presents presents In-House Counsel and Attorney-Client Privilege Protecting Confidential Information in Business Communications, Protecting Confidential Information in Business Communications, Depositions and Litigation A Live 90-Minute Teleconference/Webinar with Interactive Q&A Q& Today's panel features: Brian M. Martin, Senior Vice President and General Counsel, KLA-Tencor Corp , Milpitas, Calif. Kenneth E. McKay, Partner, Locke Lord Bissell & Liddell , Houston Mi h Michael B. Hayes, Partner, Montgomery McCracken Walker & Rhoads , Philadelphia l B H P t M t M C k W lk & Rh d Phil d l hi Tuesday, October 5, 2010 The conference begins at: The conference begins at: 1 pm Eastern 12 pm Central 11 am Mountain 10 10 am Pacific P ifi You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions emailed to registrants.
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The Attorney-Client Privilege in the United States i il i h i d Brian Martin General Counsel General Counsel KLA-Tencor, Corp. Brian Martin@kla tencor com Brian.Martin@kla-tencor.com
The Attorney Client The Attorney-Client Privilege • The attorney-client privilege has been described as "narrowly defined, riddled y f , with exceptions, and subject to continued criticism." United States v. Schwimmer, 892 , F.2d 237, 243 (2d Cir. 1989). • Nowhere is its application more Nowhere is its application more troublesome than in the corporate context.
The Attorney Client The Attorney-Client Privilege • If a client consults with an attorney for the purpose of obtaining legal assistance, all p p f g g , confidential communications with the client in furtherance of that end are protected by f f p y the attorney-client privilege. – Client to lawyer for legal advice Client to lawye fo legal advice – Lawyer to client for legal advice
The Attorney Client The Attorney-Client Privilege • (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose (4) made in confidence (5) by the client (6) are fid (5) b th li t (6) protected (7) from disclosure by himself or by the legal advisor (8) unless the by the legal advisor (8) unless the protection is waived. 8 Wigmore, Evidence sec. 2292 (4th ed. 1995). sec. 2292 (4th ed. 1995).
The Attorney Client The Attorney-Client Privilege • "In order for the privilege to attach, the information must have been given with the f g expectation of confidentiality and for the purpose of obtaining legal as opposed to p p f g g pp business advise." People v. Belge, 399 N.Y.S. 2d 539, 540 (N.Y. App. Div. 1977). , ( pp )
The Policy Behind the Rule • The privilege is intended to ensure full disclosure by clients who feel safe confiding in their attorney. Only full and frank communications between clients and their attorneys allow attorneys to provide tt ll tt t id effective, expeditious and informed representation Additionally recognizing representation. Additionally, recognizing the privilege encourages the public to seek early legal assistance. early legal assistance.
When Does the Privilege Apply? • The privilege protection attaches to all p g p communications of the client from the moment that the attorney is approached for the purpose of obtaining legal assistance. • The privilege applies regardless of – Whether the attorney decides not to represent the client; – Whether the client decides not to retain the attorney; – Whether the person consulted turns out not to have been a Wh th th lt d t t t t h b licensed attorney.
The Privilege in the The Privilege in the Corporate Setting • Applicability of privilege in corporate setting finally settled by 1963. See, Radiant g f y y , Burners v. Amer. Gas Ass'n, 320 F. 2d 314 (7th Cir. 1963) (reversing district court's ( ) ( g ruling that the attorney client privilege was not applicable to a corporation). pp p )
In-House Counsel and Attorney- y Client Privilege: Business Advice vs. Legal Advice g October 5, 2010 Ken McKay Litigation Partner Locke Lord Bissell & Liddell LLP 600 Travis, Suite 2800 Houston Texas Houston, Texas (713) 226-1127 kmckay@lockelord.com Atlanta, Austin, Chicago, Dallas, Houston, London, Los Angeles, New Orleans, New York, Sacramento, San Francisco, Washington, DC
A Different Standard? Courts have repeatedly held that there is no Courts have repeatedly held that there is no distinction between the standard to be applied for in-house and outside counsel for li d f i h d t id l f purposes of the attorney-client privilege. See Hertzog, Calamari & Gleason v. Prudential Ins ., 850 F. Supp. 255 (S.D.N.Y. 1994); S H C l i & Gl P d i l I 8 0 F S 2 (S D N Y 1 ) U.S. v. Mobil Corp ., 149 F.R.D. 533 (N.D. Tex. 1993) But there is a distinction, at least in application application. 13
But, Isn’t that a Double S Standard? d d? Absolutely! 14
But, it’s also a fact of life… , 15
Why is a different standard applied to in-house counsel? to in-house counsel? Principally because in-house counsel often perform non- legal business functions within their organizations and the law requires that privilege analysis distinguish the h l i h i il l i di i i h h two Having attorneys serve in dual capacities is the most frequently-cited factor as a basis for q y denying a claim of privilege. See Teltron, Inc. v. Alexander, 132 F.R.D. 394 (E.D. Pa. 1990); N.C. Elec. Membership Corp. v. Carolina Power & Light Co ., 110 F.R.D. 511, 517 (M.D.N.C. 1986) 16
Satisfying the “Attorney” Requirement of the Attorney-Client Privilege of the Attorney-Client Privilege General Rule: If an in-house counsel is acting in her capacity as an attorney, the attorney-client privilege applies. Where, however, counsel is acting as a business advisor or has only limited involvement , the privilege does not apply. "[T]he privilege is limited to confidential communications with an attorney acting in his professional legal capacity for the express purpose of securing legal advice As his professional legal capacity for the express purpose of securing legal advice. As a general rule, an attorney who serves a client in a business capacity may not assert the attorney-client privilege because of the lack of a confidential relationship. Thus, ordinary business advice is not protected." Teltron, Inc. v. Alexander, 132 F.R.D. 394 (E.D. Pa. 1990). See also N.C. Elec. Membership Corp. v. Carolina Power & Light Co ., 110 F.R.D. 511, 514 (M.D.N.C. 1986). 17
There is no Silver Bullet No single factor is No single factor is dispositive in every case case. See N.C. Elec. Membership Corp. v. Carolina Power & Light Co ., 110 F.R.D. 511, 516 (M.D.N.C. 1986) 18
Examples of Potentially “Non-Legal” Functions Performed by In-House Counsel Functions Performed by In House Counsel – Conducting investigations Conducting investigations – Fact-gathering regarding issues that may later be the subject of litigation j g – Regulatory compliance issues – Matters concerning the functioning of the entity Matters concerning the functioning of the entity See e.g. Giffin v. Smith , 688 S.W.2d 112 (Tex. 1985) (General counsel's communications found not to be privileged despite his role in corporate investigation because there found not to be privileged despite his role in corporate investigation because there was no evidence that the communication was confidential). 19
Dual Capacities p In-house counsel routinely handle mixed business and legal functions, sometimes with dual titles such as – Corporate Secretary – Vice President – Board Member Board Member These are sometimes perceived to be capacities separate from their legal functions Apparently, an even higher standard is sometimes applied where such is the case: “[I]n a situation where the author or recipient of allegedly privileged “[I] i i h h h i i f ll dl i il d documents functions as a corporate manager as well as an attorney, efforts must include clear designation of those communications sent or received in his capacity as a legal advisor ” or received in his capacity as a legal advisor. Hardy v. New York News, Inc., 114 F.R.D. 633, 644 (S.D.N.Y. 1987) 20
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