KEEPING CONFIDENCES

	August 6, 2001
	Gwen Ifill discusses the American Bar Association's consideration to revamp ethics rules with Nancy Moore, a Boston University law professor who helped draft the rule changes; and attorney David Pasternak, a past president of the Los Angeles County Bar Assocation.

GWEN IFILL: Finally tonight: Lawyers and ethics. For the first time in 20 years, the American Bar Association is considering revamping its ethics rules. At the center of the debate: A proposal to limit the secrets that lawyers keep. The proposed new rules would relax attorney-client privilege, giving lawyers more latitude to reveal information that could prevent an illegal act. We join the debate now with two ABA members attending the group's annual convention this week in Chicago. Nancy Moore is a law professor at Boston University. She helped draft the proposed rule changes. And David Pasternak is an attorney in private practice in Los Angeles. He is a past president of the Los Angeles County Bar Association. Nancy Moore, why is a change needed? NANCY MOORE: Well, as you said, the ABA has not conducted a comprehensive review of any of its ethics rules in the last 20 years. In reviewing the rules on confidentiality, we've discovered that a number of states have adopted variations that are at odds with the current model rules and that society has changed in ways that make it necessary to have more flexibility to permit lawyers to disclose in order to prevent harm to others. GWEN IFILL: You say society has changed. What do you mean by that? NANCY MOORE: Well, the types of harms that can occur. For example, the dangers to the... that environmental situation, for example, if a client were to negligently spill toxic chemicals into a city's water supply. That's a situation we can easily envision in which a lawyer would like the opportunity to be able to disclose in order to prevent that harm. GWEN IFILL: David Pasternak, explain for us the flip side of this. Why would this proposed change make a difference. DAVID PASTERNAK: Well, first I would respond to Nancy that I don't think anything has changed in society in the last 20 years that warrants this change. Responding to what she just said, 20 years ago, we were concerned and should have been concerned about toxics in the water supply and the like. So this isn't a situation of technological changes that we need to be concerned about. What we need to be concerned about is clients having enough trust in their attorneys that they are going to tell us everything we need to know so that we can properly counsel them to abide by the laws and not to engage in wrongful conduct. If they don't trust us, they won't tell us. GWEN IFILL: Give me an example, Mr. Pasternak, about how this would affect trust. DAVID PASTERNAK: Well, the way it's going to affect trust is through shows like this, which are terrific and through word of mouth clients are going to find out that they cannot necessarily believe that their attorneys are going to maintain the confidentiality, keep secret, everything they are told when they come to us for advice. One of these changes would allow attorneys to reveal that a client may engage in a fraudulent act that will simply harm somebody financially. We're called upon oftentimes to counsel clients, to offer guidance to clients about what the repercussions are of what their plans are. We can currently tell them not to engage in certain conduct if we believe that they shouldn't because it might constitute fraud or something else. GWEN IFILL: Nancy Moore, what is the problem worth fixing? Is there an evidence of widespread keeping of criminal or illegal secrets by lawyers on behalf of their clients? NANCY MOORE: Well, part of the problem is, again, that the current ABA model rule is not the rule that's enacted in the vast majority of states. So in that sense, what we're trying to fix is the model that's presented to the states for enactment. We have currently 41 jurisdictions that permit lawyers to disclose a client's intent to commit an economic crime. We have experience, then... these are jurisdictions that have always permitted this sort of disclosure, and the experience is that there has not been a... there's not been any change in the extent to which clients are consulting lawyers or that they're confiding in their lawyers. Basically what will happen in a situation like this, let's take an example where a client wants to make a securities filing and the lawyer finds out that there's a materially false statement in that filing. The lawyer is going to say to the client, look, either you fix it or I'll fix it. And once the lawyer indicates an intent to make sure that that filing is going to be truthful, the client is going to fix it on his own and we won't need any disclosure. So there's no indication in the jurisdictions that have already adopted proposals like these that it causes any sort of harm to the lawyer-client relationship. GWEN IFILL: David Pasternak, let's pick up on that. If 41 states already have laws -- and the states are really the ones who govern here at not necessarily the ABA. The ABA sets out the guidelines. If 41 states already have laws similar to this, what will this practically change? Will lawyers be held liable, for instance, for not disclosing this? DAVID PASTERNAK: There is a fear of that occurring. Let me respond directly to this concept that many states already have this rule. Many states including California do not. If we use simply the justification that many states have this rule without considering the merits, the wisdom of engaging in this, enacting the rule, well, using that same concept we'd still have segregation laws in this country. Many states once had those. GWEN IFILL: In California you're saying, California... Your experience with the Bar Association there, at least in LA County, is that this would not make a difference and the more stringent state law would still apply? DAVID PASTERNAK: The ABA just adopts a model rule. It's up to the state or, in California, it's the California Supreme Court, to adopt the regulatory disciplinary rules. GWEN IFILL: Nancy Moore, is this a matter of putting the American Bar Association on the record in trying to keep up... Is the cart being... Is the horse that's driving the cart the states and the ABA is just racing to catch up here? NANCY MOORE: Well, it's a question of trying to get greater uniformity. I've said that 41 jurisdictions presently permit lawyers to disclose economic crimes. And yet there's a lot of variation in the individual state proposals. What we'd like is the... For the ABA to take a position of leadership to adopt a rule that's consistent with the values that the states have already accepted, but to get them on board and to try to get them to adopt more uniform language so that lawyers who are engaged in what we call cross-border practice, lawyers who are admitted in several different jurisdictions and who handle transactions, for example, business transactions that involve two or more, possibly three, four or even five different states, it's very difficult for lawyers when they don't know precisely what rule governs. So we'd like the ABA to take a position of leadership and put out a model rule that's likely to be adopted by more of the states. GWEN IFILL: Go ahead, Mr. Pasternak. I hear you trying to get in. DAVID PASTERNAK: Sure. This rule will pose the same difficulty. It calls upon lawyers to make very difficult conclusions that judges and juries have difficulty in determining whether or not there's fraud. And here lawyers are being asked to make this determination before the client even engages in the conduct, before you know what the potential victim is going to do. Are they going to rely upon the statement? GWEN IFILL: So you're saying that as long as the lawyers have a suspicion, this is allowing lawyers to betray their clients? DAVID PASTERNAK: Well, this has a reasonable certainty. And what it requires is, it requires a lawyer before... In some instances, before a client has engaged in conduct to make a determination of whether or not that conduct is likely to be fraud. In order to have fraud, you need reliance by the other side. It needs to be justifiable. It's impossible, in my view, often times for an attorney to conclude what is going to occur in the future by somebody other than his or her own client. GWEN IFILL: Let me ask you this. I would like Nancy Moore to respond as well, which is, do we know that people just generally still expect confidentiality from their lawyers? Is this something that we just imagine actually still happens? DAVID PASTERNAK: I think so. I know that we often times remind our clients about confidentiality, to tell us everything, reveal everything, let us know the full story. We're not going to tell it to somebody else. That gives us an opportunity to then try and convince the client, if it's a situation that involves legality, to comply with the laws -- comply with what they're supposed to do. We're a last protection for society oftentimes to get clients to comply with the law. GWEN IFILL: Nancy Moore, you're the one who started this discussion about how society views this. What is your thought about this? NANCY MOORE: Well, as I said, that's not the law presently in at least 41 jurisdictions. What little empirical evidence we have-- and there have been several empirical studies. There was one that was published by a law professor, Fred Zaccharius, in the Iowa Law Review a number of years ago where he interviewed a client population and gave them hypotheticals and found out that they did not expect absolute confidentiality. GWEN IFILL: Okay. I hate to cut you off. We're going to have to leave it there. Thank you very much, Nancy Moore and David Pasternak for joining us. NANCY MOORE: Thank you. DAVID PASTERNAK: Thank you.