BAR ASSOCIATION OF NASSAU COUNTY
COMMITTEE ON PROFESSIONAL ETHICS

Opinion No. 1996-15

(Inquiry No. )

Topics:
Limits on disclosure of an attorney’s billing records for legal services when these records are requested by a civil inquiry from a federal agency, without a court order.
Digest:
Absent client consent after full disclosure, an attorney may not disclose billing records for legal services to a federal agency pursuant to the agency’s civil inquiry unless a court orders the attorney to do so. Billing records for legal services generally constitute client “secrets” under DR 4-101(A). In addition, some portions of billing records for legal services may constitute “confidences” protected by the attorney-client privilege, and an attorney must make every effort to assert and protect the attorney-client privilege to the extent it arguably applies.
Code Provisions:
EC 4-1
DR 4-101(A)
DR 4-101(C)
DR 9-102(D)(5)
DR 9-102(H)
Facts Presented:
The inquiring attorney has received a civil inquiry from a federal agency requesting billing records to clients for legal services. The inquiring attorney does not describe his law practice, but he points out that matrimonial files are not subject to public inspection, and that both civil and criminal clients might “object to voluntary disclosure of such records based upon the confidentiality between attorney and client.”
Inquiry:
May the inquiring attorney voluntarily disclose billing records for legal services when a federal agency requests those records via a civil inquiry, but the agency does not obtain a court order?
Determination:
No, unless the client consents after full disclosure or some other exception to the duty of confidentiality applies.
Analysis:
One of an attorney’s most sacred duties is the duty to maintain client confidences and secrets. As stated in EC 4-1: “Both the fiduciary relationship existing between lawyer and client and the proper functioning of the legal system require the preservation by the lawyer of confidences and secrets of one who has employed or sought to employ the lawyer.”

to a request from a federal agency in the absence of a court order depends, therefore, on whether the billing records constitute client confidences or secrets.

DR 4-101(A) defines client confidences and secrets as follows: A.

“Confidence” refers to information protected by the attorney-client privilege under applicable law, and “secret” refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client.

Whether information is a “confidence” — i.e., information protected by the attorney-client privilege — is a question of law that this Committee cannot definitively answer. However, the Committee notes that courts have struggled to establish guidelines for determining whether client billing records are protected by the attorney-client privilege.

A case in point is Comptroller of the Currency v. American Commerce National Bank, 974 F.2d 127 (9th Cir. 1993). In that case, the Comptroller of the Currency had issued an administrative subpoena to a bank asking the bank to produce all billing statements received from outside counsel over the past year. The bank contested the subpoena. The district court then conducted an in camera inspection of the billing records and held that some parts of the billing records were protected by the attorney-client privilege while other parts were not. The district court also held that the crime-fraud exception to the attorney-client privilege overcame the privilege. On appeal, the Ninth Circuit held that billing records are not protected by the attorney-client privilege except to the extent they would reveal a client’s motive for seeking legal advice or specifics about such things as litigation strategy or the purpose of particular legal research. Six weeks later, after a line-by-line in camera review of the billing records, the Ninth Circuit held that certain bills were protected by the attorney-client privilege because they “contain information which, if disclosed, would reveal litigation strategy.”

The lesson of the Comptroller of the Currency case is that it is difficult to generalize about whether billing records are protected by the attorney-client privilege. Making this determination is likely to require research into the guidelines set down in the particular jurisdiction and a line-by-line analysis of each bill.

However, it is relatively easy to conclude that billing records are “secrets” within the meaning of DR 4-101(A), and may therefore not be disclosed without a court order or some other exception specified in DR 4-101(C). There are at least two reasons for considering billing records to be secrets.

First, when the attorney informs the client that the attorney has received a request for the client’s billing records — and we think the attorney must inform the client of the request — the client has the right to request that the records “be held inviolate.” That would immediately bring them within the protection accorded “secrets” under DR 4-101. Billing records necessarily reflect information “gained in the professional relationship.” A client does not need any reason to request that information in the attorney’s file be held inviolate. The client’s mere desire for confidentiality is reason enough.

Second, disclosure of client billing records might well be “embarrassing” to the client, and in some circumstances would be “likely to be detrimental to the client.” This will not always be the case, but it will often be the case, especially in sensitive matters such as divorce litigation or criminal defense. For example, billing records in a divorce case might include entries about research on the implications of child abuse or adultery. Billing records in criminal matters might include entries about research into possible crimes that have never been charged, or about interviews with witnesses whose names the client expects to remain confidential. Even if there are no embarrassing or revealing entries in the billing records, the client may not want anyone to know how much the client is spending on legal fees. Similarly, a client might be embarrassed if billing records reveal that a third party is paying the legal fees, or that the client is being charged a reduced fee (or no fee) because the client is indigent.

As a general rule, therefore, billing records constitute client secrets that may not be revealed to a federal agency (or to anyone else) absent a court order.

One important exception to this general rule is found in DR 9-102. Under DR 9- 102(D)(5), an attorney must maintain “[c]opies of all bills to clients” for seven years after the events which they record. Under DR 9-102(H), an attorney must produce such records “in response to a notice or subpoena duces tecum issued in connection with a complaint before or any investigation by the appropriate grievance or departmental disciplinary committee,” or shall produce the records “at the direction of the appropriate Appellate Division before any person designated by it.” The inquiring attorney has received a request from a federal agency, not from a grievance committee or departmental disciplinary committee or from an Appellate Division, so the present inquiry does not implicate DR 9-102(H), and nothing in this opinion diminishes the strength of DR 9-102(H).

Of course, when an attorney receives a civil inquiry from a federal agency, it will often be to the client’s advantage to cooperate with a agency and to respond fully to its request for billing records without awaiting a court order. This will especially be so where the attorney receiving the request determines that the billing records are not protected by the attorney-client privilege or do not contain embarrassing or detrimental information. In those instances, the attorney may wish to urge the client to consent to voluntary disclosure of the billing records. However, the attorney should carefully consider whether any portions of the billing records are arguably protected by the attorney-client privilege, and whether disclosure of these portions of the records without a court order might waive the privilege. In those instances, the attorney must explain the situation to the client, including the advantages and disadvantages of asserting or waiving the privilege.

The inquiring attorney has not supplied this Committee with any billing records or with any description of his typical billing records, so this opinion is necessarily general in nature. Some attorneys keep highly detailed billing records, while others simply record time spent for “research” or “drafting” or other general activities. Conceivably, the disclosure of some billing records might not be embarrassing or detrimental to a client at all, and most billing records are probably not protected by the attorney-client privilege.

The inquiring attorney does not ask about an attorney’s obligations and options when a court orders disclosure of billing records, but DR 4-101(C)(2) ordinarily gives an attorney the right to comply with such a court order. Nor does the inquiring attorney ask about the extent of an attorney’s right to disclose billing records when disclosure is “necessary to establish or collect the lawyer’s fee or to defend the lawyer or his or her employees or associates against an accusation of wrongful conduct,” but DR 4-101(C)(4) ordinarily gives an attorney the right to disclose billing records to the extent necessary in that situation. This opinion is not intended to diminish the scope of an attorney’s rights under DR 4-101(C).

In sum, absent client consent after full disclosure of the costs and benefits satisfying a federal agency’s request for billing records, or absent some other exception to the duty of confidentiality, an attorney may not disclose billing records to a federal agency without a court order. Billing records for legal services generally constitute client “secrets” that are protected by an attorney’s duty of confidentiality. In addition, some portions of billing records for legal services may constitute “confidences” protected by the attorney-client privilege, and an attorney must make every effort to assert and protect the attorney-client privilege to the extent it arguably applies.

(Approved by the Executive Subcommittee on 10/15/96, approved by the full Committee on 10/30/96)