Worried about what your potential hire might be carrying on (or checking)? Firms should be concerned, but unfortunately, many risk costly claims and causes of action that are difficult to defend when they ignore established protocols to avoid conflicts of interest when hiring lateral attorneys.

According to Ames & Gough’s most recent 2024 legal malpractice survey, conflicts of interest remain the number one cause of legal malpractice claims. Despite most firms having procedures in place to avoid conflicts of interest, conflicts continue to produce claims, ethics complaints, and law firm disqualifications. The arrival of lateral hires is one source of these conflicts. Why? Firms fail to conduct thorough conflict checks and the necessary due diligence before hiring a lawyer who may have an undisclosed history of malpractice claims or who brings a book of business with clients that are adverse to the firm’s clients. How can you protect against a claim arising from a conflict of interest? Think of it like going through security before boarding your flight. 

ABA Model Rule 1.7 cautions that concurrent conflicts of interest can arise from the hiring firm’s responsibilities to another client, a former client or third person, or from the lawyer’s own interest. According to the Comment to Rule 1.7, the firm is required to:

1) clearly identify the client or clients; 2) determine whether a conflict of interest exists; 3) decide whether the representation may be undertaken despite the existence of a conflict, i.e., whether the conflict is consentable; and 4) if so, consult with the clients affected … and obtain their informed consent, confirmed in writing. So, while it is possible to overcome a conflict between a current firm client and the client of a prospective hire, the firm may ultimately determine they cannot hire the lateral. In other words, if the conflict cannot be resolved, the contingency of the job offer based on the conflicts check may not be met. 

The lateral hire should likewise proceed with caution before taking off from their current firm to land somewhere new. Make sure you clear conflicts before giving your current firm notice you are leaving their employ. As discussed above, the hiring firm should initiate the conflict check process by providing you with their form so you can itemize the matters and clients you have represented at your firm. Be thorough and err on the side of including all matters in which you may have only consulted or were otherwise tangentially involved so you do not inadvertently disqualify the new firm in a pending matter. If no conflicts exist, you could then give your firm notice of your departure.   

 And while coordinating an amicable exit from your firm may feel like you are stuck in the middle seat, it can benefit you and your soon-to-be former firm. Interestingly, the firm you are leaving could also find itself risking a malpractice claim if they fail to timely remove your profile from its website. Known as “website time,” a misrepresentation of services claim could arise if they continue to advertise your association with the firm which may not be covered by their professional liability policy. Or, the firm could receive a grievance for this potential ethical violation. Consider suggesting the firm post an announcement on the website noting your last day and delete your profile. 

Transitioning from one firm to another can be turbulent – for all parties involved. Whether you are the hiring firm, lateral attorney, or the attorney’s former firm, consider these tips to help avoid a malpractice claim or grievance.