Legal Opinions and Potential Ethical Issues

Picture this: a client asks their attorney to provide them with their legal opinion on the matter. It’s something that seems pretty straightforward and common, but depending on the circumstances, there may be unexpected ethical issues that could arise even in connection with an apparently simple legal opinion.

When an attorney is asked to evaluate a matter, knowing that their evaluation will then be shared with third-parties, it represents a deviation from the normal attorney-client relationship. The attorney risks getting caught between two competing interests, such as when they want to give an impartial opinion that will benefit the client, while at the same time making sure that they don’t give any information that might harm the client when shared with third parties.

A common example is when a corporation asks a lawyer to head an investigation into the conduct of the corporation’s officers and directors and provide a report evaluating any potential legal issues that may relate to their conduct. The report may be shared with third parties and so there’s the question of whether any aspects of the investigation should remain subject to the attorney-client privilege or the duty of confidentiality.

What’s more, the report may be designated as an “independent” report, which may seem inconsistent with a lawyer’s typical role as an advocate for their client. When it comes to legal opinions, a lawyer’s role may be better described as a “counselor” to their client, but when a client asks for a candid legal opinion that is intended to be shared with third parties, precautions probably need to be taken to advise whether said opinion might have an adverse impact on the client and their interests.

ABA Model Rule 2.3

Considering the potential issues that could arise in these situations, Model Rule 2.3 of the ABA Model Rules of Professional Conduct addresses lawyers’ preparation of an “Evaluation for Use by Third Persons.” Model Rule 2.3 has been adopted in many jurisdictions and it concerns some of the potentially difficult questions that can arise when a lawyer is tasked with providing a legal opinion that will then go on to be shared with others.

Model Rule 2.3 explains that “a lawyer may provide an evaluation of a matter affecting a client for the use of someone other than the client if the lawyer reasonably believes that making the evaluation is compatible with other aspects of the lawyer’s relationship with the client.” It goes on to state that the client’s informed consent is required when a lawyer “knows or reasonably should know that the evaluation is likely to affect the client’s interests materially and adversely.”

When a lawyer provides a legal opinion of an evaluation that is solely meant for the client, there will usually be no issues with the lawyer being candid regarding the issues that are evaluated or any weaknesses in the client’s position or potential liability. In these circumstances, clients may indeed expect an objective evaluation. A common example is clients asking their lawyers how likely their chances of success are in a lawsuit so that they may evaluate settlement decisions.

However, when the evaluation is to be shared with others outside of the attorney-client relationship, a candid opinion that is critical of the client or even adverse to their interests may require the lawyer to obtain an informed consent from them. The comments to rule 2.3 provide a list of situations where this may be an issue, such as an “opinion concerning the title of property rendered at the behest of a vendor for the information of a prospective purchaser, or at the behest of a borrower for the information of a prospective lender,” an opinion provided for a third person, such as someone who is purchasing a business, or an opinion with regards to the legality of securities.

Concerns over Confidentiality

Confidentiality concerns raised by legal opinions or evaluations are also addressed in Model Rule 2.3: “except as disclosure is required in connection with a report of an evaluation, information relating to the evaluation is otherwise protected by Rule 1.6.” Rule 1.6 is about a lawyer’s duty to “maintain in confidence all information gained in the professional relationship with a client.”

When a lawyer is asked to provide an evaluation that will be shared with third parties, they may also wish to consider the extent to which the evaluations will contain the client’s confidential information. If there is any ambiguity as to whether the client authorized the disclosure of confidential information, it is better to seek clarification so as to avoid any issues.

By taking into account the issues of confidentiality and the risk to the client, a lawyer can avoid any unintended and unexpected problems that may arise out of simply preparing a run-of-the-mill legal opinion or evaluation.