Whether Omission of Legal Title is Ethical (United States)

Response #1: Generally, I'd say it's not unethical to not disclose your status as a lawyer to third parties, provided you're not violating rules similar to the Model Rules of Professional Conduct of the American Bar Association - Rule 4.1 or 4.3 (assuming adoption of something similar in your jurisdiction).

Rule 4.1 prevents 1) false statements of material fact(s) or law to a third person, and 2) failure to disclose material facts when needed to avoid a crime or fraudulent act by a client. Rule 4.3 prevents a lawyer from misleading the unrepresented party, and to correct the misrepresentation. (See also Rule 8.4 on misconduct, but I don't think most apply to this scenario.)

I suppose not revealing a title could be considered misleading, but that might not necessarily be the case. I think the negotiating contracts scenario is a good example of a situation not requiring disclosure. Plenty of non-lawyers negotiate contracts. Assuming the lawyer is truthful in the facts -- i.e. "the reason we want this indemnity clause is because..." -- I see no need to disclose "I'm a lawyer." The Comment on Rule 4.1 states something similar regarding statements of fact: "Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact."¹

Response #2: I don't really see the problem. I work in a similar capacity (legal and non-legal roles) and generally do not include my Associate General Counsel title unless doing legal department work. Most of what I do does not fit into that category. But negotiating a contract is not necessarily a legal function. It can be, if you are doing it for someone else, but Mom or Pop shop-owner is perfectly free to negotiate and draft a contract without engaging in unauthorized practice of law. Not to mention that you are a non-lawyer as part of your job.

Now, where it could get murky is if you want to have privileged internal conversations about you negotiating the contract. Then you are claiming to be acting in a legal capacity. If you are doing that then I would probably disclose the title.²

Response #3: It depends on the nature of your role. If you're the company's counsel, then it's probably best to disclose that upfront. When negotiating on a transactional level, it's an ethical code issue if you're working with a party that is represented by counsel without that counsel present. If you're negotiating the financial or operational terms of an agreement (e.g.: cost of goods, duration of warranty, level of quality) then you might be clear not disclosing your status as an attorney. But if you're negotiating as a lawyer (e.g.: indemnity, warranty disclaimers...the "legal" stuff) and doing so without disclosing your role, it could be a problem - again, particularly with companies that also have counsel that aren't present. While the title can be intimidating to some, you can quickly overcome that by being a genuine, pleasant human being.³

Response #4: I would think showing them the citation to the model rules and your states' version of the communicating with a non-represented party rule should be sufficient to show them that you have an ethical obligation. Additionally, there's an article "Coming to Terms When Negotiating with a Non-Lawyer" by ACC that may be helpful to send to your team.

 

I have to explain all the time to my business folks that I cannot have a legal discussion with non-attorneys if they are represented on the issue we're discussing. Once I tell them the state bar requires that of me because they think I will manipulate the non-attorneys, they usually get it and deal with the issue themselves or go get the other attorney. To be honest, most of the time the issue turns out to be a business thing anyway.

 

After that, there are also rules that govern what your next steps are supposed to be after reporting up the issue, even all the way to the top, and no one listens. In my opinion a client that asks you to violate your ethical/legal obligations are not worth working for since you are risking your future livelihood on their refusal to comply right now. Hopefully it does not come to that.⁴

Response #5: I agree with Response #4. To ensure I'm meeting my ethical obligation under the rules, many times before I went in house I've had to tell unsophisticated parties on the other side of a negotiation, that I don't represent them/that I represent the other side, and that they should seek legal counsel of their own if they want it.

While I don't think you need to tell the other side to "seek legal counsel" in a business to business setting, I think it stretches things a bit far to say that general counsel for a corporation isn't acting in a legal capacity when they're negotiating a contract for the client, whether laypeople also negotiate contracts or not. The knowledge base and skill set behind how a lawyer would handle such a negotiation necessarily kicks in, consciously or not. I also agree with another responder's comment that -- in addition to ethical considerations -- you could lose the privilege otherwise afforded your communications with your client and the protection otherwise afforded your work product in the negotiation if you're acting as though you're not handling the negotiation in your capacity as the company's lawyer.

Having said all that, I do work in an industry where the other side sometimes seems uncomfortable when the legal department gets involved (internet marketing). So, what we usually do is have the sales team verbally work a deal; then hand it off to my department to draft (or revise) the contract (including getting firm on terms, where appropriate). Once we have the contract in good shape, we give it back to the sales person to hand over to the other side for their review. Don't know if this arrangement would work in your situation, but it's a balance that works for our company and those we do business with, especially if we can give the parties a quick enough turn around on the contract that it doesn't make them feel like the legal team is getting in the way over their working a deal.⁵

Response #6: I agree with the views expressed in Responses #4 and #5. At least where I practice, Model Rules of Professional Conduct Rule 4.3 includes an affirmative requirement to disclose your role in a transaction when dealing with an unrepresented party. That includes an affirmative obligation to explain that you represent the counterparty (your employer). So I think I have to explain that I am legal counsel representing my client in the negotiation of a contract when I am doing that - hiding the ball feels to me like a misrepresentation. If the counterparty is represented by counsel, it seems to me a clear ethical problem both because it would be an unauthorized communication with a represented party, and because in order to achieve that unauthorized communication you would have to omit (arguably material) information. So whether the other side is represented or not, I generally will not engage with them without clearly disclosing that I am an attorney who will not advise them and who does not represent them.

I think it a stretch to claim that negotiation of a contract is not legal work, but even if the answer there is unclear I think disclosure is probably wise. As others have said, if the workflow of having you forthrightly engage with parties interferes with your company's business, the best fix is probably to the workflow and not your forthrightness. Really good training might go a long way to helping the sales folks and higher-ups understand the matter as well. It may be that one reason the sales folks are not negotiating contracts is because they do not feel qualified to speak to the technical stuff, and we've found training to help out substantially.

Our process is:

1. We have drafted a library of contracts for common situations. Sales and business folks use those without a second thought;

2. If the form is unacceptable, the business unit takes a swipe at modifying it. We review their modifications and help them understand what they've done and how to mitigate any resulting risk;

3. If further negotiation of contract terms is required, we identify the places where ambiguity creates risk and send it back to the business unit with a recommendation: either the business team can negotiate the terms and we will continue to advise them, or they can have the counterparty's legal team connect with us. We generally will not deal with a non-attorney counterparty. We are able to facilitate this because our contract review turnaround is very fast (usually on the order of an hour or less).

 

That works for us and is a great allocation of resources: lawyers concentrate on doing legal work, business people make business decisions. It may not work as well for a much smaller company. I hope you can find something that works well for your situation.⁶