When must an organizational lawyer report misconduct to a higher authority within the organization?

The correct response emphasizes that an organizational lawyer has an ethical obligation to report misconduct when they possess reasonable knowledge of a legal violation that is likely to cause substantial harm to the organization. This requirement stems from the duty of loyalty and the responsibility to protect both the client's interests and the integrity of the legal profession.

In an organizational context, lawyers act not just for individual clients, but in the best interests of the organization as a whole. When the lawyer becomes aware of actions that could lead to significant harm—whether it be financial, reputational, or legal consequences—the obligation to report this misconduct becomes critical. This duty aligns with maintaining ethical standards and promoting compliance within the organization.

Understanding this obligation also distinguishes organizational lawyers from individual client representations, where the scope of reporting may differ. It highlights the unique nature of their role and the accountability they bear to their organization and the public.

Other options may point to scenarios involving conflicts of interest, non-culpable violations, or client requests, but they do not capture the core principle that drives the need for reporting potential substantial harm. The focus is specifically on the knowledge of legal violations that could severely impact the organization, making timely internal reporting essential to uphold the organization's integrity and prevent harm.