ABA issues new ethics opinion on the duty not to counsel clients about, or assist in, committing a crime or fraud

At the end of April, the ABA's Standing Committee on Ethics and Professional Responsibility issued a new Formal Opinion (No. 491) titled "Obligations Under Rule 1.2(d) to Avoid Counseling or Assisting in a Crime or Fraud in Non-Litigation Settings." You can read the opinion here.

In my humble opinion, it does not add much that we did not know already but it is always nice to have guidance on important questions.  What it does, perhaps without realizing it, is provide support for an argument with regard to a number of other duties -- more about that below.  Here is the summary of the new opinion:

Model Rule 1.2(d) prohibits a lawyer from advising or assisting a client in conduct the lawyer “knows” is criminal or fraudulent. That knowledge may be inferred from the circumstances, including a lawyer’s willful blindness to or conscious avoidance of facts. Accordingly, where facts known to the lawyer establish a high probability that a client seeks to use the lawyer’s services for criminal or fraudulent activity, the lawyer has a duty to inquire further to avoid advising or assisting such activity. Even if information learned in the course of a preliminary interview or during a representation is insufficient to establish “knowledge” under Rule 1.2(d), other rules may require the lawyer to inquire further in order to help the client avoid crime or fraud, to avoid professional misconduct, and to advance the client’s legitimate interests. These include the duties of competence, diligence, communication, and honesty under Rules 1.1, 1.3, 1.4, 1.13, 1.16, and 8.4. If the client or prospective client refuses to provide information necessary to assess the legality of the proposed transaction, the lawyer must ordinarily decline the representation or withdraw under Rule 1.16. A lawyer’s reasonable evaluation after inquiry and based on information reasonably available at the time does not violate the rules. This opinion does not address the application of these rules in the representation of a client or prospective client who requests legal services in connection with litigation.

Now, why do I think that this opinion is important for rules not mentioned in the opinion?  Because it addresses the duty of the lawyer to act to "find out more" when the duty is expressed in a rule that takes effect if the lawyer has "knowledge."  Model Rules 1.9(b), 1.10(a), 1.13(b), 4.1 and 8.4(f) are all based on knowledge, for example.  

When I teach the duties related to perjury we discuss the notion of selective ignorance and how much investigation a lawyer has a duty to do before being able to claim they did not "know" something, given that knowledge is a subjective state of mind but can be proven with objective evidence of the circumstances.  This opinion provides some guidance on that issue.

[By the way, before anyone writes to me about this, No, Rule 8.4(g) is not based on knowledge.  8.4(g) is based on a negligence standard. Read it carefully.  So is 3.6.]

UPDATE: 1/18/21:  Louisiana Legal Ethics has a comment on the opinion here.