Imagine that the board of directors of a large corporation hires you to conduct an "independent" investigation into conduct that implicates the officers or directors of the corporation. If the board contemplates that the results of the investigation will be shared outside the company, does privilege attach? Are the results truly "independent?" Those are some of the issues that arise when providing legal opinions.

A routine part of nearly every attorney-client relationship is the provision of legal opinions by the attorney to the client. This can occur in a wide variety of contexts including, for example, a legal opinion relating to a real estate transaction or regarding the client's likelihood of success in potential litigation. While providing a legal opinion may seem like a straightforward task, there are a number of ethical considerations that can arise, including most notably where the opinion is to be shared with third parties.

Providing a legal opinion can implicate the most fundamental duties owed by an attorney to a client, including the duty of loyalty, the duty to act as a "zealous advocate" on behalf of a client, and the duty of confidentiality. The key considerations that govern what precautions can be taken are the purpose for which the client seeks a legal opinion and whether that opinion will be shared with third parties.

These issues are addressed by Rule 2.3 of the Georgia Rules of Professional Conduct, which provides that "[a] lawyer may undertake an evaluation of a matter affecting a client for the use of someone other than the client if: (1) the lawyer reasonably believes that making the evaluation is compatible with other aspects of the lawyer's relationship with the client; and (2) the client gives informed consent." This article discusses the various aspects of Rule 2.3 and how they may apply to a representation.

Applications of Rule 2.3

When an attorney provides an evaluation or legal opinion that is to be solely relied upon by the client, there usually is no issue with the attorney being candid and forthright regarding the issues being evaluated, including with respect to any weaknesses in the client's position or potential liability. Indeed, in such circumstances, clients would expect that their attorneys provide an objective evaluation of the matter.

However, the same may not hold true where the evaluation is to be provided to others outside the attorney-client relationship, in which case the client may be less pleased if the attorney's opinion is adverse to the client's interests. Thus, at the beginning of the representation, attorneys can find out whether the client intends for the attorney to share the opinion with others to determine whether the provisions of Rule 2.3 may be implicated.

The Comments to Rule 2.3 provide a list of situations where this may become an issue, including an "opinion concerning the title of property rendered at the behest of a vendor for the information of a prospective purchaser, or at the behest of a borrower for the information of a prospective lender," an opinion regarding the legality of securities, or an opinion provided for a third person, such as the purchaser of a business.

There are other contexts in which this rule might be implicated. For example, corporations often retain attorneys to perform internal investigations that may serve the primary purpose of advising the corporation, but may also involve reporting the investigation results to shareholders or to regulatory agencies. In such circumstances, who exactly the client is (e.g., the corporation or only its board of directors) impacts whether Rule 2.3 may be implicated.

Ethical considerations

The U.S. Supreme Court has recognized that "the private attorney's role" is to serve "as the client's confidential adviser and advocate, a loyal representative whose duty it is to present the client's case in the most favorable possible light." United States v. Arthur Young & Co., 465 U.S. 805, 817, 104 S.Ct. 1495, 79 L.Ed.2d 826 (1984).

However, when an attorney is retained to provide an evaluation of a matter that will be shared with third parties, it represents a deviation from the normal attorney-client relationship. It may be that the attorney is caught between two potentially competing interests in the evaluation: to render an impartial opinion so that the client can benefit from candid advice but to also ensure that the evaluation does not contain any information that will harm the client if it is being shared with third parties.

Because of the tensions between the duties owed to the client and the purpose of the evaluation, the Comments to Rule 2.3 caution that "careful analysis of the situation is required." For example, issues may arise where an attorney is asked by a client to provide an impartial evaluation of a certain aspect of a transaction while at the same time advocating for the client's interests in negotiating the transaction.

In addition, the requisite "informed consent" under Rule 2.3 may require that the attorney advise the client regarding the potential adverse effects of sharing an evaluation with a third party. Having this discussion before commencing the representation can help ensure that both the attorney and client understand the purpose of the representation (i.e., whether the attorney is to act an advocate or as an impartial evaluator) and avoid client relations problems later.

Confidentiality

Rule 2.3 also addresses confidentiality concerns raised by evaluations or legal opinions as it provides that "[e]xcept as disclosure is required in connection with a report of an evaluation, information relating to the evaluation is otherwise protected by Rule 1.6." Rule 1.6 concerns an attorney's duty to "maintain in confidence all information gained in the professional relationship with a client."

Thus, even though the attorney may not be acting strictly as the client's advocate when rendering a legal opinion, the same rules of confidentiality apply. In other words, while the attorney may be acting impartially in some respects, the client is still the client when it comes to protecting confidential information. Accordingly, when retained to provide an evaluation, attorneys can take the same precautions with respect to the client's confidential information and not disclose any such information unless it is necessary for the evaluation (or the client consents).

While there is nothing inherently improper in providing a legal opinion with the knowledge that the opinion will be shared with third parties, a review of Rule 2.3 will help attorneys meet the goals of the representation as well as their ethical obligations.

While providing a legal opinion may seem like a straightforward task, there are a number of ethical considerations that can arise, including most notably where the opinion is to be shared with third parties.

As published by The Daily Report