The American Bar Association Standing Committee on Ethics and Professional Responsibility released today its first guidance on the 2023 amendments to Rule 1.16 that were intended to help lawyers detect and avoid involvement in a client’s criminal or fraudulent conduct.
In August 2023, the ABA House of Delegates approved Resolution 100 that made explicit the longstanding implicit duty of lawyers under the ABA Model Rules of Professional Conduct to inquire and assess the facts and circumstances of a representation, particularly for new clients. Formal Opinion 513 provides detailed guidance regarding that duty.
The new opinion notes that the 2023 amendments to the model rules arose from concerns about lawyers being pulled into clients’ criminal transactions, such as money laundering and terrorist financing.
The opinion also acknowledges the difficulties that a lawyer might face in determining whether a client or prospective client is seeking to use the lawyer’s services to commit or further a crime.
It concedes that a lawyer might have unresolved questions of fact concerning that possibility even after undertaking a reasonable inquiry and assessment.
“Implicit in Rule 1.16(a) is an obligation to conduct a reasonable risk-based inquiry, not a perfunctory one and not one that involves a dragnet-style operation to uncover every fact about every client,” Formal Opinion 513 said.
It also offers a detailed hypothetical scenario to help guide attorneys facing similar situations and provides a step-by-step approach with questions to consider when undertaking an assessment of the representation and whether the lawyer would be assisting or furthering a crime or fraud.
“The lawyer need not resolve all doubts,” the opinion said in its conclusion. “Rather, if some doubt remains even after the lawyer has conducted a reasonable inquiry, the lawyer may proceed with the representation as long as the lawyer concludes that doing so is unlikely to involve assisting or furthering a crime or fraud.”
The standing committee periodically issues ethics opinions to guide lawyers, courts and the public in interpreting and applying ABA model ethics rules to specific issues of legal practice, client-lawyer relationships and judicial behavior. Other recent ABA ethics opinions are available here.
In August 2023, the ABA House of Delegates approved Resolution 100 that made explicit the longstanding implicit duty of lawyers under the ABA Model Rules of Professional Conduct to inquire and assess the facts and circumstances of a representation, particularly for new clients. Formal Opinion 513 provides detailed guidance regarding that duty.
The new opinion notes that the 2023 amendments to the model rules arose from concerns about lawyers being pulled into clients’ criminal transactions, such as money laundering and terrorist financing.
The opinion also acknowledges the difficulties that a lawyer might face in determining whether a client or prospective client is seeking to use the lawyer’s services to commit or further a crime.
It concedes that a lawyer might have unresolved questions of fact concerning that possibility even after undertaking a reasonable inquiry and assessment.
“Implicit in Rule 1.16(a) is an obligation to conduct a reasonable risk-based inquiry, not a perfunctory one and not one that involves a dragnet-style operation to uncover every fact about every client,” Formal Opinion 513 said.
It also offers a detailed hypothetical scenario to help guide attorneys facing similar situations and provides a step-by-step approach with questions to consider when undertaking an assessment of the representation and whether the lawyer would be assisting or furthering a crime or fraud.
“The lawyer need not resolve all doubts,” the opinion said in its conclusion. “Rather, if some doubt remains even after the lawyer has conducted a reasonable inquiry, the lawyer may proceed with the representation as long as the lawyer concludes that doing so is unlikely to involve assisting or furthering a crime or fraud.”
The standing committee periodically issues ethics opinions to guide lawyers, courts and the public in interpreting and applying ABA model ethics rules to specific issues of legal practice, client-lawyer relationships and judicial behavior. Other recent ABA ethics opinions are available here.
