Formal Ethics Opinion 99-F-143(a)

Board of Professional Responsibilitv Formal Ethics Opinion 99-F-143
(6-14-99) addresses the increasing tendency of insurance companies to audit
the bills and files of attorneys retained to represent their insureds. The
opinion states that prior to allowing auditors to review attorney's bills
and case files, client consent must be given. The opinion also mandates that
attorneys are not allowed to enter into any agreement to represent an
insured whereby the insurance company has the power to direct the manner of
the attorney's representation.

A request for a clarification of this opinion has been presented to the
Board. The first issue presented in this request is whether an attorney may
comply with the aforesaid opinion simply by "redacting" the confidences and
secrets from the clients' files and bills prior to submitting them to the
auditors. It should be reiterated that if a client consents, there is no
problem submitting any file or bill to an auditor. DR 4-101(a) requires a
lawyer to keep not only information protected by the attorney/client
privilege confidential, but also any "secret". "Secrets" include "other
information gained in the professional relationship that the client has
requested to be held inviolate or the disclosure which would be embarrassing
or would likely to be detrimental to the client." "A secret" can therefore
be almost anything the client does not wish to be disclosed. For instance,
in Board of Professional Responsibilitv Formal Opinion No. 82-F-25 (February
22, 1982), the Board noted that even zip codes, birth dates, race, sources
of referral, etc., may be considered "secrets". It is not up to the attorney
to determine what the client wishes to keep confidential or secret. Thus an
attorney cannot unilaterally make redactions based on his/her personal
judgment as to the confidentiality of certain information in his/her file.
Client consent remains necessary for any disclosure.

The second issue is whether the attorney complies with the requirements of
this ethics opinion by sending the bill not directly to the audit service,
but to the insurance company with the knowledge that the insurance company
may forward the bill to the auditor. DR 1-102(a) states that a lawyer "shall
not circumvent the disciplinary rules through actions of another."
Therefore, a lawyer cannot evade the requirements of the aforesaid opinion
by participating in a scheme whereby the insurance company forwards the bill
to the auditor.

The final issue relates to a proposed ipsurance company requirement that an
attorney, who feels he/she cannot provide competent representation to a
client under the insurer's litigation guidelines, must first discuss the
situation with the insurance company. Such preliminary discussions are
permissible, but confidential communications or information cannot be
disclosed without the client's consent. If after the discussion the attorney
and the insurance company continue in disagreement as to specific aspects of
the attorney's representation, Opinion No. 99-F-143 requires the attorney to
disregard the insurance company's directives and to proceed in the direction
he/she believes to be in the best interest of his/her client.

This 10th day of September, 1999.

ETHICS COMMITTEE
,

Johanna J. McGlothlin. Chair

Richard A. Fisher

Tom Hill

John J. Walton

APPROVED AND ADOPTED BY THE BOARD