KEEPING CONFIDENCES CONFIDENTIAL

It is axiomatic that consultations between clients and their attorney are confidential.  But when the client is a corporate entity, it is not always obvious when, in fact, it is the “the client” doing the talking.  Not all employees are allowed to speak for the corporation, so not all employees calling the company lawyer for advice will be considered to speak on its behalf.  And if they are not, whether the conversation is privileged becomes questionable.

Generally, employees who take a substantial part in the company’s decisions – who collectively make up what the law sometimes calls the “control group” and other people often think of as the C-suite, may speak for the company.  When those people seek legal advice from the company’s attorney, their conversation is privileged.

To preserve privilege below the C-suite’s stratospheric air, employees speaking with counsel must do so at the control group’s behest.  And privilege will be limited to parts of the conversation about the specific legal advice the employee was delegated to obtain.  Additionally, privilege will survive only if that conversation was not shared by the employee with anyone other than the lawyer and members of the control group.

The best way to avoid complications is to set up procedures between the attorney and the company from the start.  A company working with a general counsel, in-house or otherwise, can and should work under a written agreement designating who will speak for the company.  For larger businesses, this can sometimes seem burdensome or needlessly strict.  But once litigation starts, a dose of certainty in keeping the company’s confidences confidential will surely make the formality well worth it.