Thompson Dorfman Sweatman LLP

Jim Ripley, General Counsel

December 11, 2020

My topic today is "Ethics for In-house Counsel". I wish to begin with a quotation not directly relevant to ethics. The sentiment behind the quotation is, however, a guide to ethical behaviour. At our firm, we refer to this quotation from time to time, and strive to follow its advice. The late James Tory, the eminent Toronto lawyer, said:

"We should work in a manner that engenders the confidence and respect, not only of clients of the firm, but of the other lawyers involved and their clients, and in an atmosphere of tolerance, friendship, trust and goodwill."

Good advice for all lawyers, whether in private practice or in-house.

I wish to deal with my topic under six headings:

  1. The Role of In-house Counsel.
  2. Conflicts of Interest.
  3. Solicitor-Client Privilege and Confidentiality.
  4. Illegal Conduct and Up the Ladder Reporting.
  5. Communications.
  6. Insurance.

First, though, I wish to comment on my role at our firm and on some resources available to you. I am General Counsel, a role I have filled since only April 1st. Before that, I practised commercial law for forty years. So I likely have far less practical experience than you have in your counsel roles. But my role, perhaps more than yours, emphasizes ethics and, in particular, conflicts. I hope therefore some of what I say may be useful to you. It will in any event qualify for a portion of your ethics and practice management cpd hours.

I also want to mention The Law Society of Manitoba Code of Professional Conduct. It is on the Law Society's website, only a couple of clicks away. It is an easily accessible practical guide to behaviour. I urge you to look at it if you are in doubt about an ethical matter. I have learned from my dealings with the Law Society representatives, who give advice on ethical matters, that they invariably have reference to the Code.

I also recommend the CBA's Conflict of Interest Toolkit, which was revised and re-issued this Fall. It is available on the CBA's website. It includes checklists and precedents for the following topics, among others:

(a) How to Analyze a Potential Conflict of Interest;

(b) Confidentiality Screens;

(c) Guidelines for Interviewing Transferring Lawyer;

(d) Guidelines to Identify Conflicts Involving Lawyer's Personal Interest; and

(e) Serving as a Director of a Client Corporation.

1. The Role of In-house Counsel

Your role is in large measure determined by a lawyer's duty of loyalty. That duty includes:

(a) a duty to commit to your company's cause. As a practical example, this duty requires in-house counsel to give notice of leaving employment consistent with the withdrawal requirements of the Code;

(b) a duty of candour, concerning information in your possession and your views on issues;

(c) a duty to avoid conflicts of interest. I will speak more about this later;

(d) a duty of confidentiality, owed to your company and to all of your former clients, whether in private practice or in-house; and

(e) a duty not to attack legal work done during a prior retainer, a circumstance which may constrain your activities as in-house counsel.

Who is your client? You represent your company, regardless of who is giving your instructions. The commentary to the definition of "client" in the Code reads as follows:

"For greater clarity, a client does not include a near-client, such as an affiliated entity, director, shareholder, employee or family member, unless there is objective evidence to demonstrate that such an individual had a reasonable expectation that a lawyer-client relationship would be established."

Of course the implication of your acting for your company is that your duties are owed to your company, rather than to the directors, officers or shareholders. You need to act in the best interest of your company, not those other groups. You may therefore be in the position of having to advise a party that you do not act for that party, and that the party must seek their own counsel. As one in-house counsel said to me, it is difficult to tell someone to get their own legal counsel, but sometimes it needs to be done. And it is useful to consider, in receiving instructions from your client company, whether the person giving the instructions has the express or implied authority to do so.

When are you likely to be found to be acting for a subsidiary? The fact that a corporation consults a lawyer does not necessarily imply that a subsidiary of that corporation is also a client, although it is more likely that a subsidiary would be treated as a client if it is wholly owned, there is significant business integration, common management or directors, and geographic proximity. But where a lawyer has a specific retainer for a specific entity, and does not provide legal assistance to a subsidiary or receive confidential information from a subsidiary, there can be no basis to conclude that any duty is owed except to the specific entity that retained the lawyer.

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