Screening is a fraud on the public and makes a monkey of the idea that law is a profession and that lawyers are their clients’ fiduciaries.
In order to understand the problems raised by screening, consider a typical case. Attorney is with firm A&B and is heavily involved in representing Plaintiff. In the middle of the litigation, Attorney switches to firm Y&Z, which is representing Defendant in the same case. The traditional rule of ethics has been that both Attorney and firm Y&Z are disqualified from representing Defendant in that case. The rule relies on presumptions that are based upon common sense and the practicalities of proof.
The first presumption is that Attorney learned confidences from Plaintiff while serving as its lawyer. This presumption is justified in part by Attorney's ethical obligation to learn everything that might be relevant to Plaintiff's case. Moreover, the presumption that Attorney learned confidences from Plaintiff avoids making Plaintiff reveal its confidences in order to protect them.
The second presumption is that Attorney, having switched sides, might use Plaintiff's confidences on behalf of Defendant. This presumption is based in part on the fact that Attorney, if he were permitted to represent Defendant, would be ethically required to be loyal to Defendant, to act zealously on its behalf, and to communicate to Defendant all information material to the representation. Thus, the traditional rule of disqualification recognizes that Plaintiff could reasonably believe that its confidences were being betrayed, and the rule respects this legitimate client concern.
The imputed disqualification of firm Y&Z is also based upon common sense and practicalities of proof. Even if Attorney is not personally representing Defendant at his new firm, there is a reasonable possibility that Attorney, having switched allegiances, might disclose Plaintiff's confidences to his new partners. As observed in the Harvard Law Review, Attorney's new colleagues have a "significant incentive" to elicit the confidences, and Attorney has a similar incentive to prove his allegiance to his new firm by cooperating. Thus, there is a "distinctive danger" that Attorney will reveal Plaintiff's confidences to Defendant's lawyers. Moreover, such violations would be virtually impossible to police. It is extremely unlikely that Plaintiff would ever be able to discover and prove a brief conversation in someone's office, or during a private dinner, or in a phone call to Attorney's home.
In short, the traditional presumption underlying disqualification in such cases is based upon a high level of temptation, a low level of visibility, and a near-impossible burden if Plaintiff were required to prove a specific breach of its confidences.
Of course, Plaintiff might consent to Attorney's representation of Defendant, or might consent to Y&Z's continued representation of Defendant with the understanding that Attorney would not be involved in that representation. Plaintiff might be willing to consent, for example, in order to avoid delaying the case. And if Plaintiff does consent, there is no need for disqualification. But what if Plaintiff, understandably, refuses to consent? The traditional answer is that the firm is disqualified.
Allowing Y&Z to erect a screen would defeat that result. That is, the lawyers at Y&Z would write to Plaintiff saying that Attorney will not work on the case or talk about it with the lawyers who represent Defendant. Nothing else would change. The temptations to violate Plaintiff's confidences would be just as high, violations would still be virtually impossible to police, and Plaintiff would still be under an impractical burden to uncover and to prove a violation.
Supporters of screening contend that objections to screening reflect skepticism, even cynicism, about lawyers' ethics. That may be. There is, sad to say, some skepticism in that regard among members of the public. Indeed, a major purpose of the conflict of interest rules is to allay that skepticism, and an unpoliceable assurance of screening by a law firm is not likely to achieve that goal. As noted in a recent federal case:
In an age of sagging public confidence in our legal system, maintaining confidence in that system and in the legal profession is of the utmost importance. In this regard, courts should be reluctant to sacrifice the interests of clients and former clients for the perceived business interests of lawyers.
Another contention by supporters of screening is that violations of screening have not been reported in those few jurisdictions that permit it, or in cases of former government lawyers. But, again, a major part of the problem is that violations of screening are so unlikely to be revealed. We cannot really expect lawyers to admit that they were subject to screening but nevertheless violated client confidences.
Nevertheless, such cases have on occasion come to light. In one case, a client, Maritrans, learned that the law firm that had been representing it in labor negotiations, Pepper, Hamilton & Scheetz, had begun to represent four of its competitors. Pepper, Hamilton & Scheetz is an old and reputable Philadelphia firm. The law firm had obtained highly sensitive client information from Maritrans that would be extremely valuable to its competitors. When Maritrans objected to the law firm’s representation of its competitors, the law firm proposed that the lawyers in the firm who represented Maritrans would be screened off from those who were representing the competitors; the law firm also proposed that it would limit its representation of Maritrans’ competitors to the four companies that the firm already represented. Maritrans agreed to this proposal primarily because it did not want the law firm to represent any additional competitors, and especially not Bouchard.
The law firm then broke its word in two ways. First, it violated the screen by passing information from the lawyers who represented Maritrans to the lawyers representing the competitors. Second, the law firm “parked” Bouchard and a sixth competitor with another labor lawyer. The other lawyer was then working at a different law firm, but was negotiating to join Pepper, Hamilton & Scheetz, and soon after, he did so, bringing Bouchard and the other competitor with him. In the meantime, Pepper, Hamilton “for all intents and purposes, was representing Bouchard” as well as the five other competitors.
The law firm’s scheme in the Maritrans case came to light because of two unusual circumstances. First, three months after Pepper, Hamilton & Scheetz promised Maritrans that it would not represent Bouchard, the law firm terminated its representation of Maritrans. Second, the lawyer with whom Bouchard had been parked joined Pepper, Hamilton, and he brought Bouchard with him as a client. These facts alerted Maritrans and led to a law suit against Pepper, Hamilton & Scheetz, in which discovery uncovered the law firm’s deceitful conduct.
Another case, with an issue analogous to screening, provides additional compelling evidence that assurances of confidentiality–again, at a large, prestigious law firm--are less than reliable.
Procter & Gamble sued Bankers Trust Company, alleging in an amended complaint that Bankers Trust is a racketeer-controlled organization. The court issued a protective order, sealing the amended complaint, in order to protect Bankers Trust’s reputation while the matter was being adjudicated. Bankers Trust was represented by Sullivan & Cromwell. The law firm is more than a century old and widely respected. Sullivan & Cromwell has strict rules and established procedures about safeguarding confidential documents. Nevertheless, when a Business Week reporter, Linda Himelstein, telephoned a Sullivan & Cromwell partner and asked for a copy of the sealed complaint, he sent it to her by messenger the same day.
The partner is Steven Holley. He had not worked on the Bankers Trust case, and he did not know that the amended complaint was under seal. In response to Himelstein's request, Holley simply asked an associate for a copy, and the associate gave it to him, without asking why Holley wanted it and without telling him about the court's order sealing it. The amended complaint was not kept in a secure place, nor was the copy stamped on its face that it was under seal. Nor did Holley follow Sullivan & Cromwell policy by checking first with the partner in charge of the case before giving the complaint to Himelstein.
It gets even worse. Himelstein testified that she had learned the following day that the complaint had been sealed and that she immediately called Holley to tell him. Under oath, Holley several times denied the call (which explained why he had failed for a week thereafter to tell his partners what he had done). In fact, he testified, at the time Himelstein said she had called him, he had not been at his office, but at home. Then, on cross-examination, Holley was impeached with telephone records showing a telephone call from Himelstein to his home that day.
The way Sullivan & Cromwell dealt with a highly sensitive document has to give pause to anyone who considers screening to be an ethical and practical way to avoid conflicts of interest. But the analogy isn't perfect. In fact, the case of Sullivan & Cromwell and Bankers Trust is even more compelling than the usual screening case in showing the fallibility of law firms in protecting sensitive documents. First, Sullivan & Cromwell had requested that the complaint be sealed in order to protect its own client. Second, Sullivan & Cromwell hadn't simply given assurances to an adversary, it had been ordered by a court to maintain confidentiality; thus, the law firm was subject to contempt of court and to sanctions for releasing the document. Third, giving the sealed complaint to a reporter was guaranteed to alert the world that there had been a leak somewhere.
Moreover, the disputed testimony about the telephone call to Holley's home underscores the difficulties of proving a breach of confidentiality. In the Sullivan & Cromwell case, Himelstein had no incentive to go along with Holley's false denial of their telephone conversation. In the typical screening case, by contrast, both parties to any conversation about a former client’s confidences will have an incentive to cover it up.
Another illustration of the unreliability of screens is the case of the New Hampshire Supreme Court. Judges who are disqualified from participation in a case are not supposed to participate in deciding the matter in any way. In effect, they are screened from the case. Ordinarily, we can expect, or hope, that judges will not tolerate violations of screens by their colleagues, if only because there are usually not the same financial incentives as there are in private practice. Nevertheless, a clerk of court revealed that the chief judge had been allowing colleagues to participate in cases in which they had been disqualified, and even, in one case, to control an important decision. During an impeachment investigation, the chief judge then lied repeatedly when questioned about the screening violations.
It appears, therefore, that the skeptics have significant justification for their concerns about the efficacy of screening, and that clients should not be compelled to accept the assurance, “Trust us – we’re lawyers.” Expressing confidence that the lawyers in a disqualification case would respect a screening arrangement, the Second Circuit nevertheless rejected the scheme, observing: “However, we cannot impart this same confidence to the public by court order.”