Inside: Remember, your client is the corporation, not executives

A refresher on how to avoid breaching duty when an executive supervisor has a competing interest

Representing a corporation as its inside counsel is a difficult task for a myriad of reasons. One specific reason is inside counsel is hired and supervised by a corporate executive — but the true client is the corporation. Thus, inside counsel is occasionally challenged with the precarious circumstance where their executive supervisor’s interests are divergent from the company’s. The purpose of this article is to provide the reader a refresher on the ethical duty an attorney retained by a corporation has to it, and how to avoid breaching this duty when an executive supervisor has a competing interest and requests advice.

Foremost, it is important to remember that when an attorney is retained to represent a corporation, the client is the corporation, not the executives who hire the attorney. Therefore, the attorney’s duty of loyalty rests in the corporation’s fictitious hands — not the executive’s. If an agent of the corporation who happens to be the attorney’s superior requests that they do something that may breach their ethical duty to the corporation, the attorney must abstain, or risk breaching their duty to the corporation. This is an issue inside counsel is faced with often, as many corporate executives do not appreciate that inside counsel loyalty lies with the corporation.

Contributing Author

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Jefferey Ogden Katz

Jefferey Ogden Katz is a partner at The Patterson Law Firm, LLC. He is a leading litigation attorney and has handled numerous professional liability cases...

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