When A Lawyer Is Representing A Corporation, Who Exactly Is The Client?
A recurring question for lawyers who represent corporations and other entities is who exactly is the attorney representing? What is the scope of the attorney’s clientele in this situation? Does the attorney also represent others? Does the attorney represent shareholders? Affiliate and subsidiary corporations? Officers? Directors?
In California, Rule of Professional Conduct 1.13 “Organization as Client” answers this question.
A lawyer employed or retained by an organization represents the organization through its duly authorized constituents. A lawyer must conform his or her representation to the concept that the client is the organization itself, acting through its duly authorized directors, officers, employees, members, shareholders, or other constituents overseeing the engagement at hand.
An organizational client is a legal entity, which, of course, may solely act through its officers, directors, employees, shareholders, and other constituents. When one of these organizational constituents in their organizational capacity communicates with the organization’s lawyer, the communication is protected by Rule of Professional Conduct (RPC) 1.6. Any agent or fiduciary authorized to act on behalf of an organization is a constituent of the organization.
Here is an example, if an organizational client requests a lawyer to investigate allegations of wrongdoing, RPC 1.6 applies to interviews made during this investigation between the lawyer and the client’s employees. However, this does not mean that the constituents of an organizational client are also the clients, in fact, of the lawyer. Attorneys may not disclose to these constituents any information relating to their representation except for disclosures explicitly or impliedly authorized by the organizational client necessary to carry out the representation or as otherwise permitted by RPC 1.6 and 1.13(c).
In dealing with an organization’s constituents, an attorney representing an organization must explain the identity of the attorney’s client whenever the attorney knows or reasonably should know that the organization’s interests are adverse to those of the constituents with whom the attorney is dealing.
An attorney representing an organization may also represent any of its constituents, subject to the provisions of the Professional Rules. If the organization’s consent to the dual representation is required by any of these rules, the consent must be given by an appropriate official, constituent, or body of the organization other than the individual who is to be represented, or by the shareholders.
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