Can a lawyer who drafted a real estate contract hand it to the client's broker without the client's consent, and does the lawyer's own interest in withholding it create a conflict?
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This page answers the general question as of 2019. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.
Plain-English summary
A New York real estate transactional lawyer practices in a locale where, by local custom, the lawyer (not the broker) prepares the contract of sale. Representing a seller, the lawyer received a request from the client's broker for a copy of the signed buyer-seller contract. The lawyer hesitated to comply without the client's consent and also did not want this broker, whom the lawyer often encounters, to see contract provisions the lawyer describes as uniquely the lawyer's own design. The lawyer asked whether it may disclose the contract to the broker without the client's consent, and whether the lawyer's own interest in withholding it creates a conflict when the lawyer seeks the client's consent.
On confidentiality, the committee applies Rule 1.6(a), which bars knowingly revealing confidential information (information gained during the representation that is privileged, likely embarrassing or detrimental if disclosed, or that the client asked be kept confidential) absent the client's informed consent. Neither Rule 1.6(b) nor the implied-authorization exception is shown on these facts, so the committee assumes the contract is confidential and must be protected absent consent. The lawyer also may not simply ignore the broker's request: Rule 1.4(a)(1) requires promptly informing the client of any circumstance for which the client's informed consent (defined in Rule 1.0(j)) is required, and the adequacy of disclosure for informed consent depends on the information and the client's sophistication.
On conflict, the committee declines to speculate whether a broker-fee dispute underlies the request, but holds that the lawyer's own admitted personal, financial, and business reason for resisting disclosure implicates Rule 1.7(a)(2), which arises where a significant risk exists that the lawyer's own interests will adversely affect the lawyer's professional judgment for the client. Where disclosure may serve the client's interest but the lawyer wishes to withhold for the lawyer's own sake, that is a conflict. It may be consentable under Rule 1.7(b)(1) if the lawyer reasonably believes it can still provide competent and diligent representation, but the committee cannot imagine compliance with Rule 1.7 without the lawyer adequately disclosing the lawyer's own stake when advising the client whether to consent to disclosure.
In practice
Under this opinion, a lawyer who drafted a real estate sale contract must treat it as the client's confidential information and may release it to the client's broker only with the client's informed consent, after promptly informing the client of the broker's request under Rule 1.4. The opinion holds that when the lawyer has a personal or business reason of its own to withhold the contract, that interest is a Rule 1.7(a)(2) conflict; the lawyer must disclose its own stake to the client as part of obtaining adequate informed consent, and the conflict is consentable only if the lawyer reasonably believes it can still represent the client competently and diligently.
Common questions
Q: Can the lawyer give the contract to the client's broker without asking the client?
A: Per the opinion, no. A lawyer-drafted sale contract is confidential information under Rule 1.6(a) that the lawyer must protect absent the client's informed consent; no exception was shown on these facts.
Q: Can the lawyer just not respond to the broker's request?
A: Per the opinion, no. Rule 1.4(a)(1) requires the lawyer to promptly inform the client of any circumstance requiring the client's informed consent, so the lawyer must bring the request to the client.
Q: Why does the lawyer's wish to keep its drafting private create a conflict?
A: Per the opinion, because disclosure may serve the client's interest while the lawyer's own reason for withholding serves the lawyer; that is a significant-risk conflict under Rule 1.7(a)(2) that the lawyer must disclose when seeking the client's consent.
Background and rules framework
The opinion applies New York Rule 1.6(a) (confidentiality and its informed-consent exception), Rule 1.4(a)(1) (promptly informing the client of circumstances requiring consent), Rule 1.0(j) (definition of informed consent), and Rule 1.7(a)(2) and 1.7(b)(1) (the lawyer's own-interest conflict and when it is consentable). These correspond to ABA Model Rules 1.6, 1.4, and 1.7.
Citations and references
Rules of Professional Conduct:
- New York Rules of Professional Conduct 1.6(a); 1.4(a)(1); 1.0(j); 1.7(a)(2); 1.7(b)(1)
- ABA Model Rules 1.6, 1.4, 1.7 (analogues)
Other opinions cited:
- N.Y. State 1125 (2017): confidentiality as a principal obligation
- N.Y. State 1059 (2015); 1061 (2015): adequacy of disclosure for informed consent depends on facts and the client's sophistication
See also
- NY State Bar Op. 1189: Designating an Alternate Client Contact Person
- NY State Bar Op. 1198: Former Government Lawyer Responding to a Subpoena for Confidential Information
Source
- Landing page: https://nysba.org/ethics-opinion-1161/
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