Yes, he should be very candid with his attorney.
The attorney may be able to secure more information for him and protect him. Generally, if the insurance company has evidence that the claimant is working, it would file a motion or request a hearing before suspending the weekly benefits. However, some insurers have been known to suspend immediately. I strongly urge your friend to consult with his attorney about his options.
By providing this general answer, no attorney-client relationship has been established. This general answer is distributed for informational purposes only and it should not be construed as a substitution for legal advice.
A good attorney can deal with the facts whether they are good or bad, but they can't help you if they do not know what is going on. Tell him everything so he can mitigate the damage or completely fix it.
Your friend should most definitely tell his attorney. The attorney is hired to protect your friend's best interests. An attorney is at a distinct disadvantage when a client withholds important information such as this.
He should definitely tell his attorney so that his attorney can help protect him. The insurance company would have to ask for a hearing in order to cut off his benefits. They could only ask to cut off his weekly benefit checks but he would still be able to get the medical care he needs.