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This article is by Kristopher Klein, J.D. of InOutsource. For more author information, please see below.

Conflicts of interest surrounding the "lateral" movement of attorneys from one firm to another have proven to be a risk management challenge for many firms today. One of the more uncertain aspects relates to conflicts created by laterals' former clients that do not come to the hiring firm. For example, Attorney was formerly with Firm A, where she did work for Company A, drafting and negotiating a supply contract with Company B.  Attorney then takes a job with Firm B, which is representing Company C adverse to Company A in a contract dispute over a similar contract.  Despite the fact that Company A is the lateral's former client and will not come to Firm B with Attorney, Attorney may have information the firm could use to the detriment of this former client. 

To prevent restrictions on practice, while at the same time reducing clients' limitations on choice of lawyer, states have adopted rules providing mechanisms to prevent imputation of conflicts brought about by laterals' former clients. Although these rules vary among jurisdictions, they typically allow firms to construct so called ethical screens to prevent imputation under limited circumstances. This past February, in a long awaited, while at the same time highly debated shift, the ABA's governing body modified Rule 1.10 of the Model Rules of Professional Conduct, to allow screening to prevent imputation of conflicts brought about by laterals' former client relationships. While not authoritative in itself, this ABA rule change has the potential to influence remaining states to adopt similar provisions.