer, the receiving firm, the client that's left behind, and the clients at the new firm."

Benefits for recruiting

The rule change could be beneficial from a recruiting standpoint, since it smoothes a path for lateral attorney movement from law firm to law firm that can otherwise be messy and fraught with delays. Law firm recruiters will have more freedom to consider applicants that otherwise may have been overlooked, and attorneys thinking about a switch may be more likely to start a job search now that they’re spared an administrative hassle.

Some associates are lauding the new rule as a boon which lifts a barrier that has long caused major delays and even affected employment options—which are all the more crucial in the current tight job market. “Dealing with conflicts was a big hassle” said one fourth-year associate at a top D.C. firm who recently made a lateral move. To maintain privacy, he requested that his name not be used. “After I got my offer [at the new firm], I waited six weeks total, plus an extra two weeks for a single waiver, all for a case I didn't work on, because of the conflicts rule. I couldn't start at the new firm, because they were worried about being disqualified.”

Is Rec. 109 dangerous?

Other attorneys see Rec. 109 as an unnecessary lapse of long-held stringent ethics rules—a lapse that could prove dangerous to the profession. During the negotiations leading to its passage, Lawrence Fox, a litigation partner at Philadelphia firm Drinker Biddle & Reath and the former chairman of the ABA's Standing Committee on Ethics and Professional Responsibility, reportedly lambasted the new rule, calling it an "assault on the rules governing confidentially and loyalty," according to the National Law Journal.

And despite its apparent benefits to attorneys looking to move laterally, not all associates are thrilled by the rule. “Even if, in the era of mega-firms, the conflicts check is frequently a formality, especially for associates, I don't think it is so onerous that standards regarding conflicts should be relaxed at all,” said Rob Johnston, a fifth-year associate in D.C. who recently moved from Latham & Watkins to Williams & Connolly.

There’s also the question of whether the benefits of the rule will be large enough to outweigh the costs. “I'm dubious that any lateral associates would be dissuaded from switching firms simply because of a conflict check delay. In my view, it was just another transaction cost, like having to fill out new health insurance forms and switching my 401(k),” said Johnston. “But the potential for the appearance of impropriety -- and ethics rules are largely about appearances -- is significant. The legal profession should be strengthening ethical rules right now, not softening them.”