Is it Ethical for an In-House Counsel to Whistleblow?

By Andrew Lu on July 11, 2012 | Last updated on March 21, 2019

Attorneys have a duty to their clients to keep their confidential information secret.

This duty of confidentiality is one of the building blocks of trust that you will have with your client. Without it, your client may not tell you everything you need to know.

Still, as in-house counsel, you may be faced with situations where you will be forced to choose between keeping your client's secrets and whistleblowing. This oftentimes arises when you are notified of a client's potential criminal act.

For example, let's say you are in-house counsel and your client tells you of a crime they are planning to commit like accounting or tax fraud. As the attorney, you are now faced with conflicting duties. Your client trusted you and revealed the secret criminal information. Yet, you feel that you must disclose this information to the authorities. So what should you do?

Unfortunately, there is no easy answer. Ethics rule vary from state to state, and you may want to seek advice from a professional responsibility attorney in your jurisdiction. However, some jurisdictions do provide some guidance. Generally, in-house counsel may want to advise the client that they are engaging in a criminal act. As the attorney, you may also warn your client that if they do not suspend the criminal endeavors, that you will withdraw from representation.

As for whistle-blowing, in-house counsel may be able to notify authorities of the criminal scheme. So instead of merely taking a passive role and withdrawing from the case, attorneys can be proactive and report the crime without violating any ethical duties owed to the client. In fact, attorneys may be required to disclose certain crimes.

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