Ohio Board Advisory Opinion Op 18-001

This nonbinding advisory opinion is issued by the Ohio Board of Professional Conduct
in response to a prospective or hypothetical question regarding the application of
ethics rules applicable to Ohio judges and lawyers. The Ohio Board of Professional
Conduct is solely responsible for the content of this advisory opinion, and the advice
contained in this opinion does not reflect and should not be construed as reflecting the
opinion of the Supreme Court of Ohio. Questions regarding this advisory opinion
should be directed to the staff of the Ohio Board of Professional Conduct.
OPINION 2018-1
Issued April 13, 2018
Representation of Organizational Client
SYLLABUS: A lawyer for an organization has an ethical obligation to carry out the legal
representation in furtherance of the best interests of the organization, but not the
independent interests of organization’s constituents. A lawyer facing conflicting
directions from constituents about the objectives of the representation should act in
accordance with the direction of constituents with higher authority in the organization.
An organization’s constituents include only its owners, officers, directors, employees,
and shareholders or persons in equivalent positions in the organization.

65 SOUTH FRONT STREET, 5TH FLOOR, COLUMBUS, OH 43215-3431
Telephone: 614.387.9370 Fax: 614.387.9379
www.bpc.ohio.gov
DAVID L. DINGWELL
CHAIR
RICHARD A. DOVE
DIRECTOR
SANFORD E. WATSON
VICE- CHAIR
D. ALLAN ASBURY
SENIOR COUNSEL
KRISTI R. MCANAUL
COUNSEL
OPINION 2018-1
Issued April 13, 2018
Representation of Organizational Client1
SYLLABUS: A lawyer for an organization has an ethical obligation to carry out the legal
representation in furtherance of the best interests of the organization, but not the
independent interests of organization’s constituents. A lawyer facing conflicting
directions from constituents about the objectives of the representation should act in
accordance with the direction of constituents with higher authority in the organization.
An organization’s constituents include only its owners, officers, directors, employees,
and shareholders or persons in equivalent positions in the organization.
APPLICABLE RULES: Prof.Cond.R. 1.2, 1.3, 1.4, 1.7, 1.13
QUESTIONS PRESENTED:
1. Whether an organization’s lawyer or its constituents are responsible for
determining what are the best interests of the organization and the objectives of the
lawyer’s representation;
2. Whether a lawyer must resolve conflicting directions from constituents
concerning the objectives of the lawyer’s representation in favor of the higher constituent
in the organization;
1 This opinion does not address situations where a constituent is pursuing a course of action that exposes the
organization to civil or criminal liability.

Op. 2018-1 2
3. Whether an organization’s “other constituents” include insurers, independent
contractors, or other third parties.
OPINION:
Question (1)
Who Determines the Best Interests of the Client Organization
An organization is a legal entity that acts only through its constituents who are
identified as its owners and duly authorized officers, directors, employees, and
shareholders. Prof.Cond.R. 1.13, cmt. [1]. A lawyer employed by an organization
represents the organization as an entity and has an ethical obligation to act in the client-
organization’s best interests, not in the independent interests of the organization’s
constituents. Id. See generally, Hile v. Firmin, Sprague & Huffman Co., L.P.A. (1991), 71 Ohio
App.3d 838, 595 N.E.2d 1023 (3rd Dist.). When representing an organization, it is
necessary for the lawyer to have a clear understanding of the best interests of the
organization. Prof.Cond.R. 1.13(b).
The best interests of an organization are defined by its constituents acting in
accordance with the organization’s decision-making procedures. Restatement of the Law
(Third), The Law Governing Lawyers, §96(1) (2000). More specifically, the best interests of
the organization are determined by the organization’s constituents in the “exercise of the
business and managerial judgment that would be exercised by a person of ordinary
prudence in a similar position” and communicated to the organization’s lawyer. Id at
§96, cmt. (f). Business decisions made by a constituent in furtherance of the
organization’s best interests “ordinarily must be accepted by the lawyer even when their
utility or prudence is doubtful.” See Prof.Cond. R. 1.13, cmt. [3]. In short, the
organizational client, acting through its constituents, and not the lawyer, has the
authority to determine the purposes or interests to be served by the legal representation.
The lawyer must act pursuant to the client’s direction, within the allowable limits of the
law and the lawyer’s ethical obligations. Prof.Cond.R. 1.2, cmt. [1].
If during the representation the best interests of the organization become unclear
to the lawyer, the lawyer must communicate and consult with the appropriate
organizational constituent to reach a better understanding. Prof.Cond.R. 1.2(a), 1.4(a)(2).

Op. 2018-1 3
Question (2)
Conflicting Directions Concerning the Objectives of Representation
A lawyer has an ethical obligation to abide by the client’s decisions concerning the
objectives of the representation and to consult with the client about the means by which
they are to be pursued. Prof.Cond.R. 1.2(a). This obligation can be more complicated
with an organizational client since the organization relies entirely upon its constituents
to carry out its business-related activities. For example, a lawyer may receive conflicting
directions from one or more constituents within the organization concerning the overall
objectives of the lawyer’s representation. When this occurs, a lawyer should use
reasonable efforts to resolve internal conflicts between constituents in favor of the best
interests of the organizational client. See Prof.Cond.R. 1.2, cmt. [3]. When an internal
conflict between a constituent and the organizational client arises, a traditional conflicts
of interest analysis is not required to be performed by the lawyer since only one client is
being represented. Prof.Cond.R. 1.7.
A lawyer who receives conflicting directions from two or more organizational
constituents concerning the objectives of representation should also evaluate and
consider the relative authority of each constituent in the hierarchy of the organization.
For example, if the board of directors of an organization passes a resolution for the
organization to take a certain action that will require the lawyer to act accordingly, but
the president/CEO directs the lawyer to disregard the direction of the board of directors,
the lawyer shall act with “commitment and dedication to the interests” of the
organizational client as previously determined and communicated by the higher
authority, i.e. the board of directors. Prof.Cond.R. 1.3, cmt. [1].
In order to avoid conflicting directions from multiple constituents, the lawyer
should clarify with the client-organization, at the outset of the representation, the
reporting relationships among constituents who may direct his or her representation.
When receiving conflicting directions from constituents, the lawyer should clarify for the
constituent the identity of the client. This serves to ensure the constituent understands
how the lawyer will proceed if the lawyer is given conflicting directions concerning the
objectives of the representation. See e.g., Prof.Cond.R. 1.13(d).

Op. 2018-1 4
Question (3)
Scope of the Term “Constituents”
An organization’s owners and duly authorized directors, officers, employees,
members, and shareholders are specifically enumerated as the constituents of an
organization. Prof.Cond.R. 1.13(a). “Other constituents,” as the term is used in the rule,
refers to persons who hold positions equivalent to officers, directors, employees, and
shareholders Prof.Cond.R. 1.13(a), cmt. [1]. Third parties such as insurers and
independent contractors do not hold equivalent fiduciary positions in the organization,
and are not considered constituents of the organization, despite the fact they may owe
contractual duties to or are authorized to act on behalf of the organization. Consequently,
a lawyer retained by an organization owes no duties to any third parties not specifically
enumerated in the rule. Prof.Cond.R. 1.13(a), cmt. [1].
CONCLUSION: The constituents of an organization include only its owners, and
authorized officers, directors, employees, and constituents, and persons holding
equivalent positions. A lawyer providing legal services to an organization represents the
organization as a legal entity and not the owners or authorized constituents. The lawyer
has an obligation to represent the organization in furtherance of its best interests as
determined by the organization and seek clarification when the best interests are unclear.
When receiving conflicting directions from constituents, the lawyer is required to follow
directions from those with higher authority in the organization.