Confidentiality stampRegulatory compliance, cyber-security issues, herding legal operations staff — in-house legal practice is more complex than ever.  One element that remains a continuing challenge is protecting the organization’s attorney-client privilege.  Slipping up can risk the loss of the privilege in litigation involving the company, and can potentially result in an order to produce otherwise confidential communications to the other side.  What are some signs that your law department needs to tune up its privilege IQ?

Some privilege ABC’s

First, for purposes of attorney-client privilege, the client is the organization, and in-house counsel is the attorney, just as much as outside counsel is.  So communications between the law department and management, for the purpose of getting or giving legal advice, made in confidence and kept confidential, can qualify for privilege protection.  The facts aren’t privileged, of course — only the actual communication.

Signs of trouble

Outside that rubric, however, issues could lead to the loss of privilege and disclosure of your confidential communications.  Here are five signs of problems.

  1. The department’s lawyers overshare.  Sharing communications is good, right?  Sometimes.  But too much sharing is not.  E-mailing confidential legal advice with a cc: to a long list of managers and employees who have no need to know it can risk the privilege — because it can be seen as negating the confidentiality that is a hallmark of a privileged communication.  (On the flip side, however, when managers discuss business issues, dropping the name of the company GC into the cc: box does not make the communication privileged.)
  2. You fail to mark your communication as privileged; or you mark everything as privilegedWhen opposing counsel makes a request for documents, nothing quite says “privileged” like a document that you have clearly marked “CONFIDENTIAL – ATTORNEY-CLIENT PRIVILEGE.”  Failing to mark that e-mail or that report to management might not result in an order to disclose it — but why not express your intention at the time you make the communication?  It can only help — unless you automatically mark everything that comes out of the law department as privileged (like your lunch invites and inter-office jokes).  Then, a court reviewing your claim of privilege might be less likely to take you seriously.
  3. You mix business advice with legal advice without distinction.  We all know that the client expects in-house counsel to wear many hats, and giving advice on business issues comes with the territory.  The problem is that business advice does not qualify for protection by the attorney-client privilege.  If you mix business advice and legal advice in one memo without any distinction, you might be inviting a privilege problem.  Some courts might parse the communication and shield the legal advice; but in other jurisdictions, the court will determine what the “predominant purpose” of the whole communication is, and you might come out on the losing side of that equation.  It’s better to keep legal advice and business advice separate, if you can.
  4. You haven’t educated managers and employees about the ground rules of privilege.  You don’t have to make it a law school course, but it really helps if your client understands the basics:  that they can’t share with  others the privileged communications they have with you; that they should keep documents marked as privileged in a safe place; that making the legal department a cc: on an e-mail is not sufficient to make it privileged.  Create a check-list for the department heads you work with.  They’ll appreciate knowing the lay of the land.
  5. You don’t acknowledge the nuances of foreign privilege law.  The global nature of business and legal practice today means that you likely need to understand privilege law as it plays out internationally.  Be aware of the issues.  For instance, some courts hold that a legal practitioner  functioning in a foreign country qualifies as an “attorney” for purposes of the privilege; others have ruled that communications with foreign in-house counsel are only privileged if they qualify under the privilege laws of the foreign country.  Several countries (and the European Union) do not recognize any evidentiary privilege for communications between a company’s in-house lawyers and management or employees.

Addressing these potential problems should help maintain attorney-client privilege.