Opinion 88-36
(November 1988)

You have asked this Committee for an opinion, inter alia, as to whether you are obligated under the Rules of Professional Conduct to disclose to the Disciplinary Board instances of apparent professional misconduct by your employer, an attorney, which have come to your attention.1 Although your inquiry is not uncomplicated, it is the opinion of the Committee that under the facts and circumstances as you have recited them, you are obligated to make known to the Disciplinary Board the potential or actual violations of the Rules of Professional Conduct of which you have become aware.

DISCUSSION


We note at the outset that certain points made in your letter of inquiry were not entirely clear. With respect to the incident involving a confidential offering memorandum, for example, you suggest that your employer, Mr. X, represented that the General Partner of the Limited Partner was not involved in litigation when, in fact, Mr. X knew it to be a defendant in a pending Philadelphia Common Pleas action. Nevertheless, you then state that the action was one to enforce a settlement agreement and resulted in a judgment not against the General Partner but against Mr. X and his law firm. It also seems that three of the specific instances of professional misconduct are not matters of first-hand knowledge on your part but, rather, were related to you by B. It is also unclear whether B is himself a lawyer.2

Notwithstanding the above, it seems to the Committee that at the very least the episode involving the misstatement of a closing date in connection with an application for exemption from registration filed with the New Jersey Bureau of Securities, together with the cumulative weight of the information that has otherwise indirectly come to your attention weighs heavily in favor of disclosure to the Disciplinary Board absent any equally important competing consideration under another Rule.

Rule of Professional Conduct 8.3(a) requires:

(a) A lawyer having knowledge that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority.

The affirmative representation by Mr. X to the New Jersey Bureau of Securities that the closing date of the offering was on January 15, 1988, rather than December 31, 1987, appears to the Committee to have been intentional. The same, of course, would be true for false court testimony regarding the repayment of a loan, false certifications to the Internal Revenue Service or the diversion of dedicated funds presumably secured from commercial lenders and private investors to Mr. X's other business interests. Such conduct clearly reflects on this particular lawyer's "honesty, trustworthiness or fitness as a lawyer in other respects...."

The Rule also requires that the violation be "substantial." While the Rule does not provide any further guidance as to how "substantial" might be defined, the Comments to the Rule suggest that "an apparently isolated violation may indicate a pattern of misconduct that only a disciplinary investigation can uncover."

You have asked about the "competing considerations" embodied in Rules 1.6 and 3.3. Rule 1.6 generally prohibits revelation of information relating to the representation of a client unless the client consents after full disclosure. Rule 8.3(c) specifically recognizes and defers to Rule 1.6.

Rule 1.6, however, specifically permits information relating to the representation of a client to be disclosed where the lawyer reasonably believes it necessary "to prevent the client from committing a criminal act that the lawyer believes is likely to result in death or substantial bodily harm or substantial injury to the financial interests or property of another...." Rule l.6(c)(l).3

The Committee notes that Mr. X is not, per se, your client, so it is a distinct possibility that Rule 1.6 has no application in this situation. Again, however, because it is not entirely clear from your inquiry whether Mr. X's conduct took place in the context of representation of clients of the firm or in his role as a principal in any of his several business entities, which entities in turn may or may not be clients of the firm with which you are associated, there may, in fact, be Rule 1.6 considerations. The Committee believes, however, that because any of the several acts of potential misconduct which you have described do pose the risk of "substantial injury to the financial interests or property" of others, including Mr. X's business associates, independent investors and/or adverse parties in litigation, you are relieved of the general prohibition against revelation of information manifested in Rule 1.6.

As for Rule 3.3 regarding candor toward the tribunal, the Committee cannot determine whether you personally are in a situation which would cause you, either orally or in writing, to have to make representations to the tribunal concerning the various states of affairs you have described. It is also the Committee's feeling, however, that to the extent you might be involved in making representation to the tribunal in connection with Mr. X's activities, Rule 3.3 reinforces rather than restricts the obligation imposed upon you by Rule 8.3.

Notes

1. Your inquiry poses a number of other questions which were felt by the Committee to be outside of the scope of its mandate. The Committee is, therefore, limiting its response solely to the fourth question on page 3 of your written inquiry.

2. While Rule 8.3(a) is mandatory, the Comments to the Rule suggest that it is not intended that a lawyer be obligated to report every violation of the Rules and that "a measure of judgment is required" in complying with the Rule. (The Comments do not have the force of law in the Commonwealth).

3. Rule l.6(c)(2) may also apply but from your inquiry as drafted it is not clear that your personal services were used in connection with a client's criminal or fraudulent act.
   

The Philadelphia Bar Association's Professional Guidance Committee provides, upon request, advice for lawyers facing or anticipating facing ethical dilemmas. Advice is based on the consideration of the facts of the particular inquirer's situation and the Rules of Professional Conduct as promulgated by the Supreme Court of Pennsylvania. The Committee's opinions are advisory only and are based upon the facts set forth. The opinions are not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. They carry only such weight as an appropriate reviewing authority may choose to give it.