Last week, during ABA Annual Meeting, the ABA House of Delegates approved three reform proposals prepared by the ABA Task Force on Corporate Responsibility. In addition to recommending structural and procedural corporate governance reforms, the House voted to amend the Model Rules in two respects.

First, the House voted to amend Rule 1.6 of the ABA Model Rules of Professional Conduct to add to the existing circumstances in which a lawyer is permitted (but not required) to reveal confidential client information. The amended rule permits disclosure where the client is using the lawyer's services to commit a crime or fraud that would cause substantial financial injury to others.

Secondly, the House of Delegates voted to amend Rule 1.13 to clarify the obligation of a lawyer representing an organizational client to report up the corporate ladder violations by employees of laws or legal duties likely to cause substantial injury to the organization. In addition, Model Rule 1.13 was amended to permit the lawyer to reveal information to persons outside of the organization in the situation where there is a clear violation of law that the lawyer reasonably believes is reasonably certain to result in substantial injury to the organization and the highest authority within the organization has not acted. In that case, the lawyer may reveal information, but only to the extent reasonably necessary to prevent substantial injury to the organization, and only information relating to the representation.

The ABA Model Rules of Professional Conduct are an ethics rules template and are not binding on the states. Most states have adopted a version of the Model Rules.

The Section of Business Law not only served as a co-sponsor, but the Section and its members also played an instrumental role in preparing these reform proposals and in shepherding through passage in the House.

Steven O. Weise, Chair    ABA Section of Business Law

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The Beat Goes On: New Cash Balance Cases That May Rock Things

A JOINT COMMITTEE ON EMPLOYEE BENEFITS TELECONFERECE/AUDIO WEBCAST August 26th, 2003 1:00 – 2:30 p.m. (EST) What you will learn Repercussions of the Most Recent IBM and Xerox Decisions The impact of court decisions on the Treasury's regulatory plans The future of cash balance plans after the IBM and Xerox decisions Update on the status of proposed IRC/ERISA age discrimination regulations. For complete program details or to register, Click Here  BACK TO INDEX

Sarbanes-Oxley: The New Disclosure and Corporate Governance Regime

NATIONAL INSTITUTE October 9-10, 2003 San Francisco, CA What You Will Learn The impact of the Sarbanes-Oxley Act on the following: How companies operate New standards for lawyer/client interaction New requirements for complying with a current and expanded disclosure regime Establishing effective and internal controls procedures Restructuring corporate governance systems Advising clients on compliance matters ... and much more For complete program details, Click Here To register, Click Here  BACK TO INDEX

Annual Review of Developments in Business & Corporate Litigation, 2003 Edition

Committee on Business & Corporate Litigation     ABA Section of Business Law     Copyright 2003 § 7.4.1 Scope of Attorney-Client Privilege Cavallaro v. United States Generally, disclosing attorney-client communications to a third party undermines the privilege. Cavallaro, 284 F.3d at 246-47. In United States v. Kovel, the Second Circuit held that, because "the complexities of modern existence prevent attorneys from effectively handling clients’ affairs without the help of others," the attorney-client "privilege must include all the persons who act as the attorney’s agents." 296 F.2d 918, 921 (2d Cir. 1961). This logic applies to accountants when "the accountant is necessary, or at least highly useful, for the effective consultation between the client and the lawyer which the privilege is designed to permit." Id. at 922. However, the communication with the accountant must be made "for the purpose of obtaining legal advice from the lawyer," and "[i]f what is sought is not legal advice but only accounting service..., or if the advice sought is the accountant’s rather than the lawyer’s, no privilege exists." Id. More To review the complete excerpt, click here Purchase this book online For a complete listing of The Section of Business Law publications click here.  BACK TO INDEX

Corporate Governance

This Corporate Governance Committee was organized to monitor developments in corporate governance. Its principal activities are the promotion of dialogue within the Association, and with interested groups and individuals throughout the world, on corporate governance issues, and the presentation of programs on such issues at meetings of the Association and the Business Law Section. The Committee maintains a listserve service, with subscribers throughout the world, which distributes information about corporate governance developments on a "real time" basis. As an important part of its encouragement of corporate governance dialogue, the Committee and its subcommittees prepare reports and articles for inclusion in Section publications and the Committee has prepared, and will from time-to-time update, the popular Handbook for the Conduct of Shareholders' Meetings, first published by the Section in 2000. Other publications, including an international survey of corporate governance practices and model shareholder materials and board committee charters, are under consideration. As a result of its monitoring activities, the Committee may on occasion make recommendations to the Section and the Association for positions on legislative and regulatory proposals with corporate governance implications. To learn more about the work of the Corporate Governance Committee, click here. To join the Corporate Governance Committee, click here. Section members are eligible to join the Section’s committees at no additional cost. Become involved or simply stay in the information flow.  BACK TO INDEX

Inaugural Cyberspace Law Excellence Award Presented during the 2003 ABA Annual Meeting

The Cyberspace Law Committee presented its first-ever Cyberspace Law Excellence Award to Professor Lawrence Lessig of the Stanford University School of Law, during a special dinner at the recent 2003 ABA Annual Meeting in San Francisco. The award recognizes substantial contributions to the development of the law of cyberspace through scholarship, participation in the legislative process or litigation. Lessig is founder and executive director of the Center for Internet and Society at Stanford Law School, where he teaches and writes in the areas of constitutional law, Internet regulation, law and high technology, comparative constitutional law and the law of cyberspace. He is chair of the board of Creative Commons and a member of the board of the Electronic Frontier Foundation. He is also the author of many publications about cyberspace and cyberlaw.  BACK TO INDEX

2003-2005 Business Law Fellows Announced

The Fellowship program, beginning its sixth year, represents a commitment by the Section of Business Law to increase the participation of young lawyers in Section activities. The goal of the program is to give active members of the Young Lawyers Division an opportunity to become involved in the substantive work of the Section, to develop future leaders of the Section, and to enhance knowledge about the work of the Section among members of the YLD. Following a lengthy nomination and selection process, the Business Law Section has appointed its Fellows class for 2003-2005. The five new Fellows are: Keith D. Burns, Durham, NC; Shawn D. Guse, Madison, WI; Nicole D. Harris, San Francisco, CA; Matthew L. Nelson, Santa Monica, CA; Jennifer Rymell, Fort Worth, Texas.  BACK TO INDEX

Jurisdiction II Project Launched

The Section of Business Law and the International Chamber of Commerce, with support from the Internet Law and Policy Forum, is jointly conducting Internet Jurisdiction and Regulatory Compliance Challenges: A Global Survey. With hundreds of companies from at least 25 countries participating, this survey will mark the largest international effort to determine the international impact of e-commerce on jurisdictional issues. The project was conceived of as a global effort and focuses on Internet risk, approaches to online contracting and the use of alternative dispute resolution mechanisms to resolve disputes. The results, which will be announced later this year, will have a direct impact on the global policy development as nations work toward international treaties on jurisdictional questions and will provide companies worldwide with a benchmark upon which to gauge the risk of doing business online. The survey will reach out to financial institutions, retailers and manufacturers, as well as to Internet, software and hardware companies. Countries participating in the effort include Germany, Italy, Israel, South Korea, Malaysia, New Zealand and Thailand.  BACK TO INDEX

Upcoming Meetings

Business Bankruptcy Fall Meeting (October 15-17) San Diego Marriott – San Diego, CA For more information, click here Negotiated Acquisitions Fall Meeting (October 16-18) Park Hyatt Toronto – Toronto, Canada For more information, call (312) 988-5588 Commercial Financial Services Fall Meeting (October 22nd) Sheraton Hotel – Chicago, IL For more information, call (312) 988-5588 Banking Law Fall Meeting (November 6-8) Loews L’Enfant Plaza – Washington, DC For more information, call (312) 988-5588  BACK TO INDEX