California Bar Journal
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California Bar Journal

The State Bar of California


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Front Page - April 2000
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News Briefs
Election schedule set for board, CYLA vacancies
Bar court judge appointments process to be reviewed
Newest board member dies
Ventura County mobile legal center cited by ABA
ABA offers three CLE programs
Bar, Western State plan annual ethics symposium
Penalty for late bar dues moved to April 28
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Legal Tech - UM: The leading edge of convergence
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From the President - Link starting salaries with service
Easy to destroy, hard to rebuild
2 trains on a collision course
Keep the judiciary independent
Letters to the Editor
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MCLE Self-Study
Viewing the Subdivision Map Act
Self-Assessment Test
MCLE Calendar of Events
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Public Comment
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Ethics Byte - More on the written agreement
Charges of grand theft, sexual battery lead to bar hearing
Attorney Discipline


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More on the written agreement
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Diane KarpmanRemember that the last, best hope for lawyerkind is the fee agreement. Last month, we considered the express creation of an attorney-client relationship, and solutions for problems which cause attorneys professional angst. Ordinarily, the relationship is created by a contract (the fee agreement), and is inherently contractual in structure. We evaluated a client’s ability to waive fundamental, core fiduciary obligations, such as confidentiality, in that contract.

Our obligations are derived from principles of agency, ethics and contract law. Agents have obligations of confidentiality owed to principals. This is the genesis of our duty of confidences and secrets. Business & Professions Code 6068(e). “[Attorneys] are fiduciaries; they owe to the principal the basic obligations of agency: loyalty and obedience [cites omitted]” Channel Lumber Co. Inc. v. Porter Simon et al, 2000 Daily Journal D.A.R. 2605. The duty of confidentiality is greater than the attorney-client privilege, a mere evidentiary rule, which is applicable to information tendered by the client, as opposed to confidential client information, which can be acquired from any source (public documents, gossip, rumor), but which, if exposed, could embarrass the client.

The lawyer would not have acquired the information, but for the agency/fiduciary relationship. Just as a client may consent to waive the lawyer’s duty of confidentiality, a client may also contractually magnify or strengthen a lawyer’s fiduciary duty of confidentiality. Reinforce-ment could occur in a fee or settlement agreement specifically restricting a lawyer’s use or misuse of these confidences in another client’s case in the future. Claims involving legal malpractice/breach of fiduciary duty are frequently settled confidentially.

A lawyer is prohibited from using confidential information to the cli-ent’s disadvantage. Wutchumna Water Co. v. Bailey, (1932) 216 Cal. 564. Exposure of a confidential settlement agreement, particularly where the lawyer received the benefits of the settlement and signed or assented to it as an officer of the court, is unequivocally disadvantageous to the former client. In a recent case, a court maintained: “Any transgression of the Confidentiality Clause, intentional or not, would bring upon [the clients] the severe sanctions set out in the Penalty Clause. . . .” Gilbert v. National Corp. For Housing Partner-ships (1999) 71 Cal.App. 4th 1240, 1250.

Some may ask about the thorny issue of Rule 1-500, Agreements Restricting a Member’s Practice. It appears that this must be balanced with a client’s right to have the attorney “maintain inviolate” the client’s “secrets.” Even the State Bar, in resolving de minimis misconduct, keeps settlements confidential in “Agreements in Lieu of Discipline,” Business and Professions Code 6092.5.

But, you may ask, what about the lawyer’s duties to society as a whole, or where the information should be disclosed for the public good? Kirsch v. Duryea (1979) 21 Cal.3d 303. Well, it’s a judgment call. Maybe that’s why one of our other core duties is the exercise of independent judgment.

Diane Karpman can be reached at 310/887-3900 or