If a lawyer learns the client is using her work, like an opinion letter, to keep defrauding a bank, must she withdraw, and may she disavow that work even though it hints at the client's fraud?

Plain-English summary

The committee addressed what the Model Rules require and permit when a lawyer learns that a client has used, is using, or plans to use her work product to perpetrate a fraud. On the assumed facts, a lawyer had issued an opinion letter to a bank vouching for the enforceability of installation contracts; she later learned the client's officers had fabricated those contracts and intended to keep dealing with the bank as though the resulting financial statements were genuine. The committee reconciled three rules: Rule 1.6 (confidentiality), Rule 1.2(d) (a lawyer may not assist client crime or fraud), and Rule 1.16(a)(1) (mandatory withdrawal where continued representation would violate the Rules).

The committee reached four conclusions. First, the lawyer must withdraw from any representation that, directly or indirectly, would assist the client's continuing or intended future fraud. Second, she may withdraw from all representation, and must do so where her continued role is likely to be known to and relied on by the fraud's targets and thus likely to assist it. Third, she may disavow her own work product to prevent its use in the continuing or future fraud, even though this "noisy" withdrawal may inferentially reveal confidences; the committee grounded this in the Comment to Rule 1.6 and read the terms "representation" in Rule 1.16(a)(1) and "assist" in Rule 1.2(d) to cover permitting continued use of past work product. Fourth, if the fraud is completed and the lawyer does not know or reasonably believe the client intends further fraudulent use of her services or work product, she may withdraw but may not disaffirm.

The committee emphasized that disaffirmance is a last resort, limited to what is necessary to disassociate the lawyer from the fraud; a silent withdrawal, or notice only to the client's new counsel, may suffice, and even where the bank must be told, the lawyer may reveal only that she no longer stands behind the work product. Three members dissented, arguing that the opinion strained the text of Rules 1.2(d) and 1.16(a)(1) to reach a result the House of Delegates had twice declined to put into Rule 1.6.

Currency note

This opinion was issued in 1992, before the American Bar Association's adoption of the 2002 (Ethics 2000) revisions to the Model Rules of Professional Conduct, which substantially amended Rule 1.6 (adding, among other things, the 1.6(b)(2)-(3) exceptions for client crime or fraud involving the lawyer's services). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: If a lawyer's work is being used to keep defrauding a third party, must she withdraw?

A: Yes. The committee concluded that a lawyer who knows or reasonably believes her services or work product are being used to perpetrate a continuing or intended future fraud must withdraw under Rule 1.16(a)(1) to avoid assisting the fraud under Rule 1.2(d).

Q: May she disavow an opinion letter even though that signals something is wrong?

A: The committee concluded she may disaffirm work product to prevent its use in the fraud, even though a "noisy" withdrawal may inferentially reveal confidences otherwise protected by Rule 1.6.

Q: What if the fraud is already finished?

A: If the fraud is completed and the lawyer does not know or reasonably believe the client intends further fraudulent use of her services or work product, the committee said she may withdraw but may not disaffirm.

Q: How far may the disaffirmance go?

A: The committee said disaffirmance is a last resort limited to what is necessary; the lawyer may say only that she no longer stands behind the work product and must decline to reveal anything more about it.

Background and rules framework

The opinion reconciled Model Rule 1.6 (confidentiality), Rule 1.2(d) (a lawyer may not counsel or assist a client in conduct the lawyer knows is criminal or fraudulent), and Rule 1.16(a)(1) (mandatory withdrawal where continued representation would violate the Rules), reading the Comment to Rule 1.6 on withdrawal and disaffirmance. It also referenced Rule 1.13 (a lawyer for an organization may report up within the organization). Because the ABA interprets the Model Rules directly, there is no state-rule analogue.

Citations and references

Rules of Professional Conduct:

• MR 1.6 (confidentiality of information; the "Withdrawal" Comment)
• MR 1.2 (scope of representation; 1.2(d) on assisting crime or fraud)
• MR 1.16 (declining or terminating representation; mandatory withdrawal)
• MR 1.13 (organization as client; reporting within the organization)

See also

• ABA Formal Op. 93-376: A lawyer's obligation where a client lies in discovery
• ABA Formal Op. 93-375: Disclosure adverse to a client in a bank examination
• ABA Formal Op. 98-412: Disclosure when a client violates a court order
• RI EAP Op. 2005-05: Lawyer Cannot Disclose a Client's Undisclosed Imprisonment Without Consent, but Cannot Further the Ongoing Fraud on the Insurer

Source

• Landing page: ABA Formal Ethics Opinions index
• Original PDF: 92-366.pdf