True or false? Your communications with your lawyer are private and you can’t be forced to reveal them to other people.
Bad news: The answer is a definite "Maybe."
Let’s eavesdrop on three typical office conversations. The lawyers are about to get pulled in on each one - but the privilege protecting attorney communications may be at risk.
Case 1: The Accountants Are Coming!
You’re sitting in your office in the accounting department minding your own business when the phone rings. It’s Archibald, one of your senior accountants. "The auditors want to know about those product liability lawsuits against us," he gasps. "Can you ask the lawyers to send them a memo letting them know they’re really serious? We’ve got big reserves on the books, so I’m not surprised they’re interested."
Case 2: Don’t Mess With Our Lawyers
Even the director of human resources is entitled to take time off for a daily latte. On your way back to your office, the district manager for the Upper Midwest stops you in the hall. "Just thought I’d give you a heads-up. Our union business agent was complaining to me that our maternity leave policy discriminates against men. I told the guy that we have a written opinion from our lawyers that the policy is 100% legal. Hope I did the right thing."
Case 3: Our Vice President is Also a Lawyer
Your job as head of purchasing is hard enough without this kind of stress. You have concluded that one of your folks is getting kickbacks from one of your vendors. You leave a voice mail for a corporate vice-president, who is also a lawyer. "Pat, we’ve got a guy down here who all of a sudden has a new BMW, a new lake place and a heckuva tan. I want you to set up an interview with this codger, get him to admit he’s shaking down a vendor, and fire him. I’ve been trying to get rid of him for years anyway. Give me a call in the morning."
Typical business problems? Of course. Privileged attorney-client communications? Don’t be so sure.
If you assume that everything you say to your lawyer is private, you are making a big mistake. Many executives and managers assume the attorney-client privilege is an impervious shield protecting their private communications with their lawyers. The fact is, however, that the shield protecting your communications is smaller and has more holes in it than most people think. Even if the communication is privileged when it is made, you can also destroy the protection after the fact if you’re not careful.
Volumes have been written about the attorney-client privilege, and hundreds of cases have considered its scope. The purpose of this article is merely to explore a few of the many ways you can abuse it or lose it.
Here are the basic rules of privilege:
1. The communication must be for the purpose of getting or giving legal advice.
2. The communication must be private.
3. The communication must be between a client and a lawyer.
4. The communication must not be for the purpose of perpetrating a crime or a fraud.
This sounds simple enough, but here’s what these rules mean in real life:
Only a client is entitled to the privilege. This doesn’t always include the client’s accountants, business partners, friends, or consultants. Of course, a corporation can act only through human beings, so it necessarily must communicate through its employees. But even employees, if their job is not to obtain or act on legal advice, may not be entitled to claim the privilege.
Only a lawyer acting as a lawyer may give or receive privileged communications. In many corporations, some executives may have dual legal and non-legal roles. In those situations, it is imperative to define when the person is acting as a lawyer and when she is acting as an executive. Ordinarily both lawyer and client may use secretaries, assistants, paralegals, interns and others to act on their behalf. But the intended recipients of the communications must be lawyers and clients.
Only private communications are protected. This means that advice given in large meetings with non-clients present, or advice broadcast widely in a corporation via memo or e-mail, may not be privileged.
Only legal matters are protected. Just because you’re talking to a lawyer doesn’t mean the subject matter is legal. Conversations about business matters, even with a lawyer, are fair game for discovery.
No one reading this article is likely to explicitly decide to consult a lawyer about how to commit a crime. But much ink has been spilled in tobacco and other mass tort litigation on the question of whether the defendants’ lawyers participated in alleged corporate skullduggery. In situations where ongoing conduct may be an issue, there is the potential for a claim that the so-called "crime-fraud" exception to the privilege applies.
It is important to claim the privilege explicitly. Thus, if there is any doubt whether a memo to or from a lawyer is privileged, it should be marked, "ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL." The same information can be included in the signature template for e-mails and the cover sheet for faxes. Be wary, however, of slapping the "confidential" label on every piece of paper or electronic communication. Overuse can constitute abuse, like crying "wolf" too often.
Finally, you can lose privilege by waiving it (intentionally or accidentally). You can do that by making copies of your lawyer’s opinions and sending them to non-clients, waving them around to prove that your lawyer can beat up the other guy’s lawyer, or otherwise destroying their confidentiality. This could include giving them to accountants or risk management professionals to use for non-legal purposes, sending copies to employees who have no need to make decisions based on the advice, or using them to make a point with people who disagree with you. A lawyer’s opinions are supposed to be private in order to remain confidential. Don’t wash your dirty laundry-or your clean laundry, for that matter-in public.
Now let’s go back and take a look at the three conversations that started this discussion.
How do you reply to Archibald’s request for a memo from the lawyers to auditors evaluating a series of lawsuits? Legal advice from lawyers is privileged, but the auditors don’t want the information in order to get legal advice. They want it to help them do their job as accountants. Therefore, you ought to be very concerned about getting a lawyer to write such a memo. Although the memo may amount to a summary of the lawyer’s mental impressions - and thus fall under the related "attorney’s work product doctrine" - it might not. G. D. Searle & Co. got some bitter medicine from the Eighth Circuit Court of appeals in 1987 when the court ruled that the company had to turn over to plaintiffs in the Copper-7 IUD cases risk management documents and aggregate case reserve information. The court held that information about individual cases might be protected, but aggregate information was not.
The second case study, in which the district manager used his lawyers’ advice to bludgeon a union business agent, presents a different problem. Has he waived the privilege by revealing that his lawyer has given him legal advice on a particular topic? Probably not, but he’s done more than that: he has openly summarized the advice. Spouting off to the business agent is the same as giving an interview to a reporter-it turns whatever you say into public information. A court would take a hard look at whether the substance of the advice-as opposed to merely the existence of the advice-was revealed. If it was, any protection provided by the attorney-client privilege may have been waived.
The final case study, involving the employee getting kickbacks, covers another gray area. You can always leave a message for your lawyer asking for legal advice, can’t you? And if you say some incriminating things, isn’t that what the privilege is supposed to protect? Perhaps, but only if it’s a lawyer you are talking to. A lawyer who wears another hat in the corporation, however, makes the situation fuzzier. Such lawyers have to assure that their legal functions are kept very separate from their non-legal functions in order to preserve the privilege. How to do that varies from one company to another, but the lawyer and the manager must be clear about the lawyer’s function at the time of the conversation. Running around saying things like, "I’ve been trying to get rid of him for years anyway," can cause a lot of trouble.
Every situation has its own unique complexities, but these examples demonstrate the dangers lurking behind the "holey" grail of privilege. When questions about the attorney-client privilege arise, it is best to discuss them with a lawyer before getting into the details of a sensitive business issue.
But if you do, be sure to shut the door first. You don’t want a stranger to overhear a privileged conversation.