Take Responsibility for Securing Your Company’s — and Your Own — Attorney-Client Privilege (Part II of V)

In Part I of this five-part series I wrote that business owners and executives need to take the lead in protecting their companies’ proprietary information — and their own as individuals — from the legal system.

And that opposing litigants, criminal prosecutors, and government agencies are all too ready to access information that may place you in civil, criminal, or regulatory jeopardy.

So you need to be proactive in reaching out to your lawyers on this. And don’t even think about DIY lawyering because application of this privilege to a specific situation can be extremely complex

In Parts II through V I offer guiding observations as you consider consultations with legal counsel:

  1. Make sure that you know who the client is: Is it a business entity that you own or work for? Or are you — as an individual — the client?
  2. Once you’ve got the attorney-client privilege, take care to avoid losing it through “waiver”.
  3. Be aware of which countries’ legal systems might be used to seek access to your proprietary information. Application of the attorney-client privilege — or its non-U.S. counterparts — can vary in a big way.
  4. In some circumstances here in the U.S. you may be better off consulting a lawyer in outside, independent, private practice rather than in-house counsel — because of the way that the courts respond to those two types of attorneys in their application of the attorney-client privilege.

1. Make sure that you know who the client is: Is it a business entity that you own or work for? Or are you — as an individual — the client?

Case study: In U.S. v. Ruelhe Broadcom Corporation’s outside private law firm interviewed Broadcom’s chief financial officer about circumstances relating to civil litigation to which Broadcom — the CFO’s employer — was a party.

Broadcom’s outside private law firm subsequently revealed the CFO’s interview statements to the U.S. Justice Department — without the CFO’s knowledge or permission.

Broadcom’s CFO was indicted on charges of conspiracy, securities fraud, and wire fraud.

In trial on that indictment the CFO invoked the attorney-client privilege to ask the court to suppress (render unusable as evidence against the CFO at trial) all contents of his earlier interview with his corporate employer’s private outside counsel relating to the civil case against the CFO’s employer.

The CFO argued that Broadcom’s outside private law firm had led him to reasonably believe that its attorneys had been representing the CFO — not just his employer.

The U.S. Justice Department argued that Broadcom’s outside private law firm was counsel to the corporation — but that it was not counsel to the CFO as an individual. Therefore — the U.S. Justice Department reasoned — the CFO’s interview statements were not protected by the attorney-client privilege.

After what I presume was much personal angst on the CFO’s part and unthinkably high legal fees the court ruled that the CFO had been led to reasonably believe that the outside private law firm represented him as legal counsel — as well as his corporate employer.

So the CFO’s interview statements were protected by the attorney-client privilege from disclosure to the U.S. Justice Department — or to anyone else — absent the CFO’s consent.

(Had the judge found the outside private firm’s lawyers to be more credible witnesses about what went on between them and the CFO — more credible witnesses than he found the CFO to be — the CFO’s interview statements would not have been protected by the attorney-client privilege.)

So when you as an individual who’s an owner, officer, board member, or employee of a company find yourself being approached by an attorney for that company seeking information — you should consider whether or not that lawyer represents you as the client — or your company.

And by “consider” what I really mean is: Confer on the matter with a separate lawyer — one you hire to represent you. And I’d guess that the CFO in U.S. v. Ruehle would agree with me on this: DIY lawyering is unthinkable in this context.

Please bear in mind my DISCLAIMER for this publication. Nothing in my blog — including this four-part series — is intended as legal advice or to be the start of an attorney-client relationship.

Link to:

Part I

Part III

Part IV

Part V