By: Arend J. Abel, Attorney

Lawyers often conclude that once representation of a client ends, they are free to take on matters adverse to the former client.  However, that is not always the case.  The Indiana Rules of Professional Conduct specifically provide that there are circumstances where a lawyer may not take a representation that is adverse to a former client.  Indiana Rule of Professional Conduct 1.9 provides that a lawyer may not, absent informed consent, represent a client who is adverse to a former client where the matters are “the same or substantially related.”  It’s easy to tell if matters are “the same.”  The trick is to determine what counts as a “substantially related matter.”

The answer to the question of whether matters are “substantially related” is sometimes counterintuitive.  For example, a lawyer who has generally represented a business owner and obtained information regarding the business owner’s finances likely cannot later represent the business owner’s spouse in a divorce, because the financial information learned from the previous representation may be highly relevant to property settlement issues.

On the other hand, a lawyer who has repeatedly defended employment matters for a business may not be disqualified from later representing persons making employment claims against the former client, because the facts of each separate employment matter stand on their own.

There are some cases that fall between those two types of representations.  For example, the Indiana Court of Appeals in XYZ, D.O. v. Sykes, 20 N.E.3d 582 (Ind. Ct. App. 2014) disqualified a law firm because one of its lawyers had previously represented the adverse party doctor in six medical malpractice suits and the current representation involved an additional allegation of malpractice, coupled with a negligent credentialing allegation against a hospital for failure to adequately investigate the circumstances of the six prior malpractice suits.  The Court of Appeals held that the two matters were substantially related and therefore the lawyer and her firm were disqualified.

The key test to determine whether matters are “substantially related” is whether there is a substantial risk that specific confidential factual information of the kind that would normally have been obtained in the prior representation would materially advance the new client’s position against the former client.  General knowledge of the former client’s policies and practices is ordinarily not enough to result in disqualification, at least for organizational clients.

Before taking on a representation that is adverse to a former client, an attorney must carefully consider the scope of the prior representation and the kind of information that would normally have been obtained from the former client for that sort of representation.  Then, the lawyer must assess whether information that would normally have been obtained from the former representation could be helpful to the new client.  If it is, the lawyer must decline the new representation.