Committee Reports

Formal Opinion 1986-8

December 19, 1986

ACTION: Formal Opinion


The inquiring law firm represented an individual and his affiliated companies for several years in both criminal and civil matters. The criminal matters included judicial proceedings as well as investigations by government authorities. The civil matters included real estate transactions and litigation. The client recently terminated the relationship when the law firm demanded payment of legal fees, and an action has been commenced against the former client to recover these fees.

The firm asks “how much, if any, of the attorney/client privilege will still be in effect at the time of depositions and or trial of this matter.” The firm believes that in order to present its case properly, it will be necessary to disclose information that the former client confided, including information concerning client conduct that is connected to criminal matters under investigation. The firm wishes to know whether it would be permitted to state what the client acknowledged to attorneys of the firm concerning the alleged criminal conduct, and the firm’s efforts on the client’s behalf, without violating any ethical standards.

The applicability of the attorney-client privilege and its possible waiver by the client are questions of law beyond the jurisdiction of this Committee. Our response is therefore limited to the inquiring law firm’s ethical obligations under the New York Code of Professional Responsibility.

Various provisions of the Code are relevant to this inquiry. Canon 4 of the Code provides that a “lawyer should preserve the confidences and secrets of a client.” This obligation clearly continues beyond the termination of the lawyer’s employment. EC 4-6. A “confidence” refers to information protected by the attorney-client privilege. The term “secret” is much broader and refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client. DR 4-101(A). A lawyer should not use information acquired in the course of the representation of a client to the disadvantage of the client or, except with the consent of the client after full disclosure, for the lawyer’s own purposes. EC 4-5. These ethical strictures apply whether or not the information is protected by the attorney-client privilege and without regard to the nature or source of the information or whether it has been shared by others. EC 4-4. They are applicable even if the information is related to a client’s alleged past commission of a crime. See N.Y. City 82-67 (1983); N.Y. State 479 (1978).

One of the exceptions to this fundamental rule of professional responsibility is set forth in DR 4-101(C)(4). That rule provides that a lawyer may reveal confidences “necessary to establish or collect his fee or to defend himself or his employees or associates against an accusation of wrongful conduct.” See Nakasian v. Incontrade, Inc., 409 F. Supp. 1220, 1224 (S.D.N.Y. 1976). Such disclosure should be made only to the extent necessary to the purpose of the exception, and without unnecessary prejudice to the interests of the client. See N.Y. City 79-63 (1980); see also N.Y. City 1986-7. Accordingly, to the extent necessary to establish the firm’s entitlement to the fees the firm is claiming, or to defend the firm against any charge of wrongful conduct that may arise in the litigation, but only to such extent, the firm may disclose confidences or secrets of the former client without violating ethical obligations.

To state the exception in general terms is not, however, the end of the matter. The duty to preserve client confidences and secrets is one of the most solemn and significant governing attorneys; it inheres in the fiduciary relationship between lawyer and client and is essential to the proper functioning of the legal system. EC 4-1. We therefore emphasize that the firm may not reveal confidences or secrets unless to do so is strictly and clearly “necessary” to establish or collect the fee. For example, it may not be at all necessary in establishing the fee for handling the criminal matters under investigation to disclose anything the client revealed in confidence, as distinct from disclosing the subject matter of the investigation, the position taken by the government officials and the nature and extent of the firm’s services on its client’s behalf.

In addition, since disclosure of client confidences and secrets may be made only to the extent necessary to establish or collect the fee, the firm should seriously consider making these submissions to the court in camera with the request that the court maintain all relevant information and proceedings under seal in order to avoid excessive and unnecessary disclosure and therefore a violation of Canon 4 and its underlying Ethical Considerations and Disciplinary Rules. See N.Y. City 1986-7.