Mark Hinderks of Stinson, LLP. Courtesy photo Mark Hinderks of Stinson, LLP. Courtesy photo

Dear Ethics Lawyer

This column, written by Mark Hinderks, of Stinson LLP, focuses on ethics questions. The discussion here is based on the ABA Model Rules of Professional Conduct, but the Model Rules are often adopted in different and amended versions, and interpreted in different ways in various places. Always check the rules and authorities applicable in your relevant jurisdiction—the result may be completely different.

Question: I am an in-house counsel for a corporation, dealing primarily with its president and substantial shareholder, Smith. Smith has asked me to prepare a legal analysis that would lay out the tax ramifications of a proposed compensation and benefits package under consideration for all corporate officers and to make recommendations about how to optimize it. Because part of the motivation in formulating the new package is the recruitment and retention of corporate officers, he asks that the memo address ramifications to the corporation and the affected individual officers, including himself, who would be subject to the new package. He provides his relevant tax information to enable the analysis (as do other existing corporate officers). What are the ethical considerations?

A. The important starting point to consider here is who is your client? This should be clarified with the corporation and with Smith and other corporate officers to avoid or account for any potential conflict that could arise from your representation of the corporation and any individual officer. Model Rule 1.13(f). If you are representing only the corporation—even in advising the corporation about the ramifications of the benefit package to corporate officers as part of evaluating the strategy—then there is no conflict, but that should be clarified with or explained to the individuals so that they understand that anything you determine and relate about tax ramifications is not as their lawyer, but only as counsel for the corporation, even if it addresses individual impacts or considerations.