Ethical Issues for In House Counsel

Transcription

1 Ethical Issues for In House Counsel Introduction to Internal Investigations and the Ethics Considerations Involved Nancy DePodesta, Esquire Michelle N. Lipkowitz, Esquire

2 Introduction: What Prompts an Investigation When is an investigation warranted? An investigation can be reactive or proactive Complaints made: internal or external whistleblower, through the EEOC, or otherwise Labor grievances, employee satisfaction surveys, exit interviews Grand jury, civil, or administrative subpoena Information uncovered during an audit Information obtained by compliance officer Interview of company employee Calls or letters from regulator

3 Objectives of Investigation May Include: Learning underlying facts and circumstances Substantiating/ruling out allegations Presenting relevant facts and circumstances to pertinent decision-maker(s), inside and/or outside the company, and facilitating a decision or action by such decisionmaker(s) Reviewing potential concerns and/or legal claims by others against the company Public relations/good will Government investigation Anticipated litigation

4 Rule 1.7 avoiding conflicts of interest Rule Comment: The lawyer s own interests should not be permitted to have an adverse effect on representation of a client. Can in-house counsel give detached advice? Who should decide whether an investigation is necessary? Who should investigate? Internal Outside Counsel If investigation is being conducted by outside counsel, what is the role of in-house counsel?

5 Rule 1.7 avoiding conflicts of interest (and other factors to consider) Relationship to subject of investigation Position of individuals under investigation Civil litigation Media attention Under government scrutiny Criminal conduct vs. more routine misconduct HR issues Resource consumption Whether someone with expertise or a deep familiarity with a particular government agency/office is required

6 Rule 1.13 Who is the client? Counsel s duty to employer versus employee who is being represented? Rule 1.13 Organization as Client A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents. Rule 1.13 Note: There are times when the organization s interest may be or become adverse to those of one or more of its constituents. In such circumstances, the lawyer should advise any constituent, whose interest the lawyer finds adverse to that of the organization of the conflict or potential conflict of interest, that the lawyer cannot represent such constituent, and that such person may wish to obtain independent representation.

7 Rule 1.13 Who is the client? Who should be in the know? Critical to maintain attorney/client privilege Be clear from the beginning who is, and who is not, the client Limit communications regarding the investigation An attorney must conduct the investigation or work should be done at the attorney s direction Are outside consultants required? Kovel agreement? Do individual employees need their own attorneys and does the company indemnify them?

8 Develop your investigative plan Create an investigation plan What is the scope of the investigation? Identify allegations and relevant issues (factual and legal) Identify potential evidence and witnesses to be interviewed Secure Evidence When securing evidence, be aware of ethical duty to retain documents Evaluate actions necessary for securing relevant documents (e.g., send out freeze notices) s, documents, and text messages Determine order of the interviews Propose schedule/time line for investigation Be flexible

9 Rule 4.3 dealing with the interviewee In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. 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 the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client. Rule Comment: In order to avoid a misunderstanding, a lawyer will typically need to identify the lawyer s client and, where necessary, explain that the client has interests opposed to those of the unrepresented person.

10 Rule 4.3 dealing with the interviewee When is the appropriate time for an interview? Staging and chilling effects Choose the right exhibits and questions to ask How to get a witness to cooperate Do not give legal advice

11 Rule 4.3 dealing with Handling the Upjohn warning the interviewee What is an Upjohn warning and when should it be given? The notice an attorney provides a company employee to inform him or her that the attorney represents only the company and not the employee individually. Providing an employee with an Upjohn warning should make it clear that: The attorney-client privilege over communications between the attorney and the employee belongs solely to, and is controlled by, the company. The company may choose to waive the privilege and disclose what the employee informs the attorney to a government agency or any other third party.

12 Rule 4.3 dealing with the interviewee The employee interview: best practices Have a prover present / 2-person interview teams Prepare written report of interview Include fact that Upjohn warnings were provided and the interviewee s response to same Include information provided by employee as well as attorney opinions, observations and impressions (less likely to be discoverable) Have exhibits to use as part of the interview

13 The Report of Investigative Findings Type of report Written Oral Powerpoint Who should receive the report? General Counsel Board of Directors Control group What if an intended recipient is found to have engaged in wrongdoing? Maintaining Privileged Nature Include attorney impressions and opinions Mark as privileged Limit distribution

14 What to do with the report? To disclose or not to disclose? Waiver issues that arise with these disclosures What happens when government gets involved or has its own pending investigation? How should in-house counsel and the corporation cooperate with the government? Submit internal non-privileged findings to HR or others who have a need to know outcome

15 The Significance of an effective compliance program Root out improper conduct before outside authorities get involved Is the company acting in good faith or turning a blind eye to misconduct? What did the company do with the information once it received it? What steps were taken to address the wrongdoing (individuals involved, systemic issues, policies, tone at the top) Does the compliance program have substance? Does it exist only on paper?

16 Questions?

17 Speaker Information Nancy DePodesta 161 North Clark Street, Suite 4200 Chicago, IL (312) Michelle Lipkowitz 500 E. Pratt Street, Suite 900 Baltimore, MD (410)

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