"The Ethical Benefits Lawyer: Avoiding Ethical Pitfalls"

Designed for lawyers who provide advice to businesses, unions, or benefit plans, or who represent employers or plans or fiduciaries in litigation, "The Ethical Benefits Lawyer: Avoiding Ethical Pitfalls" provided case examples for discussion for listeners of the recent ABA-sponsored telecast.

In laying the groundwork for the case examples to be discussed, moderator Susan Hoffman of Pepper Hamilton in Philadelphia provided an overview of some of the key provisions of the ABA Model Rules of Professional Conduct that concern employee benefits practitioners and standards that govern representing corporations, individuals within the business, and company plans. Among those are Rule 1.6 on confidentiality of information, Rule 3.3 involving "candor toward the tribunal," and Rule 1.13 on having an organization as a client, such as a benefit plan, corporation, trust, union or estate. As Hoffman pointed out early in the program, Rule 3.3 may require disclosure in certain cases that would otherwise be protected by the confidentiality rule found in Rule 1.6. A portion of Hoffman's paper, "Standards of Ethics for the Employee Benefits Practitioner," is available here [PDF]. Her whole paper is published in Northern Kentucky Law Review, Employment & Ethics Issue, Vol. 33, No. 2.

Utilizing the Model Rules, panelists were given various situations relating to a fictitious company, Wrong'un Corporation; a fictitious chief financial officer, Greaty; and a fictitious vice president of human resources, Nancy Nervous. One such case example revolved around Nancy Nervous revealing that she heard from a friend in Wrong'un's accounting department that questions were being raised about the company's accounting practices. She further lets on that she thinks the stock in the company's matching contribution accounts might drop if this news were made public. Panelists answered the questions, "Who is your client?" and "In what capacity is Ms. Nervous asking this question?"

Steve Spencer of Morgan, Lewis & Bockius in San Francisco noted that in some instances the matter may go beyond being an employee benefits matter to being a securities issue. In further case studies, securities issues continued to be raised. Under Sarbanes-Oxley, Hoffman explained, you as a lawyer need to make your concerns known "all the way up" the chain of command. However, Nell Hennessy, of Fiduciary Counselors Inc., said that if there are two lawyers involved in the matter, both are not required to alert the chain of command, and it would be logical that the securities rather than the benefits lawyer would do so.

The panel also explored the varying obligations of in-house counsel versus outside counsel, time charges, and paying attention to the tenor of communications.

The teleconference was sponsored by the ABA Joint Committee on Employee Benefits, which coordinates CLE programs for the employee benefits committees of six ABA sections, including Business Law, Health Law, Labor and Employment Law, Real Property, Probate and Trust Law, Taxation, and Tort Trial & Insurance Practice.

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