A View of Difficult Client Counseling Scenarios Through the Lens of the Rules of Professional Conduct

By: Natalie Gow

Natalie Gow presents various situations encountered when counseling difficult clients – and suggest possible solutions within appropriate ethical guidelines.

I. Introduction

Have you been in a conversation with a client where you felt it start to turn down a path you weren’t sure you should follow? This article aims to refresh your memory of certain rules of professional conduct that are of particular relevance to trust and estate practitioners navigating the nuances of client counseling. In this article, we will consider a few “difficult” scenarios through the lens of the ABA Model Rules and ACTEC comments to both remind ourselves of the “why” behind certain practices we regularly employ and of what we should consider when the correct course is not clear.1

II. Scenario #1: A client is committed to a course of action you think is ill-advised.

There are many reasons why you may disagree with a client— there is a mismatch of risk tolerances, you think their chosen strategy opens them up to legal or non-legal risks, your client heard about this at a dinner party and does not understand why it might not work for them.

According to the Model Rules, a lawyer generally should follow their client’s direction. Rule 1.2 provides, in relevant part, that “a lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued.” So, first, advise your client, make sure they have adequate information and that you have explained the material risks of their strategy and reasonably available alternatives. If, despite this, your client remains committed to their original plan, then (assuming the action is neither illegal nor unethical) you should generally follow your client’s direction (even if it goes against your better professional judgment), provided that you have obtained your client’s informed consent.2

As a lawyer, it can sometimes be easier if you can point to a legal reason for why something is a bad idea. But it can get tricky if something is ill-advised for non-legal reasons and we, as advisors, need to be careful about imposing our own values on our clients. But does this mean you have to stay in your lawyer lane or are you allowed to raise these other considerations with your client?

Rule 2.1 provides, in relevant part, that: “[i]n representing a client, a lawyer shall exercise independent professional judgment and render candid advice. In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors, that may be relevant to the client’s situation.” As an advisor, it is appropriate for a lawyer to counsel the client with respect to all aspects of the representation, including non-legal considerations and to suggest that a client consider whether or not a particular course of action might generate adverse non-legal consequences.3 In the litigation context, this may be thinking about potential reputational damage and the potential emotional cost. In the planning context, this may be thinking about family dynamics and the impact of one family member’s decision on others. But how are you supposed to balance competing interests where you represent multiple family members? Isn’t there a rule about conflicts?

III. Scenario #2: You represent multiple members of the same family.

In practice, we know that it is permissible to be a “lawyer for the family,” but it can be helpful to be reminded of why this is the case. Rule 1.7(a) provides, in relevant part, that “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest” (i.e., if the representation of one client will be directly adverse to another client or there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client). Notwithstanding the existence of a concurrent conflict of interest, Rule 1.7(b) provides, in relevant part that “a lawyer may represent a client if the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client,” each affected client gives informed consent in writing, and certain other requirements are met.

In the trusts and estates context, it is often appropriate for a lawyer to represent multiple members of the same family in connection with their estate planning and estate and trust administration.4 In many cases, clients may actually be better served by such a representation because it allows a lawyer to have a better overall understanding of all of the relevant family considerations. The fact that family members may have different individual estate planning goals does not necessarily preclude the lawyer from representing them.5

Practice Point: Consider holding regular family meetings to help promote communication and ensure everyone is on the same page.

Although it is permitted, representation of multiple family members can lead to situations where a lawyer must face the competing forces of their ethical obligations of confidentiality and communication. Rule 1.66 provides, in relevant part, that “[a] lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation” or the disclosure is permitted to the extent the lawyer reasonably believes necessary to prevent harm, crime or injury, to detect and resolve conflicts of interest, or in certain other circumstances described in Rule 1.6(b).

Rule 1.4 provides, in relevant part, that “[a] lawyer shall promptly inform the client of any decision or circumstance with respect to which the client’s informed consent… is required,” consult with the client and keep them reasonably informed about the status of the matter. A lawyer can only obtain “informed consent” if the lawyer “has communicated adequate information and explanation about the material risks of, and reasonably available alternatives to, the proposed course of conduct.” What constitutes adequate information will vary with the nature of the engagement.

Imagine that you represent both spouses in a marriage and one spouse discloses a past act of marital infidelity and asks you not to tell the other. Do you have a duty to disclose? What factors do you need to consider?

ABA Op. 08-450 (2008) examines the interplay between the duty of confidentiality and the duty to inform when estate planners are representing multiple clients on the same or related matters:

“The difference when the lawyer represents multiple clients on the same or a related matter is that the lawyer has a duty to communicate with all of the clients about that matter. Each client is entitled to the benefit of Rule 1.6 with respect to information relating to that client’s representation, and a lawyer whose representation of multiple clients is not prohibited by Rule 1.7 is bound to protect the information of each client from disclosure, whether to other clients or otherwise. The question generally will be whether withholding the information from the other client would violate the lawyer’s duty under Rule 1.4(b) to explain a matter to the extent reasonably necessary to permit the [other] client to make informed decisions regarding the representation. If so, the interests of the two clients would be directly adverse, requiring the lawyer’s withdrawal under Rule 1.16(a)(1) because the lawyer’s continued representation of both would result in a violation of Rule 1.7. The answer depends on whether the scope of the lawyer’s representation requires disclosure to the other client [emphasis added].”

Practice Point: At the outset of the representation, ask the co-clients to agree that all information can be shared and memorialize the clients’ agreement and instructions in the engagement letter or otherwise in writing.7

As the ABA opinion suggests, one way to reduce the likelihood of ending up in a difficult situation is to be thoughtful at the outset of the scope of your representation. Rule 1.2(c) provides: “A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.” Rule 1.0(h) defines “reasonable” as the conduct of a reasonably prudent and competent lawyer.

In addition to establishing ground rules about information sharing, an engagement letter can also serve to limit the scope of representation.8 The terms upon which a lawyer undertakes representation may exclude specific means that might otherwise be used to accomplish the client’s objectives, including actions that the lawyer regards as repugnant or imprudent.9

IV. Scenario #3: You and your client can’t see eye to eye, what are your options?

Refusal. The ACTEC Comments to Rule 1.2 provide that “[i] f a client insists on an action that the lawyer believes will be ineffective, such as inclusion of a provision that the lawyer believes will not be enforced by a court, the lawyer should inform the client of that risk and may refuse the request if the lawyer believes complying with it would violate the duty of competence under MRPC 1.1 [emphasis added].” Rule 1.1 provides, in relevant part, that “[a] lawyer shall provide competent representation to a client,” which requires “the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”

Depending on the situation, it may be to your benefit to put your disagreement in writing. Writing things down can help memorialize them for your future self and can help you CYA if the client forges ahead and it goes poorly. On the flip slide, be wary of creating a road map for the IRS on audit or any writings that may later need to be produced in discovery.

Withdrawal. If a lawyer has a fundamental disagreement with the client, they may withdraw from the representation. Rule 1.16(b) provides, in relevant part, that, subject to certain exceptions, a lawyer may withdraw from representing a client if it will not have a material adverse effect on the client, if the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement, or otherwise has good cause for withdrawal. So, while it is not an easy decision to make, in some cases the answer may be to remove yourself from the situation.

V. Conclusion

In this article, we have learned that, when facing complex questions, it can be helpful to go back to basics. While most of us not interacting with the ABA Model Rules in our day-to-day, this article illustrates how they may shape our policies and practices to help guide us through difficult client counseling scenarios.

Endnotes

1. All states plus D.C. have adopted some form of the ABA Model Rules (the Model Rules or MRPC), except for California. Since 1993, the American College of Trust and Estate Counsel (ACTEC) has published Commentaries on the Model Rules to provide lawyers with particularized guidance that addresses how the rules operate in the trusts & estates context. The ACTEC Commentary is often relied upon by courts interpreting the Model Rules.

2. ACTEC Comments to Rule 1.2, Disagreement Between Lawyer and Client as to Means for Accomplishing Client’s Objectives. Rule 1.0(e). Note, however, that a lawyer can only obtain “informed consent” if the lawyer “has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.” ACTEC Comments to Rule 1.2, Disagreement Between Lawyer and Client as to Means for Accomplishing Client’s Objectives.

3. ACTEC Comments to Rule 2.1

4. ACTEC Comments to Rule 1.7, General Nonadversary Character of Estates and Trusts Practice; Representation of Multiple Clients

5. ACTEC Comments to Rule 1.7, General Nonadversary Character of Estates and Trusts Practice; Representation of Multiple Clients

6. Note, California does not follow Rule 1.6. The lawyer has an absolute duty to maintain a client’s confidences and preserve a client’s secrets unless disclosure is necessary to prevent a criminal act that the attorney reasonably believes is likely to result in death or substantial bodily harm. Cal. Bus. & Prof. Code, § 6068, subd. (e).

7. ACTEC Comments to Rule 1.7, General Nonadversary Character of Estates and Trusts Practice; Representation of Multiple Clients

8. ABA Comments to 1.2 [6]

9. ABA Comments to 1.2 [6]

SUMMER 2022 eReport