Washington Lawyer - September/October 2020 - 52

SPEAKING OF E THICS

Shady Propositions:
D.C. Rule 1.2(e)
By Hope C. Todd

M

any lawyers have at
least heard about the
controversial 60 Minutes
exposé that raised questions about
the ability of high-profile lawyers
to unwittingly - or wittingly! -
engage or assist others in
potentially criminal or fraudulent
conduct.1
This is the episode in which an investigator
poses as an advisor to an anonymous wealthy
African official seeking legal assistance in
secretly purchasing an estate and other
assets worth millions of dollars in the United
States with funds from questionable sources.
Although none of the law firms ultimately
agreed to represent the fictional official, most
of the featured lawyers engaged in what might
most kindly be viewed as "unflattering preliminary discussions."2
The Rules of Professional Conduct exist
within a larger framework of law. Indeed,
woven throughout the ethics rules is the clear
mandate that those charged with assisting
society in understanding and complying with
the law should not violate that law or facilitate
the violation of that law by others.3
Perhaps most significantly, D.C. Rule 1.2(e),
like its ABA counterpart, Model Rule 1.2(d),
provides that:
A lawyer shall not counsel a client to
engage, or assist a client, in conduct
that the lawyer knows is criminal or
fraudulent, but a lawyer may discuss the
legal consequences of any proposed
course of conduct with a client and may
counsel or assist a client to make a

52 WASHINGTON LAWYER

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good-faith effort to determine the
validity, scope, meaning, or application
of the law.
Much has been written about the controversy
surrounding the international push to require
American lawyers to identify and report clients
or prospective clients suspected of money
laundering, terrorist financing, or other crimes.4
Not surprisingly, the legal profession has
strongly opposed any such requirements and
rejects the notion of lawyer as "gatekeeper"
as both fundamentally contrary to the independence of the legal profession and wholly
incompatible with the lawyer-client relationship, including a lawyer's broad duty of
confidentiality.5

A much more difficult
ethical question arises
when a lawyer suspects,
but does not know,
that a client plans to
engage in criminal or
fraudulent conduct.
In lieu of gatekeeper obligations, the legal profession's response has been to promulgate
extensive and detailed voluntary guidance to
assist lawyers in identifying risk, particularly
with respect to money laundering and terrorist
financing.6 Yet, problems persist.
One issue may be the standard of knowledge
required by Rule 1.2(e). "Knows," a defined term
in the Rules of Professional Conduct, "denotes

SEPTEMBER/OCTOBER 2020

actual knowledge of the fact in question,"
although "[a] person's knowledge may be
inferred from circumstances."7
In the easiest of cases, actual knowledge is
obvious. In In re Austern,8 the court found that
attorney Austern had violated the predecessor
to Rule 1.2(e) by counseling or assisting his
client in conduct that the lawyer knew to be
illegal or fraudulent.9 Specifically, he assisted
in closing a real estate transaction after being
told by his client that the client's escrow account
had insufficient funds to accomplish its stated
purpose.
In the face of uncontroverted actual knowl-
edge, the ethical path forward is clear.
Notwithstanding the fact that a client may
be contemplating criminal or fraudulent
conduct, Rule 1.2(e) permits a lawyer to discuss
and give an honest opinion about the legal
consequences of any proposed course of
conduct, including any potential criminal
and/or civil penalties. Many clients may be
unaware of the law, or may not fully appreciate
the scope and applicability of the law, so
lawyers are often in the best position to deter
them from criminal or fraudulent conduct and
to discuss ideas for alternative legal options. In
these circumstances, Rule 1.2(f) also requires
a lawyer to consult with the client regarding
the relevant limitations on the lawyer's
conduct, thus explaining not only that the
conduct is illegal (if that is, in fact, the case) and
the potential consequences, but also that the
lawyer ethically may go no further to counsel
or assist with such a representation. If the client
persists, the lawyer must withdraw from
the representation.10
A much more difficult ethical question arises
when a lawyer suspects, but does not know,
that a client plans to engage in criminal or
fraudulent conduct. The lawyer's role as trusted
advisor, advocate, and legal champion may
conflict with that of "inquisitor" and "investigator" and, while lawyers are loath to accuse
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