Can Confidentiality Provisions In Settlement Agreements Limit Lawyers’ Marketing?

Often when parties resolve disputes, confidentiality provisions are requested and included in a settlement agreement. The scope of such provisions may range from a preclusion of releasing the fact and amount of the settlement to a broad prohibition on disclosing any information obtained during the dispute.

Can one or both sides use such a provision to prevent or limit what an attorney can say in connection with his marketing or advertising efforts?

Yes and no. Several ethics opinions have concluded that confidentiality provisions cannot be used to completely bar a lawyer from disclosing at least some information related to disputes they have handled and resolved.

In Washington, D.C., a confidentiality provision in a settlement agreement may “provide that the terms of the settlement and other non-public information may be kept confidential, but it may not require that public information be confidential.” A a confidentiality provision preventing disclosure of even public information would violate Rule 5.6(b), which prohibits lawyers from offering or making a settlement agreement that restricts a lawyer’s right to practice.

Thus, a lawyer is allowed to disclose in marketing and advertising materials and on law firm websites public information about the case, including the name of the opponent, the allegations set forth in the complaint, or the fact that the case has settled. Otherwise, a lawyer would be prevented from informing potential clients of his experience and expertise, and potential clients would have difficultly identifying and employing well-qualified counsel in similar cases.

The Pennsylvania Bar similarly held that confidentiality “provisions which either explicitly interfere with or are intended to interfere with the handling of future clients’ cases are prohibited by Pa. R.P.C. 5.6, and it is improper to ask for and for a lawyer to agree to such provisions.”

The San Francisco Bar Association has also held that “defense counsel may not propose, and plaintiff’s attorneys may not accept, a settlement provision which obligates the attorneys to take actions that will either directly or indirectly restrict their right to practice law.” A confidentiality provision prohibiting an attorney from disclosing public information regarding the attorney’s handling of a particular type of case against the settling defendant would be an impermissible restriction on the attorney’s right to practice and would deprive potential clients of “information important to their evaluation of the competence and qualifications of potential counsel.”

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