A recent decision in Robert Mueller’s special counsel investigation involving Paul Manafort that is based on the crime-fraud exception to the attorney-client privilege has brought new attention to a lawyer’s ethical and legal obligations when a client may be committing a crime or fraud. In that grand jury investigation, the Chief Judge of the United States District Court for the District of Columbia issued a ruling that former legal counsel for Manafort and Richard Gates may be compelled to testify about some communications with their clients that otherwise would have been protected by the attorney client privilege. The ruling was based on a finding that the special counsel’s office provided prima facie evidence that Manafort and/or Gates were engaged in or planning a criminal or fraudulent scheme when they sought the advice of counsel to further the scheme.
The attorney-client privilege does not protect lawyer-client communications made in furtherance of criminal activity. Lawyers are exposed to potential liability, including discipline and sanctions against their license to practice law, when a client commits criminal or fraudulent acts while under their representation. Everyone knows lawyers cannot participate in a client’s misconduct. But when the client is seeking advice about actions they plan to take, or finds a suspicious document, it can be hard for a lawyer to know what the client’s true intent may be.
These ethical situations are too nuanced to explain here. But, at the very least, lawyers need to understand that if a client plans or acts on a crime or fraud, the lawyer may need to take actions, including withdrawing from the representation.
Often the first question when these issues arise is whether a lawyer knows a client’s conduct is or may be illegal. If you are confronted with this situation, do not stick your head in the sand. Instead, lawyers can and should seek professional advice to protect themselves and to make sure their actions are consistent with all applicable rules of professional conduct. Things can be done to help the lawyer determine the extent of their involvement, decide how to address their concerns with their client, and if needed, decide when they may, or must, withdraw.
These issues arise in unexpected places, particularly for white collar lawyers hired to assist professional clients navigate or comply with governmental regulations and reporting requirements. If you are a lawyer and find yourself wondering about the course your client may be on, reach out for professional guidance and support immediately.
Booth M. Ripke, Nathans & Ripke LLP