Are you prepared to address these sleeper ethics issues?
Photo illustration by Sara Wadford / ABA Journal
There are a variety of ethics issues that aren’t well-known—or well understood—by practicing lawyers, and some can result in pitfalls. Although attorneys are expected to stay up to date with rules of professional conduct, there are enough obscurities, misperceptions and misunderstandings to fill a seminar like the one the ABA Standing Committee on Lawyers’ Professional Liability held in December. The committee’s webinar, “I Didn’t Know That! Little-Known Facts and Common Misperceptions About Ethics,” highlighted some of the biggest red flags. And here are some of the major takeaways.
Client confidentiality
A key issue that practitioners often fail to appreciate is how broad the rule of confidentiality is in ABA Model Rule 1.6. For example, there is a common misconception that Rule 1.6 has a public records exception.
The confidentiality rule provides, in pertinent part, that “a lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent.” But many lawyers believe they do not violate this rule if they discuss information that is found in a court file or public record.
“This is a trap for the unwary,” said April McMurrey, deputy regulation counsel for the Colorado Supreme Court’s Office of Attorney Regulation Counsel, citing Comment 3 to Rule 1.6: “The confidentiality rule, for example, applies not only to matters communicated in confidence by the client but also to all information relating to the representation, whatever its source.”
Ethics expert Alec Rothrock cited Comment 4 to the rule, which also describes its breadth: “Paragraph (a) prohibits a lawyer from revealing information relating to the representation of a client. This prohibition also applies to disclosures by a lawyer that do not in themselves reveal protected information but could reasonably lead to the discovery of such information by a third person.”
In an interview with the ABA Journal, Rothrock emphasized the sheer breadth of the language of Rule 1.6(a).
“Rule 1.6 is too broad,” he says. “If taken literally, it can lead to almost absurd results—such as a lawyer not being able to speak about a published court decision. The term ‘information relevant to representation’ covers almost everything. It certainly covers far more material and information than the attorney-client privilege.”
He explains that “lawyer misconception comes into play when lawyers believe that they can discuss anything that has been filed with a court or anything that is a public record related to a case. That is not the case.”
As an example, the panelists warned that a lawyer could violate this rule in their advertisements when they discuss past results and what they recovered for a specific client.
McMurrey pointed out that ABA Formal Ethics Opinion 480 provides excellent guidance to attorneys about the breadth of Rule 1.6(a) and just how far it can extend. The opinion addresses legal issues regarding lawyers who blog about their cases.
“Lawyers who blog or engage in other public commentary may not reveal information relating to a representation, including information contained in a public record, unless authorized by a provision of the Model Rules,” the opinion reads. “Significantly, information about a client’s representation contained in a court’s order, for example, although contained in a public document or record, is not exempt from the lawyer’s duty of confidentiality under Model Rule 1.6. The duty of confidentiality extends generally to information related to a representation, whatever its source, and without regard to the fact that others may be aware of or have access to such knowledge.”
Informed consent
Another common misconception concerns ABA Model Rule 1.7, which deals with conflicts. Practitioners often believe that a conflict waiver is required only if the matters are related or that only conclusory information is required to satisfy ethical standards.
Rule 1.7 deals with concurrent conflicts of interest, but an often overlooked aspect of the rule notes that there can be directly adverse client interests even if the underlying matters with the two clients are not related. Comment 6 of Rule 1.7 explains that “Loyalty to a current client prohibits undertaking representation directly adverse to that client without that client’s informed consent. Thus, absent consent, a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated.”
Under Rule 1.7, a lawyer can overcome a concurrent conflict of interest if the lawyer is able to get informed consent from each affected client, confirmed in writing. Some lawyers mistakenly believe that they can satisfy this rule by obtaining a conflict waiver after providing only conclusory or general information to a client.
But the ethics panel warned that what is required is informed consent, defined in ABA Model Rule 1.0(e) as “adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.” Informed consent requires the lawyers to “take a deep dive with the client,” not rely on cursory information, the panel said.
Rothrock notes that lawyers often throw around the word “waiver” too lightly, while “the key term with regard to Rule 1.7 is informed consent with an emphasis on the word ‘informed.’”
For in-house counsel
The panel also discussed whether in-house counsel’s compensation and negotiations for increased compensation might present ethics issues under Rule 1.5 and Rule 1.8.
For example, Rule 1.5(a) prohibits lawyers from charging unreasonable fees. The panel did not see that as applying to in-house counsel but warned that because Rule 1.8(a) regulates lawyers entering into business transactions with clients, that could implicate the relationship between an in-house attorney and their company. For example, would this rule limit in-house counsel from negotiating certain aspects of their salaries?
“A sleeper issue with regard to the ethics obligations of in-house counsel concerns how Rule 1.8(a) applies to them,” Rothrock pointed out to viewers during the webinar. “The rule regulates business transactions with clients. It could be applied to, for example, stock options provided to in-house counsel as part of their compensation.”
Rothrock says many ethics issues involving in-house counsel start when a nonlawyer within the company, perhaps even the CEO, asks them to engage in conduct that may conflict with the rules.
“In other words, a major issue facing some in-house counsel is pressure from nonlawyer management that conflicts with the professional judgment of counsel,” but there is very little caselaw on these issues.
This story was originally published in the April-May 2023 issue of the ABA Journal under the headline: “What You Don’t Know Might Hurt You: Addressing sleeper ethics issues.”
David L. Hudson Jr. teaches at Belmont University College of Law. He is the author, co-author or co-editor of more than 40 books. For much of his career, he has focused on the First Amendment and professional responsibility.
