Opinion 94-25
(November 1994)

This inquiry concerns your ethical obligations as a subordinate attorney to inform your client of a settlement offer when directed not to do so by your supervisory attorney. You received an offer from the defendant in the amount of $22,000. You were told by your supervisory attorney to decline the offer, demand $30,000 and settle for $25,000. You were told not to contact the client regarding the offer and that your supervisory attorney would take responsibility for this and would be speaking with the client over the weekend.

The applicable provisions of the Rules of Professional Conduct are as follows:

Rule 1.4 Communication

(a) A lawyer shall keep a client informed about the status of a matter.

(b) A lawyer shall explain a matter to the extent necessary to permit the client to make informed decisions regarding the representation.

The comment to Rule 1.4 provides that a lawyer negotiating on behalf of a client should provide the client with facts relevant to the matter, inform the client of communication from another party and take reasonable steps that permit the client to make a decision regarding a serious offer from another party. A lawyer who receives from opposing counsel an offer of settlement in a civil controversy... should promptly inform the client of its substance unless prior discussions with the client have left it clear that the proposal will be unacceptable.

Rule 1.2(a) provides, inter alia, "A lawyer shall abide by a client's decision whether to accept an offer of settlement of a matter." Implicit in this Rule is that the client needs to be informed of all reasonable settlement offers.

The Committee's position is that Rules 1.4 and 1.2 require that the offer of settlement be communicated to the client.

Rule 5.2 expressly provides that a lawyer is bound by the Rules even when the lawyer acts at the direction of another person. A subordinate lawyer is relieved of responsibility for a violation if acting in accordance with a supervisory lawyer's reasonable resolution of an arguable question of professional duty. On this point, the comment to Rule 5.2 provides that, "If the question can reasonably be answered only one way, the duty of both lawyers is clear and they are equally responsible for fulfilling it." With the facts presented in your letter, the refusal to communicate the settlement offer is unreasonable.

The Committee advises that as you have concerns that the offer has not been transmitted to the client by your supervisory attorney, that you talk with that supervisory attorney to determine if he or she has communicated the offer of settlement to the client, and/or to determine if the supervisory attorney has a good reason not to communicate the settlement offer. Absent such a reason, should you ascertain that the offer was in fact not communicated to the client, or that the client had not previously authorized the firm to turn down all settlement offers under a minimum amount, then you should take steps to advise the client of the settlement offer.

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.