There is a trend in recent decisions that affects the attorney-client privilege and work-product protection long afforded inside counsel. The cases distinguishing between an inside lawyer's "legal work" and her "business" functions are being applied to the routine functions of gathering documents in response to subpoenas and issuing corresponding "litigation hold" notices. This article will describe the risk to inside counsel and outline a few simple steps to mitigate the risk.
We see issues when inside counsel take steps to preserve and produce information, especially electronically stored information, in response to subpoenas in civil and criminal cases. To control costs and concentrate resources, some companies have consolidated the process into an almost clerical function. That consolidation, however, spawns arguments that the tasks are no longer "lawyerly" and that, therefore, the process of holding and gathering documents should not be deemed "legal" and the memos reflecting the process should be discoverable. The same issues arise when outside lawyers are called in to do the work, but because outside legal resources generally are engaged to perform legal tasks like identifying and selecting responsive and privileged information, it is less likely that a court would describe what they are doing as not "legal" in nature.
Theoretically, the same rules should apply to inside and outside counsel for purposes of applying the privilege or the exemption. See, e.g., Hertzog, Calamari & Gleason v. Prudential Ins. Co., 850 F. Supp. 255 (S.D.N.Y. 1994); United States v. Mobil Corp., 149 F.R.D. 533 (N.D. Tex. 1993). Recent efforts to distinguish between "legal" duties and the "business" functions that lawyers in corporations are increasingly asked to perform reflect the adversary's eye toward gaining access to otherwise privileged legal work for the company. These arguments draw upon evolving case law on what constitutes "legal work" and whether the gathering of documents is the mere "act of production" rather than a reflection of actual legal advice. Corporations seeking to invoke the attorney-client privilege over "communications made by an attorney who serves the corporation in a legal and business capacity ... [must be able to] clearly demonstrate that the advice to be protected was given in a professional legal capacity." Teltron Inc. v. Alexander, 132 F.R.D. 394, 396 (E.D. Pa. 1990).
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By: Michael Dockterman and Ira G. Greenberg