By Lazar Emanuel [Originally published in NYPRR March 2001]
NYSBA Opinion 735
May a lawyer communicate with an accountant who has worked as an independent contractor for the opposing party without getting the consent of opposing counsel?
This issue was the subject of an Opinion by the NYSBA Committee on Professional Ethics in January 2001. The Committee concluded that the lawyer could properly communicate with the accountant unless the accountant had his own counsel in the matter or unless he could be deemed the client of opposing counsel under the doctrine of the Court of Appeals in Nieseg v. Team I [76 N.Y.2d 363 (1990)].
However, the lawyer would not be permitted to elicit from the accountant any information protected by the attorney-client privilege or the work-product doctrine “that the accountant has an obligation to keep confidential.”
The issue is controlled by DR 7-104(A)(1), which provides:
During the course of the representation of a client a lawyer shall not:
1. Communicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by a lawyer in that matter unless the lawyer has the prior consent of the lawyer representing such other party or is authorized by law to do so.
The Rule is known as the no-contact rule. “The purpose of this Rule is to preserve the proper functioning of the attorney-client relationship and to shield the adverse party from improper approaches.” [N.Y. State 652 (1993).]
The Opinion reiterates that the no-contact rule applies to all parties in a transaction as well as to parties in a litigation. It applies also to those who retain counsel in connection with a dispute prior to litigation and, during litigation, to “represented witnesses, potential witnesses and others with an interest or right at stake, although they are not parties to the lawsuit.”
The Committee took care to note that it did not interpret the recent refusal of the Appellate Divisions to change the word “party” to “person” in DR 7-104(A)(1) to “cut back on the long-standing, universal understanding concerning the scope of DR 7-104(A)(1).”
There are circumstances in which a lawyer has a duty to inquire whether a person is represented before the lawyer may conclude that he is free to contact that person. [N.Y. State 728 (2000).] In the general case, the lawyer may reasonably assume that a person is not represented unless he has received notice of the representation. But…
If the accountant has personally retained a lawyer to provide legal assistance to him in connection with the lawsuit (e.g., regarding the accountant’s role as witness), then the accountant is clearly represented for purposes of the rule. In that event, the lawyer may not communicate with the accountant about the matters involved in the lawsuit without the consent of the accountant’s counsel.
But what if the accountant has not personally retained counsel? Is he nevertheless represented by the opposing corporation’s counsel?
This question is governed by the analysis set forth by the Court of Appeals in Niesig v. Team I [76 N.Y. 2d 363, 371 (1990)]. …The Court held that when a corporation is represented in a matter, DR 7-104(A)(1) therefore forbids communications with those “corporate employees whose acts or omissions in the matter under inquiry are binding on the corporation (in effect, the corporation’s ‘alter ego’) or imputed to the corporation for purposes of its liability, or employees implementing the advice of counsel. All other employees may be interviewed informally. [Id. at 374.] The Court further stated, “This test… permits direct access to employees who are merely witnesses to an event for which the corporate employer is sued.” [Id. at 375.]
The Committee saw no reason why the Niesig rules would not apply to independent contractors such as outside accountants in the same way as to corporate employees. If the accountant had the authority to bind the corporation or was responsible “for implementing the advice of counsel,” then counsel would be prohibited from communicating with him without the consent of opposing counsel.
But if the Niesig standards for imputing representation by opposing counsel do not apply, or if the accountant has not personally retained independent counsel, then the attorney is not barred from communicating with the accountant.
The extent of permissible communications may be limited, however, if it is known that the accountant possesses information that is protected by the corporation’s attorney-client privilege or as attorney work product. …Further, if the lawyer knows in advance or learns in the course of conversation with the accountant that the only relevant information possessed by the accountant is protected from disclosure, as might be the case if the accountant were retained in the matter to lend expert assistance to the corporation’s counsel, …then it would be improper thereafter to communicate with the accountant at all concerning the matter even if the accountant were unrepresented.
Lazar Emanuel is the Publisher of NYPRR.
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