14.03. Using Client Confidential Information [Rule 1.8(b)]

In the course of representing a client, a lawyer may learn information that the lawyer could use to the disadvantage of a client.  Rule 1.8(b) prohibits use of information “relating to representation” to the disadvantage of a client unless: (1) the client gives informed consent to its use; or (2) use is allowed by other rules[1].  How is this rule different from the duty to maintain client information confidential under Rule 1.6?  Rule 1.6 prohibits a lawyer from disclosing client confidential information whereas Rule 1.8(b) requires a lawyer from using the information – even if they never disclose (tell) someone else the information.  

Note that the concern with this provision is that the lawyer will use information that the lawyer acquires in the course of representing a client to the advantage of the lawyer and to the disadvantage of the client.  However, the Rule does allow the lawyer to use the information to the lawyer’s benefit so long as the client is not harmed.

Lorretta Lawyer represents Development, Inc. in purchasing land that Development, Inc. will turn into subdivisions.  Development approached lawyer to determine zoning restrictions and environmental issues on a 10 acre parcel.  As lawyer was doing the research, he learned that the City planned to develop the neighboring parcel to the 10 acres into a park that includes tennis courts and a swimming pool.  Lawyer tells Development, Inc. about the City’s plans and Development decides it does not want to purchase the property.  Thereafter, Lawyer purchases the 10 acres, planning to build a shopping center that would cater to those visiting the city park.  Has Lawyer violated Rule 1.8(b)? [ABA Rule 1.8, Comment [5]]

No.  While Lawyer did use information that related to the representation of her client (Development, Inc.), she did not use the information to the disadvantage of the client.  Her client decided not to purchase the land before she purchased it.  The outcome here would be different if the client was still contemplating whether to purchase the land and Lawyer bought it out from under the client.  If Lawyer did that, she would be using the information to the disadvantage of her client (without client consent).

[1] To give a couple of examples where other rules would allow a lawyer to use client information:  the exceptions to the duty of confidentiality (Rule 1.6(b)) and the right to use information of former clients when the information has become generally known (Rule 1.9(c)).  See ABA Rule 1.8, Comment [5].