Attorneys around the country—even those without a white-collar or criminal practice—are facing a new ethical issue relating to law enforcement. An agent of the FBI or another governmental agency comes to the attorney's office, either by appointment or unannounced, and begins asking questions about a client who is not otherwise subject to a formal governmental investigation. The agent may ask about the client's business or relationships or may even ask to see the client's financial documents or files in possession of the attorney.
For those attorneys who do not routinely engage with federal authorities, they may feel the tension of dueling interests. On one hand, the attorney may wish to be candid or even helpful to the agent, particularly if the attorney believes that consultation may help the client by clearing up misunderstandings. On the other hand, the attorney generally has a duty to guard the confidences and secrets of a client, particularly where revealing that information would cause the client to face criminal liability or a government investigation.
Attorneys in this situation may also face their own set of risks. In years past, an attorney who cooperated in an investigation or who provided information on behalf of a client seemed to enjoy a sort of immunity as a professional courtesy. However, in recent years, when the government has investigated possible corporate misconduct, it has also held the attorneys who advised those corporations to be accountable.
Increasingly, the government contacts attorneys on an "informal" basis, such that white-collar or criminal attorneys may not yet be involved and the corporation and its counsel sees no immediate cause for alarm. Because corporate or other attorneys may lack experience in navigating these issues, here are some tips for what attorneys should do when the government comes knocking.
The attorney's obligations
It is the duty of an attorney "to maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client" unless the client gives informed consent for the attorney to provide information. Ca. R. Prof'l Conduct 3-100(A). Indeed, the attorney-client relationship is unique, with special rules and principles that protect the internal communications and the representation.
This duty is generally a mandatory requirement that ensures that an attorney does not take any steps to reveal information that could expose the client to harm. Thus, when an attorney is asked questions about client activities, the attorney should be wary of disclosing any information that is gained in the context of the attorney-client relationship.
There are limited exceptions to the requirement that attorneys should maintain confidentiality. Under Rule 3-100(B) of the California Rules of Professional Conduct, a lawyer is permitted to reveal information "relating to the representation of a client to the extent that the member reasonably believes the disclosure is necessary to prevent a criminal act that the member reasonably believes is likely to result in death of, or substantial bodily harm to, an individual." Notably, this provision is not mandatory. Attorneys are not required to reveal information that would prevent harm such that if the attorney decides to safeguard that information, the attorney has typically not violated any bar rule.
Additionally, the California Rules of Professional Conduct provide that before revealing confidential information to prevent a criminal act, a member shall, if reasonable under the circumstances:
- make a good faith effort to persuade the client: (i) not to commit or to continue the criminal act or (ii) to pursue a course of conduct that will prevent the threatened death or substantial bodily harm; or do both (i) and (ii); and
- inform the client, at an appropriate time, of the member's ability or decision to reveal information as provided in paragraph (B).
Ca. R. Prof'l Conduct 3-100(C). Finally, when revealing confidential information to prevent a criminal act, the attorney's "disclosure must be no more than is necessary to prevent the criminal act, given the information known to the [attorney] at the time of the disclosure." Ca. R. Prof'l Conduct 3-100(D).
There are limited circumstances in which an attorney may act to prevent harm to others, but if that harm has already occurred, it is generally recommended that the attorney not serve as a reporter against the client.
Other jurisdictions follow these same rules and obligate attorneys to safeguard confidential communications in most situations, even when the attorneys are aware of potentially harmful misconduct committed in the past by a client. Rule 1.6 of the ABA Model Rules of Professional Conduct permits an attorney to disclose information that would prevent the client from committing a crime or fraud that would result in substantial injury to the financial interests or property of another. However, similar to the above, the rule does not indicate that an attorney can report against a client after the fact.
Obviously, it is unethical for an attorney to assist a client in fraudulent or illegal conduct.
Risks to the attorney
Even if clients expressly authorize their attorney's cooperation with a government agent, the attorney should proceed with caution. There is a risk that the government may focus on the attorney's culpability as well.
An attorney who suggests to the government that the attorney had knowledge or awareness of the client's conduct could then face indictment or become a material witness. Further, if the client's conduct is under the government's microscope, any advice provided by the attorney to the client in furtherance of that conduct could face similar scrutiny. The wide range of Sarbanes-Oxley and other laws could mean that an attorney could face liability or charges even for good-faith conduct or participation in an investigation. As described above, attorneys could also face risks of a bar investigation if they disclose client confidential information that they were not authorized to disclose.
Additionally, a visit from a government agent may lead to a claim against the lawyer or law practice by the client, depending on the outcome of the conversation. The attorney and firm should consider reporting the visit as a circumstance under the legal malpractice policy and referencing it in any future renewal applications. Whether reporting is appropriate will depend on the facts and circumstances.
Contact in-house counsel
When first contact is made with an attorney by the government seeking information about a firm client—even if the attorney is told the agent just has some "informal" questions—the attorney should immediately notify the firm's counsel.
Responding to questions about a client from a government agent exposes the client, the attorney, and even the firm to potential risk. The attorney should not evaluate those risks alone without the benefit of counsel.
By involving the firm's in-house or outside counsel, the attorney can benefit from additional advice on how to proceed. In addition, the attorney can help ensure that his or her evaluation of what to do next is protected under the privilege shared by the attorney and the firm's counsel. In-house counsel can also involve outside counsel, if necessary, to assist the firm and the attorney.
In short, these are not issues that the attorney should consider without help. Hindsight is always 20/20, but involving counsel can help set a road map that prevents needless exposure, risk and stress.
As published in The Recorder