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[I]n the corporate arena, the lawyer lives in an 'Alice in Wonderland' world. The client to which he owes undivided loyalty, fealty, and allegiance cannot speak to him except through voices that may have interests adverse to his client. He is hired and may be fired by people who may or may not have interests diametrically opposed to those of his client. And finally, his client is itself an illusion - a fictional 'person' that exists or expires at the whim of its shareholders, whom the lawyer does not represent.
It is not surprising, therefore, that to a great extent lawyers simply do not concern themselves with these ethical considerations, or if they do, become so frustrated in their application that they throw up their hands in despair.
Jonas, Who Is the Client?: The Corporate Lawyer's Dilemma, 39 Hastings L.J. 617, 619 (1988). This chapter will address the particular professional responsibility issues that confront attorneys representing entities. While Rule 1.13 applies to many types of entities, see, e.g., ABA Formal Op. 91-361 (partnerships); ABA Formal Op. 92-365 (trade associations), corporate representation is most common. Thus, much of the material in this section addresses corporate representation. Keep in mind that other entities may face similar problems, and think about whether the resolution should be the same for those entities. Remember as well that these rules govern representation of entities of all sizes and structures; from Fortune 500 companies to "Mom and Pop" operations. Is one set of rules adequate for all these settings? Can the rules be effectively adapted for such disparate situations?
Read Rule 1.13 and Comments.
How does the fact that an attorney is representing an entity alter or affect the lawyer’s confidentiality obligations? What about entity representation makes confidentiality issues particularly difficult? In representing a corporate entity, the lawyer must address issues of confidentiality both inside the corporation itself as well as outside. This significantly adds to the complexity of the lawyer’s duties.
It is well-settled that, as part of the lawyer's obligation to keep the client - the corporation - informed, a lawyer may, and frequently must, share information communicated by an agent of the entity with those within the entity who have a need to know it. Hazard and Hodes, The Law of Lawyering 235 (2d ed. 1990). Similarly, such information may not be communicated to those within the corporation who do not have a need for it. Care must be taken to insure that the interests of the entity are served without unduly putting confidences at risk and without unfairly prejudicing those within the entity with whom the lawyer deals.
As discussed in Chapter 5, subject to very limited exceptions, a lawyer may not reveal "information related to the representation of a client unless the client consents after consultation." M.R. 1.6. This rule applies to corporate clients. M.R. 1.13, Comment. Thus, "when one of the constituents of an organizational client communicates with the organization's lawyer in that person's organizational capacity, the communication is protected by Rule 1.6." Id. Any information obtained by the attorney within his or her representational capacity falls under the protection of Rule 1.6 and may not be disclosed outside the entity (or to unnecessary people inside) unless one of the exceptions to that rule applies.
As a practical matter, questions regarding confidentiality arise when a corporate attorney deals with constituents within the organization. Those constituents, whether they be members of management or low-level employees, are not clients of the attorney. M.R. 1.13(a). Thus, the attorney owes no duty of confidentiality to them as individuals. Rather, the duty of confidentiality is owed to the corporation itself. Comment 1.13 (The Entity as Client). Frequently, however, the constituent talking with the lawyer may be unaware of the limited nature of confidentiality available, and the lawyer may well have an obligation to advise that constituent of the lawyer's duty to disclose information obtained from that individual within the corporation. See M.R. 1.13(d); 4.3. Failure to do so may constitute a violation of the Rules and, if the constituent is misled into believing that he or she is individually represented by the attorney, may lead to eventual disqualification of corporate counsel. Thus, care on the part of counsel dealing with constituents is necessary when potentially differing interests surface and normal relationships within the entity begin to break down. Hazard and Hodes at 243; see also Annotated Rules, at 210.
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