Reuters: "The American Bar Association on Monday narrowly passed a controversial proposal that will allow lawyers to pierce sacred attorney-client secrecy rules to help stop financial crimes. In a 218 to 201 vote, the ABA's policy-making body amended its ethics code to allow, but not require, lawyers to breach attorney-client privilege if they believe doing so would stop a client from committing a financial crime or fraud."
David Giacalone supplies some in-depth analysis and critique:
Now, I understand. In an attempt to avoid federal regulation, we are left with a new Model Rule 1.6 that allows but does not require disclosure of a crime or fraud likely to cause significant financial or injury. The ABA hopes this will allow more lawyers to follow their consciences and do the societally right thing — while making sure the feds don't actually make them all do it.
It seems to me, it is far more likely that the new rule will (1) cause clients to demand steelclad promises of confidentiality, unless disclosure is mandated by law; and (2) prompt law firms to explicitly adopt "no tell" rules to maintain current clients, attract new ones, and silence any firm members with overactive consciences. [...]
Two Cents from Jack Cliente: If the ABA has amended Rule 1.6 merely to avoid regulation of the profession by "outsiders" like the federal government, perhaps someone should turn in the Association for perpetrating a fraud of its own.
And on that note, back to the Reuters coverage: "Some SEC rules for lawyers went into effect last week, and the agency could adopt more stringent requirements if it is dissatisfied with the ABA's actions." Also,
The group is scheduled to vote on another controversial ethics amendment on Tuesday that applies to lawyers who represent corporate clients. The proposal clarifies "triggers" that would require lawyers to report a corporate officer's conduct to the company's upper management. It also addresses circumstances in which lawyers can reveal information to authorities about their corporate clients.
The ABA model rules are not law, but as David points out they often lead states to enact similar rules that are. In California it's worth noting the differences between the ABA proposals and Rules of Professional Conduct 3-600 ("If...the organization insists upon action or a refusal to act that is a violation of law...the member's response is limited to the member's right, and, where appropriate, duty to resign in accordance with rule 3-700") and 3-700 (concerning permissive withdrawal where a client "seeks to pursue an illegal course of conduct").
Tuesday, August 12, 2003 at 7:47PM 
