10 FAQs about the In-House Attorney-Client Privilege

As discussed in several posts,FAQ, question blackboard including this one and this one, courts apply a heightened scrutiny when in-house lawyers assert the attorney-client privilege.  And because of this heightened scrutiny, in-house lawyers often have several questions about the privilege’s application to their daily routines.  In my latest article, FAQs about the In-House Attorney-Client Privilege, In-House Defense Quarterly, at 7 (Winter 2014), I address 10 privilege-related questions often raised by in-house counsel.

The questions presented are:

  1. When are employee-in-house communications privileged?
  2. Will a boilerplate contractual choice-of-law provision ensure the company receives its preferred privilege law?
  3. Will the privilege cover in-house counsel’s communications with employees of corporate owners, subsidiaries, or affiliates?
  4. Are employees’ communications with a foreign-based in-house lawyer privileged?
  5. Does the privilege apply if the in-house lawyer is not licensed in the state where he or she works?
  6. Who in the company has authority to waive the privilege?
  7. Does the privilege protect communications to the company’s lawyer-lobbyist?
  8. Does the privilege cover conversations between two non-lawyer employees?
  9. May in-house lawyers communicate with outside consultants under the privilege umbrella?
  10. Is an email discussing business and legal issues privileged?

You may access the article here.  My thanks to DRI, the publisher of the fine In-House Defense Quarterly journal, for allowing the republication of my article on this blog.

Upjohn Warnings and External Consultants: What You Need to Know

Corporate counsel’s internal investigations often reveal that a third-party consultant maintains relevant information.  Yet, in-house and outside counsel have relatively little instruction on whether to interview these consultants and, if so, whether an Upjohn warning is necessary.  Courts have recently addressed two related concepts, however, that provide excellent guidance on this front.

Courts, notably the 9th Circuit, have reiterated the importance of providing Upjohn warnings to corporate employees prior to conducting an interview.  In United States v. Ruehle, 583 F.3d 600 (9th Cir. Cal. 2009), consultantfor example, the Ninth Circuit noted the “treacherous path” that counsel take when conducting internal investigations and called counsel’s lack of Upjohn warnings “troubling.”  And relatedly, courts have increasingly held that the corporate attorney-client privilege covers consultants considered the “functional equivalent” of corporate employees.  Together, these concepts provide corporate counsel informed guidance when interviewing consultants as part of an internal investigation.

In my recent article, Upjohn Warnings and External Consultants, published by InsideCounsel, I explore these concepts in greater detail. The article, accessible here, discusses the importance and preferred content of Upjohn warnings.  It also discusses the “functional equivalent of employee” test, including how Model Rule 1.3 and its official comments dictate that corporate counsel provide Upjohn warnings to consultants meeting the test.

For further elaboration on the functional equivalent employee test, see my post discussing a recent ruling that a Google consultant was a “functional equivalent of an employee” for purposes of the attorney-client privilege coverage.  You may also find helpful my recent post regarding the discoverability of witness statements, as these issues will apply to external consultants.

My thanks to InsideCounsel for permission to reprint my article in this post.

Court Refuses to Expand Privilege for Intracorporate Communications

It’s a simple concept: the attorney–client privilege generally protects from compelled disclosure a client’s communications to his client.  And under the Upjohn subject matter test, the corporate attorney–client privilege generally protects corporate employees’ communications to the company’s in-house counsel. Upjohn Co. v. United States, 449 U.S. 383 (1981).

The question arises whether the privilege applies to communications between corporate employees regarding a legal matter, yet occurring without an in-house lawyer present. corporateemployeesWhile not a frequently addressed subject, several courts have applied the privilege to intracorporate communications if the communications’ purpose is to facilitate the rendition of legal services.  For a collection of cases, see Alexander C. Black, What Corporate Communications are Entitled to Attorney–Client Privilege, 27 A.L.R.5th 76 § 44 (1995).  But Magistrate Judge Stephanie A. Gallagher of the U.S. District Court for the District of Maryland recently refused to expand the privilege to communications among corporate employees and inventors of a patent owned by the corporation.  Prowess, Inc. v. Raysearch Labs. AB, 2013 WL 509021 (D. Md. Feb. 11, 2013).

Prowess, Inc. licensed a patent from the University of Maryland–Baltimore (UMB).  The patent inventors were UMB employees.  During discovery, Raysearch sought communications between the patent inventors and Prowess employees.  Prowess claimed the corporate attorney–client privilege protected these communications because they occurred at the direction of Prowess’ attorneys.

Judge Gallagher agreed that the privilege may apply to intracorporate communications, but noted that, while the patent inventors had a relationship with Prowess, they were not Prowess employees.  And on this basis, she ruled that, because the inventors were third parties, Prowess employees’ communications with the inventors “cannot be considered ‘intracorporate.’”  Judge Gallagher rejected the privilege and ordered disclosure of the conversations between Prowess employees and the patent inventors.

PoP Analysis. Judge Gallagher’s ruling comports with the maxim that evidentiary privileges should not be lightly created nor expansively construed.  United States v. Nixon, 418 U.S. 683, 710 (1974). Extending the corporate attorney–client privilege to communications between corporate employees and third parties—despite the relationship—goes too far even if these discussions will assist in-house counsel.

The Kovel doctrine may prove a better alternative to gain privilege protection for this type of communication.  Originating in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), the doctrine holds that clients may involve certain experts (accountants in Kovel) to assist an attorney’s understanding of certain concepts.  And so long as necessary for counsel to render legal advice, the Kovel doctrine extends the attorney–client privilege to these discussions.