The Ethical Obligations of an Organization’s Lawyers Post-Wells Fargo
We’re pleased to announce the publication of “Navigating Conflicting Roles: The Ethical Obligations of an Organization’s Lawyers Post-Wells Fargo” in the Yale Journal on Regulation Online. The authors, John Rafael Perez, William Stone and Sarah Weiner, discuss the legal regime surrounding a lawyer’s representation of an organization during government-initiated enforcement actions. We’ve copied the introduction to their essay below. You can read the full piece here.
From the essay:
Government-initiated enforcement actions aimed at exposing white-collar crime have proliferated considerably following the recent financial crisis. To get ahead of these investigations, many organizations hire in-house or external counsel to conduct their own preliminary investigations. These internal investigations create significant issues for lawyers who must provide to employees they interview an “Upjohn warning”—a disclosure that the lawyer represents only the organization and its interests. Lawyers must caution employees that while their communications are protected by the attorney-client privilege, the privilege belongs to the organization, and the corporation may elect to waive the privilege and disclose otherwise protected information to third parties. To date, lawyers have largely confined Upjohn warnings to the context of internal investigations. But a recent case, decided by the District Court for the Southern District of New York, raises the possibility that the ethical lawyer should give Upjohn-like warnings in a wider variety of day-to-day conversations and consultations.
In United States v. Wells Fargo Bank, N.A., the court held that an employee could not disclose the privileged information necessary to raise an advice-of-counsel defense because the corporation owned the privilege. As a result, Wells Fargo poses a corollary question to the one addressed in Upjohn. Under Upjohn, organizational lawyers must warn employees that the organization may disclose privileged information over an employee’s objection. After Wells Fargo, the question becomes whether organizational lawyers warn employees that the organization may refuse to disclose privileged information in response to an employee’s legitimate request to do so. This white paper explores the professional ethical repercussions of the Wells Fargo decision and proposes several steps that organizations and their lawyers can take to reckon with the case’s implications.