tears and fears: the illusory ethical issues raised by ... · tears and fears: the illusory ethical...
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American Bar Association Section of Labor and Employment Law
Ethics & Professional Responsibility Committee 2012 Midwinter Meeting
Fairmont Hotel
San Francisco, California March 22-24, 2012
Tears and Fears: The Illusory Ethical Issues Raised by Strengthening Enforcement of the LMRDA Persuader
Reporting Rules
Gwen Thayer Handelman Scholar in Residence
Nova Southeastern University Fort Lauderdale, Florida
Professor Handelman acknowledges with thanks the assistance of Karen A. Thompson, ETHICSearch Counsel, American Bar Association, with respect to the application of legal
ethics rules when a lawyer’s services do not constitute the practice of law.
It’s life’s illusions I recall I really don’t know life at all.
Joni Mitchell, Both Sides Now
Various associations of lawyers, including the American Bar Association (ABA),
sounded the alarm and orchestrated opposition1 when the Department of Labor (DOL) proposed
to strengthen enforcement2 of the requirement under the Labor-Management Reporting and
Disclosure Act of 1959 (LMRDA) that employers and consultants report activities designed to
persuade employees regarding whether to organize and bargain collectively.3 Some associations
of lawyers claimed neutrality on the labor-management issues involved but raised fears that the
proposed changes would infringe on the attorney-client privilege, be inconsistent with “ABA
Model Rule of Professional Conduct 1.6 dealing with ‘Confidentiality of Information’ and with
the many binding state rules of professional conduct that closely track the ABA Model Rule,”
and “seriously undermine both the confidential client-lawyer relationship and the employers’
fundamental right to counsel.”4 This paper addresses those fears and finds them unfounded.
The LMRDA requires employers and their labor relations consultants to disclose
consultant activities designed to persuade employees regarding whether to exercise their
collective bargaining rights,5 but excludes from the requirement to report persuader activities a
consultant’s “giving or agreeing to give advice.”6 The LMRDA requires consultants – including
lawyers – who engage in the “persuader business”7 to file both 30-day and annual reports with
1 For example, a plethora of local bar associations submitted virtually identical letters to the Department of Labor. See, e.g., Letter to Andrew R. Davis, Chief of the Division of Interpretations and Standards, DOL Office of Labor-Management Standards, from Kevin M. Miller, President, Peoria County Bar Association (Sept. 20, 2011) and Letter to Andrew R. Davis, Chief of the Division of Interpretations and Standards, DOL Office of Labor-Management Standards, from Barbara K. Roman, President, Cleveland Metropolitan Bar Association (Sept. 21, 2011). http://www.regulations.gov. 2 Labor-Management Reporting and Disclosure Act; Interpretation of the “Advice” Exemption 76 Fed. Reg. 36178 (June 21, 2011). 3 Labor-Management Reporting and Disclosure Act of 1959, Pub. L. No. 86-257, §203(a) & (b), codified at 29 U.S.C. §433(a) & (b). 4 Letter to Andrew R. Davis, Chief of the Division of Interpretations and Standards, DOL Office of Labor-Management Standards, from William T. Robinson, President, American Bar Association 2 (Sept. 21, 2011). 5 29 U.S.C. §433(a) & (b). 6 29 U.S.C. §433(c). 7 Price v. Wirtz, 412 F. 2d 647, 650 (5th Cir. 1969) (en banc) (Brown, Chief Judge, Tuttle, Wisdom, Gewin, Bell, Thornberry, Coleman, Goldberg, Ainsworth, Godbold, Dyer & Simpson, Circuit Judges) (Dyer, Circuit Judge, joined by Judges Gewin,Coleman, Ainsworth & Godbold, dissenting).
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the DOL.8 However, the “advice” exemption assures that no person is required to file either
report if performing only “non-persuader labor relations activities.”9 Courts generally have
agreed that the term “advice” as used in the statute “‘plainly refers to advice apart from the
statutory persuasion,’”10 the purpose of the “advice” exemption being “’to guard against
misconstruction’” of the consultant reporting provision and remove from its coverage “’those
grey areas where the giving of advice and participation in legal proceedings and collective
bargaining could possibly be characterized as exerting indirect persuasion.’”11 The LMRDA
requires lawyers and other consultants who do engage in the persuader business to report
annually, not only on persuader activities yhat are the subject of the 30-day reports, but also on
receipts from employers on account of labor relations advice or services of any kind.12 However,
specifically exempted from the reporting requirements is any information lawfully
communicated to a lawyer in good standing with the bar of any State by any of the lawyer’s
clients “in the course of a legitimate attorney-client relationship.”13
The LMRDA further provides that the DOL has broad “authority to issue, amend, and
rescind rules and regulations prescribing the form and publication of reports” required to be filed
under Title 29 of the U.S. Code and “such other reasonable rules and regulations” as the DOL
may find necessary “to prevent the circumvention or evasion of such reporting requirements.”14
The DOL has long interpreted the “advice” exemption to apply to a consultant who has “no
direct contact with employees” and who restricts services to providing to the employer or
supervisory personnel “advice or materials for use in persuading employees which the employer
8 29 U.S.C. §433(b). 9 Price v. Wirtz, 412 F. 2d at, 649. 10 Price v. Wirtz, 412 F. 2d at 650 (quoting Douglas v. Wirtz, 353 F.2d 30, 32 (4th Cir. 1965), cert. denied, 383 U.S. 909 (1966) (finding Section 203 (c) exempts “independent advice” that “in itself and alone does not create an obligation to report”). See Humphreys, Hutcheson and Moseley v. Donovan, 755 F.2d 1211, 1215-16 (6th Cir. 1985) (finding the purpose of the advice exemption is “to clarify what is implicit in section 203(b) – that attorneys engaged in the usual practice of law are not obligated to report under section 203(b),” citing Price and Douglas). But see International Union, UAW v. Dole, 869 F.2d 616, 618 (D.C. Cir. 1989) (finding not “arbitrary” the DOL’s interpretation of the advice exemption removing from the reporting requirements “certain activity that otherwise would have been reportable”). 11 Price v. Wirtz, 412 F. 2d at 650 (quoting Wirtz v. Fowler, 372 F.2d 315, 330 (5th Cir. 1966), overruled in part on other grounds, Price v. Wirtz, 412 F.2d 647 (5th Cir. 1969) (en banc)). 12 29 U.S.C. §433(b). 13 29 U.S.C. §434. 14 29 U.S.C. §438. See International Union, UAW v. Brock, 783 F.2d 237 (D.C. Cir. 1986) (holding that the DOL’s interpretation of “advice” is to be upheld unless “arbitrary, capricious or contrary to law”).
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has the right to accept or reject.”15 This interpretation has allowed for nondisclosure of certain
persuader activities that otherwise would have been required to be reported.16 On June 21, 2011,
the DOL published a notice of proposed rulemaking to revise the reporting forms required under
LMRDA Section 203 and the current interpretation of the term “advice” in an effort to correct
what the DOL perceives to be a misinterpretation that has resulted in significant underreporting
of persuader activity.17 The DOL’s proposal would contract the interpretation of “advice” to
exclude all persuader activity.
The DOL has made a persuasive case in the notice of proposed rulemaking that the
current interpretation of “advice” deviates both from congressional intent and the interpretation
of the advice exemption that the DOL adopted contemporaneously with the enactment of the
LMRDA18 and that this misinterpretation has undermined the purpose of the LMRDA. However,
this paper addresses whether the proposed revisions are inconsistent with a lawyer’s ethical
obligations, not the political issues raised by the proposed revisions. This paper explains that the
proposed constriction of the “advice exemption” to exclude all persuader activity and
corresponding extension of the LMRDA’s reporting requirements to all persuader activity would
not violate the attorney-client privilege, conflict with model or binding confidentiality rules, nor
undermine the traditional confidential relationship between attorney and client. On the contrary,
the proposed changes might well have the effect of focusing the attention of lawyers in the
persuader business on their ethical responsibilities and thus strengthen their attorney-client
relationships. It is the engagement of lawyers in the persuader business and the attending
15 76 Fed. Reg. at 36181. 16 International Union, UAW v. Dole, 869 F.2d 616, 618 (D.C. Cir. 1989) (finding that the current DOL interpretation of the advice exemption removes from the persuader reporting requirement “certain activity that otherwise would have been reportable”). 17 76 Fed. Reg. 36178. 18 “At first the Department of Labor took the position that the reporting requirements covered an attorney’s undertaking to draft speeches, letters, and other written material which are to be delivered or disseminated by the employer to employees for the purpose of persuading them with regard to the exercise of their rights.” Wirtz v. Fowler, 372 F.2d 315, 329 n.27 (5th Cir. 1966), overruled in part on other grounds, Price v. Wirtz, 412 F.2d 647 (5th Cir. 1969) (en banc) (citing Beaird, Reporting Requirements for Employers and Labor Relations Consultants in the Labor-Management Reporting and Disclosure Act of 1959, 53 GEO. L.J. 267, 294 (1965)).
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“potential for ethical problems”19 that threatens to undermine the traditional confidential
attorney-client relationship.20
Absent a client’s informed consent, a lawyer has an ethical obligation to assert on the
client’s behalf all nonfrivolous challenges to a governmental entity’s claim to authority to
compel disclosure of information, on the grounds either that disclosure is not authorized by law
or the information is protected by the attorney-client privilege “or other applicable law.”21 This
is the duty of an attorney acting as advocate for a client. However, there is no ethical imperative
for an association of lawyers who may represent not only employers, but also employees and
unions, to mount such a challenge. Rather, commentary under the Model Rules themselves notes
that whether a law under which a governmental entity claims authority to compel disclosure
supersedes an attorney’s obligation of confidentiality “is a question of law beyond the scope of
these rules.”22 In sum, the substantive correctness of a governmental entity’s claim to authority
to compel disclosure, such as that asserted by the DOL in the notice of proposed rulemaking is
not an ethical matter at all.
I. The DOL’s Proposed Reporting Requirements Applicable to Attorney
Consultants
LMRDA Section 203(b) imposes reporting requirements on:
[e]very person who pursuant to any agreement or arrangement with an employer
undertakes activities where an object is, directly or indirectly –
19
MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7 cmt. [1]. 20 Left for another day is exploration of the ethical propriety of a lawyer-persuader scripting anti-union conversations between a client employer or employer representative and employees. Directing a lawyer’s persuasive skills to a layperson is recognized in analogous other contexts as ethically troubling. See, e.g., MODEL RULES OF
PROFESSIONAL CONDUCT R. 4.2 & R. 4.3. The basic purpose of Rules 4.2 and 4.3 is to prevent a person without the benefit of counsel “from making uninformed or otherwise irrational decisions as a result of undue pressure from opposing counsel.” ABA Comm. On Ethics & Prof. Responsibility, Formal Op. 461 (2011). A great deal of controversy has surrounded ABA Opinion 11-461, which concludes that neither Rule 4.2 nor Rule 8.4(a) prohibits a lawyer from giving “substantial assistance to a client regarding substantive communication with an adversary.” Id. “The concerns expressed about Opinion 11-451 focus on the issue of whether it is overreaching for a lawyer to ‘script’ a client’s conversation with an opposing party or to draft a document that the client would ask the opposing party to sign.” James Podgers, On Second Thought, Changes mulled regarding ABA opinion on client communications issue, 98 A.B.A.J. 21, 22 & 70 (Jan. 2012) (reporting, inter alia, that the Office of Lawyers Professional Responsibility of the Minnesota Supreme Court has concluded that a lawyer may not ethically script a communication between a client and an adverse party nor draft an agreement to be presented to an adverse party). 21 MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6 cmt. [13]. 22 MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6 cmt. [12].
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(1) to persuade employees to exercise or not to exercise, or persuade employees as to the
manner of exercising, the right to organize and bargain collectively through
representatives of their own choosing; or
(2) to supply an employer with information concerning the activities of employees or a
labor organization in connection with a labor dispute involving such employer, except
information for use solely in conjunction with an administrative or arbitral or a criminal
or civil judicial proceeding.23
It bears emphasizing that the LMRDA imposes reporting requirements where persuasion is “an”
object, not necessarily the sole or primary object, of an agreement or arrangement, and that
object is accomplished either “directly or indirectly,” and on information-supplying activities
unless the information is for use “solely” in legal proceedings. The LMRDA requires that
consultants engaging in such broadly-defined persuader or information-supplying activities
under an agreement or arrangement with an employer must file both 30-day and annual reports
with the DOL.24 The DOL may pursue civil enforcement of the reporting requirements or, in the
case of willful violations, criminal prosecution.25
A consultant engaging in persuader or information-supplying activities under an
agreement or arrangement with an employer must file the 30-day report on Form LM-20 for each
such agreement or arrangement within 30 days after entering into it.26 The notice of proposed
rulemaking announces the DOL’s proposal to revise the 30-day form to require more detailed
reporting about reportable labor relations consulting agreements and require electronic filing.
The term “agreement or arrangement” is to “be construed broadly and does not need to be in
writing.”27 The notice provides an overview of Proposed Form LM-20, Agreement and
Activities Report, and the Instructions; and the proposed two-page form is included as appendix
A. The principal proposed changes to Form LM-20 are the requirement of electronic filing, with
provision for temporary or continuing hardship exemptions from electronic filing, and the
addition of a detailed checklist to identify the specific activities in which consultants have
23 29 U.S.C. §433(b). 24 29 U.S.C. §433(b). 25 29 U.S.C. §439. 26 See 29 U.S.C. §433(b); 76 Fed. Reg. at 36193 (noting first publication of the form at 28 Fed. Reg. 14381 (1963)). 27 76 Fed. Reg. at 36195.
6
engaged or intend to engage under the agreement.28 The notice of proposed rulemaking
specifically explains that lawyers who engage in persuader activity under an agreement or
arrangement with an employer must file a reporting form that may require information about “the
fact of the agreement with an employer involving persuader activity, the client’s identity, the fees
involved, and the scope and nature of the employment.”29
The more comprehensive annual report must be filed on Form LM-21 for each fiscal year
during which payments were made under covered agreements or arrangements and must include
“receipts of any kind from employers on account of labor relations advice or services,
designating the sources thereof” as well as “disbursements of any kind in connection with such
services and the purposes thereof.”30 The annual report is the more controversial of the two as
applied to lawyers, but numerous courts have upheld the annual reporting requirement.31 The
Fifth Circuit has explained:
[D]isclosure for all labor relations clients is the price the Attorney-persuader must pay if
he wishes to engage in [persuader] activities. The legislative judgment that one who
engages in the persuader business must be subjected to the pressure of revealing publicity
is amply justified by the difficulty in distinguishing between those activities that are
persuader activities and those that are not, and by the opportunity for misleading
concealment of the true nature of such Attorney’s work in situations involving intricate
28 76 Fed. Reg. at 36193. The first page of the form asks for contact and identifying information for the consultant, including Employer Identification Number (EIN) and indication if the report is filed under a hardship exemption or is an amended form. The first page also asks for general information about a consultant’s reportable agreement with the employer, including the employer’s EIN, the date of the agreement, and the employer representative(s) through whom the agreement was made. Any indirect party or “sub-consultant” engaged by a primary consultant to assist in implementing a reportable agreement would be required to identify the consultant with whom that party entered into the reportable agreement or arrangement. The second page requests more detail about the reportable agreement, including a checklist of specific persuader and information-supplying activities. 76 Fed. Reg. at 36195. 29 76 Fed. Reg. at 36192. 30 The LMRDA provides that a consultant engaging in persuader or information-supplying activities “pursuant to any agreement or arrangement with an employer” must file a 30-day report “containing the name under which such person is engaged in doing business and the address of its principal office, and a detailed statement of the terms and conditions of such agreement or arrangement” and “file annually, with respect to each fiscal year during which payments were made as a result of such an agreement or arrangement, a report” with the DOL, “containing a statement (A) of its receipts of any kind from employers on account of labor relations advice or services, designating the sources thereof, and (B) of its disbursements of any kind, in connection with such services and the purposes thereof.” 29 U.S.C. §433(b). See Price v. Wirtz, 1965 U.S. Dist LEXIS 6739 (N.D. Tex. Feb. 8, 1965), aff’d, Price v. Wirtz, 412 F. 2d 647(5th Cir. 1969) (en banc). 31 See, e.g., Humphreys, Hutcheson and Moseley, 755 F, 2d 1211 (6th Cir. 1985); Master Printers Ass’n v. Donovan, 699 F.2d 370 (7th Cir. 1983), cert. denied, 464 U.S. 1040 (1984); Price v. Wirtz, 412 F. 2d 647(5th Cir. 1969) (en banc); Douglas v. Wirtz,353 F.2d 30 (4th Cir. 1965), cert. denied, 383 U.S. 909 (1966).
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corporate conglomerate associates or, equally pressing, industry-wide labor
controversies.32
Since enactment of the LMRDA, lawyers choosing to engage in the persuader business
have been subject to the annual reporting requirements, including the requirement to report the
identity of and receipts from clients for whom only legal services were provided. The DOL’s
proposal to exclude all persuader activities from coverage under the “advice” exemption only
means that now any persuader would trigger the annual reporting requirement. Modification of
the annual report form is not proposed by the DOL.
II. The DOL’s Proposed Distinction Between “Advice” and “Persuader Activity”
Under the title “Advisory or representative services exempt from filing requirements,”
LMRDA Section 203(c) provides:
Nothing in this section shall be construed to require any employer or other person to file a
report covering the services of such person by reason of his giving or agreeing to give
advice to such employer or representing or agreeing to represent such employer before
any court, administrative agency, or tribunal of arbitration or engaging or agreeing to
engage in collective bargaining on behalf of such employer with respect to wages, hours,
or other terms or conditions of employment or negotiation of an agreement or any
question arising thereunder.33
The DOL’s notice of proposed rulemaking summarizes the proposed interpretation of the
“advice” exemption as follows:
When a consultant or lawyer, or [a consultant’s or lawyer’s] agent, communicates
directly with employees in an effort to persuade them, the “advice” exemption does not
apply. The duty to report can be triggered even without direct contact between a lawyer
or other consultant and employees, if persuading employees is the object, direct or
32 Price v. Wirtz, 412 F. 2d at 650. 33 29 U.S.C. §433(c).
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indirect, of the person’s activity pursuant to an agreement or an arrangement with the
employer.34
Taking a “plain meaning” approach,35 the DOL would define “advice” to mean “an oral
or written recommendation regarding a decision or a course of conduct.”36 Preparing and editing
written materials comprises much of a lawyer’s work. The DOL explains that a lawyer editing
materials so that they will comply with the law would be providing legal advice. The DOL
recognizes that a lawyer “who exclusively counsels employer representatives on what they may
lawfully say to employees, ensures a client’s compliance with the law, or provides guidance on
NLRB practice or precedent, is providing ‘advice.’”37 However, if the lawyer edited materials to
make a more persuasive case for employees to proceed as the employer wishes, that is a
reportable persuader activity.38
The DOL proposes to define reportable “persuader activities” as “all actions, conduct, or
communications that have a direct or indirect object to persuade employees and does not simply
address the preparation of persuader materials,”39 although “an essential place to begin to draw
the distinction between advice and persuader activity is with regard to the preparation of or
revision to persuasive materials by labor relations consultants and other persons.”40 “Persuader
activity” is defined as “a consultant’s providing material or communications to, or engaging in
other actions, conduct, or communications on behalf of an employer that, in whole or in part,
have the object directly or indirectly to persuade employees concerning their rights to organize or
bargain collectively.”41 Examples of common services that lawyers provide include preparation
of manuals for supervisors as to how to discourage union activity, training supervisors in
conducting one-on-one or group meetings with workers to dissuade them from voting for a
union, preparing anti-union literature to be distributed to workers by management, and drafting
34 76 Fed. Reg. at 36191. 35 76 Fed. Reg. at 36182. See 76 Fed. Reg. 36183 (relying on “ordinary understanding,” “common construction,” and dictionary definitions). 36 76 Fed. Reg. at 36190-91, 36192. 37 76 Fed. Reg. at 36191. 38 “[A] consultant’s revision of the employer’s material or communications to enhance the persuasive message also triggers the duty to report, unless the revisions exclusively involve advice and counsel regarding the exercise of the employer’s legal rights.” 76 Fed. Reg. at 36191. 39 76 Fed. Reg. at 36182. 40 76 Fed. Reg. at 36191. 41 76 Fed. Reg. at 36192.
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emails and letters to be sent by management to workers, at home or at work.42 Under the
proposed interpretation, when a labor relations consultant or lawyer “prepares or provides a
persuasive script, letter, videotape, or other material or communications, including electronic and
digital media, for use by an employer in communicating with employees, the ‘advice’ exemption
does not apply and the duty to report is triggered.”43
The proposed Form LM-20 directs labor relations consultants to select from a list “each
activity performed or to be performed, if the object thereof was, directly or indirectly, to
persuade employees concerning their rights to organize or bargain collectively through
representatives of their own choosing, or their right to engage in any protected concerted activity
in the workplace.”44 These categories of persuader activities follow:
Drafting, revising, or providing written materials for presentation, dissemination,
or distribution to employees
Drafting, revising, or providing a speech for presentation to employees
Drafting, revising, or providing audiovisual or multi-media presentations for
presentation, dissemination, or distribution to employees
Planning or conducting individual or group employee meetings
Developing or administering employee attitude surveys concerning union
awareness, sympathy, or proneness
Training supervisors or employer representatives to conduct individual or group
employee meetings
Coordinating or directing the activities of supervisors or employer representatives
Establishing or facilitating employee committees
Developing personnel policies or practices
Deciding which employees to target for persuader activity or disciplinary action
Conducting a seminar for supervisors or employer representatives
42 See, e.g., Comments of the American Federation of Teachers to U.S. Department of Labor Office of Labor-Management Standards from David Strom, General Counsel, and Samuel J. Lieberman, Assistant Director, American Federation of Teachers, AFL-CIO. 43 76 Fed. Reg. at 36191. 44 76 Fed. Reg. at 36208.
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Other45
The proposed Form LM-20 also directs labor relations consultants to identify each
activity whereby a consultant supplies an employer with information concerning the activities of
employees or a labor organization in connection with a labor dispute involving such employer
and the source of such information:
Research or investigation concerning employees or labor organization
Supervisors or employer representatives
Employees, employee representatives, or union meetings
Surveillance of employees or union representatives (video, audio, Internet, or in
person).46
If an employer retains a lawyer, rather than a non-lawyer consultant, to assist in persuader
activity, the employer almost surely also will ask for advice regarding the legality of various
courses of conduct and or communications directed to employees. The DOL recognizes that
lawyers may provide employers responding to union activity with a range of services. “In some
cases the attorney’s role is largely one of providing legal assistance, such as advising supervisors
on what constitutes an unfair labor practice under the NLRA, with overall direction of the firm’s
[union avoidance] campaign entrusted to either top management or an outside consultant.”47 In
other situations, a lawyer “‘not only provides legal counsel but also plays an important
(sometimes dominant) role in developing and implementing the company’s anti-union strategy
and campaign tactics.’”48 Sometimes, “an employer essentially serves as a conduit for persuasive
communications prepared by an outside consultant or lawyer.”49 The DOL proposes to apply the
advice exemption only to activities that “can fairly be considered as ‘advice,’ as opposed to
engaging, in whole or in part, in any activities that go beyond mere advice and constitute direct
or indirect persuasion of employees.”50 The DOL’s notice of proposed rulemaking concludes
that “[i]t is fair to infer that reporting is required when a person engages in persuader activities,
45 76 Fed. Reg. at 36208. 46 76 Fed. Reg. at 36208. 47 76 Fed. Reg. at 36186. 48 76 Fed. Reg. at 36186 (quoting Bruce E. Kaufman & Paula E. Stephan, The Role of Management Attorneys in Union Organizing Campaigns, 16 J. LABOR RESEARCH 439, 440 (1995)). 49 76 Fed. Reg. at 36183. 50 76 Fed. Reg. at 36190.
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whether or not advice is also given.”51 However, the DOL clarifies that “[t]o the extent that an
attorney’s report about his or her agreement or arrangement with an employer may disclose
privileged communications, for instance where an attorney provides an employer with both legal
advice and engages in persuader activities, the privileged matters are protected from
disclosure.”52
III. Attorney-Client Privilege
The proposed revisions of the interpretation of the “advice” exemption and the persuader
activity reporting forms do not infringe upon the attorney-client privilege, not only because the
notice of proposed rulemaking specifically acknowledges the applicability of the attorney-client
privilege and proposes no changes to the DOL’s current interpretation of Section 204, but also
because the information required to be disclosed is outside the scope of the privilege.
LMRDA Section 204 provides:
Nothing contained in this chapter shall be construed to require an attorney who is a
member in good standing of the bar of any State, to include in any report required to be
filed pursuant to the provisions of this chapter any information which was lawfully
communicated to such attorney by any of his clients in the course of a legitimate
attorney-client relationship.53
Although this articulation of the attorney-client privilege is “inartful,”54 the DOL’s notice of
proposed rulemaking acknowledges that “Congress intended to afford to attorneys the same
protection as that provided under the common-law attorney-client privilege.55 The common-law
attorney-client privilege prevents compelled disclosure of confidential attorney-client
51 76 Fed. Reg. at 36184. 52 76 Fed. Reg. at 36192. 53 29 U.S.C. §434. 54 Letter to Andrew R. Davis, Chief of the Division of Interpretation and Standards, Office of Labor-Management Standards, U.S. Department of Labor from Mark D. Hinderks, Chair, Attorney-Client Relationships Committee, American College of Trial Lawyers 2 (Sept. 19. 2011). 55 76 Fed. Reg. at 36192. See also Humphreys, Hutcheson and Mosely v. Donovan, 775 F. 2d 1211, 1216 (6th Cir. 1985) (recognizing that Congress intended LMRDA Section 204 to provide the same degree of protection as that provided by the common-law attorney-client privilege); Wirtz v. Fowler, 372 F. 2d 315, 332 (5th Cir, 1966), overruled in part on other grounds, Price v. Wirtz, 412 F.2d 647 (5th Cir. 1969) (en banc) (concluding that LMRDA Section 204 is “roughly parallel” to the common-law attorney-client privilege).
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communications56 and applies to confidential communications from a client to the lawyer,
whether oral or written,57 as well as advice, opinions, and similar communications from the
lawyer to the client.58 The notice of proposed rulemaking thus acknowledges an interpretation of
the exemption of attorney-client communications broader than the literal language of the statute,
encompassing communications from the attorney to the client as well as from the client to the
attorney.
Neither Form LM-20 nor LM-21 requires disclosure of information protected by the
attorney-client privilege. First, the notice of proposed rulemaking notes, citing the Restatement of
the Law Governing Lawyers,59 that, “In general, the fact of legal consultation, clients’ identities,
attorney’s fees and the scope and nature of the employment are not deemed privileged.”60 The
legislative history of the LMRDA supports this conclusion. The Conference Committee rejected
the House version of LMRDA Section 204, which would have exempted from disclosure any
confidential information communicated “in the course of a legitimate attorney-client
relationship, including but not limited to the existence of the relationship of attorney and client,
the financial details thereof, or any information obtained, advice given, or activities carried on by
the attorney within the scope of the legitimate practice of law.”61
Further, the Restatement explains that, for the attorney-client privilege to apply, there
must be: “(1) a communication (2) made between privileged persons (3) in confidence (4) for the
56 See FED. R. EVID. 501 (recognizing common law privileges). 57 See CHRISTOPHER B. MUELLER & LAIRD C. KIRKPATRICK, EVIDENCE PRACTICE UNDER THE RULES §5.8 (2d ed. 1999). 58 See, e.g., Arcuri v. Trump Taj Mahal Assocs., 154 F.R.D. 97, 103–04 (D.N.J. 1994) (finding attorney-client privilege applicable to advice given by union counsel to court-appointed union monitor); American Standard, Inc. v. Pfizer Inc., 828 F.2d 734, 745 (Fed. Cir. 1987) (holding that the privilege should be applied to “lawyer-to-client communications that reveal, directly or indirectly, the substance of a confidential communication by the client”). 59 The American Law Institute (ALI) published the Restatement of the Law Governing Lawyers in August 2000. The Restatement seeks to codify decisional law and statutes that apply in proceedings, evidentiary hearings, and criminal prosecutions relating to attorney discipline, malpractice, and disqualification. Including Reporter’s Notes, comments, and case citations, the Restatement provides a convenient summary of many of the principles that apply in understanding the attorney-client privilege. RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS §69 (2000) [hereinafter RESTATEMENT] 60 76 Fed. Reg. 36192 (citing RESTATEMENT §69). See Wirtz v. Fowler, 412 F. 2d at 332 (finding that the common-law attorney-client privilege would not prevent disclosure of a client’s identity or the amount of fees paid because they ordinarily do not constitute confidential information). 61 H.R. Rep. No. 1147, 86th Cong., 2d Sess. 33 (1959), U.S. CODE CONG. & ADMIN. NEWS 1959, at 2505 (substituting enacted Section 204 for H.R. 8342, 86th Cong., 2d Sess. §204 (1959)). See Humphreys, Hutcheson and Moseley, 755 F. 2d 1211, 1218-19 (6th Cir. 1985).
13
purpose of obtaining or providing legal assistance for the client.”62 Failure to satisfy any of these
criteria will defeat a motion for protection. Thus, the privilege is not applicable to
communications for the purpose of obtaining or providing business – as opposed to legal –
advice between an attorney and a client.63 The notice of proposed rulemaking does not
specifically refer to the inapplicability of the privilege to business advice. However, both the
notice and the Form LM-20 repeatedly draw the line between “advice” that is exempted from the
persuader reporting requirements and “persuader” activity that must be disclosed at the divide
between services provided for the purpose of obtaining or providing legal advice, such as
informing employers or their representatives of their legal rights and duties, and services
provided for the business purpose of persuading employees concerning their rights to organize or
bargain collectively. In sum, as applied to lawyers, the DOL’s distinction between “advice” and
“persuader” activity is the distinction between law and business, and thus the proposed revisions
do not implicate the attorney-client privilege.
One comment submitted to the DOL in response to the notice of proposed rulemaking
criticized the DOL for reproducing the statutory language in the Instructions to the proposed new
Form LM-20 without explanatory “language instructing attorneys that they should not include
information that is protected by the attorney-client privilege in the applicable state or federal
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RESTATEMENT §68. 63 See, e.g., Asuncion v. Met. Life, 493 F. Supp. 2d 716, 721 (S.D.N.Y. 2007) (magistrate’s order) (finding that the attorney-client privilege did not apply where a senior case manager for an insurer employee benefit plan administrator emailed a draft denial letter to the insurer’s counsel for review and the lawyer edited the letter and provided comments not of a “legal” character); Neuder v. Battelle Pac. Nw. Nat’l Lab., 194 F.R.D. 289, 292–95 (D.D.C. 2000) (holding that the attorney-client privilege did not apply to business communications made at a committee meeting attended by an in-house attorney regarding a decision to fire an employee). In-house counsel was a nonvoting member of the personnel committee that decided to terminate the employee. The court noted that, when legal and business advice are intertwined, the party claiming the privilege must show that the legal advice predominated. Because the court found that the lawyer was serving as a member of the committee in a nonlegal capacity, the employer had to make a “clear showing” that the lawyer gave advice in a legal capacity for that advice to be privileged. See also Byrnes v. Empire Blue Cross Blue Shield, 1999 U.S. Dist. LEXIS 17281, at **5-15 (S.D.N.Y. Nov. 2, 1999) (magistrate’s order) (holding the privilege applicable to some, but not all, of a series of memoranda exchanged between an actuarial firm, the company’s attorney, and the company concerning benefit changes with respect to which both the actuary and the attorney were rendering advice). The magistrate ruled that the attorney-client privilege applied only to documents that were prepared to assist the lawyer in rendering legal advice and not to those meant to aid the business decisions of the company’s officers. The magistrate specifically rejected the claim that all communications from the actuary to the attorney were necessarily related to the attorney’s performance of her legal advisory function, pointing out that the lawyer’s role was not solely legal, because she was also providing the client with “business-related factual data.”
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jurisdiction.” 64 The author feared that attorneys whose reporting would be required under the
proposed new interpretation of the “advice” exemption might be misled.65 It is startling that the
commentator contemplates that a lawyer providing advice on labor law would neither be familiar
with the longstanding interpretation of Section 204 nor possess the training in legal reasoning to
know to research the interpretation.66 This is especially concerning because a lawyer should be
sufficiently familiar with the circumstances when the privilege does and does not apply to fulfill
the ethical obligations to alert a client when the attorney-client privilege will not be applicable67
and to assert the attorney-client privilege whenever a good-faith argument can be made for its
application.68 The DOL can hardly be faulted for making the statutory privilege provision more
accessible nor be expected to provide scholarly commentary on the reporting forms. Especially
when the forms ask for no information within the scope of the attorney-client privilege, it seems
an excess of caution to have drawn attention to the privilege at all.
Although the outcry from the organized bar may suggest otherwise, whether or not
communications between a lawyer and a client with respect to persuader services are protected
by the attorney-client privilege does not turn on whether the DOL requires reporting. A lawyer
who both practices law and engages in the persuader activities listed on proposed Form LM-20,
whether or not they have been reportable under the DOL’s current interpretation of the “advice”
exemption, has two businesses: a law practice and a “persuader business.” Information
communicated in the course of the “persuader business” would not be protected by the attorney-
client privilege. By shining a light on the issue, the DOL’s notice of proposed rulemaking may
well serve that portion of the legal community that provides labor relations services by
64 Letter to Andrew R. Davis, Chief of the Division of Interpretation and Standards, Office of Labor-Management Standards, U.S. Department of Labor from Mark D. Hinderks, Chair, Attorney-Client Relationships Committee, American College of Trial Lawyers 2 (Sept. 19. 2011). 65 Letter to Andrew R. Davis, Chief of the Division of Interpretation and Standards, Office of Labor-Management Standards, U.S. Department of Labor from Mark D. Hinderks, Chair, Attorney-Client Relationships Committee, American College of Trial Lawyers 2 (Sept. 19. 2011). 66 Such a lawyer would seem to be in violation of Model Rule 1.1, which requires a lawyer to employ “the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. MODEL RULES OF
PROFESSIONAL CONDUCT R. 1.1. 67 For example, when a lawyer provides “‘law-related,’ as opposed to ‘legal’ services,” the recipients are “business customers,” and Rule 5.7 “places the burden on the lawyer to make clear to the business customer that the protections of a lawyer-client relationship do not apply.” ANNOTATED MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7 Annotation: General Provisions (7th ed. 2011). 68 MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6 cmt. [13].
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prompting closer attention to the coverage of the attorney-client privilege and thus promoting
closer adherence to ethical duties.
IV. The Attorney’s Duty of Confidentiality
Although information communicated in the course of a “persuader business” generally
would not be protected by the attorney-client privilege, a lawyer’s obligation of confidentiality
may well attach. Nevertheless, the proposed revisions of the interpretation of the “advice”
exemption and the persuader activity reporting forms do not require an attorney to violate the
ethical obligation of confidentiality. Model Rule 1.6 and the confidentiality rules adopted under
state laws recognize that complying with a law requiring disclosure does not violate an attorney’s
obligation of confidentiality.69 The proposed revisions, then, are entirely consistent with the
confidentiality rules, which incorporate a number of exceptions to attorney-client confidentiality
for the public and individual good. The Restatement of the Law Governing Lawyers also
recognizes these exceptions and expressly provides that a lawyer who takes or decides not to
take action permitted by these provisions on confidentiality shall not, solely by reason of that
action or inaction, be liable for professional discipline or damages to the client or any third
party.70
The duty of a lawyer to maintain attorney-client communications in confidence is an
ethical duty, as contrasted with the attorney-client privilege, which is an evidentiary privilege,
and the scope of the information subject to an attorney’s confidentiality obligation is far greater
than that protected by the attorney-client privilege. The general ethical rule regarding
confidentiality with respect to attorney-client communications is expressed in Model Rule 1.6(a).
That rule broadly provides that a lawyer shall not reveal “information relating to representation
of a client” unless disclosure is expressly or impliedly authorized by the client, or fits into one of
the enumerated exceptions.71 The obligation of confidentiality applies to information acquired
before and during the existence of the attorney-client relationship, and continues after the
termination of the attorney’s employment.72 Under Model Rule 5.7, the obligation also attaches
69 See, e.g., MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6(b)(6) & cmts. [12] & [13]. 70 RESTATEMENT §67(4). 71
MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6. 72
MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6 cmts. [1] & [18]. The commentary notes that Rule 1.18, rather than Rule 1.6, addresses the lawyer’s duties with respect to the disclosure of information provided to the lawyer by a
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in certain circumstances when a lawyer provides “‘law-related’ as opposed to ‘legal’ services.”73
A lawyer who operates a law-related business in a manner not readily distinguishable from the
lawyer’s law practice must conduct the business in compliance with all the legal ethical rules.74
Professional conduct rules also apply to a lawyer who operates a law-related business separately
from the law practice if the lawyer “fails to take reasonable measures” to assure that business
customers know that the services are not legal services “and the protections of the client-lawyer
relationship do not exist.”75 Furthermore, Rule 5.7 “offers no assurance that by clearly
distinguishing the lawyer’s law-related business from [the lawyer’s] law practice, the lawyer can
ensure that the ethics rules will not apply.”76
Various enumerated exceptions to the requirement of confidentiality are listed in Model
Rule 1.6. Some are aimed at lawyer protection,77 others at client perjury, and the others at harm
prevention.78 Two harm-prevention exceptions were added in 2003, in the wake of corporate
scandals. The first permits disclosure of confidential information “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.”79 Although the rule does not require a lawyer to reveal a client’s
misconduct, a lawyer is required to withdraw if the lawyer’s services will be used in materially
prospective client. Similarly, Rule 1.9, rather than Rule 1.6, addresses the lawyer’s duties with respect to the disclosure of information provided to the lawyer by a former client. 73 ANNOTATED MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7 Annotation: General Provisions (7th ed. 2011). Although states have been slow to adopt Model Rule 5.7, a number of jurisdictions have issued opinions recognizing the applicability of the duty of confidentiality to lawyers providing nonlegal services to clients or other persons. See, e.g., Ariz. Bar Ass’n Ethics Op. 05-01 (2005); Ind. Bar Ass’n Ethics Op. 2002-01 (2002); N.Y. State Bar Ass’n Comm. On Prof. Ethics, Op. 752 (2002); State Bar Ass’n of North Dakota Ethics Committee, Ethics Op. 98-07 (1998). But see Dist. Of Columbia Bar Ass’n, Ethics Opinion No. 336 (2006), Dist. Of Columbia Bar Ass’n, Ethics Opinion No. 306 (2001) & Dist. Of Columbia Bar Ass’n, Ethics Opinion No. 226 (1992) (concluding that an attorney-client relationship is not normally created when a lawyer is acting as a nonlawyer). 74 MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7(a)(1) & cmt. [3]. 75 MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7(a)(2) & cmts. [3] & [4]. 76
ANNOTATED MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7 Annotation: Ethics Rules May Still Apply to Law-Related Services (7th ed. 2011) (emphasis in original). 77 For example, Model Rule 1.6(b)(5) permits disclosure of confidential information to protect the lawyer no greater than the lawyer believes reasonably is necessary: (1) to establish a claim or defense in a controversy between the lawyer and the client; (2) to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved; and (3) to respond to allegations in any proceeding concerning the lawyer’s representation of the client. In addition, Rule 1.6(b)(6) permits disclosure of confidential information if necessary to comply with other law or a court order. 78 See Zacharias’s Prophecy: Daniel J. Coquillette & Judith A. McMorrow, The Federalization of Legal Ethics Through Legislative, Court and Agency Regulation, 48 SAN DIEGO L. REV. 123, 162 (2011). 79
MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6(b)(2).
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furthering a course of criminal or fraudulent activity.80 The second recent exception to the
requirement of confidentiality in Rule 1.6 permits unauthorized disclosure “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 fraud in furtherance of which
the client has used or is using the lawyer’s services.”81 This exception addresses the situation in
which the lawyer does not learn of the client’s crime or fraud until after it has been
consummated.82
Of much longer standing is the exception under Rule 1.6(b)(6) permitting disclosure of
confidential information “to comply with other law or a court order.”83 Commentary under
Model Rule 1.6 recognizes, “Other law may require that a lawyer disclose information about a
client” and, if the other law requires disclosure, “paragraph (b)(6) permits the lawyer to make
such disclosures as are necessary to comply with the law.”84 The commentary also indicates that
an employer’s lawyer would have an ethical duty to make any good-faith legal challenge to the
DOL’s proposed revisions, once instituted, to the extent they require disclosure of information a
lawyer is ethically bound to keep confidential.85 However, if the challenge were to fail, Rule
1.6(b)(6) would authorize disclosure. Some regard Rule 1.6(b)(6) as an exception aimed at
lawyer-protection.86 However, it also serves the harm-prevention function of assuring that a
lawyer’s ethical obligations do not require subversion of the rule of law.
V. The Confidential Attorney-Client Relationship
The professional standards binding a lawyer providing law-related services may be
higher than those applicable to nonlawyer consultants. However, a lawyer’s obligation of
confidentiality to persuader business customers under Rule 5.7 is necessarily something of an
80
MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6 cmt. [2] (citing Rule 1.16); R. 1.16, cmt. [2]. An ABA opinion interpreting a prior version of the Model Rules indicates that in these circumstances, the lawyer may (but is not required to) give notice of the fact of withdrawal and may disaffirm any opinion, document, affirmation, or the like, even if such a “noisy withdrawal” has the effect of revealing confidential information. ABA Comm. On Ethics & Prof. Responsibility, Formal Op. 366 (1992). 81
MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6(b)(3). 82 MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6 cmt. [8]. 83 MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6(b)(3). 84 MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6 cmt. [12]. 85 MODEL RULES OF PROFESSIONAL CONDUCT R. 1.6 cmt. [13]. 86 See Zacharias’s Prophecy: Daniel J. Coquillette & Judith A. McMorrow, The Federalization of Legal Ethics Through Legislative, Court and Agency Regulation, 48 SAN DIEGO L. REV. 123, 165-66 (2011).
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illusion because the attorney-client privilege does not apply to the lawyer-customer relationship.
Thus, a lawyer may be compelled to disclose confidential information exchanged that would
have been protected if exchanged to obtain or provide legal services. The contraction of the
interpretation of “advice” to exclude all persuader activity from the “advice” exemption does not
threaten the traditional confidential relationship between attorney and client; it is the mixing of
the persuader business and law that is undermining the confidential attorney-client relationship.
The lawyer who steps outside the role of legal adviser into the “blurry area of law-related
services”87 jeopardizes the confidential attorney-client relationship because the lawyer may not
be able to keep client confidences as both lawyer and client might expect. Engaging in persuader
activity is such a step away from the role of legal adviser. The legislative history of the LMRDA
emphasized the distinction between “the usual practice of labor relations law and persuader
activities.”88 Congress recognized that “the ordinary practice of labor law does not encompass
persuasive activities,”89 but that, “for a legal adviser, work as a labor consultant would be
‘extracurricular.’”90
In the late 1980s and early 1990s, “there was “sharp disagreement within the legal
profession as to whether lawyers and law firms should be allowed to offer law-related services
through ownership or operation of separate consulting entities – so-called ‘ancillary
businesses.’”91 Strong positions were taken on both sides as to the propriety of ancillary
businesses and on “the basic question of whether they facilitate the practice of law or undermine
it.”92 The issue of whether to bless ancillary businesses “was intertwined with the debate over
‘law as a profession’ versus ‘law as a business,’” and the related concerns that associations of
lawyers would begin to be regarded as trade associations rather than professional organizations
87 Heather Bupp-Habuda, Speaking of Ethics: Law-Related Services, 21 WASHINGTON LAWYER 12 (May 2007) (explaining that the area of law-related services “is inherently blurry because when a lawyer provides law-related services, the lawyer is often acting as a nonlawyer”). 88 Price v. Wirtz, 412 F.2d 647, 650 (5th Cir. 1969) (en banc). “An attorney or consultant who confines himself to giving legal advice, taking part in collective bargaining and appearing in court or administrative proceedings would not be included among those required to file reports.” Wirtz v. Fowler, 372 F.2d 315, 329 n.27 (5th Cir. 1966), overruled in part on other grounds, Price v. Wirtz, 412 F.2d 647 (5th Cir. 1969) (en banc). 89 Humphreys, Hutcheson and Moseley v. Donovan, 755 F.2d 1211, 1216 n.9 (6th Cir. 1985). 90 Douglas v. Wirtz, 353 F.2d 30, 33 (4th Cir. 1965), cert. denied, 383 U.S. 909 (1966). 91 State Bar Ass’n of North Dakota Ethics Committee, Ethics Op. 98-07 (1998) (citing 91 LAWS. MANUAL ON PROF. CONDUCT 401 (ABA/BNA) (1994)). 92 91 LAWS. MANUAL ON PROF. CONDUCT 410 (ABA/BNA) (1994).
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and that government regulation of ancillary businesses would lead to government regulation of
lawyers generally.93 Model Rule 5.7 was the product of this debate.
The most sympathetic victims of a lawyer’s departure from legal adviser into the
persuader business are the lawyer’s clients who have not obtained the lawyer’s persuader
services. However, whether the law does or should require a lawyer in the persuader business to
reveal information about labor relations clients, even those for whom an attorney did not perform
persuader services, was long ago the subject of heated court battles, and the courts held in the
affirmative,94 even recognizing that the “advice” exemption could be and had been interpreted as
the DOL now proposes. 95 Some lawyers may think corrective legislation is in order, but what
clearly is in order is for lawyers in the persuader business to have full and frank discussions with
both their clients and customers about the costs of that business to them.
As the commentary to Rule 5.7 notes, “When a lawyer performs law-related services or
controls an organization that does so, there exists the potential for ethical problems. Principal
among these is the possibility that the person for whom the law-related services are performed
fails to understand that the services may not carry with them the protections normally afforded as
part of the client-lawyer relationship.”96 An annotation to the Model Rules explains, “Rule 5.7
places the burden upon the lawyer to make clear to the business customer that the protections of
a lawyer-client relationship do not apply to the provision of law-related services.”97 Commentary
to Rule 5.7 “makes clear that this communication with a person should be made before entering
into an agreement for law-related services, and preferably should be in writing.”98
93 State Bar Ass’n of North Dakota Ethics Committee, Ethics Op. 98-07 (1998) (citing HAZARD & HODES, THE LAW
OF LAWYERING (Supp. 1998)). 94 Humphreys, Hutcheson and Moseley v. Donovan, 755 F.2d 1211, 1215-16 (6th Cir. 1985); Master Printers of America v. Donovan , 751 F.2d 700 (4th Cir. 1984); Donovan v. Master Printers of America, 699 F.2d 370 (7th Cir. 1983), affirming and adopting 532 F. Supp. 1140 (N.D. Ill. 1981); Price v. Wirtz, 412 F. 2d 647 (5th Cir. 1969 (en banc); Douglas v. Wirtz, 353 F.2d 30 (4th Cir. 1965), cert. denied, 383 U.S. 909 (1966). 95 See, e.g., Price v. Wirtz, 412 F.2d 647 (5th Cir. 1969) (en banc), which overruled Wirtz v. Fowler, 372 F.2d 315, 329 n.27 (5th Cir. 1966), which had observed that the DOL originally interpreted the LMRDA to require reporting of an attorney’s drafting “speeches, letters, and other written material which are to be delivered or disseminated by the employer to employees for the purpose of persuading them with regard to the exercise of their rights.” 96
MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7 cmt. [1]. 97 ANNOTATED MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7 Annotation: General Provisions (7th ed. 2011). 98 Heather Bupp-Habuda, Speaking of Ethics: Law-Related Services, 21 WASHINGTON LAWYER 12 (May 2007) (emphasis in original). See MODEL RULES OF PROFESSIONAL CONDUCT R. 5.7 cmt. [6].
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The comments submitted by many of the associations of lawyers on the DOL’s notice of
proposed rulemaking indicate that lawyers often do not themselves understand the distinction
between “law-related” and “legal” services and so obviously have not been clarifying for their
business customers the absence of the protections afforded a traditional attorney-client
relationship. Now, a lawyer also will need to explain to each labor relations client the
consequences to that client of the lawyer’s involvement in the persuader business. To the extent
that the DOL’s proposed revised interpretation of the “advice” exemption and Form LM-20
focus attention on the distinction between “law-related” and “legal” services, the proposed
changes hopefully will cause lawyers to be more attentive to their ethical responsibilities to
clients and customers, and those who are both, and so strengthen the bond of trust that anchors
attorney-client relationships.
VI. Conclusion
The DOL proposes to draw the line between “advice” and “persuader” activity precisely
where the line is drawn between “legal” advice and “business” advice for purposes of the
attorney-client privilege. It is not the proposed revision of the interpretation of “advice” to
exclude all persuader activities that will disrupt the confidential attorney-client relationship. The
waters already have been muddied by labor lawyers who have waded into the persuader
business. Losing the protections of the attorney-client relationship is the price of exchanging
clients for customers. Those lawyers who genuinely want to restore the sanctity of the traditional
confidential attorney-client relationship should return to the practice of law or, at the very least,
more diligently identify and explain to their clients and customers the nature of the services
being provided and the consequences.