Do you need to sign a NDA with your lawyer?
Every entrepreneur should have a qualified and trusted attorney in their circle. Their invaluable guidance and advice can help protect your business, mitigate liabilities and successfully launch complex or multi-party projects.
Prior to engaging an attorney, though, you may be wondering if your secrets will be safe. After all, by the nature of her work, your attorney will necessarily be privy to some pretty critical confidential information that you wouldn’t normally share with anyone.
How can you be sure this attorney can be trusted?
In most confidentiality sharing situations, a non-disclosure or confidentiality agreement should do the trick and will ease your mind. Obliging the Recipient of your secrets to complete confidentiality, a non-disclosure agreement will protect you from potential snitches or thieves of trade secrets, and give you legal remedies in the unfortunate case of a breach.
Most non-disclosures are signed between employers and employees, prospective partners or mergers, business owners and developers, independent contractors, and other third parties.
However, your relationship with your attorney is no normal business relationship and a signed non-disclosure is most likely unnecessary, not to mention redundant.
For starters, all licensed attorneys are bound by what is known as attorney-client privilege: a long-standing and fundamental rule that automatically preserves the confidentiality of all communications between an attorney and their client.
Under this rule, attorney’s are strictly bound to the preservation and protection of any and all confidential information disclosed to them by their client, either orally or in writing, and the exceptions to this rule are few and far between.
The rule is taken so seriously, in fact, that it’s even protected by the 5th Amendment. While this is most often pled in criminal cases, as a business owner, it should give you some genuine confidence knowing that the attorney-client privilege is taken so seriously.
The attorney-client privilege is automatically applied when:
- A client (actual or potential) communicates with an attorney regarding legal advice
- The attorney is acting in a professional capacity
- And, the client intended the communications to be private and acted accordingly
The implications of these rules are pretty simple.
If an attorney is acting as a friend, neighbor, family members, or any other capacity outside of a professional one, then the attorney-client privilege doesn’t apply.
And, the client must take their own precautions to show that the communication is intended to be confidential. In other words, if you disclose information to your attorney in a crowded, public place, within earshot of several people, then your communication wasn’t likely intended to be confidential and the attorney-client privilege may no longer apply.
The purpose of this rule is simple: your attorney can’t effectively represent you or give you guidance and counsel if you’re hesitant to share details of your business or ideas honestly and fully with them.
How can your attorney, for example, give you adequate advice on how to protect your newest development if he can’t even see the new recipe, formulas or processes in question? How can he counsel you on the feasibility of a new branch or expansion if he can’t review your financial statements and business plans?
The answer is, he can’t. Your attorney’s success at counseling you is entirely dependent on your ability to speak candidly with him and openly share the details of your business, to include valuable trade secrets and confidential documents.
In fact, it’s most critical that you share these details with him because these are the things he’s looking to protect and grow.
Attorney-client privilege is so strong that its effect and application are indefinite.
Long after the attorney-client relationship ends, the privilege stills exists. In fact, even upon the client’s death, the attorney is still bound to confidentiality and may not disclose the client’s secrets.
Duty of confidentiality
It’s important to understand, here, that the attorney-client privilege is technically a rule of evidence. (Attorney’s can’t be compelled to testify against their clients or submit documents to the courts as evidence against their clients.)
A related ethical rule is the concept of an attorney’s Duty of Confidentiality. Aside from the evidential rule of attorney-client privilege, attorney’s are also ethically bound to a duty of confidentiality.
In the United States, each state has it’s own code of conduct based off the American Bar Association’s Model Rules.
ABA Model Rule 1.6 specifically states:
(a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b).
In England and Wales, this same concept is known as Legal Professional Privilege, and carries the same weight as it does in the U.S. and with almost identical implications.
The privilege has long been recognized by English common law and The Law Society of the U.K. addresses it by stating:
LPP is a privilege against disclosure, ensuring clients know that certain documents and information provided to lawyers cannot be disclosed at all. It recognises the client’s fundamental human right to be candid with his legal adviser, without fear of later disclosure to his prejudice. It is an absolute right and cannot be overridden by any other interest.
Similar rules and ethical codes of attorney conduct exist across the globe, all acknowledging and emphasizing the sensitive and critical nature of an attorney’s unique status in society and the care they must take in order to protect their clients confidential information.
Attorney engagement letter
In addition to the attorney-client privilege and duty of confidentiality, all attorney-client relationships officially begin with an engagement letter and fee arrangement.
The engagement letter and contract are a means by which to clarify other terms of your working relationship with the attorney, such as fees, law firm policies, document retention, etc, but they almost always spell out the duty of confidentiality as a way to cover all their bases and make communication clear.
As an example, a standard attorney engagement letter may include something like the following:
Other engagement letters may specifically list the rule number in their jurisdiction or at least make reference to it.
Either way, the engagement letter doesn’t assure your confidentiality, because you already had it to begin with.
But it is a means by which the attorney acknowledges his duty of confidentiality and promises, in writing, to abide by the codes of conduct and attorney-client privilege rules.
Attorney-client privilege before relationship exists
Even if you’ve spoken with attorney and didn’t officially engage them through an attorney engagement letter, have no fear.
It should ease your mind to know that even without the engagement letter and signed attorney-client contract, you’re still entitled to full confidentiality even when you reveal information as a prospective client.
In other words, if you call your local small business attorney today and reveal to them a few details about your upcoming project in order to see if they would be a good fit for your needs, they’re still bound by a duty of confidentiality for anything they discussed with you because you disclosed that information confidentially to a professional who has a duty to uphold it.
Your trade secrets are just as safe as they would be if you were to sign an official agreement with them.
So, by all means, shop for the perfect attorney, if you don’t already have one. Don’t spill every bit of your beans to every attorney in your Google search results, but don’t be concerned that they’ll steal your trade secrets if you decide not to move forward with hiring them after having an initial call. They are still bound by their professional code of conduct and must treat your confidential information as such until you tell them otherwise.
Attorneys who sign non-disclosures
While a non-disclosure agreement may not be necessary, some attorneys are still willing to sign these agreements for their clients, so long as they’re well-drafted and don’t hinder the attorney’s ability to represent you.
In fact, your confidential information is most likely extremely safe with an attorney, but a well constructed non-disclosure agreement will actually give you remedies on the rare chance that your attorney divulges your confidential information in a damaging way.
For this reason, some attorneys are actually quite willing to sign the agreement with you, if it makes you feel more comfortable.
On the other hand, many attorneys outright refuse, claiming that signing a non-disclosure could potentially limit their ability to zealously represent you, as the agreement, depending on its language, may have wording that restricts their actions in a way that’s potentially harmful to you.
Perhaps that contradiction doesn’t exactly help you, but it’s important to know that some attorneys disagree on the issue of signing these agreements with their clients.
The bottom line is that attorneys are bound by a number of rules and ethical codes of conduct which automatically holds them to a higher level of duty and care – as is the case with most licensed professionals.
It’s highly unlikely that a non-disclosure agreement is necessary for your working relationship with an attorney.
If it’s something you insist upon, however, there are attorneys out there who are willing to put their John Hancock on one.