Opinion #197: Nonprofit Board of Directors provides services to domestic violence victims, attorney member's obligation to preserve confidences between organization and a party receiving its services

Issued by the Professional Ethics Commission

Date Issued: May 20, 2009

Facts

The Commission has been asked for an opinion concerning the obligations of a member of a Board of Directors of a non-profit which offers legal assistance, as follows:

Attorney A is a member of the Board of Directors of a nonprofit organization O, which provides a variety of services to the victims of domestic violence. O’s services include advice and assistance through a twenty-four hour hotline, temporary shelter services and public education on the issues of domestic violence. O has a legal department consisting of one staff lawyer and several ‘lay advocates.’ Typically, members of the legal department attend the district court in the area at the times when protection from abuse cases are being considered, and are available to give plaintiffs advice, assistance in filling out a complaint for protection from abuse, negotiating consent orders, and the like. When protection from abuse complaints go to hearing, the lay advocates may advise a plaintiff in how to present her own case; they typically do not maintain a formal record, nor does the court note the appearance of the lay advocate or of the organization. The duties of the Board of Directors include the general policy direction of O, authorizing applications for grants, approving expenditures, and supervising the annual audit. The Board of Directors hires, evaluates, and fires an executive director, who, in turn hires, evaluates, and fires the staff, including the attorney and the lay advocates. Neither the board, nor any member has any access to confidential information or communications from the recipients of O’s services.

Attorney A has a practice which includes family matters such as divorce, parental rights cases, and occasionally protection from abuse prosecution or defense. Attorney A routinely discloses his directorship of O to all prospective family matter clients.

Questions

The question is under what circumstances, if any, is A precluded from representing party B, because the adverse party, C, has or is receiving services from O, as follows:

  1. When C has received assistance from a lay advocate of O in a concluded protection from abuse matter against B?

  2. When C is currently receiving assistance from a lay advocate in an active protection from abuse matter against B?

  3. When C was receiving legal representation from the staff attorney of O in a concluded matter against B?

  4. When C is currently receiving legal representation from the staff attorney in an active matter against B?

  5. As a related matter, what is Attorney A’s obligation when he learns that the adverse party to a currently represented party has begun to receive services from O?

Opinion

The questions posed call for the application of the rules relating to conflicts of interest to the relationships Attorney A has (1) with B, his or her client, (2) with C, the adverse party receiving services from O, and (3) with O, the non-profit organization. In this regard, it is helpful to keep in mind two rules of general applicability that inform the analysis of each question. First, a conflict of interest is defined as:

a substantial risk that the lawyer’s representation of one client would be materially and adversely affected by the lawyer’s duties to another current client, to a former client, or to a third person, or by the lawyer’s own interests.

Bar Rule 3.4(b)(1).

Second, whenever a lawyer knows of or becomes aware of circumstances that “might reasonably give rise to a conflict of interest under these rules,” the lawyer has a duty to disclose those circumstances to his or her client or prospective client. Bar Rule 3.4(a)(1).

In all five of the situations outlined above, the attorney’s initial duty to B, his client, is to disclose his position on O’s Board of Directors, as it might reasonably give rise to a conflict of interest. While the question states that “Attorney A routinely discloses his directorship of O to all prospective family matter clients,” a specific disclosure must be made whenever it becomes apparent that the adverse party, C, is actually receiving services from O, as a general disclosure at the commencement of representation might not alert the client to the specific circumstances of his or her case.

A’s duty then is to determine whether there is a substantial risk that his representation of his client “would be materially and adversely affected by [his] duties . . . to a third person or by the lawyer’s own interests.” This kind of analysis is underscored by the more specialized conflict of interest rule relating to one, such as a member of a Board of Directors, who has fiduciary duties:

Without the client’s informed consent, a lawyer may not undertake or continue to represent a client in any matter with respect to which the lawyer has a fiduciary or other legal obligation to another person if the obligation presents a substantial risk of materially and adversely affecting the lawyer’s representation of the client. Bar Rule 3.4(e).

We do not have enough information about the lawyer’s relationship to the non-profit, or to others associated with it, to determine whether such an impact would occur. This is, however, a necessary area of self-inquiry for the attorney to explore. If he determines that his representation would be compromised because of his relationship with the organization, then he needs to either obtain the client’s informed consent or decline representation or withdraw if representation has already begun. [1] The next issue for consideration is what duty, if any, the attorney owes to C, the adverse party. Since there are no facts presented which would indicate that A rendered professional legal services to C or that an objective analysis of the facts could lead someone to believe that a legal representation ever “commenced”, C is neither a client nor a former client of the attorney. See Bar Rules 3.4(a)(2) and 3.15(c) & (e). Hence, the attorney has no duty under the rules to C, and neither Bar Rule 3.4(d), the rule on successive representation, nor Bar Rule 3.4(c)(1), the rule prohibiting simultaneous representation of opposing parties, is implicated.

The next issue for consideration is whether or not the attorney’s relationship with O, the non-profit, affects his representation of B. All five specific questions involve representation of the adverse party, C, by either a lay advocate [2] or staff attorney employed by O. Bar Rule 3.4(b)(3), the rule on imputed disqualification, would preclude representation only if A’s position in O was such that the advocate or staff attorney could be characterized as being A’s associate or being “affiliated with [A] or [A’s] firm”. Although the term “affiliated” can be read broadly, we do not interpret it to cover a situation, such as presented here, where A is merely a participant on a Board of Directors which hires an Executive Director who then hires the advocate and attorney. [3]

Another issue to which the attorney needs to be alert in these kinds of situations, but which does not appear to be a problem here, is that of shared confidential information. Regardless of whether A can be deemed to have had an attorney-client relationship with C, if, by his association with the non-profit, he has acquired confidential information about C, A may at least have a continuing duty to keep the information confidential. Bar Rule 3.6(h)(1)(i) prohibits a lawyer from disclosing or using information “protected by the attorney-client privilege”. This is so regardless of whether, as detailed in other sub-paragraphs, the information is obtained during the course of actual or potential representation. See Maine Ethics Opinion #8 and Bar Rules 3.6(h)(1)(iv) and 3.15(d). Certainly any confidential information C gave to either an attorney or lay advocate employed by O would fall under Bar Rule 3.6(h)(1)(i), and attorney A has an obligation to preserve the lawyer-client privilege between O and C. See Maine Ethics Opinion #172 and Corey v. Norman, Hanson & DeTroy, 1999 ME 196, 742 A.2d 933; 1999 Me. LEXIS 220.

In summation, the Bar Rules do not preclude the attorney from representing B in the situations described in questions #1 – #4. However, as per question #5, the attorney must disclose to B his relationship with O whenever he learns that the adverse party, C, is receiving services from O. The attorney must either obtain informed consent, or must refuse employment or withdraw if he believes his obligation to O presents a substantial risk of materially and adversely affecting his representation of B.

The Commission is mindful that on February 26, 2009, The Supreme Judicial Court ordered that certain sections of the Maine Bar Rules, including Rule 3, be abrogated and replaced by the Maine Rules of Professional Conduct (MRPC) as of August 1, 2009. Reference to the relevant provisions of the MRPC in opinions such as this one, which is being issued during the transition period, may prove helpful should similar questions arise after August 1st.

As relevant to this opinion, the definition of a conflict of interest in Bar Rule 3.4(b)(1) is largely the same as the definition in Rule 1.7 of the MRPC, although the MRPC uses the word “significant”, as opposed to the word “substantial” to define the level of risk that would result in a conflict. Unlike the Maine Bar Rules, the MRPC requires that informed consent be confirmed in writing, although not necessarily signed by the client. See Reporter’s Notes to MRPC 1.7.

The MRPC would not alter the way the Commission views Attorney A’s relationship to adverse party C. The MRPC do not have a specific definition of “client” as does current Rule 3.15(c), but MRPC Rule 1.18 regarding duties to prospective clients is consistent with current rule 3.15.

Similarly, the MRPC would not alter the Commission’s conclusions regarding the effect Attorney A’s position on O’s Board of Directors might have on his representation of B. Comment (9) to MRPC Rule 1.7 is consistent with Bar Rule 3.4(e) in treating fiduciary responsibilities to third parties that could, depending upon the circumstances, result in a conflict of interest. However, no conflict could be imputed from organization O to Attorney A because MRPC Rule 1.10 only covers lawyers who are or have been “associated in a firm.”

Although the MRPC does not include the precise wording of Bar Rule 3.6(h)(1)(i), Attorney A’s obligations regarding confidential information given by opposing parties to the attorneys or lay advocates employed by O would not change. See MRPC Rules 1.6, 1.18, and 4.4.

Hence, our answers to the questions posed above would be largely the same under the MRPC, except that Attorney A’s self-examination of potential conflicts should focus on whether there is a “significant”, as opposed to a “substantial” risk that his relationship with O would materially affect his representation of B and that if he recognized a conflict, but reasonably believed that he could nevertheless provide competent and diligent representation, B’s informed consent would have to be confirmed in writing.

Footnotes

[1] “Whether a client has given informed consent to representation, when required by this rule, shall be determined in light of the mental capacity of the client to give consent, the explanation of the advantages and risks involved provided by the lawyer seeking consent, the circumstances under which the explanation was provided and the consent obtained, the experience of the client in legal matters generally, and any other circumstances bearing on whether the client has made a reasoned and deliberate choice.” Bar Rule 3.4(b)(2).

[2] We are not given the details of the role of the lay advocate or his/her relationship to the staff attorney. We assume for the sake of this opinion that the advocate falls under the supervision of an attorney, pursuant to Bar Rule 3.13(c), with sufficient responsibility so as not to be engaged in the unauthorized practice of law. See Bar Rule 3.2(a)(2).

[3] Compare Maine Ethics Opinions #41 and #104.


Enduring Ethics Opinion