Ethics Opinion 327
Joint Representation: Confidentiality of Information Revisited
Where one client has given consent to the disclosure of confidential information by the lawyer to another client, we have already concluded that the lawyer may reveal the confidence or secret. Here we conclude that the lawyer must do so if the information is relevant or material to the lawyer's representation of the other client. Because the disclosing client previously has waived confidentiality, there is nothing to weigh against either the lawyer's duty of loyalty to the non-disclosing client or the lawyer's obligation to keep that client reasonably informed of anything bearing on the representation that might affect that client's interests.
- Rule 1.3 (Diligence and Zeal)
- Rule 1.4 (Communication)
- Rule 1.6 (Confidentiality of Information)
- Rule 1.7 (Conflict of Interest)
- Rule 1.16 (Terminating Representation)
The inquiry comes from a law firm that has succeeded to the representation of several clients who had been represented by a prior firm. The prior firm had originally represented multiple clients in the same matter. In its retainer agreement, the prior firm had explained to all of the jointly represented clients that it was “understood that (a) we will not be able to advise you about potential claims you may have against any of the Other Individuals whom we represent and (b) information you provide to use in connection with our representation of you may be shared by us with the Other Individuals whom we represent.”1 After apparently learning certain confidential information from one of the jointly represented clients, the prior firm withdrew from representing the other clients and continued to represent only the client from whom the confidential information had been learned. Upon assuming the representation of the other clients, the inquiring law firm requested that the prior firm disclose all information relevant to its prior representation of those clients, including the confidential information that had led to its withdrawal. The prior firm refused. The inquirer seeks an opinion whether, under these circumstances, the prior firm is required to share with the other clients all relevant information learned during its representation, including any relevant confidences and secrets.
In Opinion No. 296, we concluded that the mere fact of joint representation, without more, does not provide a basis for a lawyer to conclude that the client has impliedly authorized disclosure of confidences or secrets to another client. “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.” D. C. Ethics Op. 296.2 Under such circumstances, the lawyer's only option is to seek consent of the disclosing client to share the information or ask the client to disclose the information directly. If the client refuses, the resulting conflict of interest requires the lawyer's withdrawal.3
The inquirer presents a variation on the question addressed in Opinion No. 296: in contrast to the earlier opinion, where we recognized that “[t]he 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,” id. at 174, the retainer agreement here expressly provided that information disclosed in connection with the representation “may be shared” with the other clients in the same matter. The question raised by this inquiry, however, is not whether the information “may” be shared but whether it “must” be shared. Rather than seeking permission to disclose the confidential information (which is the way this issue has often arisen in other jurisdictions), the prior firm has refused to reveal the information. The issue we now consider is whether, under the specific facts presented here, the prior firm has an affirmative obligation to disclose.4
When one client provides a lawyer with material information and makes clear (either directly or indirectly) that such information is not to be communicated to another, jointly represented client, the lawyer faces a potential conflict. If the information is relevant or material to the other client, the failure to disclose it would compromise the lawyer's duties of loyalty (D. C. Rules 1.3(b) & 1.7(b)), diligence (D. C. Rule 1.3(c)), and communication (D. C. Rule 1.4) to that other client. On the other hand, sharing the information would compromise the communicating client's expectations of confidentiality and risk impairing that client's trust in the lawyer. See generally Restatement of the Law Governing Lawyers §60, cmt. l (2000) (“Restatement”) (discussing the lawyer's “dilemma”). Because the lawyer simply cannot continue in the representation without compromising either the duty of communication to the non-disclosing client or the expectation of confidentiality of the disclosing client, the lawyer must ordinarily eliminate the conflict by withdrawing.5
In a comment to its Model Rule 1.7, the ABA makes this point expressly:
As to the duty of confidentiality, continued common representation will almost certainly be inadequate if one client asks the lawyer not to disclose to the other client information relevant to the common representation. This is so because the lawyer has an equal duty of loyalty to each client, and each client has the right to be informed of anything bearing on the representation that might affect that client's interests and the right to expect that the lawyer will use that information to that client's benefit. See Rule 1.4. The lawyer should, at the outset of the common representation and as part of the process of obtaining each client's informed consent, advise each client that information will be shared and that the lawyer will have to withdraw if one client decides that some matter material to the representation should be kept from the other.
ABA Model Rule 1.7, Comment .
At least one jurisdiction has recognized that a lawyer under such circumstances has broad discretion to disclose confidential information before withdrawing. In A. v. B., 726 A. 2d 924 (N. J. 1999), the New Jersey Supreme Court considered whether a law firm, which jointly represented a husband and wife in drafting wills in which they devised their respective estates to each other, may disclose to the wife the fact that the husband had recently fathered an illegitimate child. The law firm's retainer letter explained that information provided by one spouse could become available to the other. “Although the letter did not contain an express waiver of the confidentiality of any such information, each spouse consented to and waived any conflicts arising from the firm's joint representation.” Id. at 925. The information was clearly relevant to the wife because, as the court explained, “[t]he wife's will leaves her residuary estate to her husband, creating the possibility that her property ultimately may pass” to his illegitimate child. Id. at 926.
The law firm became aware of the husband's illegitimate child after the wills were executed.6 The law firm wrote to the husband that it believed it had an ethical obligation to disclose to the wife the existence (but not the identity) of the child on the grounds that it needed to inform the wife that her current estate plan might devise a portion of her assets through her spouse to that child. The law firm urged the husband to inform his wife and that, if he did not, the law firm would do so. The husband refused and obtained an injunction from the appellate division to prevent the law firm from disclosing to the wife the existence of the child.
The Supreme Court reversed. New Jersey's Rule 1.6 “permits, but does not require, a lawyer to reveal confidential information to the extent the lawyer reasonably believes necessary ‘to rectify the consequences of a client's criminal, illegal or fraudulent act in furtherance of which the lawyer's services had been used.’” Id. at 927 (quoting NJ RPC 1. 6(c)) (emphasis added).7 The court construed the term “fraudulent act” to apply in this situation: “[T]he husband's deliberate omission of the existence of his illegitimate child constitutes a fraud on his wife. When discussing their respective estates with the firm, the husband and wife reasonably could expect that each would disclose information material to the distribution of their estates, including the existence of children who are contingent residuary beneficiaries. The husband breached that duty.” Id. Under New Jersey law, therefore, the law firm was permitted to disclose the confidential information.8
The court considered and then distinguished two decisions from other jurisdictions that had prohibited disclosure to co-clients. The Florida State Bar Association's Committee on Professional Ethics had considered a factual situation similar to the one in New Jersey: Lawyer had prepared wills for both Husband and Wife and then subsequently learned from Husband that he had executed a codicil that made substantial beneficial disposition of his estate to a woman with whom he had been having an extramarital relationship. See Florida Formal Op. 95-4 (1997). Lawyer had never discussed with Husband and Wife whether confidential information learned from the one would be shared with other. Under these circumstances, the Florida Bar concluded that not only is Lawyer “not ethically required to disclose the information to Wife” but “Lawyer's ethical obligation of confidentiality to Husband precludes Lawyer from disclosing the information to Wife.” Id. at 3. Indeed, the Florida Bar expressly rejected the discretionary approach favored in the Restatement.
Florida lawyers must have an unambiguous rule governing their conduct in situations of this nature. We conclude that Lawyer owes duties of confidentiality to both Husband and Wife, regardless of whether they are being represented jointly. Accordingly, under the facts presented Lawyer is ethically precluded from disclosing the separate confidence to Wife without Husband's consent.
Id. at 5-6
The New York State Bar Association’s Committee on Professional Ethics came to the same conclusion. According to the Committee, a lawyer representing a two-person partnership may not inform one of the partners that the other had, in a conversation that was expressly deemed to be “in confidence,” advised the lawyer that he was actively breaching the partnership agreement.9 The Committee concluded that, in the absence of prior consent by the clients to the sharing of all confidential communications—and because the disclosing client had “specifically in advance designated his communication as confidential” and the lawyer did not indicate that any information would be shared with the other client – the lawyer may not disclose to the co-client the communicating client's statement. See New York State Bar Op. 555, at 6 (1984).10
The New Jersey Supreme Court distinguished both of these prior decisions on the ground that “the New York and Florida disciplinary rules, unlike [New Jersey’s] RPC 1.6, do not except disclosure needed ‘to rectify the consequences of a client's …fraudulent act in the furtherance of which the lawyer’s services had been sued.’” A. v. B. 726 A.2d at 931. Moreover, the husband and wife in the New Jersey case, “unlike the co-clients considered by the New York and Florida Committees, signed an agreement suggesting their intent to share all information with each other.” Id.11
We have already approved of the approach of the New York and Florida committees. See D. C. Ethics Op. 296. And, unlike New Jersey's version of Rule 1.6 and the current Model Rule —which permit the disclosure of client confidences to rectify the consequences of a client's fraudulent act—the D. C. Rule includes far narrower exceptions: to prevent a criminal act that the lawyer reasonably believes is likely to result in death or substantial bodily harm or to prevent bribery or intimidation of persons involved in proceedings before a tribunal. See D. C. Rule 1.6(c).
In addition, of course, D.C. Rule 1.6 permits a lawyer to use or reveal a client confidence or secret with the consent of the client, after full disclosure. See D. C. Rule 1.6(d)(1). As we made clear in Opinion No. 296, a lawyer needs “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.” D. C. Ethics Op. 296, at 175. According to the inquiry, the prior firm had made clear to each of its clients that information provided in connection with the representation “may be shared” with co-clients. We believe that this constitutes consent, authorizing the prior firm to disclose confidential information learned during the course of the representation that may be relevant or material to its representation of another client in the same matter.12
The retainer agreement presumably reflects a collective determination by all co-clients that the interests in keeping one another informed outweighs their separate interests in confidentiality. Where the disclosing client has expressly or impliedly authorized the disclosure of relevant, confidential information to the lawyer's other clients in the same matter,13 the duty to keep the non-disclosing clients informed of anything bearing on the representation that might affect their interests requires the lawyer to disclose the confidential information. Our rules provide that a “lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. ” D. C. Rule 1.4(a) (emphasis added). Where the disclosing client has unambiguously consented to further disclosure, a lawyer's duty of loyalty to and the duty to communicate with the non-disclosing client tips the balance in favor of disclosure. Indeed, in light of the disclosing client's consent, there is nothing left on the other side of the balance.14
It is, of course, possible that a client who has otherwise consented to the disclosure of confidential information may withdraw such consent for a specific disclosure. Where a client informs the lawyer before disclosing certain confidential information that he or she intends to reveal something that may not be shared with the lawyer's other clients (notwithstanding a prior agreement to do so), the lawyer has an obligation at that point to inform the client that no such confidences may be kept. Under such circumstances, the lawyer can generally withdraw from representing the disclosing client and continue to represent the other clients. Here, by contrast, the prior firm apparently received information that it knew the disclosing client did not wish revealed to the other clients.15 Under the terms of the retainer agreement, the prior firm's duty to communicate any relevant information to the other clients included any relevant information learned from other clients in the same matter, and this duty attached at the moment the prior firm learned the information. This underscores how important it is for a lawyer carefully to explain to all clients in a joint representation that, when they agree that any relevant or material information may be shared with one another, they cannot expect that any relevant or material confidential information they may subsequently reveal to the lawyer will be kept from the other co-clients.
Finally, we wish to emphasize that this inquiry raises anew the concerns we have expressed elsewhere about the hazards of representing multiple clients in the same matter. See, e.g., D. C. Ethics Ops. 217, 232, 265 & 301. By agreeing to undertake the representation of multiple clients and by obtaining a limited waiver of confidentiality, lawyers may expose themselves to significant risks. As we have concluded here, a lawyer violates the D.C. Rules of Professional Conduct when her or she withholds from one client relevant or material confidential information obtained from a co-client who has consented to the disclosure.
Inquiry No. 04-04-16
Adopted: February 2005
Published: March 2005
1. The retainer agreement defined the term “Other Individuals” by listing the names of those individuals whom the prior firm “may represent.”
2. We do not read D. C. Ethics Op. 296 to suggest that privileged information provided by one client during the course of a joint representation (that is also relevant to the joint representation) remains privileged in a subsequent dispute between the two clients. Such an interpretation would appear to be inconsistent with District of Columbia law. See Griva v. Davison, 637 A. 2d 830, 847-48 (D. C. 1994) (with respect to matters known at the time of communication to be in the common interest of an attorney’s two clients, “‘a communication by A to X as the common attorney of A and B, who afterwards become party opponents, is not privileged as between A and B since there was no secrecy between them at the time of communication.’”) (quoting 8 J. Wigmore, Evidence § 2312 at 605-06 (McNaughton rev. ed. 1961)) (citing Eureka Inv. Corp., N. V. v. Chicago Title Ins. Co., 743 F. 2d 932, 937 (D. C. Cir. 1984)).
3. Whether the lawyer must withdraw from representing all clients or only from clients other than the disclosing client depends (at least in part) on whether the lawyer's retainer agreement permits the lawyer to continue to represent only one or some of the parties. See, generally, D. C. Ethics Ops. 317 & 296. In the inquirer's case, the retainer agreement permitted the prior firm to continue to represent the client whose confidential information precipitated the conflict: “A judgment by us that you or one of the Other Individuals should seek separate counsel would be a judgment solely within our discretion, and the party who in our sole determination should seek separate counsel waives any objection to our continuing representation of the other party or parties in any matter including the one presenting the conflict, and for any purpose, including in connection with asserting position on behalf of our continuing client(s) that are or may be directly adverse to the individual seeking separate counsel.”
4. We are assuming in this opinion that the information that caused the prior firm to withdraw constituted, in fact, a client “confidence” or “secret.” If the information prompting the withdrawal were not a confidence or secret, there would clearly be nothing to balance against the prior firm's duty of loyalty to the non-disclosing clients and its duty to keep those clients “reasonably informed about the status of [the] matter.” D. C. Rule 1.4(a); see also D. C. Rule 1.16, Comment  (upon withdrawal, “a lawyer must take all reasonable steps to mitigate the consequences to the client”). We are also assuming that the confidence or secret is relevant or material to the representation of the other clients. If the information were not relevant or material to the prior firm's representation of the other clients, then there would be no duty under D.C. Rule 1.4 to disclose such information to the other clients.
5. Typically, our rules require a lawyer withdrawing under such circumstances simply to give “notice of withdrawal, without elaboration,” D.C. Rule 1.6, Comment . However, there is an exception permitting a lawyer, upon withdrawing, to “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.” Id. (emphasis added). The language of the comment makes clear that this requirement is not mandatory: “[A]fter withdrawal under either Rule 1. 16(a)(1) or Rule 1.16(b)(1) or (2), the lawyer may retract or disaffirm any opinion, document [etc. ] . . . .” D.C. Rule 1.6 Comment  (emphasis added). We made clear in Opinion No. 296, however, that such a “noisy” withdrawal disaffirming earlier written statements is permissible only “if there is a reasonable basis to expect that future harm may occur without such disavowal.” D. C. Ethics Op. 296. In the absence of such a reasonable basis, the most the lawyer may do is “to warn the affected co–client that a matter seriously and adversely affecting that person's interests has come to light, which the other co–client refuses to permit the lawyer to disclose.” Restatement §60, cmt. l.
6. The law firm learned of the husband’s paternity because the mother of the illegitimate child had coincidentally retained the same law firm to pursue a paternity action against the husband. As a result of a clerical error, the law firm did not become aware of the conflict until discovery had commenced in the paternity suit. Upon learning of the conflict, the law firm immediately withdrew from representing the mother, informing her that the law firm was representing both the husband and wife in an unrelated matter.
7. A. v. B. was decided in 1999. At that time, the ABA's Model Rule 1.6 permitted a lawyer to reveal confidential information to the extent that the lawyer reasonably believed necessary “to prevent the client from committing a criminal act that the lawyer believes is likely to result in imminent death or substantial bodily harm” or to the extent necessary to allow lawyers to defend themselves against charges of misconduct or malpractice lodged by clients or former clients. Model Rule 1.6 has since been amended twice. First, in 2002, the rule was changed to allow lawyers to reveal confidential information when they, themselves, are seeking legal advice about their compliance with the rules and when necessary to comply with other law or court order. Second, in 2003, Model Rule 1.6 was amended to recognize that confidential information may be revealed to prevent future fraud or harm from past fraud. Under the current version of Model Rule 1.6, lawyers may reveal confidential information to the extent they reasonably believe necessary “to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer’s services;” and “to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services.” ABA Model Rule 1.6(b)(2), (3) (2003). As a result of these amendments, Model Rule 1.6 now closely resembles New Jersey's Rule 1.6. D.C. Rule 1.6, however, has not been amended, so it does not recognize any of the fraud exceptions found in the New Jersey rule or in the current version of the Model Rule.
8. The court also relied on the Restatement, which “reposes the resolution of the lawyer’s competing duties within the lawyer’s discretion.” Id. at 929; Restatement §60, cmt. l (“after consideration of all relevant circumstances, [the lawyer] has the further discretion to inform the affected co-client of the specific communication if, in the lawyer’s reasonable judgment, the immediacy and magnitude of the risk to the affected co–client outweigh the interest of the communicating client in continued secrecy”).
9. The Committee determined that, given the size of the partnership, it was reasonable to view “the particular situation here presented as one where the partners are joint clients of the lawyer.” NY State Bar Ass’n, Comm. on Prof. Ethics Op. 555, at 2.
10. See also NY City Bar Ass’n, Formal Op. 1999-07 (1999) (holding that lawyer's duties of confidentiality and loyalty mandate that lawyer refuse to provide information to one former client to the detriment of the other former client).
11. See also Philadelphia Bar Ass’n, Op. No. 94-8 (1994) (concluding that, where circumstances support the conclusion that clients impliedly authorized lawyer to disclose confidential information to one another, the lawyer is not prohibited from disclosing such information). The New Jersey Supreme Court recognized a third basis for distinguishing its case from the prior two—namely, that the law firm learned of the husband's paternity from a third party, not from the husband himself, so “the husband did not communicate anything to the law firm with the expectation that the communication would be kept confidential.” A. v. B., 726 A. 2d at 931.
12. We are mindful of the concerns we expressed in Opinion No. 309 about the “considerable potential for mischief” when advance waivers of confidentiality are read too broadly. However, we do not treat the waiver of confidentiality at issue here as an “advance waiver” because a confidentiality waiver given as part of an agreement for representation by a single lawyer of multiple clients is more in the nature of a current, rather than an advance, waiver. See D.C. Ethics Op. 309, nn. 3 & 10.
13. Disclosure of client confidences is permissible not only when the client expressly consents but also “when the lawyer has reasonable grounds for believing that a client has impliedly authorized disclosure of a confidence or secret in order to carry out the representation.” D.C. Rule 1. 6(d)(4).
14. It is worth emphasizing that our opinion turns on the specific circumstances created by the prior firm's retainer agreement. If the clients had not all agreed that the prior firm was authorized to share relevant or material information, the “default” rule in our jurisdiction is that the prior firm would have been prohibited from sharing one client's confidences with the others. See D.C. Ethics Op. 296. But by contracting around this “default” rule, the clients (and the prior firm) agreed that relevant or material information would be shared. Under these specific circumstances—where the disclosing client has effectively consented to the disclosure—an attorney’s subsequent refusal to share such information with the other clients violates the D.C. Rules of Professional Conduct.
15. It appears that the lawyer described in the New York State Bar Association's Opinion No. 55 acted similarly when he represented a two-person partnership yet entered into a conversation expressly deemed to be “in confidence” with only one of the partners.