Opinion 88-22
(July 1988)

Your letter of May 26, 1988 (with attachment), has been reviewed by our Committee. Our opinion is based on the facts set forth in your letter of May 26, 1988, on which we rely. Further, our opinion is based on the Rules of Professional Conduct, effective in Pennsylvania on April 1, 1988.

The facts, as set forth in your letter, are as follows: Your firm currently represents and has in the past provided representation to two individuals A and B. A is an accountant. B is a businessperson. B was referred to your firm by A.

Your firm has provided representation when requested by A and B in specific matters involving corporate work, real estate acquisition, estate planning, pension and profit sharing work and general representation of corporate entities in which A and B were principals. In several instances, your firm provided legal representation in business transactions in which both A and B were involved.

On or about May 6, 1988, your firm was requested by B to provide a letter to a bank which was conducting a credit investigation in connection with the proposed financing of a business transaction in which B was a principal shareholder of a corporation involved in said transaction. After you discussed the letter and the representations to be made therein with B by telephone, during which B represented that said representations were true, you prepared the letter and delivered it to the bank.

On or about May 24, 1988, you and your partner were retained by A to represent him in connection with a subpoena issued by the District Attorney's Office of [omitted] County that related to an investigation having possibly both civil and criminal implications which was currently being conducted in the State of [omitted]. During the course of a meeting with A held on May 24, 1988, you received information from A indicating that B was possibly a subject of the investigation. Currently A is a material witness in said investigation. A has retained your firm to determine the extent and scope of the investigation, its focus on A and the possibility of A's resisting the subpoena in the Court of Common Pleas. A specifically requested that your firm not divulge to B or indeed any other individual, the fact of the issuance of the subpoena, the facts related thereto or the information that he provided your firm regarding B.

It is our view that a preliminary step must be taken. We believe that you should undertake a reasonable investigation to confirm information you obtained regarding Client B from Client A. This can include confronting B, and such other independent investigation as is necessary. It would not seem appropriate to rely solely on the unsubstantiated allegations of Client A.

If your investigation leads you to believe that the statements about B are true, Rule l.6(c)(2) clearly applies. [Rule l.6(c)(2) permits a lawyer to reveal confidential information "to prevent or rectify the consequences of a client's criminal or fraudulent act in the commission of which the lawyer's services are being or had been used.") Thus, you would be permitted to contact the bank, not only withdrawing your May 6th letter; but, to the extent necessary, explaining why. That is, you may take whatever steps you reasonably believe necessary to rectify the consequences. In doing so, you should be mindful of client confidences which need not be disclosed to rectify the situation.

In our view, you can request that A relieve the firm of its duty to keep the information about B confidential and waive the confidentiality. That can be part of your investigation to which reference is made above.

We understand that because of time constraints of the loan closing, you have withdrawn your May 6th letter. Based on the facts as we have them, we consider that step appropriate.

You, of course, are already mindful of the requirement of Rule 4.1 ["Truthfulness in Statements to Others"]. It applies here, but refers back to Rule 1.6, dealt with above.

Finally, our Committee is of the view that there is an unresolvable conflict in your representation of A in connection with any investigation in which B is or may be a target or likewise under investigation. We recommend that you represent neither A nor B in connection with any aspect of any such investigation.
The Philadelphia Bar Association's Professional Guidance Committee provides, upon request, advice for lawyers facing or anticipating facing ethical dilemmas. Advice is based on the consideration of the facts of the particular inquirer's situation and the Rules of Professional Conduct as promulgated by the Supreme Court of Pennsylvania. The Committee's opinions are advisory only and are based upon the facts set forth. The opinions are not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. They carry only such weight as an appropriate reviewing authority may choose to give it.