The American Bar Association Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 514 on Jan. 8, addressing a lawyer’s obligations when advising an organization about conduct that may create legal risks for the organization’s constituents.
The ethics committee wrote that when advising an organization, lawyers necessarily provide their legal advice through constituents such as employees, officers or board members.
“At times, the organization’s decisions may have legal implications for its constituents who will be acting on the organization’s behalf, including the constituents through whom the lawyer conveys advice,” the opinion states. “This situation implicates both the lawyer’s duties to the organization client and the lawyer’s professional obligations in interacting with the nonclient constituents of the organization.”
The Model Rules of Professional Conduct Rule 1.1 sets forth a general standard of competent representation and necessary communication is listed under Rule 1.4 while candid advice is addressed in Rule 2.1.
Essentially, the committee noted that when a lawyer gives advice to an organizational client about future actions, the provisions in Rules 1.1, 1.4 and 2.1 may require the lawyer to advise the organization when its actions pose a legal risk to the organization’s constituents.
The committee also noted that when an organization’s lawyer provides advice to the organization, the organization’s constituents may misperceive the lawyer’s role and mistakenly believe that they can rely personally on the lawyer’s advice. Rules 4.1, 4.3 and 1.13(f) require an organization’s lawyer to take reasonable measures to avoid or dispel constituents’ misunderstandings about the lawyer’s role, according to the opinion.
An organization’s lawyer may want to inform an organization’s constituents about the lawyer’s role early and often during the relationship, the committee advised in the opinion.