1. May an associate attorney of law firm A engage in employment discussions with law firm B, while law firm A represents X, which is in litigation with Y, represented by law firm B, where the associate and the partner for whom he worked in law firm A have done no work for X and have no actual knowledge of any matter pertaining to X?
2. If the associate is employed by law firm B, will law firm B be disqualified from continuing to represent Y in the litigation between X and Y?
An associate attorney employed by law firm A has had preliminary discussions with law firm B regarding potential employment. One of law firm B's clients (Y) is currently involved in litigation, and is likely to become involved in additional litigation, against X, a client of law firm A. Neither the associate nor the partner in law firm A with whom he works has done any work on any matter for X and neither the associate nor the partner for whom he works has any actual knowledge of matters involving X. If the associate resigns from law firm A and is employed by law firm B, he will perform no work in connection with the litigation between X and Y.
While the associate was employed by law firm A, he as well as every other member of law firm A was disqualified from accepting employment against that firm's client, X. (DR 5-105(D)). The associate's disqualification would not end upon his leaving law firm A, so he would be disqualified from representing Y, the client of law firm B, in a suit against X.
The more difficult question is whether the disqualification of the associate extends to the members of law firm B if he joins that firm. Critical to the decision of the question is the fact that the associate is vicariously disqualified by his imputed knowledge of matters affecting X and not by a direct attorney-client relationship between the associate and X. Should each member of law firm B be disqualified by imputation of the associate's imputed knowledge?
No Texas case on point has been found, but a uniformity of court decisions in other jurisdictions persuade us that the vicarious disqualification of the associate should not extend to the other members of law firm B. New partners of a lawyer who is vicariously disqualified only as the result of knowledge imputed to him during a former partnership, are not disqualified from suing the client of the disqualified partner's former law firm.
The knowledge of the business of the client obtained by his former partners and imputed to him is not imputed to his new partners. Laskey Bros. of W. Va., Inc. v. Warner Bros. Pictures, Inc., 224 F.2d 824 (2nd Cir. 1955); American Can Company v. Citrus Feed Co., 436 F.2d 1125 (5th Cir. 1971); Smith v. Whatcott, 774 F.2d 1032 (10th Cir. 1985), also supports that conclusion. In the latter case, an attorney who was a member of one firm was held to be not disqualified from serving as counsel on appeal after the original appellate counsel was disqualified due to an imputed conflict resulting from the attorney-client relationship between another member of his firm and a party to the appeal. A similar result was reached in Panduit Corp. v. Allstates Plastic Manufacturing Co., Inc., 744 F.2d 1564 (Fed. Cir. 1984).
If the associate of law firm A has done no work for X and has no knowledge of matters affecting X, it is not unethical for the associate to discuss employment with law firm B which represents Y in litigation with X. Further, under the facts presented, although it would be unethical for the associate to represent Y, it would not be unethical for other members of law firm B to continue to represent Y in pending or future litigation against X.