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Rule 1.13 in Context
 

Rule 1.13 in Context

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    Rule 1.13 in Context Rule 1.13 in Context Presentation Transcript

    • ETHICS Rule 1.13 in Context Wendy Gerwick Couture Associate ProfessorUniversity of Idaho College of Law wgcouture@uidaho.edu
    • Rule 1.13 in Context
    • Rule 1.13 (b)-(e)Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client Chain
    • Rule 1.13 (b)-(e) Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client ChainRepresenting Representing ONLY the the Entity Entity AND a Constituent
    • Rule 1.13 (b)-(e) Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client ChainRepresenting Representing ONLY the the Entity Entity AND a Constituent
    • Rule 1.13 (a), (f) Representing Treatment of Information & (g) ONLY the When InteractingEntity As Client Entity With A Constituent “One-Way Door”
    • Rule 1.13 (a), (f) Representing Treatment of Information & (g) ONLY the When Interacting Entity As Client Entity With A Constituent “One-Way Door”Information Learned From Constituent is Client’s Information • Attorney should share the information with the entity’s leadership, to the extent necessary to keep the client “reasonably informed about the status of the matter.” R. 1.4(a)(3). • The entity can decide whether to disclose that information to third parties. R. 1.6(a).
    • Rule 1.13 (a), (f) Representing Treatment of Information & (g) ONLY the When Interacting Entity As Client Entity With A Constituent “One-Way Door”Information Learned From Constituent is Client’s Information • Attorney should share the information with the entity’s leadership, to the extent necessary to keep the client “reasonably informed about the status of the matter.” R. 1.4(a)(3). • The entity can decide whether to disclose that information to third parties. R. 1.6(a).Attorney Can’t Share Client’s Information with Constituent Unless Authorized • Authorization can be either express or implied “in order to carry out the representation.” R. 1.6(a).
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY theEntity As Client Interacting With Constituent Entity
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent EntityRule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) Law Governing Lawyers § 14
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or Governingreasonably should Lawyers § 14know that theorganization’sinterests areadverse to those ofconstituent
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or Governingreasonably should Lawyers § 14know that theorganization’sinterests areadverse to those ofconstituentIdentity of Constituent Discussions betweenclient may wish to constituent & lawyer(lawyer’s not obtain own are protected by entity’sdisinterested; lawyer attorney-clientlawyer doesn’t privilege, subject torepresent waiver at entity’s soleconstituent) discretion
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or To ensure that Governingreasonably should communications Lawyers § 14know that the between constituent &organization’s attorney are protectedinterests are by the entity’sadverse to those of attorney-clientconstituent privilegeIdentity of Constituent Discussions betweenclient may wish to constituent & lawyer(lawyer’s not obtain own are protected by entity’sdisinterested; lawyer attorney-clientlawyer doesn’t privilege, subject torepresent waiver at entity’s soleconstituent) discretion
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or To ensure that Governingreasonably should communications Lawyers § 14know that the between constituent &organization’s attorney are protectedinterests are by the entity’sadverse to those of attorney-clientconstituent privilegeIdentity of Constituent Discussions between Interview is Content ofclient may wish to constituent & lawyer being conducted interview(lawyer’s not obtain own are protected by entity’s to gather facts should bedisinterested; lawyer attorney-client in order to keptlawyer doesn’t privilege, subject to provide legal confidentialrepresent waiver at entity’s sole advice to entityconstituent) discretion
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or To ensure that If know or should Governingreasonably should communications know that Lawyers § 14know that the between constituent & unrepresentedorganization’s attorney are protected personinterests are by the attorney-client misunderstandsadverse to those of privilege the lawyer’s roleconstituentIdentity of Constituent Discussions between Interview is Content ofclient may wish to constituent & lawyer being conducted interview(lawyer’s not obtain own are protected by entity’s to gather facts should bedisinterested; lawyer attorney-client in order to keptlawyer doesn’t privilege, subject to provide legal confidentialrepresent waiver at entity’s sole advice to entityconstituent) discretion
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or To ensure that If know or should Governingreasonably should communications know that Lawyers § 14know that the between constituent & unrepresentedorganization’s attorney are protected personinterests are by the attorney-client misunderstandsadverse to those of privilege the lawyer’s roleconstituentIdentity of Constituent Discussions between Interview is Content ofclient may wish to constituent & lawyer being conducted interview(lawyer’s not obtain own are protected by entity’s to gather facts should bedisinterested; lawyer attorney-client in order to keptlawyer doesn’t privilege, subject to provide legal confidentialrepresent waiver at entity’s sole advice to entityconstituent) discretion
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or To ensure that If know or should If know or reasonably Governingreasonably should communications know that should know that Lawyers § 14know that the between constituent & unrepresented unrepresentedorganization’s attorney are protected person person’s interestsinterests are by the attorney-client misunderstands have a reasonableadverse to those of privilege the lawyer’s role possibility of being inconstituent conflict with entity’s interestIdentity of Constituent Discussions between Interview is Content of No legalclient may wish to constituent & lawyer being conducted interview advice, oth(lawyer’s not obtain own are protected by entity’s to gather facts should be er thandisinterested; lawyer attorney-client in order to kept advice tolawyer doesn’t privilege, subject to provide legal confidential securerepresent waiver at entity’s sole advice to entity counselconstituent) discretion
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or To ensure that If know or should If know or reasonably Governingreasonably should communications know that should know that Lawyers § 14know that the between constituent & unrepresented unrepresentedorganization’s attorney are protected person person’s interestsinterests are by the attorney-client misunderstands have a reasonableadverse to those of privilege the lawyer’s role possibility of being inconstituent conflict with entity’s interestIdentity of Constituent Discussions between Interview is Content of No legalclient may wish to constituent & lawyer being conducted interview advice, oth(lawyer’s not obtain own are protected by entity’s to gather facts should be er thandisinterested; lawyer attorney-client in order to kept advice tolawyer doesn’t privilege, subject to provide legal confidential securerepresent waiver at entity’s sole advice to entity counselconstituent) discretion
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or To ensure that If know or should If know or reasonably Governingreasonably should communications know that should know that Lawyers § 14know that the between constituent & unrepresented unrepresented To preventorganization’s attorney are protected person person’s interests creation of aninterests are by the attorney-client misunderstands have a reasonable implied attorney-adverse to those of privilege the lawyer’s role possibility of being in client relationshipconstituent conflict with entity’s interestIdentity of Constituent Discussions between Interview is Content of No legalclient may wish to constituent & lawyer being conducted interview advice, oth(lawyer’s not obtain own are protected by entity’s to gather facts should be er thandisinterested; lawyer attorney-client in order to kept advice tolawyer doesn’t privilege, subject to provide legal confidential securerepresent waiver at entity’s sole advice to entity counselconstituent) discretion
    • Rule 1.13 (a), (f) Representing Warnings to Constituent When & (g) ONLY the Entity As Client Interacting With Constituent Entity Rule 1.13(f) Upjohn Warning Rule 4.3 Rule 4.3 Rest. (3d) LawIf know or To ensure that If know or should If know or reasonably Governingreasonably should communications know that should know that Lawyers § 14know that the between constituent & unrepresented unrepresented To preventorganization’s attorney are protected person person’s interests creation of aninterests are by the attorney-client misunderstands have a reasonable implied attorney-adverse to those of privilege the lawyer’s role possibility of being in client relationshipconstituent conflict with entity’s interestIdentity of Constituent Discussions between Interview is Content of No legalclient may wish to constituent & lawyer being conducted interview advice, oth(lawyer’s not obtain own are protected by entity’s to gather facts should be er thandisinterested; lawyer attorney-client in order to kept advice tolawyer doesn’t privilege, subject to provide legal confidential securerepresent waiver at entity’s sole advice to entity counselconstituent) discretion
    • Rule 1.13 (b)-(e) Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client ChainRepresenting Representing ONLY the the Entity Entity AND a Constituent
    • Rule 1.13 (a), (f) Representing the Entity CONFLICT Analysis & (g)Entity As Client AND a Constituent
    • Rule 1.13 (a), (f) Representing the Entity CONFLICTS Analysis & (g) Entity As Client AND a ConstituentR. 1.7 - Is there a currentconflict?- Two are directly adverse- Significant risk that representation of one will be materially limited by responsibilities to other
    • Rule 1.13 (a), (f) Representing the Entity CONFLICT Analysis & (g) Entity As Client AND a ConstituentR. 1.7 - Is there a currentconflict?- Two are directly adverse- Significant risk that representation of one will be materially limited by responsibilities to otherIf lawyer reasonably believescan nonetheless representboth competently &diligently, OK if each clientgives informedconsent, confirmed in writing.
    • Rule 1.13 (a), (f) Representing the Entity CONFLICT Analysis & (g) Entity As Client AND a Constituent R. 1.7 - Is there a potential future conflict?R. 1.7 - Is there a currentconflict?- Two are directly adverse- Significant risk that representation of one will be materially limited by responsibilities to otherIf lawyer reasonably believescan nonetheless representboth competently &diligently, OK if each clientgives informedconsent, confirmed in writing.
    • Rule 1.13 (a), (f) Representing the Entity CONFLICT Analysis & (g) Entity As Client AND a Constituent R. 1.7 - Is there a potential future conflict?R. 1.7 - Is there a currentconflict?- Two are directly adverse Yes, there is.- Significant risk that representation of one will be materially limited by responsibilities to otherIf lawyer reasonably believescan nonetheless representboth competently &diligently, OK if each clientgives informedconsent, confirmed in writing.
    • Rule 1.13 (a), (f) Representing the Entity CONFLICT Analysis & (g) Entity As Client AND a Constituent R. 1.7 - Is there a potential future conflict?R. 1.7 - Is there a currentconflict?- Two are directly adverse Yes, there is.- Significant risk that representation of one will be materially limited by R. 1.7 cmt. 22 – responsibilities to other Prospective waiver of conflict may be effectiveIf lawyer reasonably believes - Depends on thecan nonetheless represent extent to which theboth competently & client reasonablydiligently, OK if each client understands thegives informed material risks thatconsent, confirmed in writing. the waiver entails
    • Rule 1.13 (a), (f) Representing the Entity CONFLICT Analysis & (g) Entity As Client AND a Constituent R. 1.7 - Is there a potential future conflict?R. 1.7 - Is there a currentconflict?- Two are directly adverse Yes, there is.- Significant risk that representation of one will be materially limited by R. 1.7 cmt. 22 – R. 1.7 cmt. 29; R. 1.9 – If responsibilities to other Prospective waiver common representation of conflict may be fails, ordinarily must withdraw effective from representation ofIf lawyer reasonably believes - Depends on the all, absent informed consent ofcan nonetheless represent extent to which the bothboth competently & client reasonablydiligently, OK if each client understands thegives informed material risks thatconsent, confirmed in writing. the waiver entails
    • Rule 1.13 (a), (f) Representing the Entity CONFLICT Analysis & (g) Entity As Client AND a Constituent R. 1.7 - Is there a potential future conflict?R. 1.7 - Is there a currentconflict?- Two are directly adverse Yes, there is.- Significant risk that representation of one will be materially limited by R. 1.7 cmt. 22 – R. 1.7 cmt. 29; R. 1.9 – If responsibilities to other Prospective waiver common representation of conflict may be fails, ordinarily must withdraw effective from representation ofIf lawyer reasonably believes - Depends on the all, absent informed consent ofcan nonetheless represent extent to which the bothboth competently & client reasonablydiligently, OK if each client understands the BUT, constituent might begives informed material risks that able to give this consentconsent, confirmed in writing. the waiver entails prospectively
    • Rule 1.13 (a), (f) & (g) Entity As Client Representing Representing ONLY the the Entity Entity AND a Constituent Application in Context of Entity FormationSome authority that can represent ONLY yet-to-be-formed entity, if • Clarify at initial meeting that representing entity only • Specify in engagement agreement that: -represent entity only, not constituents - organizers agree to ratify on behalf of entity upon formation - information communicated by constituents will be communicated with entity’s other decision-makers • Abide by Rule 4.3 re: dealing with unrepresented constituentsState Bar of Ariz. Ethics Op. 02-06; see also Jesse v. Danforth, 869 P.2d 1203 (Wis. 1992).
    • Rule 1.13 (b)-(e) Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client Chain Initial Reporting Duty Duty to Continue ReportingRepresenting Up the Chain Representing ONLY the the Entity Entity AND a Option to Report Out Constituent
    • Rule 1.13 (b)-(e) Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client Chain Initial Reporting Duty Duty to Continue ReportingRepresenting Up the Chain Representing ONLY the the Entity Entity AND a Option to Report Out Constituent
    • Initial Reporting Duty Rule 1.13 SEC Rule 17 C.F.R. §205.1 et seq.
    • Initial Reporting Duty Rule 1.13IF lawyer for organization knows that: constituent is engaged in action, intends to act, or refuses to act in a matter related to representation that is a violation of legal obligation to the organization OR a violation of law that reasonably might be imputed to the organization that is likely to result in substantial injury to the organization SEC Rule 17 C.F.R. § 205.1 et seq.
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a violation of law that reasonably might be imputed to the organization that is likely to result in substantial injury to the organization SEC Rule 17 C.F.R. § 205.1 et seq.
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the that isn’t necessary in the best organization interest of the organization to do that is likely to result in substantial injury to the organization so, lawyer shall refer the matter to higher authority in the organization SEC Rule 17 C.F.R. § 205.1 et seq.
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the that isn’t necessary in the best organization interest of the organization to do that is likely to result in substantial injury to the organization so, lawyer shall refer the matter to higher authority in the organization SEC Rule 17 C.F.R. § 205.1 et seq.IF an attorney,appearing and practicing before the SEC,becomes aware of evidence of: a material violation by the issuer or by any officer, director, employee, or agent of the issuer
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the that isn’t necessary in the best organization interest of the organization to do that is likely to result in substantial injury to the organization so, lawyer shall refer the matter to higher authority in the organization SEC Rule 17 C.F.R. § 205.1 et seq.IF an attorney, THEN shall report suchappearing and practicing before the SEC, evidence to:becomes aware of evidence of: - the issuer’s chief legal a material violation officer, OR by the issuer or by any officer, director, employee, or - the issuer’s chief legal agent of the issuer officer and the CEO, OR - the issuer’s “qualified legal compliance committee,” if formed
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the that isn’t necessary in the best organization interest of the organization to do that is likely to result in substantial injury to the organization so, lawyer shall refer the matter to higher authority in the organization SEC Rule 17 C.F.R. § 205.1 et seq.IF an attorney, THEN shall report suchappearing and practicing before the SEC, evidence to:becomes aware of evidence of: - the issuer’s chief legal a material violation officer, OR by the issuer or by any officer, director, employee, or - the issuer’s chief legal agent of the issuer officer and the CEO, OR - the issuer’s “qualified legal complianceSimilarities – up-the-chain; shall committee,” if formed
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the that isn’t necessary in the best organization interest of the organization to do that is likely to result in substantial injury to the organization so, lawyer shall refer the matter to includes providing advice higher authority in the organization SEC Rule on securities laws re: any 17 C.F.R. § document to be 205.1 et seq. submitted to SECIF an attorney, THEN shall report suchappearing and practicing before the SEC, evidence to:becomes aware of evidence of: - the issuer’s chief legal a material violation officer, OR by the issuer OR by any officer, director, employee, or - the issuer’s chief legal agent of the issuer officer and the CEO, OR - the issuer’s “qualified legal compliance committee,” if formed
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the that isn’t necessary in the best organization interest of the organization to do that is likely to result in substantial injury to the organization so, lawyer shall refer the matter to higher authority in the organization SEC Rule 17 C.F.R. § 205.1 et seq.IF an attorney, THEN shall report suchappearing and practicing before the SEC, evidence to:becomes aware of evidence of: - the issuer’s chief legal a material violation officer, OR by the issuer OR by any officer, director, employee, or - the issuer’s chief legal agent of the issuer officer and the CEO, OR means a reporting issuer - the issuer’s “qualified legal compliance committee,” if formed
    • Initial Reporting Duty of denotes actual knowledge THEN shall proceed as is Rule 1.13 the fact in question, which may be inferred from circumstances reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the that isn’t necessary in the best organization interest of the organization to do that is likely to result in substantial injury to the organization so, lawyer shall refer the matter to higher authority in the organization SEC Rule 17 C.F.R. § 205.1 et seq.IF an attorney, THEN shall report suchappearing and practicing before the SEC, evidence to:becomes aware of evidence of: - the issuer’s chief legal a material violation officer, OR by the issuer OR by any officer, director, employee, or - the issuer’s chief legal agent of the issuer officer and the CEO, means credible evidence, based upon which it OR would be unreasonable, under the - the issuer’s “qualified circumstances, for a prudent & competent legal compliance attorney not to conclude that a violation has committee,” if formed occurred, is ongoing, or is about to occur
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the that isn’t necessary in the best organization interest of the organization to do that is likely to result in substantial injury to the organization so, lawyer shall refer the matter to higher authority in the organization SEC Rule 17 C.F.R. § 205.1 et seq.IF an attorney, THEN shall report suchappearing and practicing before the SEC, evidence to:becomes aware of evidence of: - the issuer’s chief legal a material violation officer, OR by the issuer OR by any officer, director, employee, or - the issuer’s chief legal agent of the issuer officer and the CEO, OR means a material violation of a federal or state securities law, a material breach of fiduciary duty - the issuer’s “qualified arising under federal or state law, or a similar legal compliance material violation of any federal or state law committee,” if formed
    • Initial Reporting Duty THEN shall proceed as is Rule 1.13 reasonably necessary inIF lawyer for organization knows that: the best interest of the constituent is engaged in action, intends to act, or refuses to organization act in a matter related to representation that is a violation of legal obligation to the organization OR a UNLESS lawyer reasonably believes violation of law that reasonably might be imputed to the allows lawyer more flexibility that isn’t necessary in the best organization under some interest of the organization to do so, that is likely to result in substantial injury to the organization circumstances, such as a lawyer shall refer the matter to constituent’s innocent higher authority in the organization SEC Rule misunderstanding of the 17 C.F.R. § law, which the lawyer can 205.1 et seq. correct by advising constituentIF an attorney, THEN shall report suchappearing and practicing before the SEC, evidence to:becomes aware of evidence of: - the issuer’s chief legal a material violation officer, OR by the issuer OR by any officer, director, employee, or - the issuer’s chief legal agent of the issuer officer and the CEO, OR - the issuer’s “qualified legal compliance committee,” if formed
    • Initial Reporting Duty SEC Rule 17 C.F.R.Rule 1.13 § 205.1 et seq.
    • Rule 1.13 (b)-(e) Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client Chain Initial Reporting Duty Duty to Continue ReportingRepresenting Up the Chain Representing ONLY the the Entity Entity AND a Option to Report Out Constituent
    • Duty to Continue Reporting Up the Chain Rule 1.13 SEC Rule 17 C.F.R. §205.1 et seq.
    • Duty to Continue Reporting Up the Chain Rule 1.13Unless the lawyer reasonably believes that it is not necessaryin the best interest of the organization to do so, the lawyershall refer the matter to higher authority in theorganization, including, if warranted by the circumstances, tothe highest authority that can act on behalf of theorganization as determined by applicable law. SEC Rule 17 C.F.R. § 205.1 et seq.
    • Duty to Continue Reporting Up the Chain Rule 1.13Unless the lawyer reasonably believes that it is not necessaryin the best interest of the organization to do so, the lawyer “ordinarily will be the board ofshall refer the matter to higher authority in the directors or similar governing body”organization, including, if warranted by the circumstances, tothe highest authority that can act on behalf of theorganization as determined by applicable law. SEC Rule 17 C.F.R. § 205.1 et seq.
    • Duty to Continue Reporting Up the Chain Rule 1.13Unless the lawyer reasonably believes that it is not necessaryin the best interest of the organization to do so, the lawyer “ordinarily will be the board ofshall refer the matter to higher authority in the directors or similar governing body”organization, including, if warranted by the circumstances, tothe highest authority that can act on behalf of theorganization as determined by applicable law. SEC Rule 17 C.F.R. § 205.1 et seq.Unless an attorney who has made a reportreasonably believes that the chief legal officeror the CEO of the issuer has provided anappropriate response within a reasonabletime, the attorney shall report the evidence ofa material violation to:
    • Duty to Continue Reporting Up the Chain Rule 1.13Unless the lawyer reasonably believes that it is not necessaryin the best interest of the organization to do so, the lawyer “ordinarily will be the board ofshall refer the matter to higher authority in the directors or similar governing body”organization, including, if warranted by the circumstances, tothe highest authority that can act on behalf of theorganization as determined by applicable law. SEC Rule 17 C.F.R. § 205.1 et seq.Unless an attorney who has made a report • audit committee of board ofreasonably believes that the chief legal officer directors; ORor the CEO of the issuer has provided an • another committee consistingappropriate response within a reasonable solely of independent directors;time, the attorney shall report the evidence of ORa material violation to: • board of directors (if no committee consisting solely of independent directors)
    • Duty to Continue Reporting Up the Chain Rule 1.13Unless the lawyer reasonably believes that it is not necessaryin the best interest of the organization to do so, the lawyer “ordinarily will be the board ofshall refer the matter to higher authority in the directors or similar governing body”organization, including, if warranted by the circumstances, tothe highest authority that can act on behalf of theorganization as determined by applicable law. SEC Rule 17 C.F.R. § 205.1 et seq.Unless an attorney who has made a report • audit committee of board ofreasonably believes that the chief legal officer directors; ORor the CEO of the issuer has provided an • another committee consistingappropriate response within a reasonable solely of independent directors;time, the attorney shall report the evidence of ORa material violation to: • board of directors (if no committee consisting solely of means that the attorney reasonably believes: independent directors) • no material violation occurred, is ongoing, or is about to occur; OR • the issuer has adopted appropriate remedial measures; OR • the issuer has retained counsel to review the reported evidence AND (i) substantially implemented counsel’s remedial recommendations, or (ii) been advised that counsel may assert colorable defense
    • Duty to Continue Reporting Up the Chain SEC Rule 17 C.F.R. Rule 1.13 § 205.1 et seq.
    • Rule 1.13 (b)-(e) Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client Chain Initial Reporting Duty Duty to Continue ReportingRepresenting Up the Chain Representing ONLY the the Entity Entity AND a Option to Report Out Constituent
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. §1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) (2)(i) (2)(iii)
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. §1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d)  to prevent (2)(i) (2)(iii) substantial injury to the organization  after lawyer reported constituent’s action or intention to act;  highest authority that can act on behalf of organization failed to address in timely & appropriate manner;  action or inaction is a clear violation of law
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. § 1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) to prevent  to  to prevent (2)(i) (2)(iii) client from prevent, mitigat substantial injury committing a e or rectify to the crime or fraud substantial organization injury to the that is financial  after lawyer reasonably interests or reported certain to result property of constituent’s in substantial another action or injury to the intention to act; financial  that is interests or reasonably  highest authority property of certain to result that can act on another or has resulted behalf of from the clients organization in furtherance commission of a failed to address of which the crime or fraud in timely & client has used appropriate or is using the  in furtherance of manner; lawyers which the client services has used the  action or lawyers services inaction is a clear violation of law
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. § 1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) to prevent  to  to prevent (2)(i) (2)(iii) client from prevent, mitigat substantial injury  to prevent issuer  to rectify the committing a e or rectify to the from committing consequences of a crime or fraud substantial organization a material material violation injury to the violation by the issuer that is financial  after lawyer reasonably interests or reported  that is likely to  that has caused, or certain to result property of constituent’s cause may in substantial another action or substantial cause, substantial injury to the intention to act; injury to the injury to the financial  that is financial interest financial interest interests or reasonably  highest authority or property of the property of certain to result or property of that can act on issuer or investors another or has resulted the issuer or behalf of from the clients investors organization  in furtherance of in furtherance commission of a failed to address of which the crime or fraud  may reveal to which the in timely & attorney’s services client has used SEC only appropriate were used or is using the  in furtherance of manner; lawyers which the client  may reveal to SEC services has used the  action or only lawyers services inaction is a clear violation of law
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. § 1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) to prevent  to  to prevent (2)(i) (2)(iii) client from prevent, mitigat substantial injury  to prevent issuer  to rectify the committing a e or rectify to the from committing consequences of a crime or fraud substantial organization a material material violation injury to the violation by the issuer that is financial  after lawyer reasonably interests or reported  that is likely to  that has caused, or certain to result property of constituent’s cause may in substantial another action or substantial cause, substantial injury to the intention to act; injury to the injury to the financial  that is financial interest financial interest interests or reasonably  highest authority or property of the property of certain to result or property of that can act on issuer or investors another or has resulted the issuer or behalf of from the clients investors organization fails  in furtherance of in furtherance commission of a to address in of which the crime or fraud  may reveal to which the timely & attorney’s services client has used SEC only appropriate were used or is using the  in furtherance of manner; lawyers which the client  may reveal to SEC services has used the  action or only lawyers services inaction is a clear violation of law
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. § 1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) to prevent  to  to prevent (2)(i) (2)(iii) client from prevent, mitigat substantial injury  to prevent issuer  to rectify the committing a e or rectify to the from committing consequences of a crime or fraud substantial organization a material material violation injury to the violation by the issuer that is financial  after lawyer reasonably interests or reported  that is likely to  that has caused, or certain to result property of constituent’s cause may in substantial another action or substantial cause, substantial injury to the intention to act; injury to the injury to the financial  that is financial interest financial interest interests or reasonably  highest authority or property of the property of certain to result or property of that can act on issuer or investors another or has resulted the issuer or behalf of from the clients investors organization fails  in furtherance of in furtherance commission of a to address in of which the crime or fraud  may reveal to which the timely & attorney’s services client has used SEC only appropriate were used or is using the  in furtherance of manner; lawyers which the client  may reveal to SEC services has used the  action or only lawyers services inaction is a clear violation of law
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. § 1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) to prevent  to  to prevent (2)(i) (2)(iii) client from prevent, mitigat substantial injury  to prevent issuer  to rectify the committing a e or rectify to the from committing consequences of a crime or fraud substantial organization a material material violation injury to the violation by the issuer that is financial  after lawyer reasonably interests or reported  that is likely to  that has caused, or certain to result property of constituent’s cause may in substantial another action or substantial cause, substantial injury to the intention to act; injury to the injury to the financial  that is financial interest financial interest interests or reasonably  highest authority or property of the property of certain to result or property of that can act on issuer or investors another or has resulted the issuer or behalf of from the clients investors organization fails  in furtherance of in furtherance commission of a to address in of which the crime or fraud  may reveal to which the timely & attorney’s services client has used SEC only appropriate were used or is using the  in furtherance of manner; lawyers which the client  may reveal to SEC services has used the  action or only lawyers services inaction is a clear violation of law
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. § 1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) to prevent  to  to prevent (2)(i) (2)(iii) client from prevent, mitigat substantial injury  to prevent issuer  to rectify the committing a e or rectify to the from committing consequences of a crime or fraud substantial organization a material material violation injury to the violation by the issuer that is financial  after lawyer reasonably interests or reported  that is likely to  that has caused, or certain to result property of constituent’s cause may in substantial another action or substantial cause, substantial injury to the intention to act; injury to the injury to the financial  that is financial interest financial interest interests or reasonably  highest authority or property of the property of certain to result or property of that can act on issuer or investors another or has resulted the issuer or behalf of from the clients investors organization fails  in furtherance of in furtherance commission of a to address in of which the crime or fraud  may reveal to which the timely & attorney’s services client has used SEC only appropriate were used or is using the  in furtherance of manner; lawyers which the client  may reveal to SEC services has used the  action or only lawyers services inaction is a clear violation of law
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. § 1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) to prevent  to  to prevent (2)(i) (2)(iii) client from prevent, mitigat substantial injury  to prevent issuer  to rectify the committing a e or rectify to the from committing consequences of a crime or fraud substantial organization a material material violation injury to the violation by the issuer that is financial  after lawyer reasonably interests or reported  that is likely to  that has caused, or certain to result property of constituent’s cause may in substantial another action or substantial cause, substantial injury to the intention to act; injury to the injury to the financial  that is financial interest financial interest interests or reasonably  highest authority or property of the property of certain to result or property of that can act on issuer or investors another or has resulted the issuer or behalf of from the clients investors organization fails  in furtherance of in furtherance commission of a to address in of which the crime or fraud  may reveal to which the timely & attorney’s services client has used SEC only appropriate were used or is using the  in furtherance of manner; lawyers which the client  may reveal to SEC services has used the  action or only lawyers services inaction is a clear violation of law
    • Option to Report Out Lawyer may reveal information to extent lawyer reasonably believes necessary: Rule Rule Rule 17 C.F.R. § 17 C.F.R. § 1.6(b)(2) 1.6(b)(3) 1.13(c) 205.3(d) 205.3(d) to prevent  to  to prevent (2)(i) (2)(iii) client from prevent, mitigat substantial injury  to prevent issuer  to rectify the committing a e or rectify to the from committing consequences of a crime or fraud substantial organization a material material violation injury to the violation by the issuer that is financial  after lawyer reasonably interests or reported  that is likely to  that has caused, or certain to result property of constituent’s cause may in substantial another action or substantial cause, substantial injury to the intention to act; injury to the injury to the financial  that is financial interest financial interest interests or reasonably  highest authority or property of the property of certain to result or property of that can act on issuer or investors another or has resulted the issuer or behalf of from the clients investors organization fails  in furtherance of in furtherance commission of a to address in of which the crime or fraud  may reveal to which the timely & attorney’s services client has used SEC only appropriate were used or is using the  in furtherance of manner; lawyers which the client  may reveal to SEC services has used the  action or only lawyers services inaction is a clear violation of law
    • Option to Report Out Rule 1.13(c)
    • Rule 1.13 (b)-(e) Rule 1.13 (a), (f) & (g) Reporting Up the Entity As Client Chain Initial Reporting Duty Duty to Continue ReportingRepresenting Up the Chain Representing ONLY the the Entity Entity AND a Option to Report Out Constituent
    • Rule 1.13 in Context
    • Rule 1.13 in Context Thank you! Wendy Gerwick Couture Associate ProfessorUniversity of Idaho College of Law wgcouture@uidaho.edu