In-House Counsel

Ethical Issues With Serving As More Than Legal Advisor

Failure to acknowledge the risk with juggling multiple roles can result in more than just losing a job. It can mean losing a bar license.

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sins wrong right ethicsOver the past several years, much has been written about the increasing expectation that the in-house counsel should serve both as a legal advisor and as a strategic business partner. Three years ago, I was one of those people. I wrote my very first article on the subject, In-House Counsel — More Than a Legal Advisor. In that article, I wrote about how in-house counsel must become more than just lawyers for the companies they serve. Quoting Korn Ferry, a global organizational consulting firm, I wrote that in-house counsel “must develop other attributes, such as greater knowledge of the business” so that they can advise their companies about business issues and not just about legal issues. What I did not include in that article was a discussion of the risk associated with assuming both a legal and a nonlegal role for the in-house counsel.

When the in-house counsel assumes both legal and nonlegal roles at the same company during the same period, the in-house counsel must recognize that the chances of an ethical issue arising increases exponentially in a variety of ways.

Below I have included a few of those potential ethical pitfalls.

Attorney-Client Privilege

As lawyers, we know that for a communication to be protected from disclosure by the attorney-client privilege, the communication must be made for the purpose of rendering (or seeking) legal advice. If the purpose of the communication is not for rendering legal advice (or seeking it), the attorney-client privilege will not attach. The question of whether a communication that provides both legal and nonlegal advice meets the attorney-client privilege purpose requirement has been a hotly debated topic in recent months. Until the debate has been settled, in-house counsel must proceed with caution.

With that in mind, the in-house counsel may want to give some thought to actively separating legal advice from business advice:

  • by preparing separate memorandums for legal advice and business advice;
  • by using different email accounts for separate roles; and
  • by specifically marking an e-mail with “Attorney Client Privilege” in both the e-mail subject line and the e-mail body rather than marking every e-mail as protected in the e-mail footer.

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Failure to think about what is being said and how it is being said is critical. Failure to do so may result in communications that cannot be protected later.

Resource Allocation 

In-house counsel are lawyers first and foremost, and they cannot lose sight of their ethical obligation to provide competent representation to the client company. According to the ABA’s Rule 1.1 of the Model Rules of Professional Responsibility, competent representation means that the lawyer exercises the “knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” In-house counsel who agree to assume a nonlegal role in addition to their legal role must always ensure that they attend to their responsibilities associated with the legal role first.

Effective in-house counsel must be realistic with what they can and cannot complete or oversee. Open and honest communication regarding these limitations with the executive team is essential.

Failure to acknowledge the risk and pressing forward with juggling multiple roles can result in more than just losing a job. It can mean losing a bar license.

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Client Confusion

If the in-house counsel is serving in both legal and nonlegal roles, it can be potentially confusing for company representatives. It is therefore critical for the in-house lawyer to clearly and unequivocally declare what their role is when communicating with internal company stakeholders.

As cumbersome as it may feel, it is really important. Starting a conversation with, “Good morning, ____. This is _____ and I am calling you in my capacity as ______” is a good way to get the job done. With this introduction, the in-house counsel is establishing boundaries and managing expectations as to what is to follow in the discussion.

If the in-house counsel fails to recognize these boundary issues and the in-house counsel fails to make efforts to establish them, they can find themselves in a difficult situation that may result in negative consequences for the company and the company employee.

As with anything in business, risk is all around us. The takeaway here is not to discourage you from assuming more than just a legal role. The takeaway here is for you to carefully evaluate the role before you take it; THEN you work proactively to manage and mitigate the risk associated with having both roles.

If you are looking for CLE ethics credit, check out How to Avoid Ethical Pitfalls about the Ethical Pitfalls When Partnering With the Business available through In-House Connect On Demand, where we talk about this topic and more!

Lisa-Lang_241Lisa Lang is an in-house lawyer and thought leader who is passionate about all things in-house.  She has recently launched a website and blog Why This, Not That™ (www.lawyerlisalang.com ) to serve as a resource for in-house lawyers.  You can e-mail her at lisa@lawyerlisalang.com , connect with her on LinkedIn  (https://www.linkedin.com/in/lawyerlisalang/) or follow her on Twitter (@lang_lawyer).

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