In-House Ethics Counsel Guidance Cuts Both Ways

In response to an emerging trend by large law firms to employ in-house ethics advisors, the ABA Standing Committee on Ethics and Professional Responsibility has issued Ethics Opinion 08-453 [PDF]. The opinion provides reassurance that firms’ efforts to maintain internal ethics resources are valuable, but provides an outline of pitfalls to consider when establishing such a permanent, internal relationship.

Ethics Trends at Law Firms
“These days, most large law firms designate one of their lawyers as general counsel or ‘ethics guru,’ and task that lawyer with responding to questions about the professional responsibility obligations of the law firm and its lawyers,” says Paul Koning, Dallas, TX, ABA Section of Litigation Professional Liability Litigation Committee cochair. “In many firms it is a full-time job, and it is almost always underappreciated.”

Pitfalls emerge from the inherent conflict that arises when an individual wears two hats. “The general concern is that a firm lawyer should not be providing advice adverse to a firm client—even if that advice is to the firm itself,” says Koning. Thus, Ethics Opinion 08-453 warns that firms contemplating an internal ethics counsel arrangement should consider:

• the extent consultation with the internal ethics attorney creates a conflict of interest with the firm’s client;
• whether confidential client information must and can be shared with the ethics attorney;
• if the client should be informed of the consultation with the ethics attorney; and
• the extent the ethics attorney is required to disclose ethical violations to law firm management or external regulatory authorities.

ABA Ethics Opinion
In response to these dilemmas, the opinion provides that consultation with an internal ethics attorney does not create a per se conflict of interest between a firm and its client. Further, it states that confidential client information can be shared with the internal ethics attorney, and, typically, the client does not need to be informed of the consultation unless the client needs to be told that the client’s proposed course of action would constitute a violation of the rules of professional responsibility. Even so, the firm and ethics attorney must be careful to ensure that the ethics advice provided is detached from any tendency to protect the firm. In particular, “a conflict with the client is likely to arise if the principal goal of the ethics consultation is to protect the interest of the consulting lawyer or law firm from the consequences of a firm lawyer’s misconduct,” notes Koning.

Disclosure
In terms of disclosure, the opinion states that ethics counsel may be required to disclose misconduct of a consulting lawyer to law firm management or external regulatory authorities “unless she believes the situation can be corrected without harm to the firm through counseling or other means.” Ethics counsel will generally not be required to disclose client information regarding the misconduct of a consulting lawyer to disciplinary authorities, but in the case of egregious misconduct the law firm should urge the client to consent to such disclosure.

Dual Represenation
The opinion also cautions that the ethics attorney (and other attorneys in the law firm) must be aware that “the ethics counsel represents the firm and not any of the lawyers individually.” While dual representation may be appropriate in limited circumstances, such representation should be the exception, not the rule.

Parameters of the Role of Ethics Counsel
“This is a helpful opinion. It lays out some of the most common ethical issues that in-house ethics counsel face, and sets out guidelines for handling these issues,” states Michele Hangley, Philadelphia, PA, Section of Litigation Ethics and Professionalism Committee cochair. Hangley notes, for example, that the opinion explains when a firm’s ethics counsel may or may not represent an individual attorney within the firm, and gives fairly detailed guidance as to when suspected misconduct by a firm attorney must be reported to clients, firm management, or external authorities. “By making the parameters of the role clearer, the opinion should make in-house ethics counsel’s jobs a bit easier, and may also encourage more attorneys to seek out advice from their firm’s ethics counsel,” Hangley says.

Keywords: Ethics, ethics attorney, in-house counsel, ABA Standing Committee on Ethics and Professional Responsibility, Ethics Opinion 08-453, disclosure, dual representation

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Copyright © 2012, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).