Under the Texas Disciplinary Rules of Professional Conduct, may a lawyer employed at a nonprofit agency that provides pro bono or low-cost legal services obtain client consent during the intake process that allows the disclosure of some of the client’s confidential information to third-party organizations that fund the agency?
A nonprofit social services agency (Agency) employs lawyers and provides free or low-cost legal services to low-income persons. The Agency receives funding from third-party organizations such as foundations, governments, and governmental subcontractors. Directly or through third-party monitors, these organizations conduct site visits and audits to evaluate the Agency’s performance and to ensure that the Agency is using the funding to provide grant-eligible legal services to grant-eligible clients.
During a recent site visit, a funding organization’s monitor asked to inspect a randomly selected file of a current client. The file included notes made by the Agency’s lawyers and staff during the representation, as well as drafts of documents prepared for the client. The Agency refused to allow the monitor to inspect confidential contents of the file.
After the site visit, the monitor reported to the funding organization that the Agency violated the terms of the grant by removing information from the client’s file before allowing the monitor to review the file.
The Agency asks how it can balance the funding organization’s need for information with the clients’ rights to confidentiality. The Agency believes that it would be difficult or impossible to contact randomly selected clients during a site visit to obtain the clients’ permission to share information in the clients’ files. The Agency therefore proposes obtaining each client’s advance consent, during the client intake process, to allow the Agency to reveal confidential information to the funding organization or its monitor during future site visits or audits.
Tex. Comm. On Professional Ethics, Op. 695 (2022)