An Essential Guide to Attorney-Client Privilege ... - the Missouri Bar

More documents

Recommendations

Info

epresentations for legal purposes,rather than for business or otherpurposes. 108 Furthermore, the jointdefense privilege requires the partiesto show “[s]ome form of jointstrategy[,]” not just the impressionsof one side. 109 Mere exchange ofinformation will not be protectedby the joint defense privilege. Forexample, the privilege may notapply to corporate counsel’s claim torepresent an employee for purposes ofa deposition. 110Courts have expanded the rationalebehind the joint defense doctrine toinclude situations in which the clientsare pursuing a common interest butdo not share the same attorney. 111A common example of this wouldbe a circumstance where industrymembers cooperate to respond to anindustry-wide antitrust inquiry bythe Department of Justice. Underthis scenario, the responding partiesare different entities that almostalways are represented by differentcounsel. Courts generally view thistype of industry cooperation throughthe same analytical lens as the jointdefense agreement in a litigationsetting. 112For example, in Haines v. LiggettGroup, Inc., the court held that theprotection of the privilege “extend[s]to communications between differentpersons or separate corporations whenthe communications are ‘part of anon-going and joint effort to set up acommon defense strategy.’” 113 To beprotected by the common interestprivilege, the parties must demonstratethat “(1) the communication is madeby separate parties in the course ofa matter of common legal interest;(2) that communication is designedto further that effort; and (3) theprivilege has not been waived.” 114 “Thecommon interest must be a legal”rather than a “commercial or financialinterest.” 115 There does not need to“be actual litigation in progress for thecommon interest” doctrine to apply. 116Missouri courts have recognized thiscommon interest privilege so longas parties “share a common interestin the outcome of the litigation andwhere the communication in questionwas made in confidence.” 117One consideration prior to entryinto a joint defense agreement is thepotential consequence associatedwith withdrawal by a party from thearrangement. At least one federalmagistrate has held that withdrawal bya party from the agreement subjectsthe attorney for the withdrawingparty to disqualification on thebasis of his prior representation ofan adverse party. 118 The magistratealso disqualified counsel for all ofthe other members of the jointdefense group. While this decisionultimately was overturned by thedistrict court, this issue should atleast be considered prior to enteringinto these arrangements. 119 At aminimum, participants in the groupshould understand that most courtshold that when a party withdrawsfrom a joint defense relationship, thatparty may not reveal the confidentialinformation shared by other membersof the group. 120IV. Points to Consider ForProtecting Privilege in theCorporate SettingTo ensure that confidential andsensitive corporate communicationsare protected by the attorney-clientprivilege, and to guard against waiverof the privilege, in-house counselshould consider implementing thefollowing as best practices:A. Draw Clear DistinctionsBetween Legal Advice andBusiness CounselRoutine business communicationsare not privileged merely because theywere sent to in-house counsel. Avoidfunneling all correspondence throughin-house counsel, because doing somay result in the perception of overdesignationthat, in turn, may lead toa court viewing legitimate claims ofprivilege with skepticism. Segregatelegal functions from those thattypically are non-legal by determiningwhether the function could havebeen performed by a non-lawyer. Forexample, government relations orcompliance should be maintained asa separate function from traditionallegal functions. The fact that all threefunctions ultimately may report to acorporation’s lead attorney, such as itsgeneral counsel, does not result in thenon-legal functions’ activities beingprivileged.Business and legal advice should becommunicated in separate documentswhen possible. In-house counselshould preface communicationscontaining privileged communicationswith assertions that the contentrelates to legal matters (for example,“You inquired whether there is anylegal restraint on” or “Under thefacts you presented, the law wouldallow. . . ”). Use legal titles such as“general counsel,” “chief legal officer,”“esquire,” or “attorney at law” in allwritten communications over whichthe privilege likely is to be asserted.B. Inadvertent DisclosureThe attorney-client and workproduct privileges may be waivedthrough inadvertent disclosure of aprivileged document. 121 With theincreasing amount of electroniccommunication and data storage,protecting privileged documents frominadvertent disclosure has becomeincreasingly difficult. In March 2011,Microsoft fought a motion to compelan e-mail chain, initiated by its inhousecounsel, that Microsoft believedwas protected by the attorney-clientprivilege. 122 The e-mail chain atissue had within it a request fromMicrosoft’s in-house counsel “toinvestigate whether [the] Plaintiff hadinfringed [on Microsoft’s] intellectualMarch-April 2012 / 89
property rights.” 123 Microsoftinadvertently produced this e-mail chainin 1.2 million pages of documents, andthe plaintiff filed a motion to compel,arguing that the e-mail was no longerprivileged because it was inadvertentlyproduced.Although the court agreed thatMicrosoft’s disclosure was inadvertentand that Microsoft took reasonablesteps to prevent the disclosure, thecourt determined that other than thein-house counsel’s initial e-mail, noneof the remaining e-mails containedcommunications with lawyers or legaladvice. Therefore, the court found thatthe only e-mail that would be protectedby the attorney-client privilege was theoriginating e-mail from the corporatecounsel. 124To protect against inadvertentdisclosure, companies shouldlegend documents and e-mails as“Attorney-Client Communications”as appropriate. However, as discussedpreviously, this method should be usedonly in the case where truly applicable.If documents are overly and improperlydesignated as privileged, employeesbecome conditioned to believe that allcommunication involving in-housecounsel is secure. To the contrary,noting “attorney-client privileged” onevery e-mail, fax cover sheet, letter anddocument does not create a privilegeddocument. The substance – not thelabel – of the content is determinative.Additionally, the court will be lesslikely to allow certain documents to bewithheld if non-privileged documentsare mislabeled.With respect to meetings duringwhich legal advice is sought, detailedminutes should be maintained thatinclude the date, each person present,the involvement of an attorney,the subject of the meeting, and theconfidentiality of the proceedings.C. Maintain “Need To Know” BasisWith Privileged MaterialsAll communications regarding legalissues, particularly those in writing,must be limited only to those employeeswho are working on or involved withthe problem at hand. Attorneys shoulddocument why communications areoccurring, for example, by noting thatlitigation is expected, and state whyrecipients of correspondence need to beincluded. In light of the inconsistenciesamong various jurisdictions regardingwhich employees represent thecompany, in-house counsel shouldcommunicate legal advice on a “needto know” basis only. Distribution ofconfidential memorandums and e-mailsand other written communicationscontaining sensitive communicationsshould be limited. Counsel also mustbe alert to the presence of unprivilegedpersons at a meeting where privilegedmatters are going to be discussed.Company employees often believe thescope of the privilege is far broader thanit actually is. In-house counsel shouldperiodically remind company employeesof their responsibility to the corporationand the narrow scope of the privilege byissuing statements explaining companypolicy on legal communications, withadvice on how to retain the privilege.D. If Disclosure to Outside Party isRequired, Such as to Governmentor Auditor, Obtain a PrivilegePreservation AgreementIf a corporation is served witha grand jury subpoena or receivescorrespondence from an investigatoryarm of the government, signaling aninvestigation into the corporation’spractices, the corporation shouldconsider retaining outside counselimmediately, and before contactingprosecutors or investigators to discussthe basis for the investigation. Inhousecounsel should not executeaffidavits refuting accusations againstthe company, because doing so maycause corporate counsel to become a factwitness and lead to waiver assertions.When faced with a demand forprivileged material, if disclosure is in thecorporation’s interests, the corporationshould negotiate with the governmentfor protection against future thirdparty discovery and enter into aconfidentiality/privilege preservationagreement with the investigating entity.The agreement should assert that theparties are acting cooperatively and notas adversaries, if possible.Because an agreement on the effectof disclosure in a federal proceedingis binding only on the parties to theagreement, it should be incorporatedinto a court order . 125 “A federalcourt may order that the privilege orprotection is not waived by disclosureconnected with the litigation pendingbefore the court – in which event thedisclosure is also not a waiver in anyother federal or state proceeding.” 126Where a request originates from anoutside auditor, consider negotiatingengagement letters that will protect thecompany. Include an agreement that theauditor will maintain the confidentialityof the audit materials and give advancewarning prior to disclosing documentsin response to government or thirdparty subpoena. The company shouldnegotiate with auditors to narrow thescope of the necessary information asmuch as possible.After disclosing privileged records,record what was disclosed and notdisclosed. When possible, find a way toprovide the information sought withoutdisclosing privileged information.V. ConclusionContrary to the belief of manypractitioners and their non-lawyerclients, there is no universal privilegecovering all communications made toan attorney. Even otherwise privilegedcommunications may easily be waivedwithout careful consideration andan understanding of applicable law.90 / Journal of the MISSOURI BAR
Page 1 and 2: An Essential Guide toPrivilege and
Page 3 and 4: on the client’s behalf by his or
Page 5 and 6: is jurisdiction dependent. Thiscirc
Page 7: communications are privileged. 87Be
Page 11 and 12: legal capacity.”).51 Radiant Burn

An Essential Guide to Attorney-Client Privilege ... - the Missouri Bar

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?