July 10, 2025

The American Bar Association (“ABA”) and its Standing Committee on Ethics and Professional Responsibility, like many other associations including the Bar Association of San Franciso (“BASF”), periodically issues highly informative and useful ethics opinions. On January 8, 2025, the ABA issued Formal Opinion 514 (“FO 514”) providing a thirteen-page detailed reminder of applicable ABA Model Rules of Professional Conduct in the context of providing legal advice to organization clients and working with the organization’s constituents who are not clients and with whom one must work to get the lawyer’s job done.[1] FO 514 is limited in scope in making clear to the reader that the opinion only addresses the situation in which future actions of the organization may entail risk to the organization and possibly to the organization’s constituents. (FO 514, at 2 n.2.)

FO 514 “focuses on situations where (1) a lawyer—in-house or outside counsel—is giving advice to an organization client through a constituent about future action the organization may choose to take; (2) the lawyer knows or reasonably should know that the constituents are likely to have their own legal interests at stake – for example, where the lawyer is advising the organization about possible future conduct for which the constituents may be subject to personal civil or criminal liability; and (3) the lawyer does not intend to create a client-lawyer relationship with the constituent or otherwise to assume fiduciary or contractual duties to the constituent.” (FO 514 at 2.) The opinion repeatedly reminds attorneys to guard against creating the impression or misunderstanding that the lawyer also represents the constituents, including regularly reminding the constituents that they are not the client.  The opinion wisely notes that “[i]t may be important to an organization client to know not only when potential future conduct creates legal risk to the organization but also when the conduct creates legal risk to the organization’s constituents, such as employees, officers, or board members . . . .” (Id. at 6.)

Specifically, FO 514 addresses “whether and when the duty to competently advise the organization under Model Rules 1.1, 1.4, and 2.1 includes a duty to advise the organization about the legal implications of its proposed conduct for its constituents.” (Id. at 2.) And further, the opinion addresses “whether and when the Rules regulating lawyers’ dealings with nonclients, specifically Model Rules 4.1, 4.3, and 1.13(f), require an organization’s lawyer to take measures designed to avoid or correct the constituent’s misunderstanding of the lawyer’s role or mistaken belief that the lawyer is protecting the constituent’s personal interests.” (Id.) The ABA Model Rules referenced in FO 514 correspond closely to the California Rules of Professional Conduct (“CRPC”) issued November 1, 2018, as amended, with numbering and organization resembling the ABA Model Rules.[2]

FO 514 defines the term “organization” to include corporations, governmental organizations, unincorporated associations, other unspecified types of associations, and, depending on one’s jurisdiction of legal practice, partnerships. When representing organizations, as a matter of necessity, attorneys work with those who the opinion identifies as “constituents,” such as board members, officers, and employees, to communicate legal advice to the organization. (FO 514 at 2.) Often these constituents are not clients, but the organization’s attorney-client privilege would (in most cases) extend to those communications.

FO 514 reminds lawyers representing organizations that they must take “reasonable measures to avoid or dispel constituents’ misunderstandings about the lawyers’ role.” (FO 514 at 10.) The opinion points to ABA Model Rule 1.13(f), which instructs a lawyer representing an organization that he or she must “ ‘explain the identity of the client when the lawyer knows or reasonably should know that the organization’s interests are adverse to those of the constituents with whom the lawyer is dealing.’ ” (FO 514 at 9 (quoting Rule 1.13(f)). The opinion recommends that a lawyer consider reminding an organization’s constituents about the lawyer’s role to represent the organization’s interests and not the constituents “early and often,” and not wait until a situation arises where a constituent might rely on a misunderstanding of the lawyer’s role. (Id. at 1 (emphasis omitted).)

FO 514 specifically states that it does not address situations where the attorney is conducting an internal investigation on behalf of the organization, nor does it cover the organization’s attorney’s role and duties in constituent depositions. However, it reminds the reader of the warnings typically given based on Upjohn v. United States, 449 U.S. 383 (1981), in internal investigations.[3]  (FO 514 at 3-4.) The opinion cautions that in the case of an internal investigation into alleged wrongdoing, the divergence of interests between the organization and constituents suspected of wrongdoing is often clear, but that divergence of interests may often be less clear in other situations involving an organization’s constituents. FO 514 points out that the interests of the organization client and the constituent can diverge in an organization decision in which the constituent also has a personal legal interest, and considerations of strategy and the risks and benefits arising from the decision may differ as between the organization and the constituent. (Id. at 4.) In such a case, the lawyer has a duty to remind the constituent of the lawyer’s role to avoid a misunderstanding by the constituent. (Id. at 10.)

The opinion observes that while attorneys have duties of competence and confidentiality as well as a duty to avoid conflicts of interest, these duties are owed to the client organization, not to non-client constituents. (Id. at 4-5.) FO 514 repeatedly emphasizes that legal advice is provided to the organization client acting through its constituents, and the attorney should take “reasonable efforts to rectify” any misunderstanding on the part of the constituents that the attorney’s advice has the constituents’ best interests at heart instead of only the organization’s best interests. (Id. at 11-12.) Depending on the circumstances, this distinction may warrant repeated reminders. (Id.) FO 514 mentions possible joint representation of the organization and a constituent, but the opinion does not seek to address that complex situation.[4]

FO 514 concludes in part: “The Model Rules of Professional Conduct set forth a general standard of competent representation under Rule 1.1, necessary communication under Rule 1.4, and candid advice under Rule 2.1. Where a lawyer—in-house or outside counsel—is giving advice to an organization client about future action the organization may choose to take, the Rules may require the lawyer to advise the organization about constituents’ potential legal risk. This will be a fact-based determination.” (Id. at 12-13).

The above is not a substitute for legal advice of any kind; rather it is intended to provide a preface to reading FO 514 in its entirety. On behalf of the BASF Legal Ethics Committee, I hope you enjoy the read.

David A. Wolf is a S.F. Bay Area attorney who focuses on labor, employment, business, and education law. He is a former chair of BASF’s Legal Ethics Committee and a current member of its Executive Committee, and a member of the Association of Professional Responsibility Lawyers (“APRIL”). David is admitted in all California state courts, the California Northern District and Central District federal courts, the Ninth Circuit Court of Appeals, and United States Tax Court. David has also practiced extensively before the National Labor Relations Board (“NLRB”) in its Regions 16, 19, 20, 21, 31, 32, and Subregion 36, as well as California’s Public Employment Relations Board (“PERB”). David expresses his appreciation for the editorial input of long-time Ethics Committee colleague Al Boro and co-counsel Carol L. Healey.

[1] Https://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/ethics-opinions/aba-formal-opinion-514.pdf; see https://www.americanbar.org/news/abanews/aba-news-archives/2025/01/aba-guidance-diligence-revised-model-rule/.

[2] ABA Model Rule 1.1: Competence and CRPC 1.1: Competence both pertain to competence, but CRPC 1.1 provides more specific direction in the body of the rule instead of the comments. ABA Model Rule 1.4: Communications and CRPC 1.4: Communication with Clients are not identical but have a close resemblance. The first sentence of ABA Model Rule 2.1: Advisor and CRPC 2.1: Advisor are identically worded, but the ABA Model Rule further states: “In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors, that may be relevant to the client’s situation.” CRPC 2.1 has a similar concept in its Comment 2. ABA Model Rule 4.1: Truthfulness in Statements to Others and CRPC 4.1: Truthfulness in Statements to Others pertain to truthfulness in statements made to third persons and are virtually identically worded with the exception of internal cross references. ABA Model Rule 4.3: Dealing with Unrepresented Person and CRPC 4.3: Communicating With an Unrepresented Person are not identically worded, with the California rule containing a specific admonition against seeking from an unrepresented person privileged or other confidential information that the lawyer knows or reasonably should know the person may not disclose without violating a duty to another or which the lawyer is not otherwise entitled to receive. Finally, subsections (f) of ABA Model Rule 1.13: Organization as Client and CRPC 1.13: Organization as Client are similarly worded regarding explaining the identity of the client to the organization’s constituents. See https://www.calbar.ca.gov/Attorneys/Conduct-Discipline/Rules/Rules-of-Professional-Conduct/Current-Rules.

[3] “ ‘According to the American Bar Association, it is recommended that counsel give the Upjohn warnings at the outset of the employee interview, with the minimum warnings that (1) counsel is retained by the company, not the employee; (2) the attorney-client privilege is in effect; and (3) the privilege is held by the company, which alone can decide to waive it.’ ” FO 514 at 3 n.5 (quoting Sehyung Daniel Lee, The Benefits of a Miranda-Type Approach to Upjohn Warnings, 13 Comm. & Bus. Lit. 12 (citing ABA WCCC Working Group, Upjohn Warnings: Recommended Best Practices When Corporate Counsel Interacts With Corporate Employees (July 17, 2009), available at https://www.crowell.com/a/web/4TMx7dpADUfammfw6nzEZX/abaupjohntaskforcereport.pdf)).

[4] For a discussion of some of the ethical issues raised by joint representation of clients, albeit in the mass tort context, see BASF Ethics Committee Opinion 2017-1, Representing Parties in a Mass Tort – Part 1 (September 2017) (addressing issues whether “[a California] attorney [may] ethically initiate representation of a large group of plaintiffs in a tort action? What ethical obstacles must an attorney consider before undertaking such joint/multiple client representation?”); BASF Ethics Committee Opinion 2020-1, Representing Parties in a Mass Tort – Part 2 (November 2020) (addressing issues of “[w]hat ethical obstacles may a lawyer face during the joint representation of a large group of clients in a mass tort action, and how should those issues be addressed in accordance with a [California] lawyer’s ethical obligations?”). Both are available at https://www.sfbar.org/ethics-opinions-documents-library/.