A lawyer’s duty to avoid counseling or assisting in illegal conduct is often discussed in the context of litigation– for example the production of fraudulent documents or dishonest testimony. Fraud
However, the increase of potential fraud in the transactional world due to increased counter-terrorism measures and money laundering schemes, prompted the ABA Standing Committee on Legal Ethics and Professional Responsibility to publish Ethics Advisory Opinion 491 that deals with fraud in non-litigation settings.
The Opinion notes that although client’s are generally entitled to be trusted, Model Rule 1.2, Scope of Representation, does implicate a lawyer’s duty to reasonably inquire when facts learned in an initial interview indicate a “high probability” that a client intends to use a lawyer’s services to engage in fraudulent or criminal behavior.
In fact, even if the initial facts do not rise to the level of “actual knowledge” in accordance with Rule 1.2, the Opinion notes that other fundamental Rules such as competence, diligence, communication, and the prohibition against various types of professional misconduct compel a lawyer to inquire further.
The opinion is replete with numerous citations and clarifying hypotheticals. It also contains advice as to strategies for withdrawal if it becomes necessary. Opinion 491 is a thoughtful and dense analysis that is well worth the read.
