Court Opinion

ID: 2736354
Source: CourtListenerOpinion
Date Created: 2014-09-24 14:05:11.347523+00
Date Added: 2024-06-11T10:53:11.341936
License: Public Domain

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		2014-09-17-01 
	

The Supreme Court of South Carolina

Re: Amendments to Rule 407, South  Carolina Appellate Court Rules.
Appellate Case No. 2013-001610 

 ORDER
The South Carolina Bar has filed a petition to amend  Rule 1.6 of the Rules of Professional Conduct.   We grant that portion of the Bar's petition requesting the Court adopt  the American Bar Association's amendments to Model Rule 1.6 and the Comments to  the rule.  We also adopt the American Bar  Association's amendments to the comments to Model Rule 1.17.  
Pursuant to Article V, § 4 of the South Carolina  Constitution, Rules 1.6 and 1.17 of the Rules of Professional Conduct are  amended as set forth in the attachment to this Order.  The amendments are effective  immediately. 

 s/Jean H. Toal                                  C.J.s/Costa M. Pleicones                          J.
      s/Donald W. Beatty                             J.
s/John W. Kittredge                             J.
s/Kaye G. Hearn                  
                       J.

  Columbia, South Carolina
September 17, 2014  
Rule  1.6(b), RPC, Rule 407, SCACR, is amended by adding paragraph (8), which  provides as follows:
(8) to detect and resolve conflicts of  interest arising from the lawyer's change of employment or from changes in the  composition or ownership of a firm, but only if the revealed information would  not compromise the attorney-client privilege or otherwise prejudice the client.
The  following Comments are added to Rule 1.6 as Comments 13 and 14, with the  remaining Comments renumbered accordingly:
Detection of Conflicts of Interest
[13]  Paragraph (b)(8) recognizes that lawyers in different firms may need to disclose  limited information to each other to detect and resolve conflicts of interest,  such as when a lawyer is considering an association with another firm, two or  more firms are considering a merger, or a lawyer is considering the purchase of  a law practice.   See Rule 1.17, Comment  [6].  Under these circumstances, lawyers  and law firms are permitted to disclose limited information, but only once  substantive discussions regarding the new relationship have occurred.  Any such disclosure should ordinarily include  no more than the identity of the persons and entities involved in a matter, a  brief summary of the general issues involved, and information about whether the  matter has terminated.  Even this limited  information, however, should be disclosed only to the extent reasonably  necessary to detect and resolve conflicts of interest that might arise from the  possible new relationship.  Moreover, the  disclosure of any information is prohibited if it would compromise the  attorney-client privilege or otherwise prejudice the client (e.g., the fact  that a corporate client is seeking advice on a corporate takeover that has not  been publicly announced; that a person has consulted a lawyer about the  possibility of divorce before the person's intentions are known to the person's  spouse; or that a person has consulted a lawyer about a criminal investigation  that has not led to a public charge).  Under  those circumstances, paragraph (a) prohibits disclosure unless the client or  former client gives informed consent.  A  lawyer's fiduciary duty to the lawyer's firm may also govern a lawyer's conduct  when exploring an association with another firm and is beyond the scope of  these Rules.  
[14]  Any information disclosed pursuant to paragraph (b)(8) may be used or further  disclosed only to the extent necessary to detect and resolve conflicts of  interest.  Paragraph (b)(8) does not  restrict the use of information acquired by means independent of any disclosure  pursuant to paragraph (b)(8).  Paragraph  (b)(8) also does not affect the disclosure of information within a law firm  when the disclosure is otherwise authorized, see Comment [6], such as when a  lawyer in a firm discloses information to another lawyer in the same firm to  detect and resolve conflicts of interest that could arise in connection with  undertaking a new representation.
Comment  6 to Rule 1.17, RPC, Rule 407, SCACR, is amended to provide as follows:
[6] Negotiations between seller and  prospective purchaser prior to disclosure of information relating to a specific  representation of an identifiable client no more violate the confidentiality  provisions of Rule 1.6 than do preliminary discussions concerning the possible  association of another lawyer or mergers between firms, with respect to which  client consent is not required.  See Rule  1.6(b)(8).   Providing the purchaser access to detailed  information relating to the representation, such as the client's file, however,  requires client consent.  The Rule  provides that before such information can be disclosed by the seller to the  purchaser regarding an active client, the client must be given actual written  notice of the contemplated sale, including the identity of the purchaser, and  must be told that the decision to consent or make other arrangements must be  made within 90 days.  If nothing is heard  from the active client within that time, consent to the sale is presumed.