A Special 2-Hour Ethics CLE Program for the ACC Georgia Chapter

Lori A. Gelchion
Rogers & Hardin LLP

Hypothetical 1: Dealing with Represented
Persons – GRPC Rule 4.2(a)
A lawyer who is representing a client in a matter shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or court order.

Hypothetical 2: Advising Client
Representatives – GRPC Rule 1.13
(a)A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.
(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.
(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 [related to Conflicts of Interest]. 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.

Hypothetical 3: Advising Entities Affiliated with the Client – GRPC Rule 1.7
(a) A lawyer shall not represent or continue to represent a client if there is a significant risk that the lawyer's own interests or the lawyer's duties to another client, a former client, or a third person will materially and adversely affect the representation of the client, except as permitted in (b).
(b) If client informed consent is permissible a lawyer may represent a client notwithstanding a significant risk of material and adverse effect if each affected or former client gives informed consent confirmed in writing, to the representation after:
(1) consultation with the lawyer, pursuant to Rule 1.0(c);
(2) having received in writing reasonable and adequate information about the material risks of and reasonable available alternatives to the representation, and
(3) having been given the opportunity to consult with independent counsel.
(c) Client informed consent is not permissible if the representation:
(1) is prohibited by law or these Rules;
(2) includes the assertion of a claim by one client against another client represented by the lawyer in the same or substantially related proceeding; or
(3) involves circumstances rendering it reasonably unlikely that the lawyer will be able to provide adequate representation to one or more of the affected clients.

Hypothetical 4: Ethics in Negotiations –
Relevant Rules – GRPC Rule 4.1
In the course of representing a client a lawyer shall not knowingly:
(a) Make a false statement of material fact or law to a third person; or
(b) Fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.

S. Gardner Culpepper III
Rogers & Hardin LLP

ABA Rule 4.4: Respect for Rights of Third Persons
(b) A lawyer who receives a document or electronically stored information relating to the representation of the lawyer's client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender.

Excerpt of ABA Rule 4.4 Comment [3]:
Where a lawyer is not required by applicable law to do so, the decision to voluntarily return such a document or delete electronically store information is a matter of professional judgment ordinarily reserved to the lawyer.

4.4: Transactions with Persons other than Clients
(b) A lawyer who receives a document that on its face appears to be subject to the attorney-client privilege or otherwise confidential, and who knows or reasonably should know that the document was inadvertently sent, should promptly notify the sender and

4.4(b) Transactions with Persons other than Clients (continued)
(1) abide by the reasonable instructions of the sender regarding the disposition of the document; or
(2) submit the issue to an appropriate tribunal for a determination of the disposition of the document.

4.4: Respect for Rights of Third Persons
(b) A lawyer who receives a document and has reasonable cause to believe that the document was inadvertently sent shall not read the document or, if he or she has begun to do so, shall stop reading the document, promptly notify the sender, and
return the document to the sender.

4.4: Respect for Rights of Third Persons;
Inadvertent Disclosures
(b) A lawyer who receives a writing and has reasonable cause to believe the writing may have been inadvertently disclosed and contain confidential information or be subject to a claim of privilege or of protection as trial preparation material:

4.4(b) Respect for Rights of Third Persons;
Inadvertent Disclosures (continued)
(1) Shall not read the writing or, if he or she has begun to do so, shall stop reading the writing;
(2) Shall notify the sender of the receipt of the writing; and
(3) Shall promptly return, destroy or sequester the specified information and any copies.

4.4 Respect for Rights of Third Persons
(b)

Tony G. Powers
Rogers & Hardin LLP

1.
Company commences internal investigation regarding auditors’ suspicions of earnings management.
2.
Inside Counsel and Law Firm A, regular outside counsel, conduct preliminary inquiry and interview key personnel, including CFO. Because these interviews are preliminary, counsel gives no warnings or cautionary statements. Law Firm
A subsequently represents Company and CFO in private suits relating to subject matter of investigation.

3.
After the report of the preliminary inquiry, Audit
Committee retains Law Firm B, independent outside counsel, to conduct independent investigation. Counsel receives Law Firm A’s work product and again interviews key personnel, including CFO.
4.
Law Firm B advises interviewees that it only represents the Company, that Company may waive privilege and, when asked, that it will not answer questions as to whether individuals need separate counsel.

5.
Ultimately, CFO is fired for his role. Company decides to cooperate with SEC and DOJ, waives privilege as to all interviews conducted by Law
Firm A and Law Firm B and turns over interview notes.
6.
CFO is indicted for securities fraud and for obstruction for having lied to Law Firm B.

1.
In a pretrial motion, the CFO seeks to suppress information obtained in the interviews conducted by both Law Firm A and
Law Firm B. How should the Court analyze the issue? Is the issue different as between the two law firms?
2.
The CFO files a bar complaint against Law Firm A and Law Firm
B contending that they wrongfully breached privilege and failed to advise him properly of their roles. How should the complaints be resolved?
3.
Should the CFO have been given any warnings prior to the interviews? What should any warnings say? Do the warnings required for the two interviews differ?
4.
Should the law firms have warned that the information at issue might be given to the government? That a false answer might lead to criminal charges?


Fundamental question: Do the law firms owe a duty to the officer to maintain privilege or confidentiality?

More specifically: Is there an attorneyclient relationship in this context?

“A relationship of client and lawyer arises when: a person manifests to a lawyer the person’s intent that the lawyer provide legal services for the person; and either (a) the lawyer manifests to the person consent to do so; or (b) the lawyer fails to manifest lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide the services.”
Restatement (Third) of the Law Governing Lawyers §
14 (2000).

1.
Has the firm previously represented the
CFO personally? CFO’s understanding of
Law Firm A’s role?
2.
What is the significance of Law Firm A’s representation of CFO in the lawsuit arising in connection with the investigation?
3.
Assuming an ethical duty to warn, can ethics violation lead to exclusion of evidence? Can a breach of privilege?


Recall that Law Firm B advises the CFO that it represents Audit Committee and does not represent him personally.

Does CFO have any basis to seek exclusion of interviews by Law Firm B?

1.
2.
?

Rule 1.13: Organization as Client
 a) A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents. . . .
 e) 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.

[9] There are times when the organization’s interest may be or become adverse to those of one or more of its constituents. In such circumstances the lawyer should advise any constituent, whose interest the lawyer finds adverse to that of the organization of the conflict or potential conflict of interest, that the lawyer cannot represent such constituent, and that such person may wish to obtain independent representation. . . .



Care must be taken to assure that the individual understands that the lawyer for the organization cannot provide legal representation for that constituent individual, and that discussions between the lawyer for the organization and the individual may not be privileged.
[10] Whether such a warning should be given by the lawyer for the organization to any constituent individual may turn on the facts of each case.

1.
2.

In dealing on behalf of a client with a person who is not represented by counsel a lawyer shall not: a) 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; and b) give advice other than the advice to secure counsel, if a 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.

1.
Counsel represents the Company and not the witness individually.
2.
This interview is to gather facts regarding [certain issues] to provide legal advice to the Company.
3.
This discussion is confidential and protected by the
Company’s attorney-client privilege. You must keep the conversation confidential.
4.
The privilege belongs to the Company, and the
Company alone may decide to waive it.
5.
The Company may decide to provide all of the information it collects to the government and cooperate in its investigation.

1.
Comments suggest “facts and circumstances” control. See, e.g., Rule 1.13, Comment 11.
2.
Warnings are helpful to protect privilege—not strictly required.
3.
Clarification of role may be necessary in two circumstances: (1) employee misunderstanding; and (2) conflict of interest.

1.
Why should counsel not always give these warnings when interviewing company personnel?
2.
Should warnings be in writing? How might they be recorded?
3.
Should there be a duty to warn that lying to Law
Firm B (after cooperation decision is made) may lead to criminal prosecution?

Robert B. Remar
Rogers & Hardin LLP

Program Conclusion
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