Paralegal Term paper

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IN-HOUSE COUNSEL

When a company's interest are the same as those of an individual employee, in-house lawyers generally can avoid multiple-representation problems. But once there is a conflict of interest -- or a perception of a conflict -- the picture changes dramatically. It is important for in-house counsel to know how to spot such conflicts and what steps to take in response. Corporate counsel clients normally include the company, its board of directors, its most senior management, the heads of the company's various business divisions, its employees and even its former employees. All of these clients deserve quality representation in every matter, from the most fundamental to the most vexing.

With this broad range of clients, ethical questions can arise. Specifically, can corporate counsel serve more that one client and, if so, what constraints exist upon such multiple representation? In most instances, a corporate lawyer should attempt to represent both the corporation and its employees, consistent with his or her ethical obligations. It is obviously in any company's interest to present a consistent and unified version of events that give rise to potential liability. Under governing ethics rules, corporate counsel has one client -- the corporation. Whenever conflicting loyalties arise, that relationship is paramount and requires the lawyer to cast aside any other clients. This bright-line test is muted in actual practice, however, and can put in-house lawyers into some uncomfortable situations, For example, they may have to explain to members of senior management that because the managers' interest are sufficiently different from the company's the managers need separate legal advice.

Just as the importance of corporate law departments has increased, so too have the problems for corporate attorneys. Corporate employees seem ever more aware of their rights as opposed to the company's interests, and corporate counsel must be sensitive to these potentially conflicting interests. Although predicting the future always is difficult, one thing is certain: There will be more confusion and difficulty, not less, in the area of multiple representation. And for that reason the lawyer should evaluate whether there is a conflict or a potential conflict in representing someone in addition to representing the company. Several factors should be considered during this evaluation: the nature of the matter, whether it is a criminal or civil matter, whether it involves litigation or a regulatory investigation; the individual's role in the matter, whether the person is a target of an investigation, a key witness or a custodial of records; and the individual's status, whether he or she is a senior officer or director, a temporary employee or and ex-employee. Also lawyers need to ensure that individuals involved in the matter understand the role of corporate counsel, understand multiple representation and consent to that representation.

Counsel should take the following steps in order to provide himself with an ethical shield while allowing for productive fact-gathering:

Tell the employee the reason for the meeting.

Explain that, as the corporate attorney, he or she is representing the company.

Explain that he or she may also represent the employee in the matter if the employee consents and if there is no conflict.

Explain that the employee always has the right to his or her own counsel.

Explain the details of the attorney-client privilege -- that the privilege belongs to the company, and the company and subsequently waive it.

Dictate and file a memo memorializing the conversation.

At some point, it would be prudent for counsel to revisit the issue of joint representation. This may be appropriate when the investigation becomes more formal -- upon the arrival of a grand jury subpoena, for instance, or if there is a suit filed with the company and an employee is named as a defendant. If an employee clearly is or is likely to be, the target of a grand jury investigation, the employee promptly should retain separate counsel. The employee also should retain separate counsel if he or she wants to chart a substantively different course than the company or other employees. But the fact that a matter becomes more formal does not signal that anything is wrong with the multiple representation.

There are times when a company's general counsel, at the outset, will want to have outside lawyers represent the company and its employees. This may be necessary, for instance, when the in-house lawyer has been directly involved in the matter at issue, and he or she is likely to be called as a witness. When the in-house lawyer is a target of an investigation or a potential defendant, the lawyer will be in need of his or her own counsel. And the lawyer may not choose not to represent the company and an employee simultaneously when that representation could prevent the lawyer from representing the company in future actions against the employee. There could be some benefit to the company's counsel not representing employees in high-stakes regulatory matters. It seems that regulators, regardless of lawyers' conflict rules, will go more easily on organization that definitively and publicly separate their destinies from those of their employees.

Undoubtedly questions will arise as to how these issues play...

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