Opinion #107. Obligation of Attorney/Corporate Director to Maintain Client Confidences

Issued by the Professional Ethics Commission

Date Issued: June 27, 1990

Question

Bar Counsel has requested an advisory opinion regarding the following question:

A member of the Maine Bar who serves as a director of a Maine corporation has reason to believe that a client of his is in significant financial trouble. The corporation upon whose board he sits is at risk by reason of its business relationship with his client, not a relationship arranged by the attorney. Can the attorney disclose to the corporation that his client is having serious financial problems, thus enabling the corporation upon whose board he sits to minimize the extent of the loss to it? If not, how does he fulfill his duties as a director to the corporation?

Opinion

It is the opinion of the Commission that if the lawyer’s knowledge of the information concerning his client’s financial troubles was gained “in the professional relationship” between the lawyer and the client, the lawyer is prevented by Maine Bar Rule 3.6(l) from disclosing that information to the corporation. See Maine Bar Rule 3.6(l)(1) and (5) (prohibiting disclosure of a “confidence or secret” of a client and defining “secret” as including “information gained in the professional relationship . . . the disclosure of which would be embarrassing or detrimental to the client”).

If that information concerning the client’s financial difficulties was gained by the lawyer other than in connection with the lawyer’s representation of the client, for example, through a media report of his client’s financial affairs, the lawyer would not be prohibited by the Maine Bar Rules from disclosing that public information. Whether the lawyer would be subject to common law liability for breach of fiduciary duty for reporting that information under circumstances that would be detrimental to the client is a question of law, which is beyond the authority of the Commission. In that regard, however, it should be noted that ABA Model Rule 1.8(b) prohibits a lawyer from using information relating to representation of a client to the disadvantage of the client unless the client consents thereto after consultation. ABA Model Rule 1.9(b) permits disclosure of information generally known about a former client, but that public information exception does not apply regarding a present client. ABA Model Rule 1.8(b).

Under the circumstances presented, if the lawyer does not disclose the information in question to the corporation, the lawyer should determine whether the non‑disclosure of the information in question to the corporation is incompatible with his duties as a director of a corporation under Maine law, 13‑A M.R.S.A. § 716. The circumstances under which the lawyer’s resignation from his directorship would be mandated are fact‑specific and involve questions of law beyond the authority of the Commission.


Enduring Ethics Opinion