On the facts of this case as assumed to be true for purposes of summary judgment, it is clear that, in Shakespearean terms, something was rotten in the State of Denmark—a business in financial trouble (red flag number one) was making an apparent $5 to $6 million gift to a director (red flag number two). One reasonable interpretation of this case is that where such serious and blatant problems are present, a lawyer cannot defend her silence or failure to act on the ground that she was never asked to speak to these problems.

Another reasonable interpretation, or at least an important cautionary note, has to do with how to bring about a legally effective limitation on the scope of a lawyer’s representation. The lawyer in this case sought to rely upon an implicit and unwritten limitation. The lawyer’s argument would clearly have been stronger if the client had actually signed off on the limited representation in a way that brought the potential importance of the issue home to the client.



A third interpretation would be that a lawyer who handles a business transaction for a client must give the client business, as well as legal, advice. In our opinion, this interpretation would be unreasonable. In this case, the business facts were not at issue. What was at issue was the legal implication of those facts for the company—something that is definitely a part of the lawyer’s ordinary responsibility. On the other hand, the case could be said to stand in part for the proposition that when it is apparent to a lawyer that a proposed business transaction does not appear to make business sense, the lawyer must act.