Can a lawyer sign a confidentiality agreement promising never to use a consultant's legal ideas for other clients?
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This page answers the general question as of 2011. Ezel answers yours: whether it's allowed on your facts, under the current Illinois Rules of Professional Conduct, with citations.
Plain-English summary
The opinion addresses a lawyer asked to sign a confidentiality agreement demanded by an accounting firm. The accounting firm would disclose to Client A a package of ideas that could significantly reduce Client A's taxes, on the condition that both Client A and the lawyer agree never to divulge the ideas. The Committee assumes the package contains interpretations and applications of tax law that would be useful to the lawyer in serving other clients (Clients B, C, and D).
On that assumption, the opinion concludes that signing the agreement would create a concurrent conflict of interest under Rule 1.7. The lawyer's personal interest in honoring the confidentiality agreement would materially limit the lawyer's responsibilities to Clients B, C, and D, who could benefit from the same tax ideas. The opinion further concludes the conflict cannot be cured under Rule 1.7(b): the lawyer could not reasonably believe withholding beneficial tax strategies would not adversely affect those clients, and the clients are unlikely to consent once told the information could save them significant tax dollars. The opinion contrasts this with agreeing to keep secret a third party's proprietary information (such as a manufacturing process) that is not itself useful in performing legal services, which generally would not bar continued representation of other clients in the industry.
The opinion identifies two further issues. First, although the agreement does not fall squarely within Rule 5.6 (it is neither a partnership or employment restriction under 5.6(a) nor part of the settlement of a client controversy under 5.6(b)), the restriction on representing similar future clients implicates the policy behind Rule 5.6; the opinion cites ABA Formal Op. 93-371 and ABA Formal Op. 00-417, which found that agreeing not to use information learned in a representation effectively restricts the right to practice. Second, the opinion notes that if the package contains legal advice, holding it confidential could raise a Rule 5.5 unauthorized-practice question, but concludes that unauthorized-practice questions are too fact-specific to resolve on the general facts presented.
In practice
Under the Illinois Rules, the opinion holds that a lawyer cannot agree to keep legal interpretations confidential in a way that prevents the lawyer from using them for other clients, because that promise creates a non-consentable Rule 1.7 conflict and conflicts with the policy of Rule 5.6. The opinion distinguishes confidentiality promises about a third party's non-legal proprietary information, which generally do not impair the lawyer's ability to perform legal services for others.
Common questions
Q: Can a lawyer promise an outside firm never to use its tax ideas for other clients?
A: No, where the ideas are legal interpretations useful in serving other clients. The opinion concludes the promise creates a Rule 1.7 conflict that materially limits the lawyer's responsibilities to other clients.
Q: Can the client consent to cure the conflict?
A: The opinion concludes the conflict is not curable here: the lawyer could not reasonably believe withholding the strategies would not harm the other clients, and those clients are unlikely to consent once told the information could save them significant taxes.
Q: Is a promise to keep a third party's manufacturing process secret treated the same way?
A: No. The opinion distinguishes proprietary, non-legal information that is not useful in performing legal services; a lawyer may generally agree to keep that confidential and still represent other clients in the same industry.
Q: Does Rule 5.6 forbid this agreement outright?
A: Not squarely. The opinion concludes the agreement falls outside the literal terms of Rule 5.6 but implicates its policy against restrictions on the right to practice, citing ABA Formal Ops. 93-371 and 00-417.
Background and rules framework
The opinion interprets Illinois Rule 1.7 (concurrent conflicts of interest), including the cure conditions of Rule 1.7(b), Rule 5.6 (restrictions on a lawyer's right to practice), and Rule 5.5(a) (unauthorized practice of law). It draws on Section 121 of the Restatement (Third) of the Law Governing Lawyers and on ABA Formal Opinions 93-371 and 00-417.
Citations and references
Rules of Professional Conduct:
- MR 1.7 (concurrent conflicts of interest) / IL Rule 1.7
- MR 5.6 (restrictions on right to practice) / IL Rule 5.6(b)
- MR 5.5 (unauthorized practice of law) / IL Rule 5.5(a)
Other opinions cited:
- ABA Formal Op. 93-371 (1993): restrictions on a lawyer's practice as part of settlement
- ABA Formal Op. 00-417 (2000): settlement terms limiting a lawyer's use of information
See also
- ABA Formal Op. 00-417: Settlement Terms Limiting Use of Information
- ABA Formal Op. 06-444: Restrictive Covenants and Retirement Benefits
Source
- Landing page: https://www.isba.org/ethics/opinions/1102
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