If a jointly defended co-defendant turns hostile and hints he may change his testimony, can the firm share his recorded statement with the other parties, and must it withdraw?

Plain-English summary

An insurance company retained a firm to defend its insured and two of the insured's former employees in a civil suit. As part of discovery the firm tape-recorded conversations with the two former employees (a standard practice for the firm). In one conversation, an ex-employee expressed hostility toward the former employer, refused to sign his discovery, said he was getting his own counsel and instructed the firm to withdraw from his defense, and suggested his recollection might change absent some "financial reward" from the former employer. The firm sent him a motion to withdraw, a transcript of the conversation in which he discussed wanting a financial reward, and a reminder that perjury charges could follow false sworn testimony, and told him the transcript would stay confidential at that point. The questions were whether the firm could release the transcript to the insurer, the insured, or the other employee, and whether a conflict had arisen requiring withdrawal from the employer's defense.

On disclosure, the Committee concluded the firm may not reveal the transcript to the insurer, the insured, or the other ex-employee. The information was gained in the attorney-client relationship and is protected by Rule 1.05; it cannot be disclosed without the client's informed consent. Rule 1.05(c)(7) lets a lawyer reveal confidential information when the lawyer has reason to believe it necessary to prevent the client from committing a criminal or fraudulent act, but that exception does not allow blanket disclosure: even where disclosure to the court would be appropriate, disclosure to the other defendants would not be, unless necessary to prevent the client's proposed criminal or fraudulent act. Rule 3.03 similarly requires disclosing a fact to a tribunal when necessary to avoid assisting a crime or fraud, and does not contemplate disclosure to parties. Because the ex-employee's threatened change of testimony was so far only a threat, and the perjury warning may have changed his mind, disclosure to the court was premature; until the lawyer has a more definite indication that the client intends to perjure himself, the lawyer may not disclose the transcript.

On withdrawal, the Committee concluded the situation creates a conflict requiring the firm to withdraw from representing the employer and the remaining ex-employee. Rule 1.09 bars a lawyer who has formerly represented a client from representing another person in a matter adverse to the former client where it is the same or a substantially related matter, where the new client questions the validity of the lawyer's prior work, or where the representation will in reasonable probability involve a violation of Rule 1.05. The ex-employee had assumed a position hostile to the former employer, and continuing to represent the employer or the other ex-employee could force the firm to choose between fully representing its remaining client and protecting the former client's confidences. To safeguard those confidences, the firm must withdraw from representing any of the parties.

Currency note

This opinion was issued in 1994, under the Texas Disciplinary Rules of Professional Conduct that took effect January 1, 1990. Texas did not adopt the ABA's Ethics 2000 revisions; its rules have been amended only piecemeal since, including the comprehensive 2021 revisions adopted by Texas Supreme Court order. 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 the firm give the hostile co-defendant's recorded statement to the insurer or the other defendants?

A: The Committee concluded no. The information is confidential under Rule 1.05 and cannot be disclosed to the insurer, the insured, or the other ex-employee without the client's informed consent.

Q: Can the firm ever reveal the statement because of the perjury hint?

A: Only to the court, and only if the client actually moves to commit perjury. Rule 1.05(c)(7) and Rule 3.03 permit disclosure to a tribunal to avoid assisting a crime or fraud, but not disclosure to the other parties, and a mere threat is not enough.

Q: Does the firm have to withdraw?

A: The Committee concluded yes. The former client's hostility creates a conflict under Rule 1.09, and to protect his confidences the firm must withdraw from representing the employer and the remaining ex-employee.

Background and rules framework

The opinion interprets Texas Disciplinary Rule 1.05 (confidentiality of information, including the 1.05(c)(7) exception for preventing a client's criminal or fraudulent act; ABA Model Rule 1.6), Rule 3.03 (candor toward the tribunal, requiring disclosure to a tribunal to avoid assisting a crime or fraud; Model Rule 3.3), and Rule 1.09 (conflict of interest: former client; Model Rule 1.9), which protects a former client when a lawyer would otherwise act adversely in the same or a substantially related matter.

Citations and references

Rules of Professional Conduct:

• MR 1.6 (confidentiality), MR 1.9 (duties to former clients), MR 3.3 (candor toward the tribunal)
• Texas Disciplinary Rules 1.05 (including (c)(7)), 1.09, 3.03

See also

• TX Ethics Op. 487: Joint Representation of Employer and Employee Under an Advance Agreement
• TX Ethics Op. 504: Defense Counsel's Silence on a Prosecutor's Mistaken Prior-Convictions Statement
• TX Ethics Op. 511: A Firm Representing Children Against a Father It Has Represented

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-482/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_482.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

QUESTION PRESENTED

May the law firm release the contents of the transcript to either the insurer, the insured, or the other employee? If so, under what circumstances?
Has a conflict of interest arisen sufficient to require the firm to withdraw from its defense of the employer?

STATEMENT OF FACTS

An insurance company retained a law firm to defend a civil suit brought against an insured and two of the insured's former employees. The law firm solicited discovery from each of the three defendants. As part of the discovery process, the firm tape-recorded various conversations between the firm and the two former employees. Tape-recording such conversations is a standard operating procedure for the firm.

During the telephone conversations, one of the former employees indicated hostility toward his former employer and expressed dissatisfaction with the manner in which the former employer had treated him. The ex-employee stated his refusal to sign his completed discovery. He indicated that he was arranging for his own defense counsel and instructed the firm to withdraw immediately from his defense. The ex-employee also suggested that his recollection of facts might change in the absence of some type of "financial reward" from his former employer.

The firm immediately forwarded a Motion for Withdrawal to the ex-employee, a transcript of the telephone conversation in which the former employee discussed his desire for a financial reward, and a reminder that perjury charges might possibly arise from his failure to tell the truth during sworn testimony. The firm tells the ex-employee that his transcript would remain confidential "at that point in time."

SHORT ANSWERS
The firm may not disclose the contents of the transcript to the insurer, the insured, or the other ex-employee. The firm gained this information as part of the attorney-client relationship and cannot disclose it without the client's informed consent. If the client perjures himself in open court, the firm may reveal the contents of the transcript to the court in order to avoid assisting the client's commission of a criminal or fraudulent act. Until the ex-employee definitely manifests an intention to commit perjury, however, the firm cannot disclose the confidential information.
The factual situation creates a conflict of interest that requires the firm's withdrawal from its representation of the employer and the remaining ex-employee.
DISCUSSION CONFIDENTIALITY ARISING FROM ATTORNEY-CLIENT RELATIONSHIP
Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 1.05 sets forth the protection afforded to information gained during the attorney-client relationship. The rule states that:
" ... a lawyer shall not knowingly:
1. Reveal confidential information of a client or a former client to:
(i) a person that the client has instructed is not to receive the information; or
(ii) anyone else, other than the client, the client's representatives, or the members, associates, or employees of the lawyers' law firm."
The rule provides that a lawyer may reveal confidential information "when the lawyer has reason to believe it is necessary to do so in order to prevent the client from committing a criminal or fraudulent act." Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 1.05(c)(7). Thus, the requirement of confidentiality does not override all competing policy interests.

Although Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 1.05(c)(7) provides the law firm with the latitude to prevent a criminal or fraudulent act from being committed, the exception does not allow blanket disclosure of confidential communications. Even where disclosure to the court would be appropriate under this subsection, disclosure to the other defendants would not be permissible unless it were necessary to prevent the client's proposed criminal or fraudulent act. Similarly, Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 3.03 requires the lawyer to "disclose a fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act." The rule does not contemplate disclosure to parties to the lawsuit.

Under the facts presented, the issue of the law firm's disclosure of the information to the court may be premature. The former employee's threatened change of testimony is thus far only a threat; the attorney's warming about the consequences of perjury may have changed the ex-employee's mind about committing perjury. Until the attorney has some more definite indication that the defendant intends to perjure himself, he may not disclose the contents of the transcript.

CONFLICT OF INTEREST SUFFICIENT TO REQUIRE WITHDRAWAL
The Tex. Disciplinary Rules of Prof. Conduct discuss potential conflicts of interest that would require the attorney's withdrawal from the representation. Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 1.09. states that:
(a) Without prior consent, a lawyer who personally has formerly represented a client in a matter shall not thereafter represent another person in a matter adverse to the former client:(1) if it is the same or a substantially related matter;
(2) in which such other person questions the validity of the lawyer's services or work product for the former client; or
(3) if the representation in a reasonable probability will involve a violation of Rule 1.05.

The purpose of Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 1.09 is to protect a former client's interests. Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 1.09, Comment 10. The rule guards against an attorney who, having previously represented a client, would use information gained during that representation to the former client's detriment. Rule 1.09 refers specifically to Rule 1.05, which underscores the importance of protecting the confidentiality of previous communications of a former client.

Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 1.09 applies to the present factual situation. The ex-employee has assumed a position hostile to his former employer. Were the law firm to continue to represent the former employer or the other former employee, it could be forced to choose between thoroughly representing its remaining client and maintaining the confidentiality of information obtained from its former client. Tex. Disciplinary Rules of Prof. Conduct (1992), Rule 1.09 protects a client in situations such as this one.

When an attorney undertakes a dual representation, the attorney owes obligations to each client. The attorney may not lessen the scope of those duties. To the extent the firm represented the former employee, it is bound to protect any confidences the firm received. In order to adequately safeguard those confidences, the firm must withdraw from representing any of the parties.

CONCLUSION

When an attorney undertakes a dual representation, the attorney owes obligations to each client. The attorney may not lessen the scope of those duties. To the extent the firm represented the former employee, it is bound to protect any confidences the firm received. In order to adequately safeguard those confidences, the firm must withdraw from representing any of the parties.

Tex. Comm. On Professional Ethics, Op. 482 (1994)