The Attorney-Client Privilege

Transcription

1 The Attorney-Client Privilege Union Square Ventures May 21, 2014 Doug Curtis and Patrick Mair Attorney Advertising

2 Overview 1. Introduction 2. The privilege for attorney-client communications 3. Protection of attorney work-product 4. Scenarios and practical tips WilmerHale 2

3 Types and Limitations on Transparency WilmerHale 3

4 Types and Limitations on Transparency Senior Management WilmerHale 4

5 Types and Limitations on Transparency Senior Management WilmerHale 5

6 Types and Limitations on Transparency Senior Management WilmerHale 6

7 Types and Limitations on Transparency Senior Management WilmerHale 7

8 Introduction: Transparency vs. Confidentiality WilmerHale 8

9 When might maintaining confidentiality be appropriate? Sensitive commercial/financial information Confidential marketing information Legal discussions concerning compliance with law Internal investigations and audits Litigation and arbitration Government investigation and enforcement WilmerHale 9

10 Introduction to Attorney-Client Privilege Effect Permits a party to shield certain communications from disclosure that might otherwise be required Purposes Encourage candid communications between attorneys and clients Ensure the provision of effective and reliable legal advice Promote voluntary compliance with the law Burden of Proof On the party claiming the privilege WilmerHale 10

11 What is covered? Elements A communication Made in confidence Between or among privileged persons For the purpose of obtaining legal advice And not waived either affirmatively or by being placed at issue in litigation WilmerHale 11

12 What Isn t Covered? Business advice provided by an attorney (external or in-house) is not protected. Courts sometimes apply a heightened standard of scrutiny to privilege claims involving in-house counsel i.e., they are not presumptively privileged In fact, some courts will require a clear showing that in-house counsel s advice was given in a professional legal capacity. A corporation cannot be permitted to insulate its files from discovery simply by sending a cc to in-house counsel. U.S. Postal Serv. v. Phelps Dodge Refining Corp., 852 F. Supp. 156, (E.D.N.Y. 1994) Including an in-house attorney in a communication does not automatically confer privilege. WilmerHale 12

13 What Isn t Covered (cont.)? Writing privileged on a communication, without more, doesn t make the communication privileged Boilerplate designations do not mechanically confer privilege. Oracle Am. Inc. v. Google, Inc., No. C , 2011 U.S. Dist. LEXIS 96121, at *17 (Aug. 26, 2011 N.D. Cal.) WilmerHale 13

14 Who Controls the Privilege? For a corporate client, the power to waive the privilege rests with management and is normally exercised by officers and directors BUT disclosure by mid-level employees acting within the scope of their duties may constitute waiver WilmerHale 14

15 When Might the Privilege Be Waived? By disclosure to third parties By disclosure to employees By affirmative reliance on the advice in a dispute or certain other settings WilmerHale 15

16 The International Context Legal advice given by a foreign lawyer can be privileged in the U.S. But the extent of the privilege can depend on the law of the foreign country U.S. courts will normally follow the rules governing privilege in the relevant country. WilmerHale 16

17 Work-Product Doctrine A lawyer s files and mental impressions are outside the scope of proper discovery General principles: Material collected by counsel in the course of preparing for possible litigation Work product protection is qualified and can be overcome by a showing of sufficient need But work product protection is strongest when it relates directly to an attorney s thinking Either the attorney or the client can create work product and claim work product protection WilmerHale 17

18 Elements of the Work-Product Doctrine Documents and Tangible Things Prepared in Anticipation of Litigation By a Party or the Party s Representative WilmerHale 18

19 Waiver Mere disclosure of a document to a third party will not result in waiver of the work product protection The protection is waived only when the work product is disclosed in a manner that is inconsistent with maintaining its confidentiality Example: voluntarily disclosing work product to an adversary in litigation waives the work product protection for the material disclosed WilmerHale 19

20 Work Product Protection Is Qualified Factual information that would otherwise be protected may be discoverable upon a showing of substantial need or undue hardship Opinion work product, including the mental impressions, conclusions, opinions, or legal theories of attorneys, is generally not subject to the substantial need qualification WilmerHale 20

21 Special Focus: Contractors Third Party Consultants / Independent Contractors It is not necessary to be officially employed by the corporate client to be an agent of the client for privilege. Third parties who are functionally equivalent to employees can be encompassed by the privilege WilmerHale 21

22 Scenarios Internal Audit Compliance Training Government/Internal Investigations Drafting Commercial Agreements Employment disputes Obtaining IP Advice/Advice of Counsel Tax Advice WilmerHale 22

23 Examples of Privileged Documents Notes of meeting with outside counsel to in-house counsel attaching draft of Form 10-K to be filed with the SEC and seeking comments Drafts of the specifications, claims and other parts of a patent application prepared by the attorney. Drafts of contracts with attorney's handwritten notes For contract negotiations, in-house counsel s advice must still be primarily legal to be privileged from CEO to GC requesting advice on possible legal ramifications of involuntary termination WilmerHale 23

24 Best Practices and Practical Tips for Preserving Privilege Understand the scope and limitations of privilege laws Make it explicit in each communication how it fits within the elements of privilege law Formalize the delegation of authority to non-lawyers Take practical steps to maintain the confidentiality of privileged communications Use PRIVILEGED AND CONFIDENTIAL judiciously Don t cc a lawyer and think that this will, by itself, make a communication privileged WilmerHale 24

25 Best Practices and Practical Tips (cont.) Hire outside counsel to conduct investigations and audits as needed Define scope of investigation as seeking legal advice Educate employees on the basics and limitations of privilege Never assume that any privilege, no matter how wellfounded, is absolute WilmerHale 25

26 Mixed Legal/Business Communications Understand limitations: in-house counsel have a business and legal role, but only legal advice can be privileged Where possible, keep roles separate Avoid mixing legal and business advice in a single communication Not always practical, but reduces risk that legal part of communication will be deemed business advice If separate communications are not practical, document provision of legal advice within communication, where appropriate Legal and business issues should be discussed separately at meetings and memorialized accordingly WilmerHale 26

27 Questions WilmerHale 27

28 Thank You and Contact Information Douglas F. Curtis Patrick Mair WilmerHale 7 World Trade Center 250 Greenwich Street New York, NY USA (t) (f) Wilmer Cutler Pickering Hale and Dorr LLP is a Delaware limited liability partnership. WilmerHale principal law offices: 60 State Street, Boston, Massachusetts 02109, ; 1875 Pennsylvania Avenue, NW, Washington, DC 20006, Our United Kingdom offices are operated under a separate Delaware limited liability partnership of solicitors and registered foreign lawyers authorized and regulated by the Solicitors Regulation Authority (SRA No ). Our professional rules can be found at A list of partners and their professional qualifications is available for inspection at our UK offices. In Beijing, we are registered to operate as a Foreign Law Firm Representative Office. This material is for general informational purposes only and does not represent our advice as to any particular set of facts; nor does it represent any undertaking to keep recipients advised of all legal developments. Prior results do not guarantee a similar outcome Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 28