This week the American Bar Association adopted an amendment to Model Rule 1.6 and 1.17. These rules address client confidentiality. The amendments state that during the negotiation process for a merger, acquisition, sale of a practice or lateral hire, the law firms may exchange client information in order to detect conflicts of interests – so long as attorney-client privilege is not breached and the client would not otherwise be prejudiced. Model Rules are guidelines only, but many states bars adopt these rules as their own.
Calculated Risk Advisors urges clients to discuss the insurance implications of lateral hires or M&A activity with a licensed broker. It is necessary to review the current insurance in order to assure that no modifications are necessary before the transaction. Contact a broker today if your firm is contemplating entering into these types of negotiations.