The attorney-client privilege is a special form of confidentiality similar to the doctor-patient privilege and the clergy-penitent privilege. It’s a kind of “what happens in Vegas, stays in Vegas” code of conduct that can shield some of your deepest, darkest secrets from the harsh glare of the court room.
The purpose of the attorney-client privilege is to allow clients to speak freely with their counsel so that they can fully exercise their rights under the law. It’s something that most businesses take for granted when talking to their lawyers. However, if you’re not aware of how the privilege works, you could accidently waive it and be in for a rude surprise – like being asked to testify and produce documents about your “privileged” communications.
The attorney-client privilege attaches to communications between you and a licensed attorney, who represents you, provided such communications are made in confidence and are for the purpose of seeking legal advice. Keep in mind that the privilege is not an absolute privilege. It can be waived if all of the requirements of the definition are not met.
As a practical matter it means that if you meet with your lawyer and then discuss the conversation in a crowded elevator your conversation is no longer “confidential” and could be subject to discovery in a lawsuit. In other words, you could now be required to testify about it as well as produce documents related those conversations.
Another example of waiver, although by no means the only one, would be if you’re bouncing a legal question off your neighbor, who happens to be a lawyer. That conversation won’t be privileged unless that neighbor has been retained by your company for the purpose of providing legal advice. If he’s not officially representing you it’s not privileged. If you happen to raise the question at the neighborhood potluck picnic your confidentiality may be out the door too. You need to keep all of the factors in mind.
The attorney-client privilege has been making the business news recently because of a nasty trademark infringement case between Guess? Inc. and Gucci America Inc. Apparently, Gucci’s former general counsel was not properly licensed to practice law. He went to law school and passed the bar exam; but, somewhere along the line he allowed the status of his bar license to become “inactive.” As a result he was no longer a fully licensed attorney and one of the key criteria for the creation of attorney-client privilege was no longer met. “I’m not a lawyer, but I play one on TV,” just won’t fly.
The lapsed bar license has become a costly mistake for Gucci. Lawyers for Guess are using the lapsed bar license as the basis for demanding sensitive e-mails between the former general counsel and his senior management that have bearing on the trademark case. The fight has also extended overseas, to Italy. Guess now wants documents from the files of an intellectual property specialist who was working for the general counsel’s office in Italy investigating trademark infringement and counterfeiting.
Unfortunately, the attorney-client privilege is not generally recognized for corporate in-house counsel in Europe. The European Union’s Court of Justice recently decided that an in-house counsel is not “independent” enough. The view is based on the assumption that being on the payroll represents a built-in conflict of interest. That view is hotly contested by the in-house bar.
Some EU member states do recognize the attorney-client privilege for in-house counsel, notably the United Kingdom, Ireland, and the Netherlands – not Italy. As a result, Gucci is pressing hard to demonstrate the supervisory link between the IP specialist in Italy and the U.S. counsel he was working for in an effort to keep the specialist’s documents from being handed over to the other side in this litigation.
The attorney-client privilege can be a powerful shield. It is wise to know how it works before you need to rely on, so it’s not waived inadvertently and so that you can protect yourself and your company in cross-border legal disputes.