Definition.
An evaluation may be performed at the client’s direction, but for the primary purpose of
establishing information for the benefit of third parties; for example, an opinion concerning the
title of property rendered at the behest of a vendor for the information of a prospective purchaser,
or at the behest of a borrower for the information of a prospective lender. In some situations, the
evaluation may be required by a government agency, for example, an opinion concerning the
legality of the securities registered for sale under the securities laws. In other instances, the
evaluation may be required by a third person, such as a purchaser of a business.
Lawyers for the government may be called upon to give a formal opinion on the legality of
contemplated government agency action. In making such an evaluation, the government lawyer
acts at the behest of the government as the client, but for the purpose of establishing the limits of
the agency’s authorized activity. Such an opinion is to be distinguished from confidential legal
advice given agency officials. The critical question is whether the opinion is to be made public.
A legal evaluation should be distinguished from an investigation of a person with whom the
lawyer does not have a client-lawyer relationship. For example, a lawyer retained by a purchaser
to analyze a vendor’s title to property does not have a client-lawyer relationship with the vendor.
So also, an investigation into a person’s affairs by a government lawyer, or by special counsel
employed by the government, is not an evaluation as that term is used in this rule. The question
is whether the lawyer is retained by the person whose affairs are being examined. When the
lawyer is retained by that person, the general rules concerning loyalty to client and preservation
of confidences apply, which is not the case if the lawyer is retained by someone else. For this
reason, it is essential to identify the person by whom the lawyer is retained. This should be made
clear not only to the person under examination, but also to others to whom the results are to be
made available.
Duty to Third Person.
When the evaluation is intended for the information or use of a third person, a legal duty to that
person may or may not arise. That legal question is beyond the scope of this rule. However,
since such an evaluation involves a departure from the normal client-lawyer relationship, careful
analysis of the situation is required. The lawyer must be satisfied as a matter of professional
judgment that making the evaluation is compatible with other functions undertaken in behalf of
the client. For example, if the lawyer is acting as advocate in defending the client against
charges of fraud, it would normally be incompatible with that responsibility for the lawyer to
perform an evaluation for others concerning the same or a related transaction. Assuming no such
impediment is apparent, however, the lawyer should advise the client of the implications of the
evaluation, particularly the lawyer’s responsibilities to third persons and the duty to disseminate
the findings.
Access to and Disclosure of Information.
The quality of an evaluation depends on the freedom and extent of the investigation upon which
it is based. Ordinarily a lawyer should have whatever latitude of investigation seems necessary
as a matter of professional judgment. Under some circumstances, however, the terms of the
evaluation may be limited. For example, certain issues or sources may be categorically
excluded, or the scope of search may be limited by time constraints or the noncooperation of
persons having relevant information. Any such limitations which are material to the evaluation
should be described in the report. If after a lawyer has commenced an evaluation the client
refuses to comply with the terms upon which it was understood the evaluation was to have been
made, the lawyer’s obligations are determined by law, having reference to the terms of the
client’s agreement and the surrounding circumstances.
Financial Auditors’ Requests for Information.
When a question concerning the legal situation of a client arises at the instance of the client’s
financial auditor and the question is referred to the lawyer, the lawyer’s response may be made in
accordance with procedures recognized in the legal profession. Such a procedure is set forth in
the American Bar Association Statement of Policy Regarding Lawyers’ Responses to Auditors’
Requests for Information, adopted in 1975.
