Legal Ethics Practical Tips from Where else?... Practice

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Nathaniel Booth
8 years ago
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1 Legal Ethics Practical Tips from Where else?... Practice Presented by: Mark C. Dosker

2 Corporate Miranda or Upjohn Warnings

3 Issues Facing Counsel at the Onset of an Internal Investigation While the company may suspect that certain misconduct has occurred, it likely lacks developed information about the extent of the wrongdoing and the level of participation by individual employees The company may intend either now, or later -- to disclose the attorneys findings to the government which could expose employees to civil or criminal liability if misconduct has occurred. The company s intent in that regard may well change over time, as events unfold. 3

company may intend either now, or later -- to disclose the attorneys findings to the government which could expose employees to

4 Reasons for Taking Precautions in Conducting Investigations Potential confusion by employees about the attorney s role in conducting the interviews, who the attorney represents, and to whom the attorney s duty of loyalty runs. Ensure that employees understand the purpose of the interview and how any statements made during the interview may be used. Impress upon employees the importance of giving truthful answers and providing accurate information because of potential adverse consequences. 4

Ensure that employees understand the purpose of the interview and how any statements made during the interview may be used.

5 Origins of Corporate Miranda or Upjohn Warnings Upjohn v. United States, 449 U.S. 383 (1981) in which the United States Supreme Court held that the attorney-client privilege protects communications made by company employees to company counsel to assist company counsel in providing legal advice to the company, regardless of the employees status or roles within the company. 5

383 (1981) in which the United States Supreme Court held that the attorney-client privilege

6 Basic Elements of Corporate Miranda or Upjohn Warnings The attorney represents the company and not individual employees. The purpose of the interview is to help the attorney provide legal advice to the company Any statements made by the employee during the course of the interview may be shared with the company While communications between the attorney and employees are covered by the attorney-client privilege, the privilege is owned by the company and not by individual employees. The company alone may decide whether to waive the attorneyclient privilege without notice to or consent from employees. The company may decide to waive the privilege and disclose an employee s statements to third parties including law enforcement and/or regulatory authorities. 6

While communications between the attorney and employees are covered by the attorney-client privilege, the privilege is owned by the company and not by individual employees.

7 Possible Additional Admonitions All aspects of the interviews should be kept confidential and not discussed with anyone, including fellow employees. Inform the employees about the company s expectations for cooperation with the investigation and potential adverse consequences for employees failing to do so. 7

Inform the employees about the company s expectations for cooperation with

8 Advice for Giving Effective Warnings Document that warnings were given in an interview memorandum containing the precise warnings that were given. Note whether the warnings were understood and whether the employee raised questions or objected to participating in the interview. Uniform practices should be used for all interviews conducted for an investigation so questions cannot later be raised whether warnings were consistently given. Specifically address any pre-existing relationship between the attorney and an employee that could lead the employee to mistakenly believe that the attorney represents them individually for purposes of the investigation. Example -- prior representations of the employee by the attorney. 8

Uniform practices should be used for all interviews conducted for an investigation so questions cannot later be raised whether warnings were consistently given.

9 Potential Adverse Consequences of Failure to Give Effective Warnings 9 Violations of the attorney s ethical obligations under the applicable Rules of Professional Conduct. Inadvertent formation of an attorney-client relationship with a company employee, officer, or director in connection with the investigation. Conflicting ethical duties of loyalty and confidentiality to individual employees may diminish the attorney s ability to effectively represent the company for purposes of the investigation. Employees may disclose information that they mistakenly believe is confidential which upon disclosure could result in their termination, civil liability and/or criminal liability. Disclosure of employee statements where an attorney-client relationship has inadvertently been formed could lead to state bar disciplinary proceedings for counsel. Imputation of conflicts resulting from the inadvertent formation of an attorney-client relationship to other members of the company s legal department.

10 Knowing What Every Lateral Hire Brings to In-House Counsel / Corporate Law Department

11 Is In-House Counsel a Law Firm? Under the Rules of Professional Conduct, a Law Firm is defined to include in-house counsel (where there s more than one lawyer). Here s the definition, for example, under California Rule of Professional Conduct (B)(1), Law Firm means: a division, department, office or group within a business entity, which includes more than one lawyer who performs legal services for the business entity; If you are in-house, and you are not alone, you are a Law Firm. 11

12 Got Contagion?... Are you sure?... As a Law Firm, for purposes of the Rules of Professional Conduct and related ethics issues, the same rules apply to inhouse counsel as to traditional law firms on the topic of lateral hiring. Imputation Ethical Wall / Screening Cannot be Presumed to be Sufficient Pre-hiring precautions Law Firms should take them (we do) Law Firms (in-house counsel) should take them 12

same rules apply to inhouse counsel as to traditional law firms on the topic of lateral hiring.

13 Pre-Hiring Precautions Inoculation Against Contagion Conflicts Prevention Form for Prospective New Attorneys and Law Clerks Prior Work on Matters in Litigation Confidential Information especially any which might be material to any representation in new position Familial Relationships with Any Judge Other Information 13

Litigation Confidential Information especially any which might be material to

14 The Fiduciary Duty of Loyalty As Applied to Legal Ethics Home and Away

15 The Fiduciary Duty of Loyalty as Applied in Legal Ethics In the United States and Elsewhere The Fiduciary Duty of Loyalty as applied in Legal Ethics -- under most U.S. ethics rules, a lawyer or law firm cannot simultaneously be representing a party in one matter and be adverse (ethics-wise) in another matter, without informed written consents. What is adverse (ethics-wise)? In most U.S. jurisdictions, it makes no difference if the two matters are not related. California example the conclusion is not clear from reading only the text of the Rules of Professional Conduct Clear from common law e.g., Flatt v. Superior Court 15

ethics rules, a lawyer or law firm cannot simultaneously be representing a party in one matter and be adverse (ethics-wise) in another matter, without

16 The Fiduciary Duty of Loyalty as Applied in Legal Ethics In the United States and Elsewhere Informed Written Consents think of them that way, not as waivers Informed written consents are what the ethics rules require They are to be obtained in advance (in most situations) They are consents to what is allowable, not forgiveness for what should not have been done 16

are what the ethics rules require They are to be obtained in advance (in most situations)

17 The Fiduciary Duty of Loyalty as Applied in Legal Ethics In the United States and Elsewhere Under many non-u.s. legal systems, no ethics issue is presented if the two matters are not substantially related. How is your matter being handled, ethically? One-firm firm? Or Not? Example from practice Patent prosecution and litigation on two sides of the ocean 17

matters are not substantially related. How is your matter being handled, ethically?

18 The Ethics Hat

19 The Ethics Hat The concluding message is the same, both for Squire Sanders attorneys and our guests who are in-house counsel What is The Ethics Hat? What it reportedly looks like. You don t see it? Why you don t see it because the only lawyers who can see it are those who will never face an ethics issue in the course of their career. So, no one ever sees it Everything we have discussed today has occurred in practice. The names have been removed, to keep things ethical 19

Why you don t see it because the only lawyers who can see it are those who will never face an ethics issue in the

20 The Ethics Hat Why is consulting someone in The Ethics Hat important? the world is shrinking, and the world is moving faster, but the issues are eternal, and not everyone behaves the same in practice 20

21 21 The Ethics Hat Got questions?

THE AMERICAN LAW INSTITUTE Continuing Legal Education. Estate Planning for the Family Business Owner

91 THE AMERICAN LAW INSTITUTE Continuing Legal Education Estate Planning for the Family Business Owner Cosponsored by the ABA Section of Real Property, Trust and Estate Law and the ABA Section of Taxation