Whenever a company enters into contracts, provides services or markets and sells products, its conduct carries with it potential legal implications and liability problems. An in-house attorney serves a crucial function in advising and assisting the business in securing advantageous deals and minimizing exposure to liability. Here are some basic things to know about in-house counsel:
• What are some obstacles that arise for in-house counsel? In-house counsel’s role can be complicated when it comes to dealing with other employees of the business. Nevada’s ethical rules for attorneys — the Nevada Rules of Professional Conduct, or “NRPC” — govern attorneys’ conduct at all times, including their provision of in-house counsel services. These rules have significant implications for the attorney and for the employees of the business.
• What rules govern in-house counsel’s duties? NRPC 1.13(a) provides that “(a) lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.” In-house counsel’s client is the business, not the employees. This is a crucial distinction, because the NRPC rules set forth numerous obligations an attorney owes to the client. In the in-house counsel context, these duties are owed to the business and do not apply to the employees, unless special circumstances exist.
• What is an example of a special circumstance? In the absence of a conflict of interest between the business and the employee, an attorney may represent both. Unless a special agreement exists between the employee and the attorney, however, there is no attorney-client relationship.
• So what should employees know about the role of in-house counsel? The attorney-client privilege does not necessarily apply, and the attorney may not have any duty to maintain the confidentiality of that conversation. In fact, depending on what the employee reveals to the attorney, the attorney may have a duty to reveal his or her conversations with the employee.
For instance, if an employee tells in-house counsel of a possible violation of law that may be imputed to the company, then the attorney generally has a duty to “refer the matter to higher authority in the organization.”
• Is this a common issue? Situations where the interests of the business and the employee are adverse will (hopefully) be fairly rare. More often, the interests of in-house counsel and other employees are aligned — for instance, during a contract negotiation.
Having an attorney on staff enhances the company’s ability to accomplish this goal efficiently. Still, awareness of the attorney’s role within the company is important to avoid conflicts of interest or other legal pitfalls.
Jeremy M. Welland is an attorney with Solomon, Dwiggins and Freer Ltd.