The ABA recently provided insight for attorneys who represent corporate clients. While that engagement is often limited to an attorney’s duty to the organization, there is a very real risk that the organization’s members – i.e. the employees – may misunderstand the attorney’s role or otherwise misinterpret the attorney’s guidance intended for the organization.
Typically, it is quite simple to define an attorney-client relationship. A client engages an attorney for a particular task and executes a clear and focused engagement agreement. Of course, miscommunications or worse don’t arise from the “typical” scenario. There are countless examples of a client misunderstanding the nature or scope of the professional relationship or, worse, even the existence of a professional relationship. Perhaps a non-client misconstrues casual advice when it was not intended as such. (Somewhat common). Or an existing client has expectations that the engagement includes a service that falls outside of the agreed upon scope. (Quite common).
The ABA’s Standing Committee on Ethics and Professional Responsibility is an incredible resource to practitioners. On occasion, that committee issues opinions with guidance on the ABA model rules. Whether it be confidentiality issues, AI concerns, conflicts or nearly any other cause for concern impacting attorneys, the courts, or the public interpreting those rules, the committee’s opinions serve as a terrific guide.
On January 8, the Committee issued Formal Opinion 514: A Lawyer’s Obligations When Advising an Organization About Conduct that May Create Legal Risks for the Organization’s Constituents. The recent opinion addresses the risks and duties of attorney-client communication given that an organization is a legal fiction that can only act through its employees, officers and/or board members. With reference to Model Rules governing competent representation (Rule 1.1), necessary communication (Rule 1.4) and candid advice (Rule 2.1), the committee suggested that when representing an organization, sound practice “may require the lawyer to advise the organization when its actions pose a legal risk to the organization’s constituents.”
Importantly, when an attorney provides advice to their client — the organization — that may impact the individual employees, those who receive the attorney’s advice “may misperceive the lawyer’s role and mistakenly believe that they can rely personally” on counsel. The solution: “early and often” reminders about the attorney’s role, the scope of the representation and the limitations. In this scenario, and in most professional engagements, defining and redefining the scope of the representation is paramount and is a crucial risk management tool.