Is a corporation's general counsel responsible for the ethical conduct of an in-house lawyer the company keeps outside the legal department and outside the GC's control?

Plain-English summary

A Washington-licensed general counsel works in a corporation's in-house legal department. The corporation hired another lawyer ("Other Lawyer"), licensed in good standing in another U.S. jurisdiction but not in Washington, gave that lawyer the title "Staff Attorney," and placed the lawyer outside the legal department and outside the general counsel's control, refusing the general counsel's requests to bring the lawyer under that control. The general counsel asked whether and to what extent he is responsible for ensuring the Other Lawyer complies with the RPCs.

The committee first addressed RPC 5.5(d)(1), which allows an out-of-state lawyer to provide legal services to a Washington employer only on a temporary basis (Washington's Comment 17 requires general admission under APR 3 or house-counsel admission under APR 8(f) for a systematic in-state presence). It reasoned that unless the Other Lawyer's practice is authorized by federal or other law or is temporary, the Other Lawyer must obtain admission to avoid the unauthorized practice of law, including being held out as "Staff Attorney." The committee noted RPC 5.5(a) bars assisting another in unauthorized practice, but that the general counsel's status as an employee with no supervisory responsibility over the Other Lawyer would not place him in violation, though the answer could differ if the general counsel worked with the Other Lawyer on a matter requiring unauthorized practice.

On supervisory duties, the committee applied RPC 1.0A(c) (which includes a corporation's legal department within "law firm") and RPC 5.1. Because the Other Lawyer is, by hypothesis, not part of the legal department and the general counsel has no direct or indirect control, RPC 5.1(a) and 5.1(b) impose no duty to supervise; and even if they did, the general counsel's unsuccessful attempts to bring the Other Lawyer under his control would constitute "reasonable efforts." The committee found no violation of RPC 5.1(c)(1) (no power to order conduct, absent knowing ratification) or RPC 5.1(c)(2) (control attempts rebuffed). It added that the general counsel's competence duty under RPC 1.1 and entity duties under RPC 1.13(b) may require advising the corporation of the Other Lawyer's RPC 5.5(d)(1) obligations and recommending action, and that the general counsel should tell others in the legal department they cannot assist the Other Lawyer in unauthorized practice.

In practice

Under the Washington rules as they stood at the time of the opinion (the opinion was amended in 2017), the committee held that a general counsel has no RPC 5.1(a)-(b) duty to supervise an in-house lawyer the corporation deliberately keeps outside the legal department and outside the general counsel's control, and that the general counsel's rebuffed efforts to gain control would themselves satisfy any "reasonable efforts" requirement. The opinion identifies the absence of managerial or direct supervisory authority as the controlling factor for RPC 5.1, and locates the general counsel's remaining obligations in RPC 1.1 (advising the entity client of the unauthorized-practice risk) and RPC 1.13(b) (acting on a legal violation imputable to the organization), plus RPC 5.5(a)'s bar on assisting unauthorized practice.

Common questions

Q: Is a corporation's general counsel responsible for another in-house lawyer's RPC compliance?

A: Not where the corporation places that lawyer outside the legal department and outside the general counsel's control. The committee held RPC 5.1(a) and 5.1(b) impose no supervisory duty in those circumstances.

Q: What if the general counsel tried to bring the other lawyer under supervision but the company refused?

A: The committee said that even if a duty applied, the general counsel's unsuccessful attempts to place the lawyer in the legal department or otherwise subject the lawyer to control would constitute "reasonable efforts" under RPC 5.1.

Q: Can an out-of-state lawyer work in-house in Washington without Washington admission?

A: Only on a temporary basis. The committee held that under RPC 5.5(d)(1) and Washington's Comment 17, a lawyer with a systematic in-state presence must obtain general admission under APR 3 or house-counsel admission under APR 8(f), or risk unauthorized practice.

Q: Does the general counsel have any duty at all here?

A: The committee said the general counsel may, under RPC 1.1 and RPC 1.13(b), need to advise the corporation of the other lawyer's RPC 5.5(d)(1) obligations and recommend action, and must not let others in the legal department assist the other lawyer's unauthorized practice (RPC 5.5(a), RPC 8.4(a)).

Background and rules framework

The opinion interprets Washington RPC 5.1 (Model Rule 5.1, responsibilities of managerial and supervisory lawyers), RPC 1.0A(c) (Model Rule 1.0(c), defining "firm" to include a corporate legal department), RPC 5.5(a) and 5.5(d)(1) (Model Rule 5.5, unauthorized and multijurisdictional practice, with Washington's Comments 16 and 17 and APR 3/APR 8(f)), RPC 1.1 (Model Rule 1.1, competence), and RPC 1.13(b) (Model Rule 1.13, organization as client). It also references GR 24 and RCW 2.48.180 on unauthorized practice and RPC 8.4(a).

Citations and references

Rules of Professional Conduct:

• Model Rule 5.1 / Washington RPC 5.1 (managerial and supervisory responsibilities)
• Model Rule 1.0(c) / Washington RPC 1.0A(c) (definition of "firm")
• Model Rule 5.5 / Washington RPC 5.5(a), 5.5(d)(1) (unauthorized and multijurisdictional practice)
• Model Rule 1.1 / Washington RPC 1.1 (competence)
• Model Rule 1.13 / Washington RPC 1.13(b) (organization as client)
• Washington RPC 8.4(a) (violating the rules through the acts of another)

Statutes:

• RCW 2.48.180 (unauthorized practice of law)
• Washington GR 24; APR 3; APR 8(f) (admission requirements)

See also

• ABA Formal Op. 03-429: supervising a mentally impaired lawyer in the firm
• ABA Formal Op. 467: prosecutors' managerial and supervisory obligations
• ABA Formal Op. 08-453: in-house ethics consulting

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1665

Original opinion text

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

Advisory Opinion: 2219
Year Issued: 2012
RPC(s): RPC 1.0A(c), 1.1, 1.13(b), 5.1(a)-(c), 5.5(a), (d)(1)
Subject: Corporate In-House General Counsel Responsibility for Another In-House Lawyer who is Not in the Same Legal Department

This opinion addresses the supervisory responsibility of a corporate in-house general counsel (the “General Counsel”) for another in-house lawyer-employee who is not a part of General Counsel’s legal department but will nonetheless give legal advice to the corporation on at least some occasions (the “Other Lawyer”).

BACKGROUND

General Counsel is licensed in Washington and is an employee of Corporation who represents Corporation from an office in its Washington headquarters. Other Washington-licensed lawyers work with General Counsel as a part of Corporation’s in-house Legal Department.

Recently, Corporation hired Other Lawyer but did not place Other Lawyer in the Legal Department or otherwise subject Other Lawyer to control by General Counsel. Other Lawyer is not licensed in Washington but is licensed and in good standing in another United States jurisdiction. Corporation has decided to give Other Lawyer the title “Staff Attorney” even though Other Lawyer is not a member of the Legal Department.

General Counsel has questions about whether, or to what extent, he is responsible for assuring that Other Lawyer acts consistently with the RPCs. Although General Counsel has sought to place Other Counsel in the Legal Department or otherwise to have Other Counsel become subject to General Counsel’s direct or indirect control, Corporation has refused to take either step.

DISCUSSION

1. RPC 5.5(d)(1): Authorized In-House Practice

RPC 5.5(d)(1) governs practice by in-house counsel employed in Washington who are only licensed in another state:

(d) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services in this jurisdiction that:

(1) are provided to the lawyer's employer or its organizational affiliates and are (i) provided on a temporary basis and (ii) not services for which the forum requires pro hac vice admission; or (2) are services that the lawyer is authorized to provide by federal law or other law of this jurisdiction.

Comments [16] and [17] to RPC 5.5 explain that:

[16] Paragraph (d)(1) applies to a lawyer who is employed by a client to provide legal services to the client or its organizational affiliates, i.e., entities that control, are controlled by, or are under common control with the employer. This paragraph does not authorize the provision of personal legal services to the employer's officers or employees. The paragraph applies to in-house corporate lawyers, government lawyers and others who are employed to render legal services to the employer. The lawyer's ability to represent the employer outside the jurisdiction in which the lawyer is licensed generally serves the interests of the employer and does not create an unreasonable risk to the client and others because the employer is well situated to assess the lawyer's qualifications and the quality of the lawyer's work.

[17] [Washington revision] In Washington, paragraph (d)(1) applies to lawyers who are providing the services on a temporary basis only. If an employed lawyer establishes an office or other systematic presence in this jurisdiction for the purpose of rendering legal services to the employer, the lawyer must seek general admission through APR 3 or house counsel admission under APR 8(f).

It follows that unless Other Lawyer’s practice is authorized by federal preemption, is authorized by other law or constitutes a temporary practice in Washington, Other Lawyer must obtain general or in-house counsel admission in order to avoid engaging in the unauthorized practice of law (“UPL”). This would include holding Other Lawyer out as “Staff Attorney.”

It also follows that if Other Lawyer is engaged in UPL, General Counsel would need to pay attention to RPC 5.5(a), which provides that: “A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so.” General Counsel’s status as an employee of Corporation who has neither direct nor indirect supervisory responsibility for Other Counsel’s activities would not place General Counsel in violation of RPC 5.5(a). The answer would be different if, for example, General Counsel undertook to work with Other Counsel on a legal matter that required Other Counsel to engage in UPL or to be held out as licensed to practice in Washington if he is not.

This opinion is limited to General Counsel’s supervisory responsibilities. Moreover, the Committee on Professional Ethics does not give advice on violations of law outside the RPCs. But we note that General Counsel, by virtue of his/her role as counsel for an entity under RPC 1.13, has other duties that may be triggered if Other Lawyer is practicing law in Washington on the entity’s behalf without a license to do so, as contemplated by GR 24 and RPC 5.5(d)(1). Other Lawyer may also be in violation of RCW 2.48.180. At a minimum, General Counsel’s duty of competent representation under RPC 1.1 might require General Counsel to advise his/her client of Other Lawyer’s obligations under RPC 5.5(d)(1) and recommend appropriate action. General Counsel also owes duties to the entity under RPC 1.13(b) that are triggered if an employee for the organization is engaged in action that is a violation of law that reasonably might be imputed to the organization and might result in substantial injury to the organization.

2. RPC 5.1: Supervisory Duties

RPC 1.0A(c) includes “the legal department of a corporation or other organization” within the definition of “law firm.” RPC 5. 1 provides that:

(a) A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.

(b) A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.

(c) A lawyer shall be responsible for another lawyer’s violation of the Rules of Professional Conduct if:

(1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or (2) the lawyer is a partner or has comparable managerial authority in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.”

Comments [1] through [3] to RPC 5.1 elaborate on these duties:

[1] Paragraph (a) applies to lawyers who have managerial authority over the professional work of a firm. See Rule 1.0A(c). This includes members of a partnership, the shareholders in a law firm organized as a professional corporation, and members of other associations authorized to practice law; lawyers having comparable managerial authority in a legal services organization or a law department of an enterprise or government agency; and lawyers who have intermediate managerial responsibilities in a firm. Paragraph (b) applies to lawyers who have supervisory authority over the work of other lawyers in a firm.

[2] Paragraph (a) requires lawyers with managerial authority within a firm to make reasonable efforts to establish internal policies and procedures designed to provide reasonable assurance that all lawyers in the firm will conform to the Rules of Professional Conduct. Such policies and procedures include those designed to detect and resolve conflicts of interest, identify dates by which actions must be taken in pending matters, account for client funds and property and ensure that inexperienced lawyers are properly supervised.

[3] Other measures that may be required to fulfill the responsibility prescribed in paragraph (a) can depend on the firm’s structure and the nature of its practice. In a small firm of experienced lawyers, informal supervision and periodic review of compliance with the required systems ordinarily will suffice. In a large firm, or in practice situations in which difficult ethical problems frequently arise, more elaborate measures may be necessary. Some firms, for example, have a procedure whereby junior lawyers can make confidential referral of ethical problems directly to a designated senior partner or special committee. See Rule 5.2. Firms, whether large or small, may also rely on continuing legal education in professional ethics. In any event, the ethical atmosphere of a firm can influence the conduct of all its members and the partners may not assume that all lawyers associated with the firm will inevitably conform to the Rules.

Since Other Lawyer is, by hypothesis, not a part of the Legal Department and General Counsel has no direct or indirect control over Other Lawyer, RPC 5.1(a) and 5.1(b) impose no duty on General Counsel to supervise Other Counsel. n.1 Even if they did, however, General Counsel’s unsuccessful attempts to have Corporation place Other Counsel in the Legal Department or otherwise to subject Other Counsel to General Counsel’s control would constitute “reasonable efforts” under these particular circumstances. n.2 The fact that RPC 1.0A(c) refers to “the legal department of a corporation or other organization” (emphasis supplied) does not, in our opinion, permit or require us to ignore the fact that Corporation has effectively chosen to have more than one legal department.

Since General Counsel cannot order Other Lawyer to do or refrain from doing anything, there would be no violation of RPC 5.1(c)(1) unless General Counsel knowingly ratifies an RPC violation by Other Lawyer. Similarly, and given that General Counsel’s attempts to control or limit Other Lawyer’s activities have all been rebuffed, there would be no violation of RPC 5.1(c)(2).

(Amended 2017)

Footnotes:

1. It also appears that Other Lawyer cannot fairly be described as a non-lawyer for whom General Counsel would have some degree of responsibility under RPC 5.3.

2. In addition to these unsuccessful efforts, however, General Counsel should inform others in the Legal Department that they cannot assist Other Lawyer in UPL. See the discussion earlier in this opinion about RPC 5.5(a). See also RPC 8.4(a), making it professional misconduct for a lawyer to “violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another.”