Roundtable Discussion – Part I

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Lawyers regularly deal with issues pertaining to confidentiality or privilege arising from the attorney-client relationship. Often, clients, and even practitioners, are unclear about what those terms mean and how they can affect outside requests for information. Wisconsin Law Journal editor, Tony Anderson, sat down with a panel to discuss those issues, along with some recent court decisions pertaining to confidentiality and privilege.

Daniel Shneidman, Shneidman Law; Sally Anderson, Wisconsin Lawyers Mutual Insurance Co.; Daniel Blinka, Marquette University Law School; Ralph Cagle, University of Wisconsin Law School; Nathaniel Cade Jr., Michael Best & Friedrich; Raymond Dall’Osto, Gimbel, Reilly, Guerin & Brown

Wisconsin Law Journal: Let’s just start with the basics. When is the attorney-client relationship established for purposes of confidentiality and for purposes of the privilege?

Ralph Cagle: For purposes of confidentiality and probably for purposes of the privilege, I think it starts very, very early on. I think it starts before there is what we would normally think of as an attorney-client relationship; and that is the point at which a client with some expectation that this … relationship might lead to legal representation, begins revealing confidential information.

Sally Anderson: I think the most important thing you said was when the client — would-be client — believes that this is what’s happening.

Daniel Shneidman: I don’t know … that the necessary prerequisite is the anticipation that there will be a lawyer-client relationship. I wouldn’t totally disagree with that.

But I’d say a precursor would be that the client has a reasonable expectation of privacy in asking the question and that the response to the request for legal information would be given in privacy.

It gets complicated now with the technology world that we live in where there are ethics opinions which are coming close to saying that an electronic confidentiality can be established via either a chat room or in response to an ad that the lawyer may put out. I think the ABA has clearly said, and other states as well, that they’ll apply the Rules of Professional Conduct to advertising and electronic advertising.

Most lawyers would unfortunately say it’s when the client pays the money or when you’ve got a handshake or when you have some physical manifestation of a deal that I’m going to be your lawyer and you’re going to be my client. There, I agree with Ralph. The seeking of information from a lawyer in privacy and the response to that would be — under the proper circumstances — the beginning of the confidential relationship and probably the privilege.

I have a concern [about privilege and confidentiality] that they’re really two different things, and they’re significantly different. My understanding is that privilege is an evidentiary rule, and in Wisconsin it’s [sec.] 905.03. And confidentiality is Supreme Court Rule 20:1.6 lawyer ethics.

WLJ: Do you want to follow up on that?

"[M]y starting point would be to tell the lawyer, everything you know about this case is confidential — period. Beyond that, there will be occasions in which you may very well have to disclose a lot of this information." Daniel Blinka, Marquette University Law School

Daniel Blinka: Yes. I think that Dan makes a good point that we have to distinguish the privilege from the general rule of confidences. The way I look at it, the general rule of confidences, our Rule 1.6, is much broader than the rule governing evidentiary privileges. The privilege covers statements made by a client or client representative to the lawyer and probably from the lawyer back to the client as well.

Whereas, the confidences rule literally embraces all information that the lawyer comes to know about the case regardless of the source. So the confidences will include not just what I learn from speaking with my client, but it will also cover in
formation reports. Let’s say I send an investigator out to speak to witnesses and I collect documents. All of that information is going to be covered by the rule governing confidences, even though much of it would not be covered by the lawyer-client privilege.

Nathaniel Cade Jr.: But now you’re starting to talk more about work product, and there are limits about work product. The lawyer has the ability to decide what product is releasable to the other side or releasable to the authorities and what they are going to hold inviolate under 1.6.

Blinka: That’s where we really begin to take this to the next question, which is — what disclosure rules apply to this information that the lawyer has? I think the starting point to remember is that confidences embrace everything I, as a lawyer, know. What I may have to disclose under rules of civil procedure or evidence is going to be a separate question.

Shneidman: Wisconsin’s rules prior to 1998 were called the Code of Professional Responsibility. They mirror the ABA Code of Professional Responsibility. Most of the states have abandoned the code. But in the code when they talked about the equivalent of our 1.6, they talked about confidences and secrets.

What the ABA did in 1983 and what the Wisconsin Supreme Court did in 1988 was to change that and broaden it to "information," which means everything. It means confidence. It means secrets. It means whispers. It means anything that you learn, not necessarily what the client tells you. That’s what Dan’s talking about. If you learn from any source during the course of that representation, that in my opinion under the current 1.6, you cannot reveal.

Cade: I disagree just a little bit with you, Dan. And I only do so in terms of the work product. It’s one thing … if I learn things as the lawyer and I’m told information.

For example, family members tell me things specifically because I am John Smith’s lawyer. It’s another thing if I learn of information that’s work product and then the other side goes to the court and … the file has now been destroyed. There was a fire. There was something where they can show that it’s necessary for them to learn that information.

So I think of two circles around each other; and there’s that gray area in the middle where the court can kind of step in and order the disclosure. It’s certainly not something that the lawyer can turn around and hang their hat on saying, "I only know this because I’m the lawyer."

It’s a little simplistic for that. They know it because they were hired as a lawyer. But they found out either through their investigators, they found out because they did the research and followed up and they had access to the documents. But if those things are destroyed and the other side can prove harm or need, I don’t think the court is going to rely on 1.6. They’re going to look more in terms of discovery issues.

Shneidman: What advice would you give? Let’s assu-me you’re on the Wisconsin Lawyer Ethics Hotline and a Wisconsin lawyer is faced with that question. Let’s say they’re not in the judicial proceeding yet and the district attorney or some law enforcement agency is saying, "We heard that you know about this; I want you to tell us."

Cade: I would assert privilege. … There’s a difference between the court ordering you to reveal something that is truly privileged. My client specifically told me he committed the murder. Okay. I can’t reveal that. You know, if the client dies, I can’t turn around and say, "The client’s dead; I can now talk."

There’s a difference between that and having re-viewed a document and … there are no copies. I am the witness to it. So now I’ve got issues as a lawyer witness. I’ve also got issues because the original or something is missing and the other side is harmed. Those are two different concepts.

If someone had called me on the hotline with that fact pattern, I would say, you assert privilege until you have a court ordering you to talk with the DA. Then, again, it depends on what the DA wants to know. If the DA wants to know, were you in the office on a given day, that’s one thing. If the DA says, I want to know what the suspect told you, that’s an entirely different thing.

Shneidman: I would disagree.

"The problem that I have with all of this is that I think it’s broader than: ‘We have a duty to the client under confidentiality.’ We also have a duty to the courts and a duty to society." Sally Anderson, Wisconsin Lawyers Mutual Insurance Co.

Anderson: Nate, are you say
ing then that the court can trump the confidentiality rule?

Cade: No. What I’m saying is that, because the confidentiality rule is so broad, … as Professor Blinka said, it really covers everything. But everything that’s under 1.6 is not always protected. We learn things as lawyers, but it doesn’t mean that the client expects there to be privilege on that issue.

If I can go out and ask their relatives and learn the same information, then that’s not stopping anyone else from going out and getting that same information. But there is a difference if I get it directly from my client and I’ve got to hold onto that. … I think there are always limits to what the court can or should be allowed to do. But in the situation as Dan mentioned, I think the court can order it revealed.

Shneidman: Well, I don’t believe it would be privileged. I think it would be confidential. I don’t think the court can say, “yes, I recognize your duty under 1.6, but I’m ordering…” I was trying to get at the issue, before a judicial proceeding is invoked, when the DA or the chief of police is questioning you.

Cade: I would assert a privilege.

Shneidman: It doesn’t become a privilege until there’s a judicial proceeding. At least, the attorney-client privilege, wouldn’t become a privilege until there’s a judicial proceeding. Query: When would the work product privilege become a privilege? We use the phrases so frequently and interchangeably … and the courts, unfortunately, don’t draw the distinctions well either.

Blinka: I guess if I were on this ethics hotline, my starting point would be to tell the lawyer, everything you know about this case is confidential — period. Beyond that, there will be occasions in which you may very well have to disclose a lot of this information.

When we talk about, when does work product come into play, practically speaking, it comes into play once litigation has been commenced, once the rules of civil procedure have been brought into play. But, again, unless I’m operating under a specific rule of procedure that compels me to disclose information, I am not going to give any information to the opponent unless they ask for it.

In terms of the lawyer-client privilege that we’ve been mentioning, I agree with Dan Shneidman that that’s a rule of evidentiary privilege. Think of it as a testimonial privilege. We don’t worry about that unless we’re taking testimony. If we were in a courtroom right now and we were going to assert anything, more likely it would be to assert the lawyer-client privilege as opposed to the broader umbrella Rule of Confidences. But both could be brought into play.

Anderson: All this makes me wonder what a lawyer tells a would-be client who shows up in my office today and says, “Everything I tell you is confidential, right?”

Cagle: Well, therein is the big problem. … I suspect what some number of lawyers tell their clients is that anything you tell me is confidential and will not leave this room, which of course is wrong.

There are many exceptions to confidentiality, some very broad exceptions, as well as exceptions to privilege. The problem is what do you say to clients? I can envision a lawyer saying, "Well, everything you tell me is confidential and it’s privileged, except let me explain to you some of the exceptions to that." It would take a good two and a half hours to do a decent job of explaining that.

Shneidman: But, Ralph, if they asked us, it would take five hours.

Cagle: That’s a very, very practical problem that lawyers face every day that we haven’t really come up with a very good solution to. One solution … is for lawyers to recognize that, the statement that, "Anything you tell me does not leave this office," is something they shouldn’t be saying. It really sets them up for some problems in the future simply because they’re misinforming their clients.

I think it does vary from case to case. If you’re representing a criminal defendant, I think there are some potential exceptions that you should talk about. For example, if you told me that you were going to commit a crime in Wisconsin, even engage in a fraud, then I might be obliged to report that. I think that’s a little tiny discussion that happens in that case.

Perhaps in a divorce case, it’s something of a different discussion. But I do think that there needs to be patterns of ways lawyers can respond to that. Because one of the interesting questions is, "What do clients expect in terms of what they say?" … I think many people believe that clients expect that anything they say is confidential.

I’m not so sure that’s really true. I’m not so sure they trust lawyers that much, quite honestly. But they do need to have a fairly keen sense of it.

Even that exception we’ve spent so much time over the years arguing about … comes up extraordinarily infrequently. The danger is
that, if you go into too much discussion of the exceptions and possibilities and rules and such, the client says, "Whoa, I better not tell this guy anything." I think that’s the reverse side of having a chilling effect.

Shneidman: A lot of lawyers think the way to resolve the issue of the future crime is to call the cops that your client is about to do something. And that, in my opinion, isn’t the way this is to be resolved under the rules. The rule says … "that the lawyer reasonably believes is going to happen," and then the lawyer’s got to do something to prevent the commission of the crime.

I look at 1.6 [and it] says … that if one of the exceptions kicks in about disclosure, disclosure doesn’t necessarily mean total destruction of the duty of confidentiality. It also doesn’t mean that you can put your own client in the slammer. … That’s the challenge. How do you stop the crime from happening without indicting your client?

Cagle: Taking as an example, a divorce client. And the divorce client says to you, in words that you believe, that he or she is going to kill their spouse. That’s a situation that comes up. I get a dozen calls from lawyers in exactly that situation. "What do I do?"

You have to start thinking what the alternatives are. Is there someone that you can get to talk to, or deal with, or restrain that person? Can you warn the spouse that they may be in danger? Those are actions short of calling the authorities. On the other hand, if he runs out of your office with a gun in his hand, there’s not a whole lot of time to be thinking about alternatives.

Cade: I know, you’ve got the case — I don’t remember the name offhand — from 1970…

Shneidman: Tasaroff — it’s a California Supreme Court case.

"If we’re talking attorney-client privilege or we’re discussing confidentiality, the bigger question is ‘Who is the client?’ Are you the attorney for the board? Are you the attorney for the high officers or directors? Or are you actually the attorney for the corporation, which is, in essence, the shareholders?" Nathaniel Cade Jr., Michael Best & Friedrich

Cade: Where essentially the therapist/psychiatrist never revealed that the harm was going to come. Would that be something that’s covered under malpractice for the lawyer if they didn’t call the authorities or alert the potential spouse that this harm could befall them?

Anderson: Is it an act, error, or omission in the course of rendering legal services that causes harm to a client? You can look at a lot of different fact situations and come up with a lot of different answers, just as we do with the ethics questions here. I don’t know, Nate. That’s one I’d really have to think about. What we’ve got is a client who’s committed a crime. The question is the same question we’re asking in the ethics area. That is, "What reasonably could this lawyer, should this lawyer have done?"

The problem that I have with all of this is that I think it’s broader than: “We have a duty to the client under confidentiality.” We also have a duty to the courts and a duty to society. I don’t think a lawyer leaves his or her own moral and ethical framework at the door. You may be violating a confidentiality rule, or you may even be committing malpractice. But if my own moral authority says I gotta do this, maybe I have to tell the client what I think I need to do. … You may have to bear the consequences of it, but I don’t think that you can completely wipe out who you are and what you believe.

Shneidman: You put your finger on what I believe to be a core issue — the quote that you referenced as the lawyer’s duty to the client, to the courts, and to society.

How the Supreme Court in establishing rules of professional conduct balances those criteria is very important.

When the Supreme Court did the integrated bar, [it wrote] In the Matter of the State Bar (169 Wis.2d 21), "All lawyers have a special responsibility to society. That responsibility involves far more than merely representing a client. Lawyers are guardians of the rule of law. The rule of law forms the very matrix of our society. Without the rule of law, there is chaos. Lawyers not only have a responsibility to their clients, they have an equal responsibility to the courts in which the rule of law is practical and to society as a whole to see that justice is done."

Assuming that the court’s language is exact, they are articulating that it is an equal balance. … The lawyer’s duty is primarily and essentially to the clie
nt, and that should trump any of the other rules. … Any indecision or any conflict of interpretation should be made in the benefit of the lawyer’s representation of the client, and they truly believe that zealousness has no bounds. So you’re almost exactly on point. It’s that balance.

Anderson: In a room like this, we’ve got people who have studied these things and who have really had the benefit of time. A practitioner out-state has no time to sit and ruminate about these kinds of things. That’s a luxury they don’t have. The best thing we can do is to somehow manage to come up with some kind of a guideline… "I have a problem, what do I do now?" That’s what people need to know.

Shneidman: There’s a national dialogue going on now where what I would consider very moral lawyers are taking the position that 1.6 should be an absolute limitation of the lawyer’s duty to reveal. They believe that the rule should perhaps be amended or the comments should provide that lawyers should develop the initial skill of trying to talk the client out of the crime … and that should be their major emphasis. If that best effort fails, 1.6(a) still trumps.

Cade: So with these same moral lawyers is there a duty to withdraw?

Shneidman: Yes, they can always do that.

Cade: I know one of the points Tony planned to raise was on Enron. … I’m always fearful when you read what the Justice Department is doing. Because you get back to the Thornburgh Rules where they said the Rules of Ethics didn’t apply to them. But their rationale essentially is going to be that they are expecting lawyers practicing in the securities area and lawyers who are practicing dealing with these large public clients to, in essence, snitch on their clients.

I think the problem with that is it makes two assumptions. One, it assumes that the lawyer has knowledge of the actual fraud. For most of these corporate scandals, there’s someone cooking the books. So it assumes that the lawyer has the ability to decipher these books. … Two, not only can they understand it, but then they must be able to explain the fraud and inform on their client.

I think that makes a lot of assumptions about what a lawyer’s role is. You can certainly have a lawyer whose client says, we want to shelter more income. That’s a perfectly ordinary request. It happens every day. You can explain to them the difference between an LLC and an LLP and the various financial transactions and how those are accomplished. … The bigger issue is how they accomplish that and the lawyer may not necessarily know that, but they’re still supposed to reveal on their client. I just don’t think that thought process has been thought out well enough.

	Related Article Roundtable Discussion – Part II

Cagle: Well, I think that’s one of the great changes in the issues of confidentiality and privilege we’ve seen. Historically, we’ve been most concerned about the risks of a lawyer revealing something relating to his criminal defendant client or individual client. The real issues today in terms of confidentiality are the issues posed by corporate crime and corporate fraud.

It’s a whole different set of interests that are being affected. The kind of notion of the zealous advocate of the criminal defendant who is pursuing the fundamental Constitutional right of someone to a defense, which has always been one of the justifications for the extended idea of confidentiality. I don’t know that that applies quite in the same way when the right that’s being asserted here is the right to just make billions and do it as shadily as one would choose. There’s a little less Constitutional protection, it seems to me, in that sort of interest.

Cade: One thing lawyers should know in representing a corporation or if you are a corporate lawyer is who is your client. If we’re talking attorney-client privilege or we’re discussing confidentiality, the bigger question is "Who is the client?" Are you the attorney for the board? Are you the attorney for the high officers or directors? Or are you actually the attorney for the corporation, which is, in essence, the shareholders?

There is a distinction because there may be actions taken by the board that directly harm the shareholders. And you have to decide who you are representing.

I think lawyers should always, at the end of the day when they’re giving instructions, think, who is my client. My client is n
ot who’s paying the bill. Because, you know, you can always have an insurance company or someone else pay the bill. Who do you have the ultimate duty to?

Anderson: I think it’s a whole lot easier to do that if you know going into this who your client is. It’s a good rule for all lawyers at all times.

Shneidman: I’d like to suggest that what the SEC or what Congress proposed in the Sarbanes-Oxley, as far as I’m concerned, did not substantially affect how a Wisconsin corporate lawyer should act. If you read 1.6 together with our 1.13, the only difference that the SEC had proposed was the noisy withdrawal. That means 1.13 has the steps up where the lawyer eventually has gone to the highest subdivision of the corporate entity; and that highest subdivision, whether it’s the board of directors or whatever the title is, refuses to either act or to disavow an act that the lawyer believes to be either contrary to law or contrary to the best interests of the corporation.

Wisconsin allows the lawyer to withdraw under 1.13. However, when you read 1.6 together with that … after the lawyer has exhausted his or her 1.13 obligations, they must whistle-blow. … I think the duty under 1.6(b) to whistle-blow trumps whether you get fired. Obviously, if you’re telling a client, "What you’re doing is illegal and, unless you stop it, I’m going to blow the whistle," you’re fired.

Cagle: Just to be clear, the duty under 1.6(b) is not a whistle-blowing duty. It’s a duty … to prevent the crime. And that’s actually a very, very big difference. I mean, it’s a step short of just automatically going over and turning your client over to the prosecutors.

Blinka: As I listen to this conversation, I can’t help but think that if we were to have a silent audience of 30 or 40 lawyers from around the state at random listening in, they’d be shaking their head in bewilderment and saying, "You gotta remember, whether you’re withdrawing or getting fired, the end result is still the same, you’re not getting paid anymore, and that it’s difficult enough to make a living as it is without telling clients, ‘I don’t like what you’re doing; therefore, I’m going to withdraw.’" …

Where, you’re talking about … representing private clients in private disputes, the clients who are going to pay those lawyers $200, $300, perhaps more dollars per hour are going to insist not only upon confidentiality, but upon loyalty.

Look for Part II of the roundtable discussion on privilege and confidentiality in the Aug. 6 issue of the Wisconsin Law Journal. Thank you to Gramann Reporting Limited for sponsoring this roundtable session. Gramann provided Bobbi Peterson, RPR, to report and transcribe the session. This article was edited for grammar, content and space.