Can a New York lawyer keep a client's identity secret and use the escrow account to make an anonymous charitable donation for the client?

Plain-English summary

A client wanted to make an anonymous donation to a charity, place the money in the lawyer's escrow account, and have the lawyer forward it while keeping the client's identity secret. The lawyer asked whether this was permissible and whether the escrow account could be used (paragraphs 1, 2).

The committee held that the client's identity here is confidential information under Rule 1.6(a)(3)(c) because it is information the client has requested be kept confidential, so the lawyer must maintain its confidentiality unless authorized or required to disclose it. The committee noted it had protected client identity before, under the prior Code, in N.Y. State 645 (1993) (paragraphs 3 through 5).

The duty has limits. The request for anonymity does not let the lawyer make the donation if doing so would be unlawful, and the lawyer must not mislead the recipient, for example by presenting the lawyer's trust account as the donor. Rule 4.1 bars knowingly false statements to a third person; Rule 8.4(b) and (c) bar illegal conduct reflecting on fitness and conduct involving dishonesty or misrepresentation. The committee observed that circumstances can require disclosure of a donor's identity (for instance, to confirm the gift is not from an improper foreign source or does not evade limits), and Rule 1.6(b)(6) permits disclosure required by law. Because disclosure may become necessary, the lawyer should explain under Rule 1.4(b) that anonymity may not be guaranteed and confirm the client still wishes to proceed (paragraphs 6, 7).

On the escrow account, Rule 1.15(a) and (b) govern. If the donation is incident to the practice of law, the lawyer may receive the funds into the trust or escrow account, must not commingle them, and under Rule 1.15(c) must give the client a receipt and keep proper records; the lawyer must also ensure the recipient understands the donation is anonymous and not actually from the lawyer. If the donation is not incident to the practice of law, a separate account may be needed (paragraph 8).

In practice

The opinion holds that, under the New York rules as they stood at the time, a lawyer both may and must keep a client's identity confidential at the client's request, and may carry out an anonymous donation through the escrow account. The committee made three conditions operative: the lawyer must make no false statement and must ensure the recipient knows the gift is anonymous rather than the lawyer's own (Rules 4.1, 8.4(c)); the lawyer must segregate the funds without commingling and document them with a receipt and records (Rule 1.15); and the lawyer must be satisfied the donation is lawful, recognizing that Rule 1.6(b)(6) permits disclosure required by law, so under Rule 1.4(b) the lawyer should warn the client that anonymity may not be guaranteed.

Common questions

Q: Is a client's identity protected when the client asks me to keep it secret?

A: Yes. The committee held that an identity the client requests be kept confidential is confidential information under Rule 1.6(a)(3)(c), so the lawyer must protect it unless authorized or required to disclose it (paragraphs 3, 4).

Q: Can I use my escrow account to pass through an anonymous donation for a client?

A: Yes, if the donation is incident to the practice of law. The lawyer receives the funds into the trust account, does not commingle them, gives the client a receipt, keeps proper records under Rule 1.15(c), and ensures the recipient knows the gift is anonymous and not from the lawyer (paragraph 8).

Q: What if I learn the donation might be unlawful or the donor must be disclosed?

A: The duty of confidentiality does not authorize an unlawful donation, and Rule 1.6(b)(6) permits disclosure required by law. The committee said the lawyer should explain under Rule 1.4(b) that identity may have to be disclosed and confirm the client still wants to proceed (paragraphs 6, 7).

Background and rules framework

The opinion interprets New York Rule 1.6(a)(3) and (b)(6) (confidential information and the disclosure-required-by-law exception), Rule 1.15 (trust and escrow accounts, segregation, and recordkeeping), Rule 4.1 (truthfulness to third persons), Rule 8.4(b) and (c) (illegal conduct and dishonesty), and Rule 1.4(b) (explaining matters so the client can make informed decisions), corresponding to ABA Model Rules 1.6, 1.15, 4.1, 8.4, and 1.4.

Citations and references

Rules of Professional Conduct:

• MR 1.6 / NY Rule 1.6(a)(3), (b)(6): confidential information; disclosure required by law
• MR 1.15 / NY Rule 1.15: trust and escrow accounts; segregation and recordkeeping
• MR 4.1 / NY Rule 4.1: truthfulness in statements to third persons
• MR 8.4 / NY Rule 8.4(b), (c): illegal conduct reflecting on fitness; dishonesty and misrepresentation
• MR 1.4 / NY Rule 1.4(b): explaining a matter so the client can make informed decisions

Cases:

• U.S. v. Legal Services for New York City, 100 F. Supp. 2d 42 (D.D.C. 2000), revealing client identity may not breach ethical obligations where law requires it
• U.S. v. Hunton & Williams, 952 F. Supp. 843 (D.D.C. 1997), legal disclosure obligation can override a claimed duty of secrecy

Other opinions cited:

• N.Y. State 645 (1993): a lawyer's obligation to protect a client's identity under the prior Code

See also

• NY State Bar Ethics Op. 1030: Old Letterhead and a Trust Account After Adding a Name Partner
• NY State Bar Ethics Op. 1020: Cloud Storage for Sharing Transaction Documents

Source

• Landing page: https://nysba.org/ethics-opinion-907/