Keep in mind some basic principles when assessing
the state of attorney-client privilege. by Thomas LaLLa
Many inside counsel—most of whom also have a role on the business side—strive to preserve their
legal advice on the grounds of attorney-client privilege. The privilege serves as the foundation upon
which the relationship of trust with our clients is built. It provides our management teams with the
assurance that they can explore with their inside counsel the various legal options that are available to them in total confidence. ¶ Should we be trying to protect every document we create? That
seems unrealistic in light of the joint legal and business roles that many inside counsel perform.
When do we straddle the fence between
business and legal advice? Is this just an
imaginary line like the equator? What
about documents containing mixed business and legal advice? Most importantly,
must we surrender the business functions
in which we participate to preserve the
Some basic principles need to be kept
in mind. Inside counsel should not be
barred from raising the privilege merely
because they perform tasks other than
providing legal advice. Where an inside
attorney has other functions in addition
to providing legal advice, the lawyer’s
role in any particular situation may not
be self-evident. The focus should be on
the nature of the advice that is given, i.e.,
whether it is primarily legal or business.
Business advice is not protected.
Where counsel negotiates a business
transaction, reporting developments in
the negotiations will not be protected by
the privilege, especially if unconnected
to legal advice. Also, the use of inside
counsel as a conduit for the transmission
of business information does not shield
Participation in executive meetings
where both business and legal matters
are discussed can pose some risks. If the
purpose of the meeting is to make a legal
decision, the communications between
inside counsel and the executive team will
be protected. It is advisable to separate
any executive meeting into two separate
and distinct parts, one where the man-
agement team discusses purely business
matters and a second part involving only
the executive team members who will be
deciding the legal course of action. Any
memoranda prepared by counsel as to the
meeting should be restricted to that por-
tion of the meeting where counsel gave
legal advice and management determined
a legal course of action.
At the beginning of an e-mail
intended to fall within the privilege,
remind recipients that the document is
confidential and contains legal advice
subject to the attorney-client privilege.
The document should clearly indicate that
the recipients should neither forward it to
anyone nor discuss it with anyone unless
they have counsel’s permission.
Some education is required here.
Management must understand the limitations imposed on the assertion of the
privilege, especially as it relates to the
dual roles of inside counsel. We also need
to understand the federal rules regarding
privilege as well as those of the state in
which we practice.
With planning, an inside counsel wearing two hats inside a company
may be able to continue protecting his or
her communication under the privilege.
However, inside counsel need to remain
realistic concerning the risks that the
privilege may not be asserted successfully
and any document prepared by the legal
department may be discoverable.
THOMAS;LALLA;is SVP and GC of
Pernod Ricard USA.