Ethics when the feds come knocking

It is becoming increasingly common for attorneys, no matter their area of expertise, to have to deal with law enforcement on behalf of their clients. For many, this might involve an FBI agent or another governmental investigator coming to an attorney's office (by appointment or otherwise) and asking questions about a client who is not otherwise subject to a formal governmental investigation. The agent might ask about the client's business or even ask to see the client's financial documents or files in the attorney's possession. This presents an ethical quandary.

For attorneys who do not routinely engage with federal authorities, they may feel the tension of dueling interests. On one hand, the attorney may wish to be candid or even helpful to the agent, particularly if the attorney believes that consultation may help the client by clearing up misunderstandings. On the other hand, the attorney generally has a duty to guard the confidences and secrets of a client, particularly where revealing that information would cause the client to face criminal liability or a government investigation.

Attorneys in this situation may also face their own unique set of risks, including that the attorney could be held accountable (1) by the government for advice provided to the client if the government determines the client's conduct was wrongful or (2) by the client for needlessly exposing it to risk by sharing its confidences with the government.

Increasingly, the government seems to contact attorneys on an "informal" basis, such that white-collar or criminal attorneys may not yet be involved and the corporation and its counsel may not see an immediate cause for alarm. Because corporate or other attorneys may lack experience in navigating these issues, here are some tips for what attorneys can do when the government comes knocking.

Ethical Obligations

An attorney is obligated "to maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client" unless the client gives informed consent for the attorney to provide information. CRPC 3-100(A). Thus, when an attorney is asked questions about client activities, attorneys may not be permitted to disclose information if gained in the context of the attorney-client relationship, no matter who is asking the question.

There are limited exceptions to the requirement that attorneys should maintain confidentiality. Under Rule 3-100(B) of the California Rules of Professional Conduct, a lawyer is permitted to reveal information "relating to the representation of a client to the extent that the member reasonably believes the disclosure is necessary to prevent a criminal act that the member reasonably believes is likely to result in death of, or substantial bodily harm to, an individual." Notably, this provision is not mandatory.

Additionally, Rule 3-100(C) provides that before revealing confidential information to prevent a criminal act, a member shall, if reasonable under the circumstances:

(1) make a good faith effort to persuade the client: (i) not to commit or to continue the criminal act or (ii) to pursue a course of conduct that will prevent the threatened death or substantial bodily harm; or do both (i) and (ii); and

(2) inform the client, at an appropriate time, of the member's ability or decision to reveal information as provided in paragraph (B).

Finally, when revealing confidential information to prevent a criminal act, the attorney's "disclosure must be no more than is necessary to prevent the criminal act, given the information known to the [attorney] at the time of the disclosure." CRPC 3-100(D).

Other jurisdictions follow these same rules and obligate attorneys to safeguard confidential communications in most situations, even when the attorneys are aware of potentially harmful misconduct committed in the past by a client. Rule 1.6 of the ABA Model Rules of Professional Conduct permits an attorney to disclose information that would prevent the client from committing a crime or fraud that would result in substantial injury to the financial interests or property of another. However, the rule does not indicate that an attorney can report against a client after the fact.

This, of course, assumes the scenario in which a government agent asks questions about a client who is not under formal investigation or indictment. In the context of a formal investigation or in response to service of process, the attorney - and the client - are typically best served by retaining counsel with experience in this area.

Risks for the Attorney

Even if a client expressly authorizes her attorney's cooperation with a government agent, there is a risk that the government may focus on the attorney's culpability as well.

An attorney who suggests to the government that the attorney had knowledge or awareness of the client's conduct might ultimately face indictment or become a material witness. Further, if the client's conduct is under the government's microscope, any advice provided by the attorney to the client in furtherance of that conduct could face similar scrutiny. The wide range of Sarbanes-Oxley and other laws could mean that an attorney could face liability or charges for good-faith conduct or participation in an investigation.

A visit from a government agent may lead to a claim against the lawyer or law practice by the client, depending on the outcome of the conversation. Moreover, attorneys could face risks of a bar investigation if they disclose client confidential information beyond what they were authorized to disclose. As a result, the attorney and firm may be required to report the visit as a "circumstance" under the legal malpractice policy and reference it in any future renewal applications. Whether reporting is appropriate will depend on the facts and circumstances.

Seek Assistance from In-House Counsel

When first contact is made with an attorney by the government seeking information about a firm client - even if the attorney is told the agent just has some "informal" questions - most attorneys in that situation will notify the firm's counsel.

Responding to questions about a client from a government agent exposes the client, the attorney, and even the firm to potential risk. By involving the firm's in-house or outside counsel, the attorney can benefit from additional advice on how to proceed. In addition, the attorney can help ensure that his or her evaluation of what to do next is protected under the privilege shared by the attorney and the firm's counsel. In-house counsel can also involve outside counsel, if necessary, to assist the firm and the attorney.

Issues surrounding governmental investigations can be complex. Hindsight is always 20/20, but involving counsel can help set a road map that prevents needless exposure, risk and stress.