Can a lawyer share confidential client information, including trust-account data, with an outside accounting or bookkeeping service?

Plain-English summary

A lawyer asked whether he could disclose to his outside accounting agency information relating to a trust account maintained for a client's funds. The committee answered yes, subject to conditions, and addressed a broader interpretive question along the way.

The committee started from EC 4-3, which provides that unless the client otherwise directs, a lawyer may give limited information from his files to an outside agency for statistical, bookkeeping, accounting, data-processing, banking, printing or other legitimate purposes, provided he uses due care in selecting the agency and warns it that the information must be kept confidential. The central question was whether the phrase "unless the client otherwise directs" implicitly requires the lawyer to notify the client first. The committee said the better, more prudent practice is to communicate the intention to the client, but it could not say the Code requires prior notice.

The committee reasoned that a lawyer may safely assume he is free to communicate to outside agencies, for limited office purposes, confidential information the client has not asked to be kept secret and whose disclosure would not embarrass or harm the client. Even where disclosure could be detrimental if it reached hostile parties, the lawyer may still disclose to an outside agency where the client could have foreseen the disclosure and would not reasonably be expected to object to that limited use; reasonable foreseeability relieves the lawyer of any duty to notify. Once the client directs that information not be revealed to anyone, however, the lawyer can no longer assume consent.

Applying those principles, the committee found that where a lawyer maintains a trust account for a client's funds, the client may reasonably be expected to foresee disclosure for office-accounting purposes, so unless and until the client instructs otherwise the lawyer is free to give the trust-account information to an outside agency for office accounting. Throughout, the lawyer must comply with the EC 4-3 proviso of due care in selection and a confidentiality warning, and where added precautions are needed must exercise reasonable care to prevent the agency from revealing the information (DR 4-101(D)). The question was answered in the affirmative, subject to those conditions.

Currency note

This opinion was issued in 1977, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (confidentiality is now governed by Rule 1.6, including the duty to make reasonable efforts to prevent unauthorized disclosure). 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: Can a lawyer use an outside bookkeeping or accounting service for client matters?

A: Under this opinion, yes, for legitimate office purposes. The committee read EC 4-3 to permit giving limited client information to such agencies with due care in selection and a confidentiality warning.

Q: Must the lawyer tell the client first?

A: The committee said notifying the client is the better and more prudent practice but held the Code does not require it where the client could reasonably foresee the disclosure for that limited office purpose.

Q: What happens if the client says not to share the information?

A: Then the lawyer can no longer assume consent. The committee held that once the client directs that information not be revealed to anyone, the foreseeability assumption no longer applies.

Background and rules framework

The opinion applies EC 4-3 (limited disclosure to outside agencies for office purposes) and DR 4-101(D) (reasonable care to prevent agency disclosure), both part of the Code's confidentiality scheme. The current Model Rule analogue is Rule 1.6 (confidentiality of information), which likewise requires reasonable efforts to prevent unauthorized disclosure when a lawyer uses outside service providers.

Citations and references

Rules of Professional Conduct:

• MR 1.6 (confidentiality of information)
• NY EC 4-3; DR 4-101(D)

Other opinions cited:

• ABA Inf. 1364 (1976); ABA Inf. 1002 (1968): disclosure to outside agencies for limited purposes
• N.Y. State 95 (1969): foreseeable disclosure of trust-account information
• Ariz. Op. 190A (1966); N.Y. County 413 (1953)

See also

• NY State Bar Op. 485: A legal aid lawyer disclosing client confidences to a research study
• NY State Bar Op. 490: A legal service organization and client confidences

Source

• Landing page: https://nysba.org/opinion-473/