MRPC Rule 1.13(b)

When the lawyer involved is a member of a firm, the firm’ s procedures may require referral of

difficult questions to a superior in the firm. In that event, Rule 5.2 may be applicable.

Unincorporated Associations.

The duty defined in this rule applies to unincorporated associations.

Governmental Agency.

The duty defined in this rule applies to governmental organizations. However, when the client is

a governmental organization, a different balance may be appropriate between maintaining

confidentiality and assuring that the wrongful official act is prevented or rectified because public

business is involved. In addition, duties of lawyers employed by the government or lawyers in

military service may be defined by statutes and regulations. Therefore, defining precisely the

identity of the client and prescribing the resulting obligations of such lawyers may be more

difficult in the government context. In some circumstances, it may be a specific agency, but in

others it may be the government as a whole. For example, if the action or failure to act involves

the head of a bureau, the department of which the bureau is a part may be the client for purpose

of this rule. With these qualifications, the lawyer’ s substantive duty to the client and reasonable

courses of action are essentially the same as when the client is a private organization.

Clarifying the Lawyer’s Role.

The fact that the organization is the client may be quite unclear to the organization’s officials and

employees. An organization official accustomed to working with the organization’s lawyer may

forget that the lawyer represents the organization and not the official. The result of such a

misunderstanding can be embarrassing or prejudicial to the individual if, for example, the

Michigan Rules of Professional Conduct 37 Updated with MSC order(s)

situation is such that the client-lawyer privilege will not protect the individual’s communications

to the lawyer. The lawyer should take reasonable care to prevent such consequences. The

measures required depend on the circumstances. In routine legal matters, a lawyer for a large

corporation does not have to explain to a corporate official that the corporation is the client. On

the other hand, if the lawyer is conducting an inquiry involving possible illegal activity, a

warning might be essential to prevent unfairness to a corporate employee. See also Rule 4.3.

Dual Representation.

Paragraph (e) recognizes that a lawyer for an organization may also represent a principal officer

or major shareholder. Such common representation, although often undertaken in practice, can

entail serious potential conflicts of interest.

Derivative Actions.

Under generally prevailing law, the shareholders or members of a corporation may bring suit to

compel the directors to perform their legal obligations in the supervision of the organization.

Members of unincorporated associations have essentially the same right. Such an action may be

brought nominally by the organization, but usually is, in fact, a legal controversy over

management of the organization.

The question can arise whether counsel for the organization may defend such an action. The

proposition that the organization is the lawyer’s client does not alone resolve the issue. Most

derivative actions are a normal incident of an organization’s affairs, to be defended by the

organization’s lawyer like any other suit. However, if the claim involves serious charges of

wrongdoing by those in control of the organization, a conflict may arise between the lawyer’s

duty to the organization and the lawyer’s relationship with the board. In those circumstances,

Rule 1.7 governs whether independent counsel should represent the directors.