Law Firm Trend to Designate In-House Ethics Counsel Raises Issues on
Privileged Communication, Potential Duty to Report Misconduct

CHICAGO, Nov. 25, 2008 — A new American Bar Association ethics opinion issued today explores the growing trend of law firms to designate a member or a committee as an ethics consultant for members of the firm, and discusses how lawyers may resolve conflicts between their confidentiality obligations and their potential obligation to report lawyer misconduct.
 
The ABA Standing Committee on Ethics and Professional Responsibility identifies factors that could determine the ethics counsel’s course of action in Formal Opinion 08-453.  The issues are raised by the possible creation of a client-lawyer relationship between the consulting lawyer and the in-house ethics counsel, and by the potential conflict that may arise between the interests of the law firm and those of the consulting lawyer.  Although consulting in-house ethics counsel is “without question valuable,” law firms must understand and consider the ethical issues created by such consultations, according to the committee.
 
A firm lawyer’s consultation with the firm’s ethics counsel about prospective conduct can serve two purposes, according to the opinion.  It can help the consulting lawyer avoid action that might violate ethical rules, and also help the lawyer to advise her client about the legality and wisdom of proposed conduct.   But when the consultation is to protect the interests of the lawyer or the firm and involves misconduct already committed by the lawyer while serving the client, “it may be difficult or impossible for that lawyer (or anyone in the lawyer’s firm) to give the client sufficiently detached advice as the matter progresses,” the committee said.  That situation creates a significant risk that the interests of the firm or the lawyer could materially limit the lawyer’s representation of the client. 
 
Misconduct by the consulting lawyer also raises another issue.  Generally, the client of an in house ethics lawyer is the law firm, not the individual lawyer within the firm who seeks advice.  If there has been no misconduct, there may not be any conflict of interest for the ethics lawyer advising both the consulting lawyer and the firm.  But if there has been misconduct, the ethics counsel may be required to disclose the misconduct to law firm management or even to external regulatory authorities, depending on whether the situation can be corrected, how management of the firm responds and how serious or urgent the problem is, according to the opinion. 
 
Lawyers are obliged to report other lawyers to professional disciplinary agencies for behavior that is egregious and “of a type that a self-regulating profession must vigorously endeavor to prevent,” the committee notes.  But if reporting the lawyer would reveal confidences of a client, the ethics counsel might be bound under other ethics rules to keep silent and protect the confidences, unless the client consents to disclosure. 

The ABA Standing Committee on Ethics and Professional Responsibility periodically issues ethics opinions for the guidance of lawyers, courts and the public interpreting and applying the ABA Model Rules of Professional Conduct to specific issues of legal practice and client-lawyer relationships.

The opinion is available from the ABA Center for Professional Responsibility at http://www.abanet.org/cpr. 

With more than 400,000 members, the American Bar Association is the largest voluntary professional membership organization in the world.  As the national voice of the legal profession, the ABA works to improve the administration of justice, promotes programs that assist lawyers and judges in their work, accredits law schools, provides continuing legal education, and works to build public understanding around the world of the importance of the rule of law.

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