December 11, 2014 Articles

Ethical Issues for Corporate Counsel in an Internal Investigation

Clear identification of corporate clients will assist lawyers in carrying out the duty of loyalty while maintaining client confidentiality.

By Michael T. Dawkins

When a lawyer is hired by a corporation to conduct an internal investigation or to shadow a criminal investigation, the lawyer often steps into a whirlwind. The lawyer must, in the flurry of activity, pause and identify the client. For the lawyer and those with whom the lawyer interacts, clarity as to who the client is and who the client is not is critical to the lawyer’s carrying out the duty of loyalty as well as protecting the privilege cloaking the lawyer’s communications during the investigation.

In an Internal Investigation, Who Is the Lawyer’s Client?
ABA Model Rule of Professional Conduct 1.13(a) specifies that “[a] lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents [officers, directors, employees, and shareholders].” The lawyer must take the initiative to ensure that these corporate representatives who are involved in the investigation understand whom the lawyer is representing in the investigation.

The best practice is for the lawyer to have one client, the company. In an internal investigation, the lawyer is trying to determine whether the company, through the acts or omissions of its representatives, violated the law and, if so, who is responsible. The lawyer’s goal is to obtain facts so that the lawyer can provide the company with informed legal advice as to these questions: (1) What happened? (2) Who is responsible? (3) Should the company report the noncompliance or illegality to officials? (4) What should the company do in the future to avoid repeated noncompliance? Corporate counsel’s objectivity and loyalty to the entity may be clouded by an attempt to serve multiple parties while carrying out these functions.

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