Representing Corporations While Supervised by Executives
on March 31, 2014 by James T. Hunt, Jr.on March 31, 2014
In-house attorneys can face difficult issues when representing a corporation, while receiving instruction from corporate executives who are not the client. What happens when the supervising executive’s interests are not the same as the company’s interests?
An attorney retained to represent a corporation must always remember that the company is the client. Thus, the lawyer’s duty of loyalty is to the corporation, not to the executives who run it. This can obviously create a myriad of issues if the executive asks the lawyer to do something that would breach the lawyer’s duty to the corporation. In many cases, the corporate executives are not aware that what they are asking places the attorney in a difficult position.
To prevent being placed in a compromising position, it is essential for the corporation’s lawyer to fully and repeatedly inform or remind the corporate executives of the attorney’s relationship and obligations toward the corporation. This may be done in the form of memorandums, meetings or a handbook outlining the purpose, duties and loyalties of the corporation’s in-house legal department. Another option to consider is the creation of an ethics committee consisting of both lawyers and the company’s managers where concerned parties can turn to when conflicts or issues arise.
By taking these measures, in-house counsel complies with his/her ethical obligations and makes a pre-emptive strike at avoiding future conflicts. If an executive seeks advice from a corporate attorney, it is essential that he/she explain the differing interests involved and advise the executive to seek independent legal advices. The attorney should also keep a record signed by the executive that this advice was provided to him/her.
If you are in need of corporate counsel or independent counsel for executives, contact the business law attorneys at Slater, Tenaglia, Fritz & Hunt for assistance.
The attorneys at Slater, Tenaglia, Fritz & Hunt, P.A., provide clients with experienced legal representation. We handle many types of business disputes on behalf of corporate clients, including Fortune 500 Corporations and individuals throughout New York, New Jersey, Pennsylvania and nationally. Our attorneys handle cases from pre-litigation negotiations through litigation to obtaining and enforcing judgments. If you need assistance, or are interested in learning more, please contact us by phone at (201) 820-6001 in New Jersey or (212) 692-0200 in New York. We can also be found on Facebook, Linkedin, Twitter, Google+, Youtube and the Internet. All initial consultations are free of charge.