 Remember 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 karpethics@aol.com.
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