A lawyer is negotiating a complex business deal on behalf of Client A. During the negotiation, the opposing party's lawyer, who is known for aggressive tactics, makes a statement that, while technically true, is highly misleading and creates a false impression about a material fact. The lawyer for Client A realizes the misimpression but believes correcting it would significantly disadvantage Client A. What is the lawyer's ethical obligation?
- AThe lawyer must withdraw from representation if the client insists on capitalizing on the misimpression.
- BThe lawyer should advise Client A to capitalize on the misimpression to secure a better deal.
- CThe lawyer is not obligated to correct the misimpression, as it was made by opposing counsel, not the lawyer's own client.
- DThe lawyer must correct the misimpression, even if it disadvantages Client A, to uphold the duty of candor.
Show answer & explanationAnswer & explanation
Correct answer: C. The lawyer is not obligated to correct the misimpression, as it was made by opposing counsel, not the lawyer's own client.
Model Rule 4.1(b) states that a lawyer shall not knowingly fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6 (confidentiality). Here, the misimpression was created by opposing counsel, not the client, and the lawyer did not make a false statement. The lawyer has no affirmative duty to correct a misimpression created by an adversary, especially when doing so would disadvantage their own client and is not necessary to avoid assisting a client's crime or fraud.
Why the other options are wrong
- A. Withdrawal is not mandated here because the lawyer is not assisting a client's crime or fraud, nor is the client insisting on such conduct.
- B. Advising the client to capitalize on a misimpression where the lawyer did not create it and is not assisting client fraud is ethically permissible within the adversarial system, as long as the lawyer does not make any false statements themselves.
- D. While lawyers have duties of candor, this duty primarily prevents a lawyer from making false statements or assisting their own client's fraudulent acts, not correcting an adversary's misleading statements.
Duty of Candor (Adversarial Misimpression)
A lawyer has a duty of candor to third persons, prohibiting the lawyer from knowingly making false statements of material fact or law, or failing to disclose a material fact when necessary to avoid assisting a client's criminal or fraudulent act. However, this duty does not generally extend to correcting a misleading statement made by an opposing party or counsel.
- Lawyer cannot make false statements (Rule 4.1(a)).
- Lawyer cannot assist client's crime/fraud (Rule 4.1(b)).
- No affirmative duty to correct adversary's misleading statements.
- Confidentiality (Rule 1.6) limits disclosure under Rule 4.1(b).
Memory trick: Speak Truth, Don't Enable Lies, But You're Not the Adversary's Editor.