There is no per se rule prohibiting a lawyer from serving on a corporate client’s board of directors. But just because they can, doesn’t mean that they should.
Some major concerns include:
- conflicts of interest
- increased risk of personal liability
- increased risk of losing the attorney-client privilege
- increased risk of vicarious liability for the lawyer-director’s law firm
The American Bar Association Standing Committee on Ethics and Professional Responsibility has issued Formal Opinion 98-410, which provides the following general guidelines for an attorney who decides to serve as a director of a client corporation. A lawyer-director should:
- Reasonably assure that corporate management and the board understand the different responsibilities the attorney will have when acting as the corporation’s counsel or as a director.
- Reasonably assure that corporate management and the board understand that the attorney-client privilege may not extend to matters discussed at board meetings.
- Recuse herself as a director from any deliberations when the relationship of the corporation with the lawyer or her law firm is under consideration.
- Maintain independent professional judgment required of a competent lawyer.
- Perform diligently the duties of counsel once a decision is made by the board or management, even if the attorney (as a director) disagrees with the decision.
- Decline any representation as counsel when the attorney’s interest as a director conflicts with the responsibilities of competent and diligent representation.
Comment 14 to Ga. Rule Professional Conduct 1.7 suggests that a lawyer serving as a board member of a client corporation “should determine whether the responsibilities of the two roles may conflict.” And if “there is material risk that the dual role will compromise the lawyer’s independence of professional judgment, the lawyer should not serve as a director.”