Ethics Opinions

Opinion No. 79-1

Summary: A lawyer asked by a client to draft a will who learns that the client has wrongfully received welfare benefits is not obligated by DR 7-102(B)(1) to reveal the fraud to the government, as the fraud was not perpetrated in the course of the representation. Where the lawyer learns of the client's intent to continue to commit a crime, the attorney may, but is not required to, reveal that intention. In view of the uncertain application of DR 7-102(B)(1), the lawyer asked to draft a will that seems likely to dispose of assets fraudulently acquired may, consistent with his or her professional obligation, either withdraw or draft the will without violating a disciplinary rule, if the fraud is not closely connected with preparation of the estate plan.

Facts: An elderly woman has sought an attorney's services for the purpose of writing her will. In the course of his representation the attorney has learned from the client that she maintains a large amount of cash in secret while receiving Supplementary Security Income and Medicare benefits. The attorney has informed the client what she already knew, that the continued receipt of the benefits is in violation of the law. This information has caused a severe psychological reaction and a suicide threat.
Discussion: This request for an opinion raises three questions: first, the lawyer's obligation when the initial disclosure of unlawful receipt of benefits was made to disclose past unlawful activity; second, the lawyer's obligation to disclose the apparent intention of his client to continue to receive benefits to which she was not entitled in violation of law; third, the lawyer's obligation with respect to preparation of her will.
First, when told of past unlawful activity, the lawyer's obligation was to respect his client's confidence. This situation comes clearly within the obligation of DR 4-101(B), which states: "Except where permitted under DR 4-101(C), a lawyer shall not knowingly: (1) Reveal a confidence or secret of his client." None of the exceptions of DR 4-101(C) that would permit a breach of confidence apply. DR 7-102(B)(1), which in certain cases requires revelation of fraud, applies only when the fraud is committed in the course of the lawyer's representation, which did not occur in this case.
Second, DR 4-101(C)(3) provides that "[a] lawyer may reveal: (3) The intention of his client to commit a crime and the information necessary to prevent the crime." (Emphasis added.) The disciplinary rule does not state how certain the lawyer must be of the client's intention before breaking the confidence nor does it give any guidance about how the lawyer is to exercise the discretion the rule gives. Section 3.7 of the Standards relating to the Defense Function, recommended by the American Bar Association, states that revelation must be made "if the contemplated crime is one which would seriously endanger the life or safety of any person or corrupt the processes of the courts and the lawyer believes such action on his part is necessary to prevent it." When the Supreme Judicial Court recently promulgated some of the standards relating to the Prosecution Function and the Defense Function, it did not address those standards, such as section 3.7, which were designed only as guides and not statements of disciplinary rules. It did state, however, that, depending on the circumstances, practitioners might, or might not, get helpful guidance from these advisory standards. Although the standards were designed for criminal cases, we believe that section 3.7 is a helpful guide to interpreting DR 4-101(C)(3). The more dangerous the crime, the more lawyers ought to consider very seriously breaking the confidence and, as a corollary, the less absolutely certain they need be of the client's intention to commit the crime. The more trivial the crime, the less responsibility lawyers should feel to reveal. The question that has been put to the committee involves breach of an expressed governmental policy of providing aid only to those persons of a demonstrated financial need, but it does not involve a threat to the person or property of any individual or corruption of the processes of the court. As such there are considerations that point both ways. While there may be differences of opinion about what the lawyer should do, it seems quite clear that this is a case where under the rules as written, the lawyer may properly follow either course.
Third, the most difficult question relates to the lawyer's ability to draft a will that in due course will doubtless dispose of property that has been, and will continue to be, acquired by fraud. The crucial disciplinary rule is DR 7-102(B)(1). It states:
A lawyer who receives information clearly establishing that: (1) His client has, in the course of representation, perpetrated a fraud upon a person or tribunal shall promptly call upon his client to rectify the same, and if his client refuses or is unable to do so, he shall reveal the fraud to the affected person or tribunal.
There are two issues involved in applying this rule to the facts presented. The first is the more general question of which rule applies when there is a clash between the Confidence Rule, DR 4-101(B), and DR 7-102(B)(1). This committee has indicated in the past that in view of the failure of the Supreme Judicial Court to act upon the petition recommending amendment to DR 7-102(B)(1) that would except privileged communications from the requirement of disclosure, DR 7-102(B)(1) should prevail over DR 4-101(B) in case of conflict. See Opinions Nos. 77-12 and 78-9. We should point out, however, that others have taken a different view (see ABA, Opinions, No. 287 (1953)), and recently in a civil case involving deceptive testimony by a client during trial, the Oregon Supreme Court interpreting the identically worded disciplinary rules advised that the lawyer must withdraw but not disclose. In Re A, 276 Or. 225, 554 P. 2d 479 (1976). Without retracting our former opinions, we nevertheless feel constrained to mention that there is contrary authority.
The second issue, whether any fraud is committed "during the course of representation" so as to make DR 7-102(B)(1) applicable at all, is also difficult. It is possible to view this matter as a simple disposition of client's property with a relatively routine, standard will, with the lawyer's activity having nothing at all to do with client's welfare fraud. If that view is correct, then DR 7-102(B)(1) is not applicable, and the lawyer may draw the will. This position is supported by viewing the purpose of DR 7-102(B)(1) as preventing clients from using lawyers to help perpetrate fraud by requiring lawyers to disclose fraud when they discover that they have been used to help in its commission. On the facts of this matter, the lawyer was not used to perpetrate the fraud.
It is also possible, however, to take the view that knowledge of the continuing fraud with its continuing production of assets might be relevant to the language chosen by the lawyer drafting the will and hence that the fraud was being committed "in the course of representation" in the sense that it was material to the lawyer's work. This view is supported by ascribing a broader purpose to DR 7-102(B)(1) than the one outlined above: not only should lawyers not be used to help commit fraud, but lawyers should be kept as far away from participating in it as possible. Thus when the fraud becomes material to their legal product in any substantial way, they should decline to participate.
This is one of those cases where there are persuasive arguments for both interpretations of the rule. We are not aware of authoritative discussion in other jurisdictions. Since our function is to advise and not to decide, we find ourselves unable to give advice beyond our view that both interpretations we have given seem defensible. In the absence of clarification of DR 7-102(B)(1) by the Supreme Judicial Court, our conclusion is that a lawyer who follows either course of action ought not to be held to have violated his or her professional obligation. We would caution, however, that there may be situations where the fraud would be more closely connected with the preparation of an estate plan than appears to be the case here, so that it would clearly be "in the course of representation" and hence within DR 7-102(B)(1).
Finally, we do not believe that the attorney's duties under the rules are altered by the psychological state of the client.


Permission to publish granted by the Board of De;legates, 1979. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.
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