December 2021
Every fan of TV legal dramas has heard the phrase “attorney-client privilege.” Tune in to almost any episode of Law & Order and odds are good that you will hear someone asserting “attorney client privilege” or discussing the implications of “the privilege” for their investigation or case. It is easy to dismiss attorney-client privilege as a TV plot point but maintaining attorney-client privilege should be an important consideration for any business acting through its employees and agents.
What is Attorney-Client Privilege and Why is it Important?
The attorney-client privilege is a legal rule that protects (1) confidential communications (2) between clients and their lawyers (3) made in the context of seeking or obtaining legal advice. The privilege is a bedrock principle of the law – there have been thousands of cases dealing with attorney-client privilege questions, making it one of the most fought over issues in the American legal system. The policy goal underlying the privilege is to further the effectiveness of legal representation by encouraging clients to communicate candidly and openly with their lawyer without fear that what they say will be disclosed to others or used against them. Similar privileges apply to other relationships that the law considers sacred – for example, doctors and patients, clergy and parishioners, and married spouses.
For businesses, the privilege applies to discussions between employees at all levels and the attorneys for the business when those employees are seeking legal advice relating to their work duties. The range of applicable subject matter is very broad, including not just disputes, investigations and litigation, but also patent prosecution, procurement transactions, advice on the applicability of laws or regulations to the business, nondisclosure obligations, and more – basically anything where there is a legal aspect to the interaction. The privilege is helpful because it facilitates open and free discussion – brainstorming about options to comply with regulatory requirements, or discussions about the implication of proposed language changes in an agreement with a supplier or partner – all can be protected by the privilege when lawyers are involved. But the privilege cannot exist in the absence of a lawyer.
Key Concepts
The privilege protects communications, not facts. Most often, that means oral and written statements – discussions, phone calls, emails etc. between an attorney and a client representative – but it can also include nonverbal communications like nodding, winking, or even emojis (although for other reasons, we suggest that emojis may not be the best way to communicate about company business). Anything that conveys information to the lawyer that would help the lawyer render legal advice is considered a communication. But the underlying facts themselves are not protected merely because they are communicated to a lawyer. For example, in a lawsuit about a car accident, your admission to your lawyer that you were speeding would be privileged, but the fact that you were speeding and caused an accident, as verified by radar and witnesses, would not be protected.
The communication must be between a client and a lawyer (or someone under a lawyer’s supervision) acting in a legal advisor role. In the privilege context, the business entity is the client, and its employees are client representatives. Employees within the business might have legal training or even licenses to practice law, but because they are not acting as lawyers for the business, communications with them about legal matters are not protected by attorney-client privilege. Similarly, conversations with the business’s lawyers concerning personal legal issues would also not be protected, because the lawyers would only represent the business itself, not any of its employees personally.
The communication must be confidential. Talking with a lawyer about legal matters where uninvolved parties can overhear the conversation (in a bar, on a plane, at the cafeteria, etc.), or copying unnecessary people on emails, can potentially result in those communications being unprotected.
The communication must involve legal advice. You cannot protect non-legal conversations by simply bringing a lawyer to a business meeting or adding a lawyer to an e-mail list. For example, including a lawyer on a hiring panel would not make non-legal communications with the lawyer about that hiring panel subject to the privilege.
The privilege only arises once you consult the lawyer. You cannot retroactively protect conversations or email chains with non-lawyers by sending the chain to a lawyer or later discussing the matter with a lawyer. For this reason, it is always better to include lawyers in discussions concerning projects or issues that may have a legal component sooner rather than later.
The client controls the privilege. The attorney-client privilege is one aspect of a lawyer’s broad duty of confidentiality concerning client information. Lawyers are generally not free to disclose privileged communications without the client’s consent. However, it is important to remember that the client is usually the business, not any individual employee (even the founder or CEO). As the client, the business can disclose privileged communications by its employees if doing so is in the business’s best interest. Individual employees are not empowered to waive the business’s privilege, but intentional or accidental disclosure can have the same effect.
Waiver can result in loss of the protection. Even when the privilege applies to a communication, its protection can be lost through waiver. Most often, waiver results from sharing privileged information, either intentionally or inadvertently, with external parties or with other internal personnel who do not have a need to know. A famous example of waiver involved Martha Stewart emailing with her attorney about her stock trading activity – a privileged communication – and then forwarding that email to her daughter, which destroyed the privilege.
Conclusion
Maintaining attorney-client privilege is important, but so long as employees take reasonable steps to keep communications confidential and limit who they share information with, those communications will in all likelihood be protected by the privilege. Attorney-client privilege is a complex area of law and there are nuances and numerous exceptions – hence the thousands of cases mentioned above.
The important point to remember is to consult with your attorneys early and often about matters having legal implications to ensure that the privilege is established and maintained. If you have any questions about developing practices to protect privileged communications, it is certainly worth contacting the experienced litigation attorneys at FLAS to determine the best course of action for your business.
*Litigation Insight is one in a series of occasional publications authored by the attorneys in the Firm’s Litigation Practice Group. If you would like more information about how the Litigation Practice Group can support you, please contact any of the Partners/Associates at 805-966-700:
