By: John M. Burman

Most lawyers and many clients believe their communications are confidential.  That belief is generally correct, though there are exceptions, including important new ones, which lawyers and clients need to understand (they also need to know about the “old” ones, which are also discussed in this article).  The concept of confidentiality is so important it applies to prospective clients, current clients, and former clients.[1]Confidentiality is a “fundamental principle in the client-lawyer relationship . . .”[2]  Because of that principle,

[t]he client is . . . encouraged to seek legal assistance and to communicate fully and frankly with the lawyer . . .  The lawyer needs this information to represent the client effectively and, if necessary, to advise the client to refrain from wrongful conduct.[3]

The lawyers’ duty of confidentiality is not just an ethical one:

The principle of client-lawyer confidentiality is given effect by related bodies of law: the attorney-client privilege,[4] the work-product doctrine[5] and the rule of confidentiality in professional ethics.  The attorney-client privilege and work-product doctrine apply in judicial and other proceeding . . .  The rule of client-lawyer confidentiality applies in situations other than those where evidence is sought . . .  The confidentiality rule . . . applies not only to matters communicated in confidence by the client but also to all “confidential information” relating to the representation, whatever its source.   A lawyer may not disclose such information except as authorized or required by the Rules of Professional Conduct or other law.[6]

Since the ethical rule of confidentiality applies in situations where the attorney-client privilege, the work-product doctrine, or neither, do not apply, the ethical duty applies most of the time.  And in addition to not revealing “confidential information,” new Rule 1.6(c) provides that lawyers must act competently to prevent such disclosure:

A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, confidential information relating to the representation of a client.”[7]

As a general matter, a lawyer must communicate with his or her clients using methods which have a “reasonable expectation” of privacy, or, in the words to the commentary, a lawyer must take “reasonable precautions” when communicating with a client.[8]  Even if a lawyer uses such a method, that may not be enough.  A client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to forgo security measures that would otherwise be required by this Rule . . .[9] (A good place to specify the acceptable methods of communication is in an engagement letter.[10])

To inform clients, and prospective clients, about the exceptions, both mandatory and permissive, to the obligation of confidentiality is not just a good idea, it is necessary for the client or prospective client to know the information so he, she, or it, can make appropriate decisions about the representation.  Perhaps no decision that a prospective client makes is more important than the decision of which lawyer to retain.  Accordingly, that decision, as any important one, should be an “informed” one.[11]  No decision can be “informed,” unless it meets the requirements of Rule 1.4(b).  That is, the decision is made after the “lawyer has explained the matter to the extent reasonably necessary for the client to make [an] informed decision . . .”  A lawyer who fails to advise a perspective client about the mandatory and permissive exceptions to confidentiality deprives the individual or entity of information which is necessary to make an informed decision.

With that background, it is now time to turn to the new Rules.

The New Rules

On August 5, 2014, E. James Burke, Chief Justice of the Wyoming Supreme Court, signed an order adopting important changes to the Wyoming Rules of Professional Conduct (“the Rules”), with an effective date of October 6, 2014.  Among the changes were amendments to the rules governing confidentiality.  This article is about the confidentiality changes, and how they will alter the practice of every Wyoming lawyer.

The Basic Ethical Requirement to Protect “Confidential Information” Remains

The first thing to know about the confidentiality rules is what they did not change.  The amendments did not change Wyoming’s basic rule on confidentiality, a rule that is substantially different than the rule suggested by the American Bar Association (“ABA”) in its Model Rules.

In 2006, the Rules adopted a requirement that Wyoming lawyers not reveal “confidential information,” (the Model Rules did not and do not contain the word “confidential;” rather, they require lawyers not to reveal “all information relating to the representation.”) “Confidential information” was then defined, in Wyoming, to mean “information provided by the client or relating to the client which is not otherwise available to the public.”[12]  That change was retained.

When the new Rules were distributed, the Bar provided some explanation about the changes. With respect to retaining Wyoming’s confidentiality rule, the explanation was:

The Committee [the “committee” refers to the “advisory committee” that proposed changes to the Officers and Commissioners of the Bar] considered the Model Rule language, but concluded that this language is overly broad and unrealistic.   Thus, under the committee’s proposal, which is incorporated in the amended rule, an attorney’s duty of confidentiality in Wyoming would continue to apply to confidential information, which would continue to be defined by Wyoming Rule 1.0(b) as “information provided by the client or relating to the client which is not otherwise available to the public.[13]

The only other change to 1.6(a) was replacing the phrase “informed decision” with “informed consent,” a change that was made throughout the Rules (except in Rule 1.4(b)).  The new phrase is defined the same: “the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.”[14]

The Exceptions to Confidentiality

The major changes are to (b), especially the addition of subparagraphs (2) and (3).  Also, new rule 1.13(c) contains disclosure language that will affect the practice of lawyers who represent organizations of any type or size.

Before discussing the changes, it is important to mention a non-change because lawyers need to know what to tell clients or prospective clients about confidentiality and its exceptions, both actual and potential.

One of the exceptions which allows lawyers to disclose “confidential information” is in paragraph (b).  Subparagraph (1) remains the same, though it is much different than the Model Rules’ suggestion.  The new (b)(1) continues to allow Wyoming lawyers to reveal otherwise “confidential information . . . to prevent the client from committing a criminal act.”  (By contrast, the corresponding provision of the Model Rules limits disclosure to information necessary “to prevent reasonably certain death or substantial bodily harm;”[15])

Subparagraph (7) is also new, though it does not require much explanation. Lawyers simply need to know it exists.  It allows “confidential information” to be revealed:

to detect and resolve conflicts of interest arising from the lawyer’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client;[16]

The two exceptions that will affect virtually all lawyers are subparagraphs (2) and (3). They say “[a] lawyer may reveal such information to the extent the lawyer reasonably believes necessary:”

(2) to prevent the client from committing a fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer’s services;

(3) to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the lawyer’s services;

Since (b)(1) already permits the disclosure of “confidential information” to “prevent the client from committing a criminal act;” (2) has the effect of adding non-criminal behavior (“fraud”[17]) to the list of “confidential information” that lawyers may reveal.

The language of subparagraph (b)(3) is deceptively similar to that of (b)(2), but it has dramatically different results.  Under (b)(3), a lawyer may reveal information:

 “to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the lawyer’s services . . . .”

The difference between (b)(2) and (b)(3) is in the third and fifth words of (b)(3).  A lawyer may reveal “confidential information . . . to prevent, mitigate or rectify . . . .”  The second word, “prevent,” applies to future acts, as does subparagraph (b)(2).  The third and fifth words, “mitigate or rectify,” are the key words. Unlike “prevent,” which applies to future behavior, “mitigate or rectify” apply to past behavior.

The reason for allowing a lawyer to disclose “confidential information” pursuant to subparagraphs (b)(2) or (b)(3) is described in the commentary.

Disclosure Adverse to Client

[6] Paragraph (b)(2) is a limited exception to the rule of confidentiality that permits the lawyer to reveal information to the extent necessary to enable affected persons or appropriate authorities to prevent the client from committing a fraud, as defined in Rule 1.0(d), that is reasonably certain to result in substantial injury to the financial or property interests of another and in furtherance of which the client has used or is using the lawyer’s services. Such a serious abuse of the client-lawyer relationship by the client forfeits the protection of this Rule. The client can, of course, prevent such disclosure by refraining from the wrongful conduct. Although paragraph (b)(2) does not require the lawyer to reveal the client’s misconduct, the lawyer may not counsel or assist the client in conduct the lawyer knows is criminal or fraudulent. See Rule 1.2(d). See also Rule 1.16 with respect to the lawyer’s obligation or right to withdraw from the representation of the client in such circumstances, and Rule 1.13(c), which permits the lawyer, where the client is an organization, to reveal information relating to the representation in limited circumstances.

[7] Paragraph (b)(3) addresses the situation in which the lawyer does not learn of the client’s crime or fraud until after it has been consummated.  Although the client no longer has the option of preventing disclosure by refraining from the wrongful conduct, there will be situations in which the loss suffered by the affected person can be prevented, rectified or mitigated.  In such situations, the lawyer may disclose information relating to the representation to the extent necessary to enable the affected persons to prevent or mitigate reasonably certain losses or to attempt to recoup their losses.  Paragraph (b)(3) does not apply when a person who has committed a crime or fraud thereafter employs a lawyer for representation concerning that offense. [18]

As noted in comment [6], above, Rule 1.13(c) also permits certain disclosure.  As amended, 1.13(c) says:

If,

(1) despite the lawyer’s efforts in accordance with paragraph [1.13](b) the highest authority that can act on behalf of the organization insists upon or fails to address in a timely and appropriate manner an action or a refusal to act, that is clearly a violation of law; and

(2) the lawyer reasonably believes that the violation is reasonably certain to result in substantial injury to the organization, then the lawyer may reveal information relating to the representation whether or not Rule 1.6 permits such disclosure, but only if and to the extent the lawyer reasonably believes necessary to prevent substantial injury to the organization.

As a result of the changes described above, lawyers will need to change the advisement they give to all prospective clients, to something like this (numbers (1) through (3) have not changed):  Everything we discuss is confidential, with four (there will be five if the client is an organization) possible exceptions.  First, if I learn about child abuse, I must report it.  Second, if I learn of abuse of a vulnerable adult, I must report that.  Third, if I learn that you intend to commit a crime, I may report that.  And fourth, if I learn that you intend to commit a crime or fraud, or have committed a crime or fraud that will “result in substantial injury to the financial interests or property of another . . .  in furtherance of which [you have] used or [are] using [my] services,” I may reveal that; and finally, if the client is in organization, I may reveal “confidential information” if I believe doing so is necessary to prevent substantial injury to the organization.

Revealing “confidential information” is not the only option available to a lawyer.  He or she may withdraw, and withdraw in such a way that the withdrawal says loudly and clearly that something is wrong.  The lawyer may, in other words, make a “noisy withdrawal.”  Such a withdrawal is described in the commentary to Rule 4.1.

Ordinarily, a lawyer can avoid assisting a client’s crime or fraud by withdrawing from the representation.  Sometimes it may be necessary for the lawyer to give notice of the withdrawal and to disaffirm an opinion, document, affirmation or the like.  In extreme cases, substantive law may require a lawyer to disclose information relating to the representation to avoid being deemed to have assisted the client’s crime or fraud.  If the lawyer can avoid assisting a client’s crime or fraud only by disclosing this information, then under paragraph [Rule 4.1] (b) the lawyer is required to do so, unless the disclosure is prohibited by Rule 1.6.[19]

Summary

Retaining the language of Rule 1.6(a) that Wyoming’s lawyers must protect “confidential information,” rather than all information that “relates” to the representation, means that the basic rule on confidentiality remains the same.  The addition of subparagraphs 1.6(b)(2) and (3), as well as the adoption of the changes to rule 1.13(c), mean that Wyoming’s lawyers will have to change the advisements they give clients and prospective clients, as both categories of clients are entitled to be fully informed about when their lawyers must or may disclose “confidential information.” The alternative to informing a client or a perspective client is to not tell about the exceptions, and to then disclose information that the client or perspective client thought was confidential (not informing a prospective client about the possibilities of disclosure may result in the lawyer having a duty to disclose information about the prospective client, information that the prospective client would never have revealed if the lawyer had properly informed the prospective client[20]). That type of disclosure will likely result in a very unhappy former client or prospective client who will react by filing a grievance, a malpractice suit, or both.

Even if a lawyer has no intention of making a permissive disclosure, he or she still has an obligation to inform both clients and prospective clients so that they may give “informed consent” before deciding to reveal “confidential information” which may be disclose.

 ●  ●  ●  ●  ●

[1] Wyo. Rules of Prof’l Conduct, R. 1.6, cmt. [1] (Westlaw 2015].  All citations are to the amended rules as they now appear on Westlaw.  Those rules were attached to Sharon Wilkinson’s email to the Wyoming Bar sent on August 12, 2014.  The amended rules are also available on, I think, Lexis.  Id. at Rule 1.0(b).

[2] Id. at Rule 1.6, cmt. [2].

[3] Id.

[4] The attorney-client privilege in Wyoming is codified at Wyo. Stat § 1-12-101(a) (LexisNexis 2013).

[5] The work product doctrine is contained in the Rules of Civil and Criminal Procedure.  See Wyo. R. Civ. P. 26(b)(3) and Wyo. R. Crim. P. 16(a)(2) & (b)(2) (LexisNexis 2013).

[6] Wyo. Rules of Prof’l Conduct, R. 1.6, cmt. [3] (Westlaw 2015).

[7] Id. at Rule 1.6(c).

[8] ABA Formal Op. 99-413. The term “reasonable expectation of privacy,” has been changed, at times, to “reasonable precautions” in the comments to the Rules and the Model Rules. See Wyo. Rules of Profess’l Conduct, R. 1.6, cmt. [19] (Westlaw 2015), and ABA Model Rules, R. 1.6, cmt. [19] (2014).

[9] Wyo. Rules of Prof’l Conduct, R. 1.6, cmt. [18] (Westlaw 2015).

[10] For an example, see John M. Burman, Professional Responsibility in Wyoming, appendix B (2008).

[11] Wyo.  Rules of Prof’l Conduct, R. 1.44 (b) (Westlaw 2015). Both the Wyoming Supreme Court and the ABA’s Standing Committee on Ethics and Professional Responsibility have issued opinions that suggest such a decision should be an informed one.  Carlson v. Langdon, 751 P.2d. 344, (1988) (the lawyer- client relationship may arise by the conduct of the parties. The burden is on the lawyer to clarify whether there is or is not such a relationship.  751 P.2d at 345 (this is consistent with the Rules, which, in the commentary, place the burden on the lawyer. See Wyo. Rules of Prof’l Conduct, R. 1.3, cmt. 4 (Westlaw 2015) and  Formal Op. 02-425 (Retainer Agreement Requiring the Arbitration of Fee Disputes and Malpractice) (“It is permissible under the Model Rules to include in a retainer agreement with a client a provision that requires the binding arbitration of disputes concerning fees and malpractice claims, provided that the client has been fully apprised of the advantages and disadvantages of arbitration and has given her informed consent to the inclusion of the arbitration provision in the retainer agreement.); see alsoFormal Op. 11-458 (Changing Fee Agreements During Representation).

[12] Wyo. Rules of Prof’l Conduct, R. 1.0(b) (Westlaw 2015).

[13] E-mail from Sharon Wilkinson to the Wyoming Bar, dated August 12, 2014.

[14] Wyo. Rules of Prof’l Conduct, R. 1.0(f) (Westlaw 2015).

[15] ABA Model Rules of Prof’l Conduct, R. 1.6(b)(1) (2014).

[16] Wyo. Rules of Prof’l Conduct, R. 1.6(b)(7) (Westlaw 2015).

[17] “Fraud” means “conduct that is fraudulent under the substantive or procedural law of the applicable jurisdiction and has a purpose to deceive.”  Id. at Rule 1.0(e).

[18] Id. at Rule 1.6, cmts. [6 and 7].

[19] Id. at Rule 4.1, cmt. [3] (emphasis added).

[20] Informal Op. 1470 (Duty of Lawyer to Inquire into Fraudulent or Criminal Conduct and Disclose Past Behavior of a Prospective Client).

The Ethical Corner
With John M. Burman
John M. Burman’s Ethically Speaking Column that was published in the Wyoming Lawyer for 19 years can be found on the Wyoming State Bar’s site.
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