12.01. Introduction

In this topic we delve into questions of advising a client. What are the ethical limits on the advice you can provide? What about when a client asks a lawyer to provide an evaluation of the client for a third party? What right/ability does the lawyer have to represent multiple individuals in the formation of a business? This is another area you as a lawyer will not think much about until a question arises. So, take for example these two questions – both of which we will address in the readings: Can you advise a divorce client to consult with all the attorneys in a small town so that all the attorneys are disqualified from representing her spouse when you file the divorce? What about if a state legalizes medical marijuana, but the possession and use of marijuana is still illegal at the federal level, what advice can you provide to the client about setting up a medical marijuana dispensary business in the state? We will also spend some time talking about the difference between advising a client in engaging in a crime or fraud, which is improper, and advising a client about the consequences of a future or past action, which is precisely why we have lawyers!

Of course, lawyers provide advice to organizations as well as individuals. Organizations present unique problems. For example, is it ethically appropriate for a lawyer who represents an organization to serve on the organization’s board of directors? (do you see why there might be a problem with advising an organization as a lawyer while serving as a director?). Perhaps the most important aspect of this topic is the need to understand the relationship between the lawyer for the organization and the constituents of the organization such as employees. Can a lawyer represent both the organization and an employee when the employee’s actions are a subject of a claim? For example, when an organization and employee are sued for the negligence of the employee, can the lawyer represent both the organization and the employee in the lawsuit? Why or why not?

In the context of advising a corporate client, it is important to keep in mind the distinction between issues that can arise as a matter of the attorney-client privilege and as a matter of conflict of interest. Remember, with regard to the attorney-client privilege the question is whose communications with the corporate attorney are protected from forced disclosure as a matter of evidence (see Upjohn). In this problem, we are concerned with the question of whether a lawyer can simultaneously represent both the corporation and an employee/constituent of the organization or whether the lawyer would have a conflict of interest that would prohibit joint representation. We will also see the consequence of a lawyer’s failure to recognize a conflict (Perez).   

We will also address the question of what steps a lawyer is ethically required to take when the constituent of an organizational client takes action that would harm the organization. We will discuss the changes to the rule of reporting misconduct in response generally to Enron and Worldcom, but more specifically in response to the U.S. Congress passing Sarbanes-Oxley – a law that dictated the responsibilities of a lawyer appearing before the Securities and Exchange Commission.

This topic also includes a discussion on the lawyer’s ethical obligations when providing an evaluation for a third party. This is a specific type of advisement in which the lawyer evaluates the client for a third party (it is important to note that this does not cover the situation where the client asks the lawyer to evaluate a third party for the client). You should immediately see some potential problems with such an action. Evaluations involve a large of amount of disclosure of a client’s confidential information – how does Rule 1.6 play into the lawyer’s obligation here? Concern over the ethical obligations when providing an evaluation were so great that it prompted a separate black-letter rule to govern a lawyer’s responsibility [Rule 2.3].

The final area that we will look at in this topic is the lawyer acting as an intermediary. This rule is unique to Mississippi. The ABA deleted the rule in 2002. What is the purpose of the Rule? Why do you think the ABA removed it from the Model Rules? Should it be deleted from the Mississippi Rules?