This Wisdom of the Crowd, compiled from responses posted in the Employment and Labor eGroup and the Litigation eGroup*, addresses the practice of legal counsel sitting in on calls with clients/customers without announcing counsel's presence on the call.
*(Permission was received from the ACC members quoted below prior to publishing their eGroup comments in this Wisdom of the Crowd resource.)
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Question
Occasionally I have been asked to sit in on calls with clients, customers, etc. without announcing my presence on the call. The reason behind the request is to have my opinion on a matter but without the other party having knowledge of attorney involvement and feeling the need to also have their attorney on the call. I have always pushed back on this request and consider it to be an ethical issue. To my knowledge, most state's eavesdropping laws address recorded conversations and this would not give rise to that level. However, I still am not comfortable with it and am curious if others have received similar requests from their clients, and how they have handled it. Thank you.
I. Ethical Issues and Deception
II. Passive vs. Active Role
III. Implications of this Practice
I. Ethical Issues and Deception
Wisdom of the Crowd
Response #1
Putting aside the ethical issues, having corporate counsel present during a conference call without disclosing that to the people on the other end of the phone is really bad form. You are being asked to engage in deception. I always tell our salespersons, etc. that when they have a conf call to find out the position of each person on the other team as I am concerned about the very deception you are being asked to engage in: the hidden lawyer in the room. If I found out that our company was being deceived in this manner, we would be very adverse to forming or continuing a business relationship, as we consider our clients, our vendors, and others we do business with to be our partners. Maybe you should create a policy, predicated on viewing this situation as if "the shoe was on the other foot. 1
Response #2
I believe you need to look at the ethics rules in your state. Texas has some particular rules regarding this so I would not listen in without announcing my presence and would suggest that whoever is taking the call within your organization inquire as to who is on the call and whether or not the call is being recorded. 2
Response #3
ACC has an article concerning communications with unrepresented parties that may guide you in considering this issue. It does not discuss silent observer conference calls but is helpful. 3
Response #4
There are indeed ethical issues if you have reason to believe the other party is represented by counsel - whether they are in the room or not. I would not agree to sit silently if the call involves outside individuals. What does the group think about the same scenario but with an employee of the company on the phone being disciplined or interviewed by a company manager to whom you are offering guidance in the process? 4
Response #5
OK. I'm convinced. Thanks for setting it out clearly. Won't do it again. And yes, my business people will need to learn to take notes if the call just won't happen if the other side knows that counsel is on the phone. 5
Response #6
The instincts and legal assessment [in another post] is correct. It is unethical to communicate with a represented third party without their counsel's consent. To listen in without such consent would be receiving a communication improperly. In addition, even though the conversation may not be recorded, eavesdropping laws could subject the attorney to liability if his/her presence was not announced. Even if the third party was unrepresented or not known to have representation, it still just doesn't feel right. Certainly you would not want it done to you. On rare occasions, I have had conversations via speaker phone with other counsel or a person with information relevant to some litigation or transaction where I have also had a client representative or co-counsel present. On those occasions, I have always let them know who might be present with me for the conversation even if there is no intention that the other person joining me will speak. 6
II. Passive vs. Active Role
Wisdom of the Crowd
Response #1
I'm sorry but I have to disagree [with Section I, Response #1].
My job is to protect my company. If my clients think something is going on that could create a legally charged situation then I have a responsibility to know the facts. Obviously I can't be an active participant if the other side doesn't have counsel present or, INFORMED that I'm on the call, doesn't waive its right to counsel. And I still have an ethical question about what I can say if the other side waives its right. But as a corporate officer as well as a counselor I'm certainly entitled to know what's going on. (We'll often tell the other side I'm sitting in and it doesn't object, but that's not the original poster's question.) I don't think "third-party eavesdropping laws" (intended to protect both call parties, not just one) bar a representative of a business enterprise (my company) from having the business's resources available. Nor do I think there's an actionable "deception" going on. My guys get enough calls from people using speaker phones to make me think the caller isn't alone either. We're talking about BUSINESS calls. There's no reasonable expectation that EITHER side doesn't want to protect itself.
The greater risk is that the attorney is now a witness. But that's a different issue. 7
Response #2
I have occasionally been asked to do that, particularly in connection with discussions with one large company that could not engage with counsel unless their lawyer was also present.
I thought about the "engage" part in coming to my decision that it was probably OK. All I did was listen. I did not engage with the other side, did not write notes to my client as the call went on, just sat there. The inherent problem with any non-video teleconference is that you don't have absolute certainty on who is present, and for all you know the other side has someone sitting there, too.
If it is not an adversarial situation, just a routine matter, I think it may not be that significant an issue, but I can certainly understand the reluctance. 8
III. Implications of this Practice
Wisdom of the Crowd
Response #1
I have been in this position as well and I decline to do it for several reasons. First is the "no contact rule." I have not done research on whether silent participation (i.e., being a "fly on the wall") is covered by the rule. Although the rule is to prevent overreaching by an attorney against the other client, which does not happen if you do not speak, it does seem to be pushing against the spirit of the rule if they have counsel. In some jurisdictions, incidentally, if you do not know if the other side has counsel, you may be required to inquire. Second, if the client keeps asking you for guidance as to what to say and you begin scripting your client's remarks, that might be an issue if the other side has counsel. You could cross the line by turning your client into your agent because you can't have a third party do for you what you are not allowed to do. The line between advising on communications between clients and directing specific communications is not a clear one, but there have been articles about these risks, so it is a recognized ethical risk.
Finally, I point out to my clients that they should consider what would happen if it ever came out that I, or anyone else, for that matter, was secretly on a call. Consider how that looks from the standpoint of personal and company image. It will make all involved look sneaky, dishonest and shady. That is not a good atmosphere for a continuing business relationship. I know I have reacted negatively when hearing someone has done it to us. Indeed, one time while in private practice, a partner walked in on a conference call I was having, whispered something to me about the call, and the attorney on the other side (who heard the sound) went ballistic. She thought he was listening in secretly to the whole call. We protested he had just walked in, but she was skeptical, to say the least. The distrust factor between us increased and took some time to dissipate.
In sum, even if it turns out being a "fly on the wall" is not formally unethical, the reputational harm if the truth comes out may not outweigh the momentary gain from the first hand hearing of a conversation.
That's my own personal view. 9
Response #2
Let's put the question otherwise: why is it still an issue today that attorneys need to "hide" their presence ? This approach still stems from ancient times when attorneys were considered as being potential "business brakes" or "trouble shooters" or "litigation warriors" rather than (as I would hope is the case today !!) constructive "business supports" and "trouble solvers". If listening in enhances your understanding of the deal, why should it be kept secretive ? And going one step further, if the other party then wants its own attorney participate, what's wrong with that ? If both sides discuss the deal in presence of (and with the input of) their respective attorneys, wouldn't that be beneficial to all, since this allows that all issues get raised, discussed and, if possible, solved in one and the same call? 10
Response #3
Following this thread somewhat late in the game, would the group think that business people should now inquire as to whether or not legal counsel for the other party is on the call or ask for a roll call of who is participating along with their positions? That seems a bit much. I have participated in many calls in which we don't even know if the other personnel named on the call are employees of the business or contractors or third parties. 11
1 Kenneth Coronel, Chief Legal Officer, Verisys Corporation (Employment & Labor Law eGroup, April 29, 2014).
2 Archangela DeSilva, Associate General Counsel, Spectra Energy Corp. (Employment & Labor Law eGroup, April 30, 2014).
3 Todd Etzler, General Counsel and VP Public Affairs, Family Express Corporation (Employment & Labor Law eGroup, May 1, 2014).
4 Najia Haddock, General Counsel, Chief Legal Officer, Children's Learning Adventure USA, LLC (Employment & Labor Law eGroup, April 30, 2014).
5 Anonymous.
6 William Davis Harn, Senior Vice President & Senior Counsel, City National Bank (Employment & Labor Law eGroup, April 29, 2014).
7 Arnold Graber, Executive Vice President & General Counsel, Metalico, Inc. (Employment & Labor Law eGroup, April 30, 2014).
8 Anonymous.
9 Arthur Saiewitz, Corporate Counsel, Alcatel-Lucent (Litigation eGroup, April 29, 2014).
10 Erik Verbraeken, Senior Group Counsel, Johnson Controls, Inc. (Litigation eGroup, April 30, 2014).
11 Maryrose Delahunty, Vice President & General Counsel, Invocon, Inc. (Employment & Labor Law eGroup, May 14, 2014).