The ethical responsibility of confidentiality and right of attorney clients are the pillars upon which lawyers provide clients with service. The rule of confidentiality developed in professional ethics and the attorney-client privilege offer effect to the concept of client-lawyer confidentiality. The rule of confidentiality applies not only to matters shared in trust by the client, but also to all representation-related information, whatever its source. In judicial and other cases in which a lawyer may be called as a witness or otherwise compelled to produce proof involving a client, the attorney-client privilege applies.
In the Model Principles of Professional Conduct, a model of the ethical responsibility of confidentiality is set out.
Many states have a comparable version of the Professional Conduct Rules. The ethical obligation of confidentiality found in the Professional Conduct Laws is broader in nature than the Attorney-Client Privilege.
Model Rule 1.6, entitled ‘Confidentiality of Information,’ states that information relating to the representation of a client shall not be revealed by a lawyer unless the client gives informed consent or the disclosure is implicitly allowed for the representation to take place. The rule also extends to disclosures by a lawyer that do not disclose protected information in themselves but may fairly lead to the discovery by a third party of such information. All details relating to the representation covers the responsibility of confidentiality.
Unauthorized disclosure is, as a rule, allowed only under particular situations, such as the prevention of death or bodily harm, the prevention of crime or fraud, or compliance with the law or order of the courts. The ethical obligation of confidentiality, unlike the attorney client privilege, is not an evidentiary matter and does not serve as a justification for refusing the order of a court to reveal information otherwise covered by the law. Similar to the Attorney-Client Privilege, information covered under the regulation remains confidential and that confidentiality survives the dissolution of the partnership between the lawyer and client and even the client’s death.
The trial lawyer would occasionally have to deal with a disagreement between his duty of candor to the court and his duty of confidentiality to the consumer. When that happens, it is important to realize that the law requiring the client’s confidentiality prevails over candor to the court.
The Supreme Court of the United States expanded the attorney-client privilege to in-house lawyers in 1981. Upjohn Co. v. USA, 101 S.Ct. 677, 449 U.S. 383, L.Ed. 66. 584 484 (1981). In Upjohn, the concern was whether the attorney-client privilege involved contact between the attorney and the corporation’s low-level workers in the corporate sense. The Supreme Court held that any information received by the counsel of a corporate defendant that is requested for legal advice purposes is shielded by the attorney-client privilege. The client is not only the corporation’s ranking officials, but also every individual from whom data is requested.
The fact that corporate counsel may not have the same right to have privileged conversations with clients as external counsel is important. The issue is that a correspondence is not regarded as privileged by the courts merely because it was made by or to an attorney. Only if the primary object of the communication is to further the interests of the attorney-client privilege would a communication be privileged. In other terms, for the purpose of finding, receiving or offering legal aid, correspondence must be carried out. Specifically, when the communications are 1) made for the purpose of obtaining or offering legal advice, the attorney-client privilege covers communications between a lawyer and a client, as opposed to business advice; 2) confidential when made; and 3) held confidential by the client.
It is widely accepted that the “client” is not all corporate workers. Model Rule 1.13(a) states that a “lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.” Except through its offices, administrators, employees, shareholders and other constituents, an organizational client does not act.
The ethical obligation of confidentiality of Rule 1.6 applies when one of the constituents of an organizational client interacts with the lawyer of the company in the organizational capacity of the son. The Comments to Rule 1.13 include the following example: This does not mean, however, that an organizational client’s constituents are the lawyer’s clients. Except for disclosures specifically or indirectly allowed by the organizational client to carry out the representation or as otherwise required by Rule 1.6, the lawyer must not reveal details relevant to the representation to those constituents.
With regard to the attorney-client privilege, when an attorney represents a company, the extent of the privilege is special. Two theories have been utilized by courts to determine in which corporate workers in-house counsel should interact in a privileged sense.
One principle is the “control group test” in which only such negotiations are qualified for immunity between in-house counsel and the controlling executives and managers of the company. Often, the “control group” of a company consists of a very small number of corporate employees.
The Supreme Court modified the control group test to include an investigation into the subject matter of the correspondence in Upjohn, supra. Under this principle, workers with relevant knowledge on the subject are considered to be the “customer” irrespective of their role in the company. Therefore, a privileged communication with corporate counsel is possible for every corporate employee. The conversations are not always, however, privileged. Issues occur because many company employees are always under the assumption that they should and would be privileged to address any corporate legal matter with a corporate lawyer. On every legal question, not every corporate employee is entitled to privileged contact. It is not privileged, unless the contact is within the limits of the employee’s duty. In addition, as regards some legal matters, certain workers may be beyond the scope of the privilege. Issues occur as these staff attend meetings where legal advice is provided by corporate counsel.
The extended test in Upjohn is not used by all jurisdictions; others continue to use the control group test.
Many in-house lawyers have concurrent legal and business positions and, in addition to the position of General Counsel, others hold corporate titles such as Vice President or Secretary. Ethical conflicts may be created by this dual position. Corporate legal advice also requires at least some aspect of business advice; thus, when it comes to extending the attorney-client privilege, in-house counsel faces further scrutiny. In general, correspondence made from and to an in-house lawyer about business matters or business advice are not covered by the Attorney-Client Privilege.
The correspondence must be solely for the purpose of rendering legal advice in order to claim the attorney-client privilege. The fact that legal advice is always mixed with business advice is unavoidable. Some courts have allowed the writing or exclusion of privileged parts of documents mixed with business concerns involving legal advice.
Courts have considered that when it comes to extending the attorney client privilege to corporate counsel, there is a need for this enhanced scrutiny because of the likelihood that an attorney may engage merely to be able to claim the privilege and hold the records off discovery limits. Therefore, the courts also have to differentiate between the legal and business work of a lawyer.
In addition, the right is not invoked by the fact that counsel is carbon-copied on a text or attends a conference. Usually, under these cases, the right would not extend unless it can be shown that the contact would not have been made except for the need for legal advice from the client. If the object of the correspondence is not to seek legal advice for the primary purpose, the inclusion of counsel as recipients does not become privileged. In addition, the recommendation of, or participation in, a business transaction by counsel does not generally put the transaction under the shield of privilege.
Unless the client affirmatively waives the protection or is implicitly released by the actions of the client, communications subject to the attorney-client privilege remain covered. An individual officer, director or employee without the proper authority may not waive the privilege which applies to information exchanged on behalf of the company.
Although in-house counsel can consult with any company employee or agent about their work when appropriate to provide the company with legal services, counsel must ensure that the privilege of the attorney-client is protected.