Daniel R. Alonso discussed "Must lawyers now affirmatively challenge their clients? — New ABA guidance" at a Celesq webinar
Lawyers are trusted keepers of their client’s secrets, but sometimes a lawyer might suspect that the client is seeking the lawyer’s advice or assistance to carry out a transaction that is criminal or fraudulent. Existing Rule 1.2(d) of the American Bar Association’s Model Rules of Professional Conduct prohibits lawyers from counseling clients to engage in activity the lawyer knows is fraudulent. But what if the lawyer strongly suspects nefarious aims, but does not have actual knowledge? On April 29, 2020, the ABA issued Formal Opinion 491, in which it advised that lawyers have a duty to inquire further if the facts known establish a “high probability” that the client is seeking to use the lawyer’s services to commit a crime or a fraud. The panel of distinguished ethics professionals explored the contours of this duty to inquire, with concrete guidance and examples of scenarios in which the issue might arise. The panel also discussed how this applies to prior guidance from the ABA regarding client due diligence in the context of money laundering and terrorist financing.