Thomas C. Green, the Washington attorney who was present last November when classified documents in the Iran-contra case were smuggled out of the Old Executive Office Building, refused to testify in April before a federal grand jury investigating the case, according to informed sources.

In the appearance before the grand jury of independent counsel Lawrence E. Walsh, Green cited several reasons for not testifying, including attorney-client and other privileges and his Fifth Amendment right against self-incrimination, his lawyer, Earl Silbert, former U.S. attorney here, said yesterday.

"Mr. Green has always been ready to respond to any questions about his conduct," Silbert said. "His ability to do so has been restricted by the attorney-client and other privileges and constitutional rights. And he has followed the advice of his counsel."

Over the past two days, testimony at the congressional Iran-contra hearings by Fawn Hall, former secretary to Marine Lt. Col. Oliver L. North, has shown for the first time why Green felt the need to hire an attorney. Hall testified Monday that Green was with North Nov. 25 when she took secret National Security Council documents out of the Old Executive Office Building after North's office had been ordered sealed by security officials. She gave North the documents in Green's car, she said. Green asked her what she would say if she were asked about shredding by investigators. "We shred every day," Hall said she replied. Yesterday she told the committees that Green replied, "That's great" or "That's good."

Sen. David L. Boren (D-Okla.), a member of the Iran-contra committee, emphasized Green's problem during questioning of Hall yesterday, noting that "Mr. Green is a lawyer and a sworn officer of the court. And he at no time tried to dissuade you or made strong statements to you about not taking documents or about being truthful about the shredding? He didn't in any way attempt to urge you to preserve evidence?"

Hall said Green had not.

Legal experts said yesterday that Hall's testimony, if true, could make Green vulnerable to charges of obstructing justice, suborning perjury or false statements and violating ethical standards. Silbert strongly denied the assertions.

Charles Wolfram, professor of law at Cornell University and author of a recent book on legal ethics, said that the law is obscure on exactly when destroying or removing documents rises to obstruction of justice. But he said because Hall removed documents as North's office was being sealed and then passed documents from her boots and clothing to North in Green's car "it seems to me you have a smoking gun in an obstruction-of-justice case and the attorney's participation in it."

Silbert said yesterday: "Lawyers sometimes are confronted with wholly unexpected events." He said Green "knew nothing about removal of papers from the White House until he witnessed a transfer of some papers in his car. Immediately after Col. North and Ms. Hall left his car, he drove to his partner's home in Maryland, explained his shock at what occurred and made arrangements to withdraw from representation of Col. North that evening.

"His actions were completely appropriate and in full accord with the Code of Professional Responsibility that governs the conduct of lawyers."

Wolfram and Stephen Gillers, professor of law at New York University, said Green's shredding question raises the possibility that he was suggesting Hall perjure herself or make false statements to investigators. She testified that she misled a White House counsel a few days later by saying that shredding was common in North's office. She testified to the committees under a grant of immunity.

Silbert said yesterday that "as of that evening Mr. Green had no information at all about any shredding of documents." He said he couldn't say why Green had raised the issue with Hall because of Green's attorney-client privilege with North at the time.

Gellers also questioned Green's representation of retired Air Force major general Richard V. Secord at the congressional hearings. He said that the lawyers' code of ethics "flatly forbids an attorney who is himself a suspect from representing someone else. It's a conflict. Would he be protecting himself or his client?"

Silbert responded that Green had properly addressed that issue weeks previously. Another source close to Green said he had disclosed the potential conflict to Secord, who approved Green's continued representation.

Hall also testified yesterday that she recalled that North had taken calls from Green as early as late 1985. And Secord told a Washington Post reporter that he had paid Green's law firm $80,000 in fees from Swiss bank accounts over the past two years, including a $45,000 "finder's fee" in 1985 because Green had introduced a Canadian arms dealer to Secord.

Previous testimony has shown that Green met with North, Secord and Secord's partner, Albert A. Hakim, twice during the weekend after North and Hall shredded documents and then went to see Justice Department attorneys.

Green, 46, is a graduate of Dartmouth College and Yale Law School. He was an assistant U.S. attorney here in the late 1960s. Since then he has been an active defense lawyer. He represented a close friend of Maryland Gov. Marvin Mandel in Mandel's 1976 political corruption trial, and Carter White House aide Tim Kraft in a special prosecutor's investigation of alleged cocaine use in 1980. Staff writers Walter Pincus and Joe Pichirallo contributed to this report.