Clients referred by courts and allied agencies present therapists with problems of confidentiality, allegiance, and client deception. Among agencies that frequently make such referrals are State child protection agencies. Once the parent has been referred to the therapist, the relationship is atypical from the start, as the agency must be kept informed of the parents' progress, and thus the normal contractual relationship whereby the therapist agrees not to reveal a client's confidences is nonexistent. The thereapist must also exercise discretion regarding what should be revealed to the agency. This discretionary power confronts the therapist with powerful and conflicting obligations. Because the client knows that an unfavorable report will result in the permanent loss of the children, he may withold information, making a successful therapeutic relationship impossible. Finally, if the client's case goes to court the protective services agency may call the therapist as a witness against the client. It is argued that the therapeutic relationship cannot fully serve both client and court. Problems described herein may be alleviated by informing clients of limits on confidentiality and by client participation in defining the relationship between therapist and referral institution. In addition, it is suggested that agencies that wish to maximize the potential benefit of mental health referrals will consider abstaining from interference with whatever therapy is provided and allow complete therapistclient confidentiality. Information about clients may be gathered in other ways, such as psychiatric evaluation by someone other than the therapist. Eight references are included in the article.