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Working in-house might save you from many of the hassles of traditional lawyering, but it doesn't insulate you from the same ethical rules and requirements that apply to the rest of the bar. You are still expected to abide by the same mandates, even if the nature of your work is very different.
Since those rules were crafted without you in mind, compliance can be tricky -- and it's sometimes simply overlooked. But thankfully, as an in-house attorney, compliance is your specialty, so keep your eyes peeled for these common ethical pitfalls facing in-house lawyers.
1. Conflicts of Interest
Nothing better represents the mismatch between in-house practice and traditional legal ethics than the conflict of interest rules. In a firm setting, it can be easy to identify and avoid "directly adverse" conflicts prohibited under Rule 1.7 of the Model Rules of Professional Conduct.
In a corporate legal department, that's not so easy. While the company is your client, answering legal questions for individual employees may create an attorney-client relationship and thus create a conflict when, for example, the company sues that employee for breach of contract. Similar conflicts can arise when representing the company and its subsidiaries or affiliates in transactions with each other. Failing to recognize those conflicts can lead to malpractice suits down the line.
2. Imputed Disqualifications
Under Rule 1.10, when any lawyer "associated in a firm" has a conflict of interest, that conflict is imputed to the firm as a whole. For in-house attorneys, the firm is the entire legal department. One lawyer's disqualification can then disqualify the entire department. To avoid this, legal departments should take measures to conflict screen when hiring in-house and outside counsel and make sure to receive informed written consent from prior clients when a conflict does arise.
3. Taking Stock or Options in the Company
Ethical rules place strict limitations on attorneys entering into business with their clients. When working in a traditional firm, those business transactions are more the exception than the rule. But in-house, it's not uncommon to be offered stock or stock options as part of a compensation plan. And that counts as a "business transaction," meaning that the professional rules for business dealings with clients apply.
Don't overestimate the reach of attorney-client privilege. Communications and work product are only protected if they are for the purposes of "giving or receiving legal advice" and made in confidence. Not all communications between you and the company, other attorneys, or employees are protected and in-house attorneys should take pains to make this clear.
5. Licensing Errors
Finally, there's your law license. Many attorneys let their bar membership go inactive after they move in house, or move with the company and do not join a new bar. While many states allow special in-house attorney registration, so you don't have to retake the bar or be waived in, not all do. Make sure you're on top of your bar registration and licensing, lest you get caught practicing illegally.