Most organizations do not provide even rudimentary training in the basics of attorney-client privilege to executives and others who rely on internal and external counsel.
The inevitable lack of understanding of privileges can lead to no privileges where one is needed and other proof issues.
In-house counsel should provide their principals with a general introduction to attorney-client privilege before and independently of a specific privacy issue. Here are some of the more salient components of recommended training.
“Executive” is used interchangeably here with “stakeholders” to include other key stakeholders such as the Human Resources Director.
Any in-house counsel knows that unless he’s representing that person on a specific matter, they’re representing the employer and not the CEO, CFO, or HR manager. However, not every manager knows this. Instead, it’s not uncommon for executives to refer to—and refer to—the in-house counsel as “my attorney.”
As part of recommended training that is not related to a specific matter, internal legal counsel should state that they represent the company and not an individual executive. The middle of an argument is not the best time to hear this reality for the first time.
But what happens when there is a hot topic and the executive refers to the company lawyer as “my lawyer” despite previous training? Should they be corrected at the moment?
The purist answer: yes. The realistic answer: It depends.
For example, if you’re correcting an executive in front of opposing attorneys, you may need a recruiter if your embarrassed boss is removing the source of his embarrassment. In this scenario, you could have waited and later reminded them individually that you don’t represent them.
But if you don’t correct an executive in front of a grand jury, you may need your own attorney later. By no means hypothetically, expect that the executive will argue that you proposed to represent them by not correcting them, but then failed to take the necessary steps to protect them from the grand jury.
Privileges cannot be brushed aside with a broad brush.
Scope of Privilege
Some executives believe that anything they share with the internal counsel is privileged. However, communications are generally privileged only when the citizen is seeking or receiving legal advice.
Inform your constituents in advance of the scope of the privilege defined above. Also, make it clear in the training that the privilege does not extend to business or personal communications with counsel.
Also, focus on the documentation. For example, advise your constituents not to write a “cc” in a business email to the lawyer out of reflex. An in-house attorney for a business communication can effectively make you a witness.
Similarly, you can make unprivileged what isn’t by sticking a privileged label on the communication. This can only serve to make the label questionable where it shouldn’t be. If everything is privileged, then nothing is privileged, or so it is argued with some force.
There are two general principles regarding confidentiality and privilege.
First, make it clear that lawyers, whether internal or external, retain the right to disclose what they are told. This includes the right of disclosure to the board of directors and senior management, among others.
Second, the manager cannot disclose to others what she is discussing with her lawyer. Yes, there is no reciprocity.
Lack of reciprocity can be a hard pill for many leaders if not carefully explained. That is why it is best to explain it during an orientation program before a specific problem arises.
Even if you address the issue upfront, there may be times when you need to remind executives of this reality. For example, if a manager asks you to keep something strictly confidential, you may need to remind the manager before disclosing it that you cannot promise absolute confidentiality.
Just as important, you are clear about what the manager needs to keep confidential. The privilege covers what is discussed with the attorney, not the underlying facts of what happened.
The following example illustrates this and is intended to help avoid an obstruction charge based on an executive’s refusal to cooperate with a government investigation.
“If a government official asks you if you heard John Doe say X, you must answer truthfully and completely. What you cannot reveal is that I asked you the question and gave the answer you gave me.”
The company “owns” the privilege, so only it can relinquish it. But what an executive does could bind the company, and that includes relinquishing the privilege.
As part of the training, let your constituents know what could result in the privilege being relinquished. For example, disclosing the advice to non-employees such as family or friends, sharing it with employees outside the control group, or seeking legal advice as a defense for what was done.
In this last example, it’s not just in court. It could be a dispute with an opposing party. There’s a big difference between “I’m comfortable with our legal position” and “My lawyer told me you’re not entitled because…”. The associated waiver can justify the claim.
You may be thinking, will executives remember all of this and more? The answer is “no” and therefore refresher training must be conducted on a regular basis. Without regular training, the privilege becomes a danger.
This article does not necessarily represent the opinion of the Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
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Information about the author
Jonathan A. Segal is a partner at Duane Morris. As a former litigator, his practice focuses on maximizing legal compliance and minimizing legal risk with an eye on culture. Areas of focus include Covid-19, diversity and inclusion, harassment and courtesy, compliance with wages and hours, workplace investigations, equal pay, and employment, severance and corporate protection agreements.