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Five Privilege Pitfalls Employees and In-House Counsel Should AVOID

By Mary Kathryn Curry

The attorney-client privilege continues to cause issues for in-house counsel who frequently play different roles at different times, and for employees involved in legal communications. The basic elements of the privilege are equally applicable to individual clients as they are to corporate clients, but tend to be far more problematic in the corporate setting. 

The basic elements of the privilege include: 

  • A confidential communication between a lawyer and a client, 
  • Related to legal advice, or with the expectation of legal advice, 
  • Without waiving the privilege. 

Counsel must consider whether those basic elements have been met for each communication. 

Whether a particular communication is protected by the privilege depends, in part, on the role in-house counsel is playing at the time they are engaged in the communication. In the simplest context, when in-house counsel wears their “legal hat” and provides clear legal advice, the likelihood a communication will be deemed privileged is high. But often in-house counsel serve as business advisors as well. When in-house counsel provides business advice, as opposed to legal advice, communications with others within the business is far less likely to be considered privileged. Complicating matters further, in-house counsel often serves as both a business and a legal advisor simultaneously. In such situations, sending an email to multiple recipients about issues that involve both legal and business advice, as but one example, may not be deemed privileged. 

It is also important to train employees to ensure that privileged communications remain protected. In the age of email and electronic information exchange, the privilege is easily waived. For example, an employee may waive the privilege by forwarding a privileged communication to recipients whose duties are not impacted by the legal advice and/or are not within the protection of the privilege. Then there are employees who wrongly assume that if they label something “privileged,” it will automatically become or remain privileged. 

Here is a list of five privilege pitfalls that employees and in-house counsel should remember: 

  1. If you do not involve legal counsel on a legal issue, asserting a claim of privilege later will be virtually impossible.
  2. Being Loose Lipped! Discussing privileged communications with someone outside the protections of the privilege – including other coworkers – can waive the privilege. 
  3. Assuming that if Legal Counsel is copied on the email, the communication will be privileged. It is not that simple: the communication must involve legal advice or pending or threatened litigation. 
  4. Labeling everything with the header or footer “Privileged & Confidential,” even when it should not be, undermines the credibility and jeopardizes the treatment of communications that should be privileged. 
  5. E-carelessness! Too often a privileged communication is waived when an email is sent to individuals who are not directly involved or impacted by the legal advice. Or if legal advice is provided in a Reply All to more individuals than should be included. 

The overall rule is that attorney thoughts and analysis are protected, but not when they are shared improperly. Remind employees that sharing legal advice with third parties (“our lawyers don’t think your non-compete is enforceable….”) or attributing business decisions to the legal team (“we hate to do this, but we talked to legal and we have to let you go…”) may jeopardize attorney work product that would otherwise be protected by the attorney-client privilege.