These 10 tips should help in-house counsel ensure legal professional privilege attaches – and stays attached.
Because in-house counsel are employed by their client, courts traditionally said that made it impossible to give independent advice, and so their advice could not be privileged. While that attitude has changed, in-house counsel still need to demonstrate independence and capacity if their advice is to be protected by legal professional privilege.
So how can you ensure your work product is privileged? These 10 tips should help you ensure privilege attaches – and stays attached.
1. Practising certificates
Problem: You don't have a practising certificate.
Tips: A practising certificate is not strictly necessary, but it's prudent because
- it means you are an officer of the Court and hence have a duty to the Court; and
- not having one might suggest you undertake non-legal work (at least sometimes).
If you don't have a practising certificate, your supervisor should.
2. Job title
Problem: Your job title doesn't say you're an in-house counsel.
Tips: Although your job title or description will never be determinative in itself, it can be relevant if a court is trying to understand what capacity you are acting in. Job titles which emphasise your legal role are better than those with which emphasise non-legal or management responsibilities. So "General Counsel", "Principal Legal Officer" or "Chief Legal Officer", are better than "Manager, Corporate & Legal Services".
3. Documenting the dominant purpose
Problem: As in-house counsel you subjectively intend that a report be commissioned for the dominant purpose of obtaining legal advice or for use in anticipated legal proceedings, but while your subjective view is relevant, it isn't determinative.
Tips: If the communication was requested for the relevant dominant purpose, try to get that request and the company's purpose in writing (eg. an email or memorandum from a senior executive of the company to the in-house counsel instructing him or her to commission the report for the relevant dominant purpose) and make sure that the subsequent use of the communication is consistent with that purpose.
4. Wearing two hats
Problem: If you have legal and non-legal roles, is your work product legal advice or general commercial advice?
Tips: Keep the roles as separate as possible – avoid intermingling your functions and make sure this is reflected in your work product. Seriously consider having two titles which you use at different times to indicate what hat you are wearing at any particular point in time.
5. Marking documents "Privileged"
Problem: Marking documents as privileged can be a useful flag both for the business (to remind people to keep documents confidential) and to a court examining the document, if a claim for privilege is challenged. However, routinely putting the "privilege" label on correspondence which is not privileged may undermine a claim of privilege over documents which actually are privileged.
Tips: Use the "privilege" label, but only where you think there's a justifiable claim.
6. Reporting lines should reflect your independence from your client
Problem: If you're reporting to someone in a non-legal position this can confuse the purpose for which a communication has been created. It could also compromise your advice if it appears its finalisation could be subject to management involvement.
Tips: Preferably, you should report to more senior legal positions within the organisation or directly to the CEO.
7. The terms of your employment should reflect your independence
Problem: Linking your remuneration package to the performance of the company or a business unit within it (such as ownership of shares) may be seen as a lack of independence from your employer.
Tips: Include an independence clause in your employment contract that guarantees that your ethical and professional obligations as a lawyer and to the court are paramount, and prevail over your duties to the company as your employer.
A statement of position, a charter, or internal company policy might reinforce the company's commitment to your independence.
8. Privilege and the Board
Problem: Legal advice (written or oral) to the Board will usually be privileged, but it can lose that privilege easily.
Tips: If possible, keep legal advice in a separate document. You can annex it to Board papers or keep a record of privileged matters separate from the rest of the minutes. If that's not possible, put it in a discrete section of the papers or minutes and clearly mark the advice with a heading like "subject to legal professional privilege". At all costs avoid intermingling the provision of legal advice with other commentary which is plainly not privileged (such as discussion of management or operational matters).
9. It may be impossible to be independent about some issues
Problem: In Rich v Harrington the General Counsel, who was also a partner, was asked for advice on a claim by one partner against other partners. The General Counsel as a partner was a likely respondent herself. Her communications in relation to that matter were not protected by privilege, because she could not, in those circumstances, be independent of her client, the firm.
Tips: Even if you and your organisation have taken the suggested steps to maintain your status as an independent legal adviser, there might be some issues that you cannot give independent advice on, given their nature. In these circumstances, a court might find you are not independent, and hence your advice is not privileged. Contemplate stepping away and engaging outside legal advice.
Problem: Your advice might start off as privileged, but you can inadvertently waive it.
Tips: The essence of waiver is acting inconsistently with the maintenance of confidentiality of the privileged document. You should avoid:
- referring to legal advice when trying to obtain forensic advantage over other side, especially the substance of gist of that advice ("We have legal advice and we're confident of our prospects" might be enough to waive privilege)
- lengthy email chains on legal matters, and hitting "reply all" – mark the email as one that is not to be published beyond the initial recipients, and use the phone!
- including a record of legal advice in your communications with auditors
- sharing legal advice with third parties with whom you might in future have a common interest, such as insurers or prospective purchasers performing due diligence. Either give them the facts so that they can seek their own advice, prepare a standalone advice that you accept may later have to be disclosed, or agree to the lawyers concerned taking a (carefully limited) retainer from the other party to provide it with the relevant advice.
This is an edited version of the presentation given by Norm and Sally at our CLE Intensive for in-house counsel on 3-4 March 2011.< /p>
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.