Duty to Disclose Client Benefit

Duty to Disclose Client Benefit

Rule 6.4 lets a lawyer serve as a director, officer, or member of a law reform organization even though the reform may affect a client's interests.¹ The ordinary conflicts machinery stays out of the way: the lawyer need not run a conflicts check whenever the lawyer speaks or participates as a public citizen on law reform.² The rule then adds one condition. When the lawyer knows that a client's interests may be materially benefitted by a decision in which the lawyer participates, the lawyer shall disclose that fact but need not identify the client.³ The word “shall” makes this a mandatory duty, and because the decision belongs to the organization, the organization and its other participants are the evident audience. The shape of the duty suggests its purpose: the lawyer must put the existence of a client stake on the table, without exposing the client, so that the people deciding alongside the lawyer know what may stand behind the lawyer's views.

Each element of the trigger does work. The rule's verb is “knows,” so the duty turns on what the lawyer is actually aware of, not on what the lawyer could conceivably speculate.⁴ The phrase “may be materially benefitted” sets two thresholds. “May” asks for a possibility, not a certainty, and “materially” asks for a benefit of real size, not a trivial one.⁵

The trigger runs in one direction only. The disclosure sentence speaks of a client's benefit and says nothing about harm, so a lawyer on a commission that is considering a proposal that would only hurt a client owes no disclosure under it.⁶ That situation is a different problem. When a lawyer takes a public position antithetical to a client's on a subject directly related to the representation, the representation may be weakened and the client's faith in the lawyer shaken. The conflict-of-interest analysis in the next section addresses that risk.⁷

The lawyer must disclose the fact of the client connection: that a client of the lawyer may be materially benefitted by the decision. The lawyer need not say who the client is.⁸ The other participants learn that a client stake exists, and the client's name stays private.

The rule's command stops at disclosure. Nothing in its text requires the lawyer to abstain, recuse, or leave the room, and its opening permission to serve “notwithstanding” effects on client interests points the same way.⁹ The lawyer who has disclosed remains entitled to a sphere of political freedom in which to take part as a citizen in public life.¹⁰

Exam stems on this sentence tend to add duties the text omits: naming the client, stepping aside from the vote, or disclosing a harm rather than a benefit. The text requires one thing, disclosure of the fact of a possible material benefit.

An organization might adopt stricter terms of its own, such as demanding the client's name or requiring recusal. Those terms would be the organization's, not Rule 6.4's. The rule's own duty remains disclosure of the fact without naming the client, and a bylaw that demands more is a separate source of obligation.¹¹