Current Month (October 2025)
Ethics and Professional Responsibility
Lawyers and Third-Party Neutrals: Don’t Check Your Ethics Hat at the Door
The Model Rules of Professional Conduct explicitly recognize this truism: Lawyers can wear a number of different hats. One singled out in paragraph [3] of the Preamble is that lawyers can act in a non-representational role, namely as third-party neutrals, a function that includes lawyer-arbitrators and lawyer-mediators.[1] Thus, even when a lawyer is not functioning as a counselor or as an advocate, certain rules should be borne in mind. That is the topic addressed by the recent ABA Formal Opinion No. 518 (October 15, 2025).
Formal Op. 518 focuses primarily on Model Rules 2.4 and 8.4(c). The opinion notes, but does not elaborate upon, Model Rule 1.12, which generally delineates in paragraph (a) the common-sense, conflicts-based prohibition against representing a client in a matter in which a lawyer has acted as a judge or other third-party neutral and, in paragraph (b), against negotiating for employment with anyone involved as a party or as a lawyer in that matter.[2] Although the opinion largely ignores this rule, it is worth highlighting the ramifications when a lawyer in a law firm is serving as an arbitrator or mediator. The problem, of course, is imputation: If a lawyer is disqualified under paragraph (a), paragraph (c) imputes the disqualification to every other lawyer in the firm unless (1) the disqualified lawyer is timely screened from the matter and receives no part of the fees, and (2) written notice is promptly given to the parties and any appropriate tribunal to enable them to ascertain compliance with the provisions of this Rule.
Moving to what the opinion does cover, the principal rule under discussion is Rule 2.4. Subsection (a) defines a third-party neutral for these purposes as a lawyer who assists two or more persons—who are not clients of the lawyer—to reach a resolution of a dispute. Subsection (b) articulates the key requirement—akin to various scenarios that arise when a lawyer is acting in a representational capacity, such as an Upjohn warning[3]—which is to make clear to unrepresented parties that the lawyer acting as a third-party neutral does not represent them. This is particularly important when the lawyer-arbitrator or lawyer-mediator “knows” (meaning actual knowledge, as defined in the Model Rules) or reasonably should know that a party does not understand that lawyer’s role as a third-party neutral.
Formal Op. 518 concentrates on the mediation role and distills the following advice to assure compliance with this rule:
- If the lawyer-mediator’s confidentiality obligation under applicable mediation rules comes up,[4] the lawyer-mediator should ensure that the parties understand that the source of the obligation is not a client-lawyer relationship, and that the attorney-client privilege does not apply.
- When conducting the mediation, the lawyer-mediator should stick to providing no more than truthful information about any proposed resolution and assiduously avoid suggesting that the lawyer-mediator is acting to achieve a party’s best interest or that a proposed settlement is in a party’s best interest. This should obviate mistaken, detrimental reliance on the mediator acting, in effect, as the party’s lawyer.
- Should the mediation process include discussion of how the law applies to the parties’ dispute, the lawyer-mediator should avoid communicating in a manner that might be taken as rendering legal advice or otherwise implying that the lawyer-mediator’s role is to protect or advance a party’s legal interests or to help the party to attain a particular desired result.
Moreover, the opinion suggests that unless the parties are sophisticated consumers of mediation services, it is prudent for the lawyer-mediator not only to inform all parties that the lawyer-mediator does not represent them but also to afford them an opportunity to discuss what this means. The negative implication is that if the parties are sophisticated consumers of mediation services, some of the foregoing disclosures are unnecessary. One can speculate that a corporate entity that is a repeat player in mediation would be such a “sophisticated consumer,” but the opinion provides no guidance in this regard.
The other ethical proscription highlighted by Formal Op. 518 is the ukase against conduct that is dishonest, fraudulent, deceptive, or misleading in violation of Model Rule 8.4(c). The opinion notes that application of this proscription is not always straightforward in a negotiation context, where Model Rule 4.1, cmt. [2], provides some degree of plasticity to a lawyer in a representational role when it comes to making inaccurate statements of facts that are not material.[5] Formal Op. 518 emphasizes that no such flexibility is available to a lawyer-mediator, however, because of the parties’ reasonable expectations as to mediator neutrality.
In short, the opinion expatiates on the trust reposed in a lawyer-mediator and their neutrality, honesty, and integrity by the parties to a mediation and emphasizes the need for the former’s clarity in conducting the procedure.
The ultimate third-party neutral role is that of a judge, and judges are governed by an entirely different set of ethics rules. See ABA Model Code of Judicial Conduct. ↑
There is a limited exception for judicial law clerks on matters in which they have participated personally and substantially, provided that the judge or other adjudicative officer has been notified. Model Rule 1.12(b). ↑
In conducting internal investigations for corporate clients, counsel must navigate the difficult terrain of interviewing company employees whose interests may diverge from the company’s interests. This presents a number of unique and complex ethical and practical considerations. One of the most pressing considerations, relating to avoidance of confusion about who owns and may assert (or waive) the attorney-client privilege, is ensuring that counsel makes clear exactly whom they represent—and whom they do not—when conducting internal interviews. See Upjohn Co. v. United States, 449 U.S. 383 (1981) (delineating scope of attorney-client privilege with respect to the hierarchy of company employees). Cf. Model Rule 1.13(f) (“In dealing with an organization’s directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization’s interests are adverse to those of the constituents with whom the lawyer is dealing.”); Model Rule 4.3 (“In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. . . .”). ↑
The opinion makes reference to the American Arbitration Association, American Bar Association & Association for Conflict Resolution, Model Standards of Conduct for Mediators (Sept. 2005). See Formal Op. 518 at 2, n.2; id. at 3, n.4. These references do not cite Rule 2.4, cmt. [2], which alludes to the selfsame standards. ↑
Formal Op. 518 contrasts Formal Op. 06-439, which deals with lawyers representing clients in a mediation, and cites note 19 of that earlier opinion for the proposition that “A lawyer serving as a mediator is not representing a client, and is thus not subject to Rule 4.1, but may well be subject to Rule 8.4(c).” ↑
