August 15 Meeting Attorney Client Privilege _ www.bit.ly/taiho123

EFFECTIVE IN-HOUSE
COMMUNICATIONS AND
PRESERVING THE PRIVILEGES
Presented By:

August, 2006

John Eldridge
Haynes and Boone, LLP
(713) 547-2229
and
Chris Chaffin
BMC Software

1


PRIVILEGES
(FRE 501)
•
•
•
•
•
•
•

Attorney Client (Tx Rule 503)
Work Product Doctrine (TRCP 192)
Against Self-Incrimination (5th Amendment)
Husband – Wife (Tx Rule 504)

Communications to Clergy (Tx Rule 505)
FRE 501
Statutory Basis (States) and Common Law Basis
(Federal)
• In Diversity Cases, State Law

2


General Overview of the AttorneyClient Communication Privilege
•
•
•
•
•
•

In order to establish the attorney-client
communication privilege , there must be a:
Communication
between a Lawyer
and Client
that was Confidential
and remained Confidential
for the purpose of seeking or giving Legal Advice,
not business advice.
3


Who is the Lawyer?

4


Who is the Lawyer?
•
•
•
•
•

Rule 503
Corporate Counsel
Corporate Counsel, Licensed in any State
Foreign Attorneys
Outside Counsel

5


Who is the Lawyer?
• Rule 503 of the Texas Rules of Evidence:
A “lawyer” is a person authorized, or
reasonably believed by the client to be
authorized, to engage in the practice of law in
any state or nation.

6

Who is the Lawyer?
Agents or “Representatives” of the Attorney
•
•
•
•
•
•

Accountants
Investigators
Consultants
Patent Agents
Special Counsel
Paralegals

7


Who is the Lawyer?
• A “representative of the lawyer” is:
(A) one employed by the lawyer to assist the
lawyer in the rendition of professional legal
services; or
(B) an accountant who is reasonably necessary
for the lawyer’s rendition of professional legal
services

8

In-House Counsel as Client
or Attorney

9


Business Advice versus
Legal Advice
• Where in-house counsel is also involved in the
business matters of the company, e.g. as an
officer of the company, the company must show
that the advice was given when the lawyer was
wearing the lawyer’s hat

10


Negotiating a Contract
• When in-house counsel is negotiating a contract,
privilege not likely
• Negotiation is viewed more as business function
• Case specific decisions by courts
• Use outside counsel or have a business person
involved in the negotiation
• Prepare a memo describing roles of the
participants

11

Who is the Client?
•
•
•
•
•
•
•

Rule 503
Agents or Representatives of the Client
Employees
Consultants & Independent Contractors
Accountants
Appraisers
Insurance Agents

12


Who is the Client?
• Rule 503 of the Texas Rules of Evidence
A “client” is a person, public officer, or
corporation, association, or other organization
or entity . . . who is rendered professional legal
services by a lawyer, or who consults a lawyer
with a view to obtaining professional legal
services from that lawyer.

13


Who is the Client?
• A “representative of the client” is:
(A) a person having authority to obtain
professional legal services, or to act on advice
thereby rendered, on behalf of the client; or
(B) any other person who, for the purpose of
effectuating legal representation for the client,
makes or receives a confidential
communication while acting in the scope of
employment for the client.

14


Not all Corporate Employees
are “Clients”
* Corporate clients can share their knowledge of legal
advice under some circumstances with other
employees.

* Dissemination of legal advice beyond those who
“need to know” may waive the privilege.

15


Corporate Employees

– “Control Group” rejected by Supreme Court –
– Texas Rule 503
– “Subject-matter Test”

• The Control Group test was arbitrary.
• “Need to Know” is appropriate guideline
– Restrict distribution of sensitive material

16


Consultants and
Independent Contractors
• Is disclosure of attorney client communication
“reasonably necessary” in order to inform the
attorney of all pertinent facts.
• Insurance Agent
• Accountant
• Appraiser

17


Inter-Corporate Communications
• Legal advice disseminated to wholly owned
subsidiaries held not to be a waiver
• Parent corporation and subsidiaries share a unity
of interest such that the parent (as well as the
subsidiary) is the ‘client’ for purposes of the
attorney-client privilege

• Documents from subsidiary’s in-house counsel to
parent’s in-house counsel, prepared for the
purpose of obtaining legal advice or opinions, are
privileged communications between client and
attorney or as communications among counsel
18


Common Interests
• “Joint Defense” privilege
• Rule 503 of the Texas Rules of Evidence:
Confidential communications between a client
or lawyer and another lawyer representing a
party in a pending action and concerning a
matter of common interest.

19


Common Interests
(Joint clients who later become adverse)
• Rule 503 of the Texas Rules of Evidence
provides that “there is no privilege as to
communications relevant to a matter of
common interest between or among two or
more clients if the communication was made by
any of them to a lawyer retained or consulted in
common, when offered in an action between or
among any of the clients.”

20


What is a Confidential
Communication?
• Rule 503 of the Texas Rules of Evidence:
A communication is “confidential” if not
intended to be disclosed to third persons other
than those to whom disclosure is made in
furtherance of the rendition of professional
legal services to the client or those reasonably
necessary for the transmission of the
communication.
21


Confidential Communication?
• Communications often privileged if joint
defense, but not if business enterprise
• Former employees - - may reveal information
to others (e.g., new employer); treated as failed
waiver
• Communications with auditors generally not
privileged
• Presence of other people

22


What Communications are

Privileged?
• Non-Confidential Information Provided to
Attorney
– Information that is not privileged when communicated to
the attorney does not become privileged merely because it
is communicated to an attorney

• Privilege Attaches to the Communication Itself
– The privilege does not attach to the facts communicated,
it attaches to the communication itself

23


What Communications are
Privileged?
• Transacting the General Business of the
Company
– Routine, non-privileged communications
between employees transacting the general
business of the company do not attain
privileged status merely because an attorney is
“copied” on the correspondence or memoranda

24


What Communications are
Privileged?
•

•
•
•

Client’s Recording of Facts
Business Advice vs. Legal Advice
Legal Advice Discussed by Clients
Patent Work

25