To Hire or Not to Hire

by Warren T Wilson, QC

Following the Martin v. Gray case in the Supreme Court of Canada in 1990, the B.C. Law Society amended the Professional Conduct Handbook to insert Rules 7.1 to 7.9 of Chapter 6. These provisions set out institutional devices and procedures to follow in connection with lateral hires. Recruiting partners and lawyers changing firms should read Chapter 6 Rules 7.1 to 7.9 and be vigilant in following the procedures set out therein. Recent events suggest that they are not.

A firm wishing to make a lateral hire should do as follows:

1. Ascertain from the lateral hire all current matters involving the hiring firm on which the lateral hire has worked and ask each member of the firm to provide information on all current files where the other side is represented by a firm for which the lateral hire has worked. Compile a list of all responses for review by the lateral hire and for affirmation that the lateral hire has no relevant confidential information relating to such files.
2. If the lateral hire is unable to affirm as provided in 1 above, then review with the lateral hire Chapter 6 of the Handbook and in particular Rules 7.4 and 7.5. If the lateral hire has relevant confidential information seek consent from the former client to the hiring firm’s continued representation of its client. If the lateral hire has relevant information that is not confidential, follow the procedure outlined in Rule 7.5.
3. Have the lateral hire execute an undertaking not to participate in the hiring firm’s representation of its client or disclose any confidential information respecting the former client.
4. If consent is not forthcoming from the former client then consider if it is in the interests of justice that the hiring firm continue to represent its client and take reasonable screening measures or withdraw the offer of employment. Appendix 5 to the Professional Conduct Handbook sets out guidelines to be followed in setting up screening measures.

It is important to insert a condition precedent relating to conflicts in any letter offering employment to a lawyer who has practised with another firm in case problems arise.

Some law firms assume it is in the interests of justice for every case to stay with the law firm that has acted in the past. Such firms set up screening measures and expect to convince a court that they have taken proper steps if challenged. I am not aware of any cases that say screening measures will protect firms in all circumstances.

If a hiring firm intends to rely on screening measures, they must be set up immediately upon arrival of the lateral hire or commencement of a new conflicted matter. In the recent British Columbia Supreme Court case, Alcan Inc. v. Farris, Vaughan, Wills & Murphy, the court held that screening measures set up 17 months after Farris commenced to act were not adequate and Farris was required to cease acting.

Warren T. Wilson, QC is a retired partner at the Vancouver office of Borden Ladner Gervais LLP where he is currently responsible for lateral hire recruitment and is Chair of the Conflicts Committee. Mr. Wilson is a Life Bencher and Past President of The Law Society of British Columbia. He was elected Chair of The Law Foundation of British Columbia in January 2006.

This article was published in the August 2006 issue of BarTalk. © 2006 The Canadian Bar Association. All rights reserved.