Because these rules were created without you, compliance can be difficult – and sometimes it`s just overlooked. But fortunately, compliance as an in-house lawyer is your specialty, so keep your eyes peeled for these common ethical pitfalls that in-house lawyers face. In this case, the defendant was sanctioned for failing to obtain evidence while the litigation was ongoing. Although the in-house lawyer participated in several steps to protect the information, he did not even monitor or approve the copying and deletion of laptop hard drives and did not participate in the transfer of email archives from servers. When this information was no longer available, it was found that the defendant had a guilty state of mind with regard to the failure to retain it. Practical tip: If you`re filing a dispute internally, you need to be aware of the risks. Your in-house litigators essentially have the duties of the lawyer and the client. Just because something is confidential to you does not mean it is protected by solicitor-client privilege Many laymen and a troubling number of lawyers believe that solicitor-client privilege is associated with any communication with a lawyer. That`s not true. Solicitor-client privilege applies only if the communication between a lawyer and a client is for the purpose of legal advice and is expressed confidentially.
But today`s in-house lawyers are often in the crosshairs of regulators and are supposed to be “gatekeepers” whose job is in part to maintain the firm`s honesty in a way that doesn`t always fall clearly under professional liability rules. 3. Outsourcing of legal work. Legal departments often hire non-legal firms to provide services such as documentation or due diligence, contract preparation, and legal research. In accordance with §§5.1 and 5.3, you are responsible for their work results and for ensuring that they comply with ethical rules. Read the practical guide “Ethical Issues for In-House Counsel” available with a free trial of Practical Law Connect. The rules of professional conduct continue to apply to in-house lawyers. Not only that, the stakes are higher as it is much harder for you to detach yourself from your customer when you are an intern. If you have any questions about your ethical duties, contact the author. If you read the ABA`s Model Rules of Professional Conduct or your state`s applicable rules (and you should), you`ll notice that most of the written rules apply to lawyers in private practice. There are few rules specific to in-house counsel (but in-house counsel must still comply with them). There are several reasons for this discrepancy – there are no fee disputes for in-house lawyers, no problems with the client`s escrow account, no publicity issues, and corporate counsel are employees of the client.
Do not overestimate the scope of solicitor-client privilege. Communication and work results are protected only if they “give or receive legal advice” and are confidential. All communications between you and the Company, other lawyers or employees are not protected, and corporate counsel should endeavour to clarify this. Speakers on ethical issues for in-house counsel are often challenged by the public about the reality of the problems posed. Many in-house lawyers apparently believe that ethical rules do not apply to them or apply less forcefully. 5. Reporting Misconduct. Rule 1.13(b) also causes tension. Under the right circumstances, you must report to a higher authority if the actions of officers or employees violate a legal duty to the company, hold the company liable for a violation of the law, or are likely to cause significant harm to the company. This case concerned a dispute between associated enterprises.
A company`s in-house counsel had often done legal work for affiliates. In the litigation, it was concluded that the lawyer`s notes were not privileged over either of the companies in dispute, as he was counsel for both companies. It was also decided that the doctrine of common interest did not apply to the protection of banknotes, as that doctrine required the involvement of several lawyers. This is another case in a long series of Southern District of New York (SDNY) cases involving in-house attorneys who are not licensed in the jurisdiction where they are regularly based. The court ruled that there was no solicitor-client privilege for communications between the corporate lawyer and the client because the in-house lawyer was unlicensed and therefore not a “lawyer”. The Company agreed to provide legal counsel to defend the testimony and provided in-house counsel, Mr. Plummer. Literally about to be fired, Mr. Yanez told Mr. Yanez. Plummer that: (a) he lied to the company`s investigator; and (b) that the truth was worse for the Society than he had said before. Mr.
Plummer was basically saying, “Just tell the truth; Everything will be fine. Mr. Rosefielde`s first defence was that the requirements of Rule 1.8 relating to a commercial transaction with a customer did not apply to him because he was in-house. This was so strongly denied that it could be called irrational: in this case, Goodyear withheld documents and gave wrong answers during the discovery. The court imposed drastic penalties on Goodyear, and the “nail in the coffin” was the fact that Goodyear`s in-house counsel had participated in reviewing the false answers to the investigation before they were filed. All of this requires a delicate balancing act. Understanding that things are “different” internally gives you a lens to examine the various ethical issues that come your way. Practical tip: All ethical rules apply to in-house lawyers, including the prohibition of fraudulent behaviour. In fact, reported cases involving ethical issues have increased significantly in recent years.
The following is a list of ten of the most significant cases involving in-house counsel and ethical issues. Ayesha advises clients on how to deal with problematic employees, complaints of discrimination or harassment, partnership disputes, dismissals or disciplinary action. Hamilton Law Firm PC also drafts personnel manuals, employment contracts, separation agreements and restrictive agreements. In addition, she handles labour defence negotiations and litigation and provides litigation support to in-house lawyers. In-house counsel reported inappropriate business practices “on scale” as required by Rule 1.13. At one point, the lawyer was fired and sued for release in retaliation. The lawyer`s request was rejected and the rejection was upheld on appeal. The Utah Supreme Court ruled that the lawyer was an employee at will, entitled to be fired for any reason that was not illegal, and that the ethical requirements he had signaled “at the top” were not sufficient to transcend general public order in favor of employees at will. 1.
Who is the customer? Although you interact with senior management and others on a daily basis, a corporate lawyer`s client is the company, not just one person. This can lead to awkward moments, especially during internal investigations, where you need to make it clear to the person you represent the company, not them, usually with an “upjohn” warning. It is also easier to combine business and legal advice, which jeopardizes solicitor-client privilege. This case involved a corporate lawyer who had complained to the U.S. Department of Energy (DOE) about discrimination against her client. To advance her case, she provided DOE with information about other complaints of discrimination within the company. Although she won her jury trial, the verdict was overturned. The Fifth Judicial District ruled that there was no exception to the ethical rules that allowed it to disclose information about other errors without the client`s consent, which he did not have. The verdict was overturned and the case was closed due to the lawyer`s misconduct.
Practical tip: In-house counsel should be alert to potential conflicts when representing someone other than the firm. Nothing better represents the mismatch between internal practice and traditional legal ethics than the rules governing conflicts of interest. In a fixed environment, it may be easy to identify and avoid “immediately prejudicial” conflicts prohibited by Rule 1.7 of the Model Rules for the Profession. Mr. Rosefielde has worked in-house for several small businesses owned by Mr. Kaye. He also represented Mr. Kaye himself and a foundation for his children. As he had done many times before, Mr. Rosefielde started a small business under Mr.
Kaye`s leadership and took a small stake. He did not hide it from M. Kaye, but he also failed to comply with Code of Business Conduct 1.8 with respect to business dealings with a client. Another argument put forward by Mr. Rosefielde was that, for certain conducts, he was acting as an officer of the company, and not as in-house counsel, and that, therefore, the ethical rules were not applicable to his conduct. This was also categorically dismissed as “misleading”. PROCESS: Hamilton Law Firm PC conducted negotiations with the franchisor and the franchisee`s developer with all parties involved. By respecting and understanding the objectives of other parties while effectively defending his client`s interests, Mr. Hamilton was able to find a legal balance acceptable to all parties involved. Rule 1.10 states that if a “lawyer affiliated with a law firm” has a conflict of interest, that conflict is assigned to the firm as a whole. For in-house lawyers, the law firm is the entire legal department.
The disqualification of a lawyer can then disqualify the entire department.