This week one of my students turned in a homework assignment saying that a certain proposed action by a hypothetical client “is securities fraud.” I commented to the student that you usually don’t want to be so categorical, because:
- if it were to turn out that the actions in question didn’t constitute securities fraud, then you might have to try to walk back your statement — this would be embarrassing, and worse, it could affect your long-term credibility with the client, the partner, opposing counsel, etc.; *
- if you were saying this to a client about the client’s proposed actions, then your own words might be quoted against the client someday, for example in a court brief or a deposition or a jury argument — “ladies and gentlemen, her own lawyer said it was securities fraud” — and that might be difficult or impossible to walk away from.
In making cautionary statements of this nature, it’s often better to leave room to argue to the contrary, for example, as follows — if you were to do this, then:
- it might be found to be securities fraud;
- it could be argued to be securities fraud;
- it might be characterized as securities fraud.
This language conveys the same warning, with less risk that the lawyer will be seen as implicitly endorsing the finding of securities fraud.
* As a general rule of thumb, in the eyes of a client, a partner, etc., it’s usually far worse to say something that turns out not to be so, than it is simply to say, “I don’t know the answer but can find out.”