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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


Michigan Legal Ethics

1.13   Rule 1.13 Organization as Client

1.13:100   Comparative Analysis of MI Rule

Primary Michigan References: MI Rule 1.13
Background References: ABA Model Rule 1.13, Other Jurisdictions
Commentary:

1.13:101      Model Rule Comparison

MRPC 1.13 varies from the Model Rules by adding, in Subsection (c), a provision that the lawyer may take such action in addition to resigning by also revealing information otherwise protected by Rule 1.6 if the lawyer reasonably believes that the highest authority in the organization is acting in conflict with the interest of the organization and that revealing the information is necessary in the best interest of the organization. Otherwise, this Michigan Rule is substantially identical to the Model Rule.

1.13:102      Model Code Comparison

[The discussion of this topic has not yet been written.]

1.13:200   Entity as Client

Primary Michigan References: MI Rule 1.13(a)
Background References: ABA Model Rule 1.13(a), Other Jurisdictions
Commentary: ABA/BNA § 91:2001, ALI-LGL §§ 96, 97, Wolfram § 8.3
MI Commentary: Dubin and Schwartz MRPC 1.13

When the client is an entity, the client/lawyer relationship is maintained through an intermediary -- an agent such as an officer or employee -- between the client and the lawyer. Because of this situation, in certain circumstances, the lawyer may be concerned whether the intermediary legitimately represents the client. This Rule makes clear that the lawyer retained to represent an organization represents the organization as distinct from its constituents and imposes upon the lawyer a duty to reasonably protect the best interest of the organization if the lawyer learns that an agent associated with the organization is acting unlawfully or in violation of a duty to the organization. In Informal Opinion RI-254, the State Bar stated that a dissenting council member’s request for an opinion on the unconstitutionality of an ordinance which had been passed was contrary to the expressed goals of the organization and should not be granted. In the case of In re Grand Jury Proceedings, 434 F Supp 648 (ED Mich, 1977), affirmed 570 F2d 562 (CA 6, 1978) the operating official of a corporation who was a member of the so-called control group claimed the attorney-client privilege to prevent disclosure of communications between himself and the corporation’s attorney when the corporation waived the privilege. The court held that because the privilege belonged to the corporation, which waived it, and because the individual was not a client of the lawyer and did not have a privilege as to communications with the corporation’s lawyer, the court would not quash the subpoena directing the lawyer to testify as to those communications. Subparagraph (c) even permits the lawyer to reveal information otherwise protected by Rule 1.6 under certain circumstances. The Rule also permits dual representation by the lawyer representing an organization and any of its directors, officers, employees, members, shareholders or other constituents subject to the provisions of Rule 1.7.

1.13:210      Lawyer with Fiduciary Obligation to Third Person

Much of the analysis of situations which arise under this Rule requires reference to the dictates of Rule 1.7. See generally Discussion under 1.7 above. See also Informal Opinion RI-96 (Assistant prosecutor may advise sheriff’s department if he reasonably believes advice will not adversely affect representation and clients consent; such lawyer may not act as county prosecutor in matter for which advice was given); and RI-112 (Prosecutor’s enforcement of law against county employees is not ethically prohibited).

1.13:220      Lawyer Serving as Officer or Director of an Organization

See Discussion under 1.7:310, 1.7:330 and 1.7:340 above.

1.13:230      Divers Kinds of Entities as Organizations

[The discussion of this topic has not yet been written.]

1.13:300   Preventing Injury to an Entity Client

Primary Michigan References: MI Rule 1.13(b) & (c)
Background References: ABA Model Rule 1.13(b) & (c), Other Jurisdictions
Commentary: ABA/BNA § 91:2001, ALI-LGL § 96, Wolfram § 13.7
MI Commentary: Dubin and Schwartz MRPC 1.13

The Rule in Subparagraph (b) provides for several measures which an attorney should consider in order to avoid substantial injury to the organization. Subparagraph (c) permits the lawyer to take remedial action in the best interest of the organization, including revealing information otherwise protected by Rule 1.6 under certain circumstances.

1.13:310      Resignation Versus Disclosure Outside the Organization

Subparagraph (c) seems to suggest that disclosure of information otherwise protected by Rule 1.6 under the circumstances delineated is the proper path for the lawyer to take in the best interest of the organization rather than resignation.

1.13:400   Fairness to Non-Client Constituents Within an Entity Client

Primary Michigan References: MI Rule 1.13(d)
Background References: ABA Model Rule 1.13(d), Other Jurisdictions
Commentary: ABA/BNA § 91:2001, ALI-LGL § 103, Wolfram § 13.7.5
MI Commentary: Dubin and Schwartz MRPC 1.13

See Discussion under 1.13:300 above.

1.13:500   Joint Representation of Entity and Individual Constituents

Primary Michigan References: MI Rule 1.13(e)
Background References: ABA Model Rule 1.13(e), Other Jurisdictions
Commentary: ABA/BNA § 91:2601, ALI-LGL § 131, Wolfram § 13.7
MI Commentary: Dubin and Schwartz MRPC 1.13

See Discussion under 1.13:200 above.

1.13:510      Corporate Counsel's Role in Shareholder Derivative Actions

When the shareholders or members of a corporation bring suit to compel the directors to perform their legal obligations in the supervision of the organization through a derivative action, the question arises whether counsel for the organization may defend such an action. Most derivative actions are a normal incident of an organization’s affairs, to be defended by the organization’s lawyer like any other suit. However, the lawyer representing the corporation must keep in mind that if the claim involves serious charges of wrongdoing by those in control, a conflict under Rule 1.7 may arise and consideration must be given as to whether independent counsel should represent the directors.

1.13:520      Representing Client with Fiduciary Duties

See Discussion generally under Rule 1.7 above. See also In re Green Charitable Trust, 172 Mich App 298; 431 NW2d 492 (1988) discussed supra at 1.7:340.

1.13:530      Representing Government Client

This Rule applies to governmental organizations as well as private organizations. The difference is that public business is involved and statutes and regulations may further define the duties of lawyers employed by the government. The lawyer must determine with precision the identity of the client, that is, whether it is the government as a whole, a department or a bureau. Nevertheless, the duty to the client and the reasonable courses of action are essentially the same as when the client is a private organization. See Comment to Rule 1.13.