CLE Seminar for the in-house counsel- O'Bleness & Thurman & Hill June 8, 2016 Chicago, Illinios

1. Ethical Issues in Investigations
and Compliance for
In-House Counsel
CLE Seminar for In-House Counsel
June 8, 2016
Chicago, Illinois
Brian O'Bleness
Partner
Dentons
Kansas City
+1 816 460 2527
brian.obleness@dentons.com
Monica Thurman
Assistant General Counsel and
Director, Business Conduct
Halliburton
+1 713 839 4184
monica.thurman@halliburton.com
Stephen Hill
Partner
Dentons
Kansas City
+1 816 460 2494
stephen.hill@dentons.com

2. The complexity of representing the
company when it acts only through
its people.
2

3. (c) "Firm" or "law firm" denotes a lawyer or lawyers in a law
partnership, professional corporation, sole proprietorship or
other association authorized to practice law; or lawyers
employed in a legal services organization or the legal
department of a corporation or other organization.
3
"Law Firm" means Legal Department
Model Rule 1.0 Terminology

4. The "client" is the company itself.
(a) A lawyer employed or retained by an organization represents the
organization acting through its duly authorized constituents.
The lawyer must explain that to constituents of the
company when the interests may be adverse
(f) In dealing with an organization's directors, officers, employees,
members, shareholders or other constituents, a lawyer shall
explain the identity of the client when the lawyer knows or
reasonably should know that the organization's interests are
adverse to those of the constituents with whom the lawyer is
dealing.
4
Who Is the Client?
Model Rule 1.13 Organization As Client

5. United States v. Stein, 463 F.Supp.2d 459 (S.D.N.Y. 2006)
(KPMG tax shelter case)
• "Once a government investigation begins, the interests of the
employees and of the entity may diverge. . . . "
• "Employees are often unaware of the potential personal
consequences of cooperating with lawyers hired by their
employers."
• "Even more troublesome, they may cooperate with employer-
retained counsel in the belief that their communications are
protected by a personal privilege, sometimes as a result of
misapprehension of the law and occasionally perhaps as a
result of deception, inadvertent or otherwise."
5
Interests of Employee and Employer may diverge

6. Interacting with Employees
6

7. • The duty to preserve confidential information of a client is
central to the attorney-client relationship
• Requires counsel to keep in confidence all information
relating to representation of a client
• Interviews often involve give and take of information with an
employee; if that information is confidential, Model Rule 1.6
may come into play:
(a) A lawyer shall not reveal information relating to the representation of a
client unless the client gives informed consent, the disclosure is impliedly
authorized in order to carry out the representation or the disclosure is
permitted by paragraph (b).
7
What Do We Tell the Employees?
Model Rule 1.6 Confidentiality Of Information

8. In the course of representing a client a lawyer shall not
knowingly:
(a) make a false statement of material fact or law to a third
person or
(b) fail to disclose a material fact to a third person when
disclosure is necessary to avoid assisting a criminal or
fraudulent act by a client, unless disclosure is prohibited by
Rule 1.6.
8
The Flexible Truth
Model Rule 4.1 Truthfulness In Statements To Others

9. (a) In representing a client, a lawyer shall not use … use
methods of obtaining evidence that violate the legal rights of
such a person.
Comment [1] "Responsibility to a client requires a lawyer to
subordinate the interests of others to those of the client, but
that responsibility does not imply that a lawyer may disregard
the rights of third persons [including] unwarranted intrusions
into privileged relationships, such as the client-lawyer
relationship."
9
Don't violate employees rights to obtain information
Model Rule 4.4 Respect For Rights Of Third Persons

10. Requires that a lawyer not state or imply that s/he is
disinterested when dealing with an unrepresented person
(i.e., company employee)
When the lawyer knows or reasonably should know that the
unrepresented person misunderstands the lawyer’s role in the matter,
the lawyer shall make reasonable efforts to correct the
misunderstanding.
The lawyer shall not give legal advice to an unrepresented person,
other than advice to secure counsel, if the lawyer knows or reasonably
should know that the interests of such person are or have a reasonable
possibility of being in conflict with the interests of the client.
10
Model Rule 4.3 -- Unrepresented Persons

11. Impact of the DOJ's Yates Memo
11

12. To be eligible for any cooperation credit, a company must
provide DOJ with all relevant facts about individuals involved
in the corporate misconduct
True for civil and criminal matters involving DOJ
12
Yates Memo

13. According to Ms. Yates herself, "I will acknowledge that our
focus on culpable individuals may make some employees
nervous. Some may have reason to be nervous. But to the
extent that there's a tension between the interest of the
company and the interests of individuals in an internal
investigation, that dynamic is nothing new."
Before the Yates Memo, it was common that cooperation
credit was available to a company on a sliding scale involving
the prosecutor's judgment and evaluation of the value of the
cooperation to resolution of the case.
13
Impact of Yates Memo

14. • Avoid the "circle the wagons" meeting, phone call and e-mail
• Identify who your client is, what their interests are in the
investigative matter, what it may take to mitigate risk
(including Yates obligations) and exposure for that client
Post-Yates: Before you reach for the phone….

15. A question often asked during an employee interview is:
"Do I need a lawyer?"
• Cannot provide advice on that issue
• Could advise employee has right to separate counsel
15
"Do I Need a Lawyer?"

16. Upjohn Warnings
16

17. • This is the mechanism that has emerged to make clear there is a
privilege and the company holds it and can waive it
• The object is to limit later disputes about the attorney-client relationship
and to allow the company employee to better evaluate risk
• Need for Upjohn warnings are less clear when employee comes to in-
house counsel
• Many factors to consider, however, whenever a likely conflict exists
between the corporation and the employee, counsel should give at a
minimum give a warning that s/he represents the company, not the
employee
17
Upjohn Warnings

18. • Interviews involving only company counsel and corporate
employees are usually protected by the attorney-client
privileged in the U.S.
• The company alone holds that privilege, not the company
employee
• Only the company can decide to waive the privilege, not the
employee, not counsel
• If the company determines to self-report, it may disclose
employee interview content; the employee cannot prevent
disclosure
18
Upjohn v. US, 449 U.S. 383 (1981)

19. Company began an internal investigation and interviewed employees were
told by counsel that:
"We represent the company. These conversations are privileged, but the privilege
belongs to the company and the company decides whether to waive it. If there is
a conflict, the attorney-client privilege belongs to the company."
Lawyer conducting the employee interview said that "counsel could represent
[the employee] as well, as long as no conflict appeared."
Company later cooperates and produces privileged materials. Three
employees were indicted and sought to prevent disclosure.
Court relied on the Upjohn warning and the difference
between, "we can represent you" and "we do represent you"
in rejecting the employees claim they were represented by the
company's counsel.
19
In re Grand Jury Subpoena, 415 F.3d 333 (4th Cir.
2005)

20. Planning Today for
Investigations Tomorrow
20

21. Develop a plan, explain the plan and execute the plan before you have an
open matter that raises these issues
• Gain buy in
• Examine D&O coverage
• Consider using outside counsel to explain Yates
• Communication strategies
21
So in a post-Yates world what should I consider?

22. Questions?
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23. 23
Thank You!
We are very interested in your feedback -
please take a moment to leave a note about this class and the
presenters on your evaluation form.
Brian O'Bleness
Partner
Dentons
Kansas City
+1 816 460 2527
brian.obleness@dentons.com
Monica Thurman
Assistant General Counsel and
Director, Business Conduct
Halliburton
+1 713 839 4184
monica.thurman@halliburton.com
Stephen Hill
Partner
Dentons
Kansas City
+1 816 460 2494
stephen.hill@dentons.com