Two Hats, One Lawyer:
Demystifying Privilege &
Confidentiality
Stuart I. Teicher, Esq.
The Basic Definition
Information discussed
between a client and a lawyer, told
in confidence,
for the purpose of securing legal
advice,
not in furtherance of a crime or tort,
which has not been waived.
Rule 1.13 Organization As Client
(a) A lawyer employed or retained
by an organization represents the
organization acting through its
duly authorized constituents.
(1) Made for the purpose of legal advice, and your
people knew that
(2) At the request of the employee’s supervisor
(3) The subject of the conversation must be within the
scope of the employee’s duties and about
information not available to the control group and
(4) The conversation must have been limited to people
who “need to know”
Rule 4.3 Dealing With Unrepresented Person
In dealing on behalf of a client with a person who
is not represented by counsel, a lawyer shall not
state or imply that the lawyer is disinterested.
When the lawyer knows or reasonably should
know that the unrepresented person
misunderstands the lawyer’s role in the matter,
the lawyer shall make reasonable efforts to correct
the misunderstanding. The lawyer shall not give
legal advice to an unrepresented person, other
than the advice to secure counsel, if the lawyer
knows or reasonably should know that the
interests of such a person are or have a reasonable
possibility of being in conflict with the interests of
the client.
Rule 1.13(f)
In dealing with an organization's directors,
officers, employees, members, shareholders or
other constituents, a lawyer shall explain the
identity of the client when the lawyer knows or
reasonably should know that the organization's
interests are adverse to those of the
constituents with whom the lawyer is dealing.
Minimum Corporate Miranda Warnings
• I owe my loyalty to the company, not you, the
employee
• I represent the company
• Our conversations will be privileged (ans
explain what that means)
• The privilege belongs to the corporation, not
the employee and only the employee can
waive it
• Tell them about the reason for the interview
1.13 (g) A lawyer representing an organization
may also represent any of its directors, officers,
employees, members, shareholders or other
constituents, subject to the provisions of Rule
1.7. If the organization's consent to the dual
representation is required by Rule 1.7, the
consent shall be given by an appropriate official
of the organization other than the individual
who is to be represented, or by the
shareholders.
Rule 1.7 Conflict Of Interest: Current Clients
(a) Except as provided in paragraph (b), a lawyer shall not represent a
client if the representation involves a concurrent conflict of interest. A
concurrent conflict of interest exists if:
(1) the representation of one client will be directly adverse to another
client; or
(2) there is a significant risk that the representation of one or more
clients will be materially limited by the lawyer's responsibilities to
another client, a former client or a third person or by a personal
interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of interest
under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to
provide competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one
client against another client represented by the lawyer in the same
litigation or other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in writing.
Factors that determine if it’s legal advice
• Look at the content of the communication
• Consider your role
• Consider how your role is viewed if you bring in
OC
• Think about the details of your communications
• It’s also about the scope of your task
• Consider formalities like your title
• Other formalities
• Consider the request that got you involved in the
first place
RULE 1.6: CONFIDENTIALITY OF INFORMATION
(a) A lawyer shall not reveal information relating to the
representation of a client unless the client gives
informed consent, except for disclosures that are
impliedly authorized
representation,
in
order
to
carry
and except as stated in paragraph (b).
out
the
Rule 1.6. Confidentiality of Information
(b) A lawyer may reveal such information to the
extent the lawyer reasonably believes necessary:
(1) to prevent the client from committing a criminal
act that the lawyer believes is likely to result in
imminent death or substantial bodily harm;
Fraud is bad.
1.0(d) "Fraud" or "fraudulent" denotes conduct
that is fraudulent under the substantive or
procedural law of the applicable jurisdiction and
has a purpose to deceive.
Can't assist a fraud.
Rule 1.2 (d) A lawyer shall not counsel a client to
engage, or assist a client, in conduct that the
lawyer knows is criminal or fraudulent, but a
lawyer may discuss the legal consequences of any
proposed course of conduct with a client and may
counsel or assist a client to make a good faith effort
to determine the validity, scope, meaning or
application of the law.
If you realize you're assisting, you
can't continue assisting a fraud.
You must withdraw.
1.2 Comment [10] When the client's course of action has already
begun and is continuing, the lawyer's responsibility is especially
delicate. The lawyer is required to avoid assisting the client, for
example, by drafting or delivering documents that the lawyer
knows are fraudulent or by suggesting how the wrongdoing
might be concealed. A lawyer may not continue assisting a
client in conduct that the lawyer originally supposed was
legally proper but then discovers is criminal or fraudulent.
The lawyer must, therefore, withdraw from the
representation of the client in the matter. See Rule 1.16(a). In
some cases, withdrawal alone might be insufficient. It may be necessary for the
lawyer to give notice of the fact of withdrawal and to disaffirm any opinion,
document, affirmation or the like. See Rule 4.1.
But shouldn't we have to say
something?
Old rules gave no exception for financial crimes or
frauds. They were protected by confidentiality.
But then along came.....
Enron was awful. It caused a lot of damage. If lawyers
knew about the fraud, shouldn't they be required to say
something?
Confidentiality says NO. Congress didn't like that...
Sarbanes-Oxley Act
Sec. 370- SEC Rule: Lawyers must report
information about securities fraud to the
highest officials in the organization.
Does that cause us to reveal confidences? No.
But...
Congress wanted to go further...
Wanted the “noisy withdrawal”- if the lawyer
reported the securities violation to officers but the
officer did not act promptly on the internal report,
the lawyer had to withdraw and notify the SEC
that it was no longer representing the company
based on “professional considerations.”
The ABA said....
COME ON! NO WAY!
And the compromise was
ABA 1.6(b) (2) & (3)
Rule 1.6 Confidentiality of Information
(b) A lawyer may reveal information relating to the
representation of a client to the extent the lawyer
reasonably believes necessary:
(2) to prevent the client from committing a crime or fraud
that is reasonably certain to result in substantial injury to
the financial interests or property of another and in
furtherance of which the client has used or is using the
lawyer's services;
(3) to prevent, mitigate or rectify substantial injury to the
financial interests or property of another that is reasonably
certain to result or has resulted from the client's commission
of a crime or fraud in furtherance of which the client has
used the lawyer's services;
SCR 20:1.6 Confidentiality
(b) A lawyer shall reveal information relating to the
representation of a client to the extent the lawyer reasonably
believes necessary to prevent the client from committing a
criminal or fraudulent act that the lawyer reasonably believes is
likely to result in death or substantial bodily harm or in
substantial injury to the financial interest or property of
another.
(c) A lawyer may reveal information relating to the
representation of a client to the extent the lawyer reasonably
believes necessary:
(1) to prevent reasonably likely death or substantial bodily
harm;
(2) to prevent, mitigate or rectify substantial injury to the
financial interests or property of another that is reasonably
certain to result or has resulted from the client's commission of
a crime or fraud in furtherance of which the client has used the
lawyer's services;
Rule 1.13 Organization As Client
(a) A lawyer employed or retained by an organization represents the organization acting
through its duly authorized constituents.
(b) If a lawyer for an organization knows that an officer, employee or other person
associated with the organization is engaged in action, intends to act or refuses to act in
a matter related to the representation that is a violation of a legal obligation to the
organization, or a violation of law that reasonably might be imputed to the organization,
and that is likely to result in substantial injury to the organization, then the lawyer shall
proceed as is reasonably necessary in the best interest of the organization. Unless the
lawyer reasonably believes that it is not necessary in the best interest of the
organization to do so, the lawyer shall refer the matter to higher authority in the
organization, including, if warranted by the circumstances to the highest authority that
can act on behalf of the organization as determined by applicable law.
(c) Except as provided in paragraph (d), if
(1) despite the lawyer's efforts in accordance with paragraph (b) the highest authority
that can act on behalf of the organization insists upon or fails to address in a timely and
appropriate manner an action, or a refusal to act, that is clearly a violation of law, and
(2) the lawyer reasonably believes that the violation is reasonably certain to result in
substantial injury to the organization,
then the lawyer may reveal information relating to the representation whether or not
Rule 1.6 permits such disclosure, but only if and to the extent the lawyer reasonably
believes necessary to prevent substantial injury to the organization.
d) Paragraph (c) shall not apply with
respect to information relating to a lawyer's
representation of an organization to
investigate an alleged violation of law, or to
defend the organization or an officer,
employee or other constituent associated
with the organization against a claim arising
out of an alleged violation of law.
(
(e) A lawyer who reasonably believes that he or
she has been discharged because of the lawyer's
actions taken pursuant to paragraphs (b) or (c),
or who withdraws under circumstances that
require or permit the lawyer to take action under
either of those paragraphs, shall proceed as the
lawyer reasonably believes necessary to assure
that the organization's highest authority is
informed of the lawyer's discharge or
withdrawal.
RULE 1.6: CONFIDENTIALITY OF INFORMATION
(a) Except when permitted under paragraph (b), a lawyer shall not knowingly
reveal information relating to the representation of a client.
RULE 1.15 SAFEGUARDING PROPERTY
Comment [1] A lawyer should hold property of others with the care required of
a professional fiduciary.
Understand
Anticipate
& Act
“Technology Permissibility Factors” (paraphrased)
1- An attorney’s ability to assess the level of security afforded by the technology,
including:
(i) how the technology differs from other media use (ii) whether reasonable
precautions may be taken when using the technology to increase the level of security
and (iii) Limitations on who is permitted to monitor the use of the technology to
what extent and on what grounds
2- Legal ramifications to third parties of intercepting, accessing or exceeding
another’s authorized use of the information
3- The degree of sensitivity of the information
4- The possible impact on the client of an inadvertent disclosure, including possible
waiver of privileges issues.
5- The urgency of the situation
6- Client instructions and circumstances