Outside counsel may handle a variety of tasks for clients, including, potentially, receiving and responding to inquiries from government agencies on behalf of clients.

But there can be risks for outside counsel when a governmental agency—particularly those with law enforcement power—makes an informal inquiry regarding a client. In some instances, a government representative could, with or without warning, contact outside counsel to ask questions about the client’s activities, including the client’s business, relationships or financials.

In such cases, the corporate attorney may be called upon to navigate the inherent tension between being forthright with the inquiring government officials (perhaps in an attempt to clear up any perceived misunderstanding and resolve the inquiry swiftly and favorably), with the requirement to abide by counsel’s ethical obligations to guard client confidences, particularly where revealing information could cause the client to face criminal liability or a formal government investigation.

There can also be risks to the attorney. In recent years, law enforcement agencies like the U.S. Department of Justice have placed a greater emphasis on individual culpability for corporate wrongdoing. To that end, some investigations of corporate misconduct have sought to hold corporate counsel accountable as well.

Because these inquiries could implicate a thicket of competing obligations, risks, and ethical dilemmas, here are some tips to consider when the government comes knocking.

The Role of Counsel

At the moment of first contact with a government agent, the first issue for counsel to determine is what role the attorney will play. Is the attorney simply a “third-party witness” with access to information and documents related to a former client matter? Or does the client want the attorney to represent the client in the investigation?

The answer has the potential to create a conflict between the client and attorney and should be considered carefully. If the attorney is representing the client in connection with work previously performed by the attorney and which could cause the government to focus on the attorney, then representing the client could implicate conflict of interest issues.

Indeed, if the client’s conduct is under the government’s microscope, any advice provided by the lawyer to the client in furtherance of that conduct could face scrutiny. A lawyer who suggests to the government that the lawyer had knowledge or awareness of the client’s conduct could also transform his or herself into a material witness (putting the lawyer’s ability to continue to serve as counsel at risk) or, worse, face a criminal indictment.

Thus, when facing a government inquiry, the lawyer must evaluate whether he or she can take on the new representation and whether the inquiry itself creates a conflict between the lawyer and the client. It may be prudent for the lawyer to decline representation and to advise the client to obtain separate counsel in the inquiry or investigation going forward so the lawyer can respond separately as a witness.

If the lawyer takes on the matter, he or she should continually evaluate conflict issues as the inquiry progresses to insure that the lawyer is taking the appropriate steps to abide by its ethical obligations and ensure that all confidentiality obligations are met.

Duty of Confidentiality

Whether in a role as counsel or witness, a government inquiry will implicate whether confidentiality obligations permit an attorney to respond regarding a client’s conduct, business or finances.

When an attorney is asked questions about client activities, responding to those questions could implicate confidential information or be detrimental to the client. Pursuant to Rule 1.6(a) of the Georgia Rules of Professional Conduct, “[a] lawyer shall maintain in confidence all information gained in the professional relationship with a client, including information which the client has requested to be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client, unless the client gives informed consent” for the attorney to provide information, “except for disclosures that are impliedly authorized in order to carry out the representation, or are required by these rules or other law, or by order of the court.”

There are limited exceptions to this requirement of confidentiality that may apply in a criminal or quasi- criminal investigation. Under Rule 1.6(b)(1)(i), a lawyer has the option to reveal information “to avoid or prevent harm or substantial financial loss to another as a result of client criminal conduct or third party criminal conduct clearly in violation of the law.” This provision is not mandatory and only applies “if the harm or loss [resulting from the criminal conduct] has not yet occurred.” In other words, although an attorney is clearly not permitted to assist a client in fraudulent or illegal conduct, it is not unethical or a violation of the rules for lawyers not to take preventive action.

Get Help

Not only is it prudent to consider the implications of the lawyer’s ethical obligations to the client, but lawyers also may benefit from calling in some backup. That is because responding to questions about a client could expose the client, the lawyer, and even the lawyer’s firm to potential risk.

When the government begins its probe—even if the lawyer is told the agent just has some “informal” questions about a client—lawyers should inform the client of the inquiry. Notification also provides the client with the opportunity to provide direction on how to respond.

The lawyer may also consider notifying the firm’s counsel as well. Getting another set of eyes involved can be helpful to stay on the right path. Under certain circumstances, in-house counsel can involve outside counsel to assist the firm and the lawyer.

Consider these issues when responding to inquiries regarding clients from governmental agencies—particularly those with law enforcement power—to minimize the risks inherent in such circumstances.