Attorney-client confidentiality prevents such correspondence from being discoverable in lawsuits by opposing or prosecuting parties as correctly implemented and handled. The underlying aim is to ensure that attorneys can provide their clients with legal advice and that the secrecy of such conversations can be protected for clients.
While correspondence between a corporation and its outside law firm lawyer or a convicted criminal and its defense attorney are most frequently linked, confidentiality can also extend to such communications in an entity between in-house counsel and business staff. But it’s not really straightforward. Attorney-client privilege is often overlooked by business owners and even generalist attorneys, particularly for interactions with in-house counsel.
If the protection does not extend to a specific contact, or if the privilege is extended, but then lost or waived, through e-discovery, the communication may need to be revealed and may also become public. And what does privilege look like in-house, and what would you do to preserve it? The response will differ between countries and states, but here’s a high-level look at where to begin.
Who’s the attorney?
The right extends to interactions with any accredited lawyer who has a legal title, is part of the legal department of the business, and has been employed as a lawyer to operate.
Former lawyers can work in various capacities in some firms. However, since these people aren’t paid to operate in a professional capacity, the attorney-client privilege does not necessarily extend to their communications—even though they hold law licenses and have legal opinions on a topic.
Disclosure of confidential correspondence to lawyers who are not lawyers, such as paralegals and administrative assistants, on the other hand, does not affect the right. This is so given that the delegate is engaged in the particular legal matter to which the correspondence refers.
Who is the client?
A business functions through managers, directors, owners, and personnel. For the reasons of attorney-client privilege, not all of these persons should be seen as the client. Courts have created their own tests for deciding when privilege applies in multiple jurisdictions.
A 1981 US Supreme Court decision known as the Upjohn Test, which applies the right to attorney-client correspondence covering matters beyond the framework of the individual’s duties, is applied by the US federal courts and most US state courts. The right could have been waived if the privileged contact is made by or transmitted to an individual whose job duties are not applicable to the legal issues. The right may be used, for example, by a business entity requesting legal advice on the interpretation or enforceability of a negotiated contract.
Communication to receive or give legal advice
In general language, attorney-client confidentiality covers the interactions of attorney-clients that are created for the purpose of receiving and offering legal advice. Yet in-house attorneys function as an integral part of the organization and also act in capacities of “dual purpose,” offering a combination of legal and corporate advice in response to issues of mixed purpose. But how does the hybrid competence account for the laws of privilege?
In-house attorney-client privilege rulings in US courts differ between federal and state courts, and between multiple state courts, and each ruling appears to be very fact-specific. In certain countries, courts maintain that where there is a combination of legal and business purposes, the right still holds, as long as legal advice is the “primary purpose.” For example, in 2013, the New Mexico Court of Appeals ruled that if the primary purpose is ambiguous, the court should rule against the presence of privilege. In 2014, however, the DC Circuit Court claimed that the true measure is whether “one of the significant purposes” of the correspondence was to receive or give legal advice.
A sales chief could give his general counsel an email with proposed conditions for agreements that would assign exclusive business territories to rival distributors as an example of how these ideas could apply. The email may question if antitrust law concerns remain and, if so, if the GC has ideas for resolving these issues by alternate ways to arrange the agreements or modify the terms of the contract. By seeking non-legal feedback on how other firms have dealt with these challenges, the sales chief could also dig into the greater in-house history expertise of the GC.
In that case, the email from the sales leader should be covered by the “one of the significant purposes” legal advice test of the DC Circuit. However, under the “primary purpose” legal advice test, based on the wording, it may be a closer call. Around the same time, in any jurisdiction that does not permit a combined primary legal and secondary business intent for privileged contact, the same email seems impossible to acquire privileged status. For the GC’s answer, a similar analysis will apply, but the next step in this example is more likely to be an oral debate.
Certain conversations fell short on all legitimate intent privilege tests. It does not generate attorney-client privilege to simply copy counsel on a message to other company staff. Similarly, it would not secure the conversations by calling counsel to a larger conference to hold counsel broadly updated. In comparison, in these types of cases, using the privilege mark too often may generate a sense that the privilege is being implemented too loosely. This could weaken attempts to extend the right to more relevant correspondence from attorney-clients, and it could place your e-discovery procedures at risk.
Attorney-Client Privilege Applying and Protection
It is evident that no small amount of problems play into effectively enforcing the right of attorney-client and defending the privilege against waiver based on inappropriate disclosure.
In contact with in-house attorneys, it is highly important to be aware of these problems, since internal business interactions appear to be easier and more informal than communications with outside lawyers. Cases have switched to internal emails shot off by employees to other staff, copied by in-house lawyers, without properly taking into account that the material can contain adverse admissions of legal fault or misconduct.
Fortunately, there are several realistic means of avoiding the minefield of entitlement by reinforcing the following:
– Leave it out when in question. In other terms, rather than sending dangerous letters, communicate with activists in person.
– Instead of talking to counsel in person, if you feel the need to put anything sensitive in writing, please answer your legal messages directly to counsel, rather than copying them.
– Other workers can be included in the correspondence only if they are interested in the legal matter at hand and thus have a justification for being told. In addition, emails should be kept brief to keep the subject matter concentrated and regulate the number of recipients.
– In correspondence to lawyers, specifically seek “legal advice for the company,” and explicitly mark the “CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE AND ATTORNEY WORK PRODUCT” sensitive legal communications accordingly.
– Counsel should prohibit, if necessary, the use of business and legal advice in the same correspondence or divide the advice into parts. Additionally, before signing off on legal advice, attorneys with dual titles (e.g., general counsel, vice president, and secretary) should recommend using only their legal title.
These activities may not ensure the position of a positive right, but they will support a case for privilege. Make careful not to overuse them, though, and run the risk of a court deciding that the right was stretched so thin that it is redundant.
As a special note, bear in mind that, based on a supposed lack of freedom, most European Union countries do not accept in-house attorney-client privilege at all. US in-house counsel may choose to engage in communications on important European issues with outside counsel.
Similarly, also in the US, for such issues where privilege security is critical, the in-house lawyer can favour involving outside counsel.