Adams Stirling PLC


Avoid Conflicts. The association's attorney, as legal counsel to the association, should never represent other persons or entities that could have conflicting interests with the association.

Management's Attorney. Associations should never hire an attorney that also represents the association's management company. If most of the attorney's business comes from the management company, he/she will put the management company's interests ahead of the association's. The same is true for board members.

Director's Attorney. If a board member wants the board to hire his personal attorney to serve as the association's corporate counse, the board should decline. The association's legal counsel must be free of any conflicts of interest so he/she can provide sound advice to the board.

Corporate Counsel. As corporate counsel to the association, the association's attorney does not represent the board, individual directors, or owners. The association's legal counsel represents the association as a corporate entity.

Corporations have a separate legal identity and enjoy the benefit of the attorney-client privilege. Evidence Code section 951 defines a "client" as the "person" who "directly or through an authorized representative, consults a lawyer for the purpose of retaining the lawyer ...." The term "person" includes a corporation; indeed, it may  extend to an unincorporated organization "when the organization (rather than its individual members) is the client."  (Smith v. Laguna Sur.)

This is also the position taken by the California State Bar in Rule 3-600(A) of the Rules of Professional Conduct:

In representing an organization, a member shall conform his or her representation to the concept that the client is the organization itself, acting through its highest authorized officer, employee, body, or constituent overseeing the particular engagement.

As a result, even though members pay the attorney's legal fees through their dues, members do not have the right to call or email the association's attorney with questions. Nor can directors presume the attorney represents them individually:

In representing a corporation, an attorney's client is the corporate entity, not the individual shareholders or directors, and the individual shareholders or directors cannot presume that corporate counsel is protecting their interests. (La Jolla Cove v. Superior Court (2004) 121 Cal.App.4th 773.)

Communication With Board. The association's attorney interacts with the board because the association speaks and acts through its board of directors (Corp. Code §300(a); also see Authority of Board & Members). Normally, such communications are through the president and manager and are subject to attorney-client privilege. See "Following Legal Advice."

No Director Confidences. Because the attorney acts as legal counsel for the corporation rather than individual directors, the attorney generally cannot agree to keep communications with one director secret from other directors. There are exceptions, such as when one director is in litigation with the association or an executive committee has been formed to deal with a particular issue.

No Right to Inspect. Because communications, i.e., letters, emails, etc., between the board and legal counsel are privileged, members do not have the right to inspect those communications.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC