The Risk Manager, Summer 1997

In two recent decisions the Kentucky Supreme Court has made it clear that the "appearance of impropriety" standard will be used to evaluate Kentucky lawyer compliance with professional responsibility requirements. The most recent decision, Lovell v. Winchester, Ky., 941 S.W.2d 466 (1997), concerned a motion to disqualify opposing counsel for a conflict of interest. Opposing counsel had an initial consultation with the moving party about the matter, but declined representation. Opposing counsel later accepted the other side of the matter. When a motion was made to disqualify him for a conflict of interest, he argued that he recalled nothing about the consultation. In requiring disqualification the Court explained its position on the appearance of impropriety standard:

"Even though the comment to [Model] Rule 1.9 specifically rejects the "appearance of impropriety" standard in favor of a fact-based test applied to determine whether the lawyer's duty of loyalty and confidentiality to a former client will likely be compromised by the subsequent representation, the appearance of impropriety is still a useful guide for ethical decisions. The Arkansas Supreme Court found that although the language of Canon 9 regarding avoiding even the appearance of impropriety was not adopted as part of the Arkansas rules of professional conduct, lawyers still must avoid the appearance of impropriety because such is an integral component of professional responsibility, First American Carriers, Inc. v. Kroger Co., 302 Ark. 86, 787 S.W.2d 669 (1990).

In First American Carriers, Inc., a law firm was disqualified even though no confidential information was obtained and the contacts were minimal. In American Insurance Association v. Kentucky Bar Association, 917 S.W.2d 568 (1996), this Court stressed that the mere appearance of impropriety is just as egregious as any actual or real conflict. Id at 573.

Although the appearance of impropriety formula is vague and leads to uncertain results, it nonetheless serves the useful function of stressing that disqualification properly may be imposed to protect the reasonable expectations of former and present clients. The impropriety standard also promotes the public's confidence in the integrity of the legal profession. For these reasons, courts still retain the appearance of impropriety standard as an independent basis of assessment."

Lovell is well worth reading for the Court's discussion of how a person on the basis of an initial consultation and notwithstanding the declination of the representation can become a "client" under KRE 503(a)(1); and its discussion of how the lawyer/client relationship can arise from the conduct of the parties. The following paragraph is particularly instructive:

"Consultation with a lawyer may ripen into a lawyer/client relationship that precludes the lawyer from later undertaking a representation adverse to the individual who consulted him. The lawyer/client relationship can arise not only by contract but also from the conduct of the parties. Courts have found that the relationship is created as a result of the client's reasonable belief or expectation that the lawyer is undertaking the representation.

Such a belief is based on the conduct of the parties. The key element in making such a determination is whether confidential information has been disclosed to the lawyer."

  • Do your client intake procedures protect you from getting into the fix the lawyer found himself in Lovell?
  • Do you use a new client interview checklist to document initial interviews?
  • Are you careful to obtain only the minimum amount of information necessary to conduct a conflict of interest check before going into detail with a prospective client?
  • Are you relying on memory, rolodex, and office appointment calendars as your conflict check system or do you employ automated conflict check systems?
  • Do you use letters of nonengagement for declined representations?
  • Do you use closing letters for completed representations to return client property and documents, and to make it clear that the representation is over?