CBA Record

LEGAL ETHICS

John Levin’s Ethics columns, which are published in each CBA Record, are now in-

dexed and available online. For more, go to http://johnlevin.info/ legalethics/.

BY JOHN LEVIN The Department of Justice and More Problems for Lawyers A recent column reviewed actions by the U.S. Department of Justice and the D.C. Circuit Court of

ETHICS QUESTIONS? The CBA’s Professional Responsibility Commit- tee can help. Submit hypothetical questions to Loretta Wells, CBA Government Affairs Direc- tor, by fax 312/554-2054 or e-mail lwells@ chicagobar.org. there is such adversity of interest, the lawyer for the organization cannot provide legal representation for that constituent individual, and that discussions between the lawyer for the organization and the individual may not be privileged.” The problem for lawyers is that there may be situations in which it is in the best interest of the client to get maximum credit under the Federal Sentencing Guidelines. In such instances the client can waive the attorney-client privilege and request its lawyers to disclose the possibly criminal actions of its employees. Since there is no attorney-client relation between the employee and the lawyer, the lawyer is not prohibited from doing so. However, because of this possibility, the lawyer is obligated to disclose the situation to the employee at the time of the interview. Needless to say, this may adversely affect the candor of the interviewee and impair the investigation.

ing a matter with a corporation; … [and] Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases….” While the memorandum does not call the attorney-client privilege into question, it does create serious problems for law- yers engaged in corporate investigations. The problems arise out of the language of Illinois Rule of Professional Conduct (based on the ABA Rule) 1.13: Organiza- tion as Client. Section (a) states: “a lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.” Section (f ) states: “In dealing with an organization’s directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization’s interests are adverse to those of the constituents with whom the lawyer is dealing.” Comment 10 to the Rule expands on this principle, stating: “There are times when the organi- zation’s interest may be or become adverse to those of one or more of its constituents. In such circumstances the lawyer should advise any con- stituent, whose interest the lawyer finds adverse to that of the organi- zation of the conflict or potential conflict of interest, that the lawyer cannot represent such constituent, and that such person may wish to obtain independent representation. Care must be taken to assure that the individual understands that, when

Appeals that reaffirmed the attorney-client privilege in the context of corporate inves- tigations performed by counsel. This is a welcome development. However, on September 9, 2015, the Office of the Deputy Attorney General issued a memorandum to all U.S. Attor- neys concerning individual accountability for corporate wrongdoing. The memoran- dum reaffirms policy that “[o]ne of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.” The memo listed six key steps to strengthen the pursuit of indi- vidual corporate wrongdoing. The steps of particular interest to lawyers involved in corporate investigations are: “in order to qualify for any cooperation credit [under the Federal Sentencing Guide- lines], corporations must provide to the Department all relevant facts relating to the individuals responsible for the mis- conduct; … criminal and civil corporate investigations should focus on individuals from the inception of the investigation; … absent extraordinary circumstances or approved departmental policy, the Depart- ment will not release culpable individuals from civil or criminal liability when resolv-

John Levin is the retired Assis- tant General Counsel of GATX Corporation and a member of the CBARecord Editorial Board.

44 NOVEMBER 2015