Navigating attorney-client privilege is often more complicated for in-house counsel.
In theory, attorney-client privilege is the same for in-house and outside counsel. A confidential communication between a client and a lawyer for the primary purpose of seeking or providing legal advice is privileged. In practice, however, the situation is far more complicated for corporate counsel. Following these 12 practical pointers will help you protect the in-house attorney-client privilege.
1. Analyze your own duties first.
Which hat were you wearing when you wrote that email? Most in-house lawyers have business duties in addition to their legal responsibilities. Compliance, human resources, strategic planning and operations support are some common business roles filled by corporate counsel. Attorney-client privilege is only created when the legal hat is on. The first step in protecting attorney-client privilege is knowing which of your communications and documents are privileged – and which aren’t.
2. Keep your title up to date and your license active.
Your title should reflect your legal role at the organization. The main reason, of course, is that your title conveys your authority to represent the organization in legal matters. A significant secondary reason is that some courts have considered the lawyer’s title as a factor in determining whether a communication was for a legal or business purpose. On a related note, some courts have considered whether the lawyer’s license is active and in good standing.
3. Educate employees about legal purpose versus business purpose.
Educate employees that a communication is privileged if, and only if, it relates to legal advice. Protect them from the surprise – and potential embarrassment – of public disclosure of something they thought would be kept in-house. Employees can contribute to safeguarding privileged communications by making it clear when they are in fact seeking legal counsel (“I need legal advice about … ”). Whether the lawyer’s name is in the “To” field or the “Cc” field of a particular email could be the difference between a finding of privileged or not privileged.
4. Keep privileged communications separate.
One of the most effective tactics for protecting privileged communications is to physically separate them from nonprivileged ones. In other words, do everything you can to avoid intermingling legal subject matter and business subject matter in the same email thread. If you receive a partially privileged email, write separate replies for the legal and business portions. (This principle applies equally to texts, instant messages, Slack, etc.) Keeping privileged communications separate helps them withstand judicial scrutiny. It also makes it easier to follow some other best practices.
5. Don’t overuse privilege designations.
Designating privileged communications “Attorney-Client Privileged” in the subject line and header is always recommended. The same holds for litigation work product. Unfortunately, some businesspeople and lawyers use the designation for virtually every email involving counsel, without regard to the substance of the communication. That probably won’t do any harm if the lawyer’s job description is exclusively legal; for example, in-house patent lawyers. For most in-house counsel though, many of their emails are clearly business-related and thus nonprivileged. Labeling every communication “privileged” devalues the designation.
6. Educate employees on the necessity of confidentiality.
A communication can only be privileged if it’s confidential. Forwarding an email containing legal advice to a third party makes it nonconfidential – and therefore nonprivileged. Repeating the substance of the advice has the same effect (“Our lawyer says we can’t agree to that because … ”). Forwarding an email to another employee also has the potential to break the privilege. Depending on your jurisdiction, either (a) the recipient’s duties must be impacted by the legal advice, or (b) the recipient must be within the “control group.” It’s critical to educate employees on the importance of sharing legal advice only within the four walls of the organization and on a strict need-to-know basis.
7. Know when to call or meet instead of emailing.
Putting legal advice in writing may increase the risk of an unintended privilege waiver. Exercise good judgment in selecting the means of communication. For example, you might be aware certain salespeople are careless about maintaining the confidentiality of legal communications during contract negotiations. In such instances, it’s prudent to request that they call you or come by your office instead of sending a substantive written reply.
8. Verify outside counsel’s data security bona fides.
Confidentiality and data security are extremely important to your organization. You need outside counsel who takes it just as seriously. Evaluate procedures for handling privileged communications and work product as part of due diligence into a law firm’s data security bona fides. As with your own organization, key areas should include secure email and file transfer, least-access privileges (in this context, limiting access to privileged information to a need-to-know basis), physical device security, background screening and intrusion monitoring.
9. Make confidentiality your watchword.
Make confidentiality a personal priority. First, rigorously comply with information security policies and procedures. Physical security, approved remote network access, and encrypted file transfers are especially relevant when protecting privileged files. Second, pause a moment before hitting “send” on privileged emails. Does every recipient really need to know? (Watch out for “reply all.”) Did autofill add an unintended recipient? Have you made the appropriate attorney-client privilege and work product designations?
10. Lay the groundwork to protect privilege in internal investigations.
Internal investigations are a high-risk area for privilege challenges and adverse rulings. The case law suggests three proactive steps to protect privileged materials generated during internal investigations:
a. State in organizational policies and procedures that all internal investigations are to be conducted for the purpose of obtaining legal advice.
b. Have in-house or outside counsel direct and oversee the work of investigators and staff. Document this throughout the investigation.
c. Give witnesses a prepared statement of subject matter, purpose and roles, including counsel’s direction and oversight. Reference the policy statement on legal purpose.
11. Organize work product in anticipation of a privilege challenge.
The impact of adverse court rulings on privilege can be mitigated by limiting the scope of the waiver. In an investigative context, witness interviews, investigators’ reports and other documents recording the underlying facts are not privileged. Create separate documents for privileged analyses of potential claims and defenses, executive summaries and legal recommendations. As a general guideline, organize combined legal and business documents to facilitate redaction. Put legal content in separate sections and make liberal use of (appropriate) attorney-client privilege and litigation work product designations.
12. Know who your client is.
Attorney-client privilege only protects communications between a lawyer and a client. Identifying the in-house lawyer’s client can be surprisingly difficult. Based on corporate structure and ownership, an in-house lawyer may (or may not) represent related entities. Representation of directors and shareholders is complex and dependent on the situation. Explaining to employees that they aren’t the client is a well-known danger zone for in-house counsel, especially in internal investigations. (Have a response ready to the question, “Do I need my own lawyer?” Answering “yes” or “no” constitutes legal advice; whether to retain a lawyer is the employee’s decision.) The final pointer is to know who your client is in all situations – and what to say when asked.
Protecting your clients’ privileged communications and documents is an important responsibility that comes with the in-house counsel job. The starting point is to cultivate a defensive mindset. Be circumspect and thoughtful at all times. Following best practices, we can meet the corporate counsel privilege challenges.
Published December 31, 2019.