rule 1.13 in context
DESCRIPTION
TRANSCRIPT
ETHICS
Rule 1.13 in Context
Wendy Gerwick CoutureAssociate Professor
University of Idaho College of [email protected]
Rule 1.13 in Context
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Treatment of Information When Interacting
With A Constituent“One-Way Door”
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Information Learned From Constituent is Client’s Information• Attorney should share the information with the entity’s leadership, to the extent
necessary to keep the client “reasonably informed about the status of the matter.” R. 1.4(a)(3).
• The entity can decide whether to disclose that information to third parties. R. 1.6(a).
Treatment of Information When Interacting
With A Constituent“One-Way Door”
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Information Learned From Constituent is Client’s Information• Attorney should share the information with the entity’s leadership, to the extent
necessary to keep the client “reasonably informed about the status of the matter.” R. 1.4(a)(3).
• The entity can decide whether to disclose that information to third parties. R. 1.6(a).
Attorney Can’t Share Client’s Information with Constituent Unless Authorized• Authorization can be either express or implied “in order to carry out the
representation.” R. 1.6(a).
Treatment of Information When Interacting
With A Constituent“One-Way Door”
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14
Rule 4.3 Rule 4.3
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
Rule 4.3 Rule 4.3
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3 Rule 4.3
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
To ensure that communications between constituent & attorney are protected by the entity’s attorney-client privilege
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3 Rule 4.3
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3 Rule 4.3
Interview is being conducted to gather facts in order to provide legal advice to entity
Content of interview should be kept confidential
To ensure that communications between constituent & attorney are protected by the entity’s attorney-client privilege
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
To ensure that communications between constituent & attorney are protected by the attorney-client privilege
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3If know or should know that unrepresented person misunderstands the lawyer’s role
Rule 4.3
Interview is being conducted to gather facts in order to provide legal advice to entity
Content of interview should be kept confidential
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
To ensure that communications between constituent & attorney are protected by the attorney-client privilege
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3If know or should know that unrepresented person misunderstands the lawyer’s role
Rule 4.3
Interview is being conducted to gather facts in order to provide legal advice to entity
Content of interview should be kept confidential
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
To ensure that communications between constituent & attorney are protected by the attorney-client privilege
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3If know or should know that unrepresented person misunderstands the lawyer’s role
No legal advice, other than advice to secure counsel
Rule 4.3If know or reasonably should know that unrepresented person’s interests have a reasonable possibility of being in conflict with entity’s interest
Interview is being conducted to gather facts in order to provide legal advice to entity
Content of interview should be kept confidential
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
To ensure that communications between constituent & attorney are protected by the attorney-client privilege
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3If know or should know that unrepresented person misunderstands the lawyer’s role
No legal advice, other than advice to secure counsel
Rule 4.3If know or reasonably should know that unrepresented person’s interests have a reasonable possibility of being in conflict with entity’s interest
Interview is being conducted to gather facts in order to provide legal advice to entity
Content of interview should be kept confidential
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
To ensure that communications between constituent & attorney are protected by the attorney-client privilege
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3If know or should know that unrepresented person misunderstands the lawyer’s role
No legal advice, other than advice to secure counsel
Rule 4.3If know or reasonably should know that unrepresented person’s interests have a reasonable possibility of being in conflict with entity’s interest
To prevent creation of an implied attorney-client relationship
Interview is being conducted to gather facts in order to provide legal advice to entity
Content of interview should be kept confidential
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing ONLY the
Entity
Warnings to Constituent When Interacting With Constituent
Rule 1.13(f) Upjohn Warning Rest. (3d) Law Governing
Lawyers § 14If know or reasonably should know that the organization’s interests are adverse to those of constituent
To ensure that communications between constituent & attorney are protected by the attorney-client privilege
Identity of client (lawyer’s not disinterested; lawyer doesn’t represent constituent)
Constituent may wish to obtain own lawyer
Discussions between constituent & lawyer are protected by entity’s attorney-client privilege, subject to waiver at entity’s sole discretion
Rule 4.3If know or should know that unrepresented person misunderstands the lawyer’s role
No legal advice, other than advice to secure counsel
Rule 4.3If know or reasonably should know that unrepresented person’s interests have a reasonable possibility of being in conflict with entity’s interest
To prevent creation of an implied attorney-client relationship
Interview is being conducted to gather facts in order to provide legal advice to entity
Content of interview should be kept confidential
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing the Entity
AND a Constituent
CONFLICT Analysis
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing the Entity
AND a Constituent
CONFLICTS Analysis
R. 1.7 - Is there a current conflict?- Two are directly adverse- Significant risk that
representation of one will be materially limited by responsibilities to other
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing the Entity
AND a Constituent
CONFLICT Analysis
R. 1.7 - Is there a current conflict?- Two are directly adverse- Significant risk that
representation of one will be materially limited by responsibilities to other
If lawyer reasonably believes can nonetheless represent both competently & diligently, OK if each client gives informed consent, confirmed in writing.
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing the Entity
AND a Constituent
CONFLICT Analysis
R. 1.7 - Is there a current conflict?- Two are directly adverse- Significant risk that
representation of one will be materially limited by responsibilities to other
If lawyer reasonably believes can nonetheless represent both competently & diligently, OK if each client gives informed consent, confirmed in writing.
R. 1.7 - Is there a potential future conflict?
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing the Entity
AND a Constituent
CONFLICT Analysis
R. 1.7 - Is there a current conflict?- Two are directly adverse- Significant risk that
representation of one will be materially limited by responsibilities to other
If lawyer reasonably believes can nonetheless represent both competently & diligently, OK if each client gives informed consent, confirmed in writing.
R. 1.7 - Is there a potential future conflict?
Yes, there is.
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing the Entity
AND a Constituent
CONFLICT Analysis
R. 1.7 - Is there a current conflict?- Two are directly adverse- Significant risk that
representation of one will be materially limited by responsibilities to other
If lawyer reasonably believes can nonetheless represent both competently & diligently, OK if each client gives informed consent, confirmed in writing.
R. 1.7 - Is there a potential future conflict?
Yes, there is.
R. 1.7 cmt. 22 – Prospective waiver of conflict may be effective- Depends on the extent to which the client reasonably understands the material risks that the waiver entails
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing the Entity
AND a Constituent
CONFLICT Analysis
R. 1.7 - Is there a current conflict?- Two are directly adverse- Significant risk that
representation of one will be materially limited by responsibilities to other
If lawyer reasonably believes can nonetheless represent both competently & diligently, OK if each client gives informed consent, confirmed in writing.
R. 1.7 - Is there a potential future conflict?
Yes, there is.
R. 1.7 cmt. 22 – Prospective waiver of conflict may be effective- Depends on the extent to which the client reasonably understands the material risks that the waiver entails
R. 1.7 cmt. 29; R. 1.9 – If common representation fails, ordinarily must withdraw from representation of all, absent informed consent of both
Rule 1.13 (a), (f) & (g)
Entity As Client
Representing the Entity
AND a Constituent
CONFLICT Analysis
R. 1.7 - Is there a current conflict?- Two are directly adverse- Significant risk that
representation of one will be materially limited by responsibilities to other
If lawyer reasonably believes can nonetheless represent both competently & diligently, OK if each client gives informed consent, confirmed in writing.
R. 1.7 - Is there a potential future conflict?
Yes, there is.
R. 1.7 cmt. 22 – Prospective waiver of conflict may be effective- Depends on the extent to which the client reasonably understands the material risks that the waiver entails
R. 1.7 cmt. 29; R. 1.9 – If common representation fails, ordinarily must withdraw from representation of all, absent informed consent of both
BUT, constituent might be able to give this consent prospectively
Rule 1.13 (a), (f) & (g)Entity As Client
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Application in Context of Entity FormationSome authority that can represent ONLY yet-to-be-formed entity, if
• Clarify at initial meeting that representing entity only• Specify in engagement agreement that:
-represent entity only, not constituents- organizers agree to ratify on behalf of entity upon formation- information communicated by constituents will be communicated with entity’s other decision-makers
• Abide by Rule 4.3 re: dealing with unrepresented constituents
State Bar of Ariz. Ethics Op. 02-06; see also Jesse v. Danforth, 869 P.2d 1203 (Wis. 1992).
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Option to Report Out
Initial Reporting Duty
Duty to Continue Reporting Up the Chain
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Option to Report Out
Initial Reporting Duty
Duty to Continue Reporting Up the Chain
Rule 1.13
SEC Rule17 C.F.R. §
205.1 et seq.
Initial Reporting Duty
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
Initial Reporting Duty
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
Initial Reporting Duty
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
Initial Reporting Duty
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
IF an attorney, appearing and practicing before the SEC, becomes aware of evidence of: a material violation by the issuer or by any officer, director, employee, or
agent of the issuer
Initial Reporting Duty
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
IF an attorney, appearing and practicing before the SEC, becomes aware of evidence of: a material violation by the issuer or by any officer, director, employee, or
agent of the issuer
THEN shall report such evidence to: - the issuer’s chief legal
officer, OR- the issuer’s chief legal
officer and the CEO, OR
- the issuer’s “qualified legal compliance committee,” if formed
Initial Reporting Duty
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
IF an attorney, appearing and practicing before the SEC, becomes aware of evidence of: a material violation by the issuer or by any officer, director, employee, or
agent of the issuer
THEN shall report such evidence to: - the issuer’s chief legal
officer, OR- the issuer’s chief legal
officer and the CEO, OR
- the issuer’s “qualified legal compliance committee,” if formedSimilarities – up-the-chain; shall
Initial Reporting Duty
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
IF an attorney, appearing and practicing before the SEC, becomes aware of evidence of: a material violation by the issuer OR by any officer, director, employee, or
agent of the issuer
THEN shall report such evidence to: - the issuer’s chief legal
officer, OR- the issuer’s chief legal
officer and the CEO, OR
- the issuer’s “qualified legal compliance committee,” if formed
includes providing advice on securities laws re: any document to be submitted to SEC
Initial Reporting Duty
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
IF an attorney, appearing and practicing before the SEC, becomes aware of evidence of: a material violation by the issuer OR by any officer, director, employee, or
agent of the issuer
THEN shall report such evidence to: - the issuer’s chief legal
officer, OR- the issuer’s chief legal
officer and the CEO, OR
- the issuer’s “qualified legal compliance committee,” if formed
means a reporting issuer
Initial Reporting Duty
Initial Reporting DutyRule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
IF an attorney, appearing and practicing before the SEC, becomes aware of evidence of: a material violation by the issuer OR by any officer, director, employee, or
agent of the issuer
THEN shall report such evidence to: - the issuer’s chief legal
officer, OR- the issuer’s chief legal
officer and the CEO, OR
- the issuer’s “qualified legal compliance committee,” if formed
means credible evidence, based upon which it would be unreasonable, under the circumstances, for a prudent & competent attorney not to conclude that a violation has occurred, is ongoing, or is about to occur
denotes actual knowledge of the fact in question, which may be inferred from circumstances
Initial Reporting DutyRule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
IF an attorney, appearing and practicing before the SEC, becomes aware of evidence of: a material violation by the issuer OR by any officer, director, employee, or
agent of the issuer
THEN shall report such evidence to: - the issuer’s chief legal
officer, OR- the issuer’s chief legal
officer and the CEO, OR
- the issuer’s “qualified legal compliance committee,” if formed
means a material violation of a federal or state securities law, a material breach of fiduciary duty arising under federal or state law, or a similar material violation of any federal or state law
Rule 1.13
IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to
act in a matter related to representation that is a violation of legal obligation to the organization OR a
violation of law that reasonably might be imputed to the organization
that is likely to result in substantial injury to the organization
SEC Rule17 C.F.R. §
205.1 et seq.
THEN shall proceed as is reasonably necessary in the best interest of the organization
UNLESS lawyer reasonably believes that isn’t necessary in the best interest of the organization to do so, lawyer shall refer the matter to higher authority in the organization
IF an attorney, appearing and practicing before the SEC, becomes aware of evidence of: a material violation by the issuer OR by any officer, director, employee, or
agent of the issuer
THEN shall report such evidence to: - the issuer’s chief legal
officer, OR- the issuer’s chief legal
officer and the CEO, OR
- the issuer’s “qualified legal compliance committee,” if formed
allows lawyer more flexibility under some circumstances, such as a constituent’s innocent misunderstanding of the law, which the lawyer can correct by advising constituent
Initial Reporting Duty
Rule 1.13
SEC Rule17 C.F.R.
§ 205.1 et seq.
Initial Reporting Duty
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Option to Report Out
Initial Reporting Duty
Duty to Continue Reporting Up the Chain
Rule 1.13
SEC Rule17 C.F.R. §
205.1 et seq.
Duty to Continue Reporting Up the Chain
Rule 1.13
SEC Rule17 C.F.R. §
205.1 et seq.
Duty to Continue Reporting Up the Chain
Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization as determined by applicable law.
Rule 1.13
SEC Rule17 C.F.R. §
205.1 et seq.
Duty to Continue Reporting Up the Chain
Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization as determined by applicable law.
“ordinarily will be the board of directors or similar governing body”
Rule 1.13
SEC Rule17 C.F.R. §
205.1 et seq.
Duty to Continue Reporting Up the Chain
Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization as determined by applicable law.
“ordinarily will be the board of directors or similar governing body”
Unless an attorney who has made a report reasonably believes that the chief legal officer or the CEO of the issuer has provided an appropriate response within a reasonable time, the attorney shall report the evidence of a material violation to:
Rule 1.13
SEC Rule17 C.F.R. §
205.1 et seq.
Duty to Continue Reporting Up the Chain
Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization as determined by applicable law.
“ordinarily will be the board of directors or similar governing body”
Unless an attorney who has made a report reasonably believes that the chief legal officer or the CEO of the issuer has provided an appropriate response within a reasonable time, the attorney shall report the evidence of a material violation to:
• audit committee of board of directors; OR
• another committee consisting solely of independent directors; OR
• board of directors (if no committee consisting solely of independent directors)
Rule 1.13
SEC Rule17 C.F.R. §
205.1 et seq.
Duty to Continue Reporting Up the Chain
Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization as determined by applicable law.
“ordinarily will be the board of directors or similar governing body”
Unless an attorney who has made a report reasonably believes that the chief legal officer or the CEO of the issuer has provided an appropriate response within a reasonable time, the attorney shall report the evidence of a material violation to:
• audit committee of board of directors; OR
• another committee consisting solely of independent directors; OR
• board of directors (if no committee consisting solely of independent directors)means that the attorney reasonably believes:
• no material violation occurred, is ongoing, or is about to occur; OR• the issuer has adopted appropriate remedial measures; OR• the issuer has retained counsel to review the reported evidence
AND (i) substantially implemented counsel’s remedial recommendations, or (ii) been advised that counsel may assert colorable defense
Rule 1.13
SEC Rule17 C.F.R.
§ 205.1 et seq.
Duty to Continue Reporting Up the Chain
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Option to Report Out
Initial Reporting Duty
Duty to Continue Reporting Up the Chain
Option to Report Out
Rule 1.6(b)(2)
Rule 1.6(b)(3)
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
Option to Report Out
Rule 1.6(b)(2)
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization failed to address in timely & appropriate manner;
action or inaction is a clear violation of law
Rule 1.6(b)(3)
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
Option to Report Out
Rule 1.6(b)(2)
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
Rule 1.6(b)(3)
to prevent client from committing a crime or fraud
that is reasonably certain to result in substantial injury to the financial interests or property of another
in furtherance of which the client has used or is using the lawyer's services
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization failed to address in timely & appropriate manner;
action or inaction is a clear violation of law
Option to Report Out
Rule 1.6(b)(2)
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
Rule 1.6(b)(3)
to prevent client from committing a crime or fraud
that is reasonably certain to result in substantial injury to the financial interests or property of another
in furtherance of which the client has used or is using the lawyer's services
to prevent issuer from committing a material violation
that is likely to cause substantial injury to the financial interest or property of the issuer or investors
may reveal to SEC only
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
to rectify the consequences of a material violation by the issuer
that has caused, or may cause, substantial injury to the financial interest or property of the issuer or investors
in furtherance of which the attorney’s services were used
may reveal to SEC only
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization failed to address in timely & appropriate manner;
action or inaction is a clear violation of law
Option to Report Out
Rule 1.6(b)(2)
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
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization fails to address in timely & appropriate manner;
action or inaction is a clear violation of law
Rule 1.6(b)(3)
to prevent client from committing a crime or fraud
that is reasonably certain to result in substantial injury to the financial interests or property of another
in furtherance of which the client has used or is using the lawyer's services
to prevent issuer from committing a material violation
that is likely to cause substantial injury to the financial interest or property of the issuer or investors
may reveal to SEC only
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
to rectify the consequences of a material violation by the issuer
that has caused, or may cause, substantial injury to the financial interest or property of the issuer or investors
in furtherance of which the attorney’s services were used
may reveal to SEC only
Option to Report Out
Rule 1.6(b)(2)
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
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization fails to address in timely & appropriate manner;
action or inaction is a clear violation of law
Rule 1.6(b)(3)
to prevent client from committing a crime or fraud
that is reasonably certain to result in substantial injury to the financial interests or property of another
in furtherance of which the client has used or is using the lawyer's services
to prevent issuer from committing a material violation
that is likely to cause substantial injury to the financial interest or property of the issuer or investors
may reveal to SEC only
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
to rectify the consequences of a material violation by the issuer
that has caused, or may cause, substantial injury to the financial interest or property of the issuer or investors
in furtherance of which the attorney’s services were used
may reveal to SEC only
Option to Report Out
Rule 1.6(b)(2)
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
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization fails to address in timely & appropriate manner;
action or inaction is a clear violation of law
Rule 1.6(b)(3)
to prevent client from committing a crime or fraud
that is reasonably certain to result in substantial injury to the financial interests or property of another
in furtherance of which the client has used or is using the lawyer's services
to prevent issuer from committing a material violation
that is likely to cause substantial injury to the financial interest or property of the issuer or investors
may reveal to SEC only
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
to rectify the consequences of a material violation by the issuer
that has caused, or may cause, substantial injury to the financial interest or property of the issuer or investors
in furtherance of which the attorney’s services were used
may reveal to SEC only
Option to Report Out
Rule 1.6(b)(2)
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
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization fails to address in timely & appropriate manner;
action or inaction is a clear violation of law
Rule 1.6(b)(3)
to prevent client from committing a crime or fraud
that is reasonably certain to result in substantial injury to the financial interests or property of another
in furtherance of which the client has used or is using the lawyer's services
to prevent issuer from committing a material violation
that is likely to cause substantial injury to the financial interest or property of the issuer or investors
may reveal to SEC only
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
to rectify the consequences of a material violation by the issuer
that has caused, or may cause, substantial injury to the financial interest or property of the issuer or investors
in furtherance of which the attorney’s services were used
may reveal to SEC only
Option to Report Out
Rule 1.6(b)(2)
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
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization fails to address in timely & appropriate manner;
action or inaction is a clear violation of law
Rule 1.6(b)(3)
to prevent client from committing a crime or fraud
that is reasonably certain to result in substantial injury to the financial interests or property of another
in furtherance of which the client has used or is using the lawyer's services
to prevent issuer from committing a material violation
that is likely to cause substantial injury to the financial interest or property of the issuer or investors
may reveal to SEC only
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
to rectify the consequences of a material violation by the issuer
that has caused, or may cause, substantial injury to the financial interest or property of the issuer or investors
in furtherance of which the attorney’s services were used
may reveal to SEC only
Option to Report Out
Rule 1.6(b)(2)
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
to prevent substantial injury to the organization
after lawyer reported constituent’s action or intention to act;
highest authority that can act on behalf of organization fails to address in timely & appropriate manner;
action or inaction is a clear violation of law
Rule 1.6(b)(3)
to prevent client from committing a crime or fraud
that is reasonably certain to result in substantial injury to the financial interests or property of another
in furtherance of which the client has used or is using the lawyer's services
to prevent issuer from committing a material violation
that is likely to cause substantial injury to the financial interest or property of the issuer or investors
may reveal to SEC only
17 C.F.R. § 205.3(d)
(2)(i)
17 C.F.R. § 205.3(d)
(2)(iii)
Rule 1.13(c)
Lawyer may reveal information to extent lawyer reasonably believes necessary:
to rectify the consequences of a material violation by the issuer
that has caused, or may cause, substantial injury to the financial interest or property of the issuer or investors
in furtherance of which the attorney’s services were used
may reveal to SEC only
Rule
1.6(b)(2)
Option to Report Out
Rule 1.6(b)(3)
Rule
1.1
3(c)
17 C.F.R. §
205.3(d)(2)(i)
17 C.F.R. § 205.3(d)(2)(iii)
Rule 1.13 (a), (f) & (g)
Entity As Client
Rule 1.13 (b)-(e)
Reporting Up the Chain
Representing ONLY the
Entity
Representing the Entity
AND a Constituent
Option to Report Out
Initial Reporting Duty
Duty to Continue Reporting Up the Chain
Rule 1.13 in Context
Rule 1.13 in Context
Thank you!
Wendy Gerwick CoutureAssociate Professor
University of Idaho College of [email protected]