CBA Record November 2015

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44 NOVEMBER 2015
LEGAL ETHICS
BY JOHN LEVIN
The Department of Justice and
More Problems for Lawyers
Arecent column reviewed actions
by the U.S. Department of Justice
and the D.C. Circuit Court of
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.
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
John Levin’s Ethics columns,
which are published in each
CBA Record, are now in-
dexed and available online.
For more, go to
legalethics/.
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@
.
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.