Ethics Opinion 296

Joint Representation: Confidentiality of Information

* [NOTE: See how Opinion 296 has been substantively affected by the amendments to the D.C. Rules of Professional Conduct that became effective on February 1, 2007]

Joint Representation: Confidentiality of Information

A lawyer who undertakes representation of two clients in the same matter should address in advance and, where possible in writing, the impact of joint representation on the lawyer’s duty to maintain client confidences and to keep each client reasonably informed, and obtain each client’s informed consent to the arrangement. The mere fact of joint representation, without more, does not provide a basis for implied authorization to disclose one client’s confidences to another.

Where express consent to share client confidences has not been obtained and one client shares in confidence relevant information that the lawyer should report to the non-disclosing client in order to keep that client reasonably informed, to satisfy his duty to the non-disclosing client the lawyer should seek consent of the disclosing client to share the information or ask the client to disclose the information directly to the other client. If the lawyer cannot achieve disclosure, a conflict of interest is created that requires withdrawal.

Where the disclosed confidence involves fraud or criminal activity that may detrimentally affect others involved in the representation in the future, in withdrawing, the lawyer may retract or disaffirm documents that were premised on the fraud.

Applicable Rules

• Rule 1.4 (Communication)
• Rule 1.6 (Confidentiality of Information)
• Rule 1.7 (Conflict of Interest)
• Rule 1.16 (Terminating Attorney–Client Relationship)

Inquiry

The inquirer, a private law firm (“Firm”), has asked whether it is allowed or obligated to advise an employer, who paid the law firm to obtain a work trainee visa from the Immigration and Naturalization Service (“INS”) for its alien employee, of its subsequent discovery that the employee had fabricated the credentials that qualified her for the visa.

The Firm was originally contacted by an alien who had been referred by a law firm (“Employer”) who wanted to employ her with the objective of becoming work authorized. At the outset it was clear that the Employer would be responsible for the Firm’s legal fees. The Firm drafted a retainer agreement, addressed only to the Employer, stating that the Firm would jointly represent the alien and the Employer. The retainer agreement did not address the impact of joint representation on client confidences or seek consent for the Firm to share confidences of one party to the joint representation with the other. Nor did the retainer agreement address the potential that a conflict of interest between the Employer and the alien employee could arise in the future or the consequences of such a conflict. The agreement provided signature lines for both the alien and the Employer but it was never signed or returned to the Firm. Neither the alien nor the Employer disputed the terms of the retainer and the subsequent representation was consistent with the terms of the unsigned retainer agreement.

The Firm prepared an INS filing in reliance on interviews with the alien and the Employer and entered an appearance with the INS on behalf of both the alien and the Employer. However, the petition for the visa was signed only by the Firm and by the Employer as petitioner, under penalty of perjury. The petition was granted.

Subsequently, the alien communicated with the Firm to request advice regarding obtaining an extension of her alien-trainee visa. A memo was provided to the alien containing brief instructions and fee terms. The Employer issued a check for that fee and signed the extension petition under penalty of perjury.

After the work was completed and approvals and extensions issued, the alien spontaneously disclosed to the Firm that she had falsified the credentials that were submitted by the Firm in support of the filings. Absent the falsified credentials, she would not have qualified for the visa. Promptly upon learning of the falsification, the Firm sent the alien a letter confirming that neither it nor to the best of the Firm’s knowledge, the Employer, knew of the falsification when the petitions were filed. The Firm also notified the alien that due to the falsification the firm was withdrawing from further representation of the alien. The Firm did not ask the alien to correct the record with the INS or to inform the Employer of the false application. Nor did the Firm ask the employee to consent to the Firm informing the Employer. The Firm did not contact the Employer to withdraw from representation.

The Firm desires to advise fully at least the petitioning Employer of the alien employee’s falsification. However, it does not wish to violate any duty under Rule 1.6 to protect client confidences or secrets that may exist between the alien and the Firm. The Firm emphasizes that the alien did not predicate her revelation to the Firm with any questions regarding confidentiality nor were there any assurances that the conversation would be confidential. The Firm suggests that the retention may have ended once the visa and extension were obtained.

Discussion

1. Is the admission a protected confidence or secret under Rule 1.6?

At the outset, we must evaluate who enjoys the benefit of the attorney-client relationship on the facts presented. The mere fact that the Employer agreed to pay the legal fees incurred in obtaining a visa for the alien does not establish client status for the Employer. Conversely, it would be possible that the Firm represented only the Employer and thus owed no duty to maintain the confidences of the alien employee. In this case, however, the retainer agreement confirming representation of both the Employer and the alien coupled with the entry of appearance at the INS on behalf of both parties reflects the law firm’s intent to undertake a joint representation of the Employer and the alien seeking the visa. Thus, the alien and the Employer are each entitled to the protection of Rule 1.6.

Rule 1.6 prohibits in relevant part 1) disclosure of client confidences and secrets and 2) the use of a confidence or secret of the lawyer’s client to the disadvantage of the client. A threshold question is whether the alien’s spontaneous statement that she had lied is a “confidence or secret” within the meaning of the Rule. Rule 1.6(b) defines the terms as follows:

“Confidence” refers to information protected by the attorney-client privilege under applicable law, and “secret” refers to other information gained in the professional relationship that the client has requested be held inviolate, or the disclosure of which would be embarrassing, or would be likely to be detrimental, to the client.

Based on the facts provided by the Firm, there is some question as to whether the alien employee’s disclosure would qualify as information protected by the attorney-client privilege in that the communication may not have been made in order to obtain legal advice. This is a legal question beyond the Committee’s purview because questions of privilege arise under the law of evidence, not the Rules of Professional Conduct.

It does appear, however, that the information is a “secret” for purposes of Rule 1.6 in that the information was obtained in the course of the professional relationship and disclosure, at a minimum, would be embarrassing and would likely be detrimental to the client. There is some suggestion by the inquiring law firm that, because the legal assignment had been completed, the representation of the alien had terminated. It is noteworthy in this regard, that upon learning of the falsification, the Firm wrote to the alien advising her that the firm was withdrawing from representation. Thus, it would appear that the law firm believed that an attorney-client relationship still existed at the time it learned of the falsification. Thus the strictures of Rule 1.6 obtain unless an exception applies.

2. The effect of joint representation on the lawyer’s duties under Rule 1.6.

A necessary predicate to a decision to undertake joint representation is an initial determination that the interests of the joint clients can be pursued without conflict. No matter how consistent the apparent interests of clients in a joint representation may appear at the onset, however, such a relationship poses inherent risks of future conflicts of interest. Such conflicts arise under Rule 1.7(b)(2) and (b)(3), where the representation of one client would be, or is likely to be, adversely affected by the representation of another client.

By way of analogy, Rule 2.2, which addresses the lawyer’s role as intermediary, provides guidance. In summary, Rule 2.2 permits a lawyer to act as intermediary between two clients only where (1) there is consultation “with each client concerning the implications of the common representation and [the lawyer] obtains each client’s consent”; (2) the lawyer reasonably believes each client’s best interests will be served and each will be able to make “reasonably informed” decisions; and (3) the lawyer reasonably believes the joint representation can be accomplished impartially and without improper affect on the other ethical responsibilities to the clients. Rule 2.2(a). The Rule provides that except in unusual circumstances, disclosure of risks involved in “common representation” must be in writing, as well as the client’s consent to the representation with those risks disclosed.

While the joint representation posed here does not involve the attorney as “intermediary”, the provisions of Rule 2.2 nonetheless provide an analogous framework to evaluate the ethical concerns of representing more than one client in the same matter. In a joint representation, a lawyer owes ethical duties of loyalty and confidentiality, as well as the duty to inform, to each client. A joint representation in and of itself does not alter the lawyer’s ethical duties to each client, including the duty to protect each client’s confidences. Other state bar associations have reached results consistent with the analysis. New York State Bar Op. No. 555 (“mere joint employment” not sufficient to imply consent to disclosure); Florida Formal Op. 92-5 (in joint representation of husband and wife in estate planning where husband reveals confidence to attorney, duty of confidentiality prevails); Association of the Bar of the City of New York Op. 1999-07; New York State Bar Op. No. 1994-10.

Comment [8] to Rule 2.2 underscores the difficulty of balancing ethical duties to two clients in the same manner:

In a common representation, the lawyer is still required both to keep each client adequately informed and to maintain confidentiality of information relating to the representation. See Rules 1.4 and 1.6. Complying with both requirements while acting as intermediary requires a delicate balance. If the balance cannot be maintained, the common representation is improper.

Because of this “delicate” ethical balance, Rule 2.2. generally requires the lawyer to provide “both clients with an explanation in writing of the risks involved in the common representation and of the circumstances that may cause separate representation later to be necessary or desirable. The consent of the clients shall also be in writing.” Rule 2.2(b). Comment [2] to Rule 2.2 underscores that the explanation of risks and consent must be in writing because “the potential for confusion is so great.” A written explanation requires the lawyer to “focus specifically on those risks” and educates the client to “risks that many clients may not otherwise comprehend.”

While Rule 2.2 is addressed to the lawyer as intermediary, its requirements suggests the difficult ethical issues under Rule 1.7(b)(2) and (b)(3) posed by joint representations of any kind. The best practice is clearly to advise clients at the outset of a representation of the potential for ethical conflicts ahead. Written disclosure of potential effects of joint representation and written consent can substantially mitigate, if not eliminate, the ethical tensions inherent in common representation.

3. Express Consent

Rule 1.6 allows disclosure of client confidences “with the consent of the client affected, but only after full disclosure to the client.” The prudent course for a lawyer undertaking a joint representation is to address the issue of disclosure at the outset of the retention and to obtain written consent from both clients that the lawyer may divulge to each client all confidences received during the course of the retention that relate to the representation. See Rule 2.2.

Where consent is sought at the outset of a joint representation, the lawyer must assure that the client has been advised of the potential adverse consequences of any such consent.

As noted above, in the case presented, the Firm did not seek advance consent to share all information regarding the representation with both clients. Nor did the law firm seek the client’s consent to advise the employer of the apparent fraudulent filings after the fraud was revealed. At the same time that the law firm owed a duty to maintain the employee client’s confidences and secrets, it owed the Employer client a duty under Rule 1.4 to keep it “reasonably informed” about the status of the representation. Rule 1.4(a). Comment [3] to Rule 1.4 explains that: “The guiding principle is that the lawyer should fulfill reasonable client expectations for information consistent with (1) the duty to act in the client’s best interests, and (2) the client’s overall requirements and objectives as to the character of representation.”

Where duties to the two clients conflict, and no advance consent has been obtained, the law firm should make an effort to fulfill its duties to the employer by seeking the employee’s informed consent to divulge the information. In the alternative, the Firm should encourage the employee client to divulge the facts to the Employer client. The Firm’s fiduciary duty to the Employer requires an affirmative effort to achieve disclosure within the bounds of Rule 1.6 before withdrawing from the representation.

4. Implied Authorization

Absent express consent, disclosure of client secrets is permissible “when the lawyer has reasonable grounds for believing that a client has impliedly authorized disclosure . . . in order to carry out the representation.” Rule 1.6(d)(4). In this case, the Firm understood that it had been retained to represent jointly the alien and the Employer for the limited purpose of obtaining a valid visa for the alien so that the Employer could legally employ her. The Employer needed to rely on the alien for the facts necessary to file the INS petition, which the Employer signed. As discussed above, the mere fact that the Firm was jointly representing the alien employee and the Employer does not provide a basis to infer consent to disclosure of confidences. D.C. Bar Op. 290 (1999). See also N.Y. State Bar Op. No. 555, supra. Without clear authorization, a lawyer may not divulge the secrets of one client to another, even where the discussion involves the subject matter of the joint representation. This is particularly true where disclosure would likely be detrimental to the disclosing client.

None of the other exceptions set forth in Rule 1.6 applies. Thus, absent client consent, the Firm may not divulge the secret. This result may seem unpalatable to the extent that the Employer who is also a client is left employing a dishonest worker whose visa has been fraudulently obtained pursuant to a petition signed by the Employer under penalty of perjury. Striking the balance in favor of protecting client confidences and secrets is nonetheless required by our Rules. The guarantee of confidentiality of communication between client and attorney is a cornerstone of legal ethics.

A fundamental principle in the client-lawyer relationship is that the lawyer holds inviolate the client’s secrets and confidences. The client is thereby encouraged to communicate fully and frankly with the lawyer even as to embarrassing or legally damaging subject matter. Comment [4] to Rule 1.6.

Rule 1.7(b) prohibits a lawyer from representing a client with respect to a matter if the representation of another client “will be or is likely to be adversely affected by such representation.” Because a conflict of interest arises between the interest of the alien employee in protecting the confidence that she lied in connection with the INS filing and the interest of the Employer in knowing that the work visa was fraudulently obtained, the lawyer must withdraw from representing both clients unless the retainer agreement permits the firm to continue representing one of the parties. Rule 1.16(a)(1).

5. Notice of Withdrawal

Rule 1.6 does not prohibit giving notice of the fact of withdrawal to parties other than the client “without elaboration.” Comment [19] to Rule 1.6 confirms that such notice is “not proscribed by this Rule or by Rule 1.16(d).” In terminating the relationship with the Employer, the Firm can advise the Employer that the relationship with the employee client was terminated. While the Rules do not address what can be said to a client as to the basis for terminating the relationship, the Employer client is entitled to know at least what ethical provision led to the termination.

The question arises whether in notifying the Employer, the Firm may engage in a so-called “noisy” withdrawal. Comment [19] to Rule 1.6 provides that after withdrawal under Rule 1.16(a)(1), the lawyer “may retract or disaffirm any opinion, document, affirmation or the like that contains a material misrepresentation by the lawyer that the lawyer reasonably believes will be relied upon by others to their detriment.” (emphasis added) Thus, a lawyer may signal that a problem exists by disaffirming earlier written statements but only if there is a reasonable basis to expect that future harm may occur without such disavowal. It is unclear from the facts presented whether future detriment may result to the Employer from the previous issuance of a visa based on false representations of which it was unaware. If there is reasonable basis to believe that the employer or the INS could rely on the petition to their detriment, the firm could disaffirm the INS petition in giving notice of its withdrawal. It may not, however, go beyond notice of disaffirmation to explain the basis for its disavowal.¹

Inquiry No. 98-11-31
Adopted: February 15, 2000

1. As it is beyond the purview of this Committee, which opines exclusively on the interpretation of the D.C. Rules of Professional Conduct, we have not researched or analyzed whether any provision of federal law that may be applicable to INS petitions purports to override attorney-client confidentiality rules to require disclosure to INS under the circumstances described in this opinion.