Materials on the duty of confidentiality, the attorney-client privilege, and the work-product protection. Presented November 2016.

1. © 2016 Downey Law Group LLC. For educaƟonal purposes only.
Protecting Privilege as In-House
Counsel
Michael Downey
Downey Law Group LLC
November 2016

2. Duty of Confidentiality
Attorney-Client Privilege
(Common-Interest Privilege)
Work-Product (Privilege) Protection
2

3. Duty of Confidentiality – Rule 4-1.6
§ A lawyer shall not reveal information relating
to the representation of a client unless the
client gives informed consent, the disclosure is
impliedly authorized in order to carry out the
representation, or the disclosure is permitted
by Rule 4-1.6(b).
3

4. Duty of Confidentiality – Rule 4-1.6
• Information from
any source
• Relating to
representation
• Limit on
"revelation"
• Limit on "use" in
Rule 1.8
Client
Media reports Opposing
counsel
Pleadings
Adverse
party
Third party
Lawyer
4

5. 5
Rule 4-1.13
"A lawyer employed or retained by an
organization represents the organization acting
through its duly authorized constituents."

6. Confidences and Client Problems –
Rule 1.13(b)
If a lawyer for an organization knows that [a constituent] is
engaged in action, intends to act, or refuses to act in a matter
related to the representation that is a violation of a legal
obligation to the organization, or a violation of law which
reasonably might be imputed to the organization, and is likely to
result in substantial injury to the organization, the lawyer shall
proceed as is reasonably necessary in the best interest of the
organization.
6

7. Confidences and Client Problems –
Rule 1.13(b)
In determining how to proceed, the lawyer shall give due consideration to the
seriousness of the violation and its consequences, the scope and nature of the
lawyer's representation, the responsibility in the organization and the apparent
motivation of the person involved, the policies of the organization concerning
such matters, and any other relevant considerations.
Any measures taken shall be designed to minimize disruption of the organization
and the risk of revealing information relating to the representation to persons
outside the organization. Such measures may include among others:
(1) asking for reconsideration of the matter;
(2) advising that a separate legal opinion on the matter be sought for presentation to
appropriate authority in the organization; and
(3) referring the matter to higher authority in the organization, including, if warranted
by the seriousness of the matter, referral to the highest authority that can act on
behalf of the organization as determined by applicable law.
7

8. Reporting Up (and Out?)
MO Rule 4-1.13(c) If, despite the
lawyer's efforts in accordance with
Rule 4-1.13(b), the highest authority
that can act on behalf of the
organization insists upon action, or a
refusal to act, that is clearly a
violation of law and is likely to result
in substantial injury to the
organization, the lawyer may resign
in accordance with Rule 4-1.16.
Up
Out
8

9. Reporting Up and Out – Model Rule
Model Rule 1.13(c) Except as provided in
paragraph (d), if
(1) despite the lawyer's efforts in accordance with
paragraph (b) the highest authority that can act on
behalf of the organization insists upon or fails to
address in a timely and appropriate manner an action,
or a refusal to act, that is clearly a violation of law, an
(2) the lawyer reasonably believes that the violation is
reasonably certain to result in substantial injury to the
organization,
then the lawyer may reveal information relating
to the representation whether or not Rule 1.6
permits such disclosure, but only if and to the
extent the lawyer reasonably believes necessary
to prevent substantial injury to the organization.
Up
Out
9

10. Model Confidentiality Exceptions –
Model Rule 1.6
(1) to prevent reasonably certain death or substantial bodily harm;
(2) to prevent the client from committing a crime or fraud that is reasonably certain to result in
substantial injury to the financial interests or property of another and in furtherance of which
the client has used or is using the lawyer's services;
(3) to prevent, mitigate or rectify substantial injury to the financial interests or property of
another that is reasonably certain to result or has resulted from the client's commission of a
crime or fraud in furtherance of which the client has used the lawyer's services;
(4) to secure legal advice about the lawyer's compliance with these Rules;
(5) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer
and the client, to establish a defense to a criminal charge or civil claim against the lawyer
based upon conduct in which the client was involved, or to respond to allegations in any
proceeding concerning the lawyer's representation of the client;
(6) to comply with other law or a court order; or
(7) to detect and resolve conflicts of interest arising from the lawyer's change of employment or
from changes in the composition or ownership of a firm, but only if the revealed information
would not compromise the attorney-client privilege or otherwise prejudice the client.
10

11. Client Wrong-Doing – Model Rule
(1)to prevent reasonably certain death or substantial bodily harm;
(2)to prevent the client from committing a crime or fraud that is
reasonably certain to result in substantial injury to the financial
interests or property of another and in furtherance of which the
client has used or is using the lawyer's services;
(3)to prevent, mitigate or rectify substantial injury to the financial
interests or property of another that is reasonably certain to result
or has resulted from the client's commission of a crime or fraud in
furtherance of which the client has used the lawyer's services; …
11

12. Client Wrong-Doing – Missouri
Rule 4-1.6(b)
A lawyer may reveal information relating to the representation of a client to
the extent the lawyer reasonably believes necessary:
(1) to prevent death or substantial bodily harm that is reasonably certain to
occur;
(2) to secure legal advice about the lawyer's compliance with these Rules;
(3) to establish a claim or defense on behalf of the lawyer in a controversy
between the lawyer and the client, to establish a defense to a criminal
charge or civil claim against the lawyer based upon conduct in which the
client was involved, or to respond to allegations in any proceeding
concerning the lawyer's representation of the client; or
(4) to comply with other law or a court order.
12

13. 13
Exceptions to Confidentiality – Illinois
b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer
reasonably believes necessary:
(1) to prevent the client from committing a crime in circumstances other than those specified
in paragraph (c);
(2) to prevent the client from committing fraud that is reasonably certain to result in substantial
injury to the financial interests or property of another and in furtherance of which the client
has used or is using the lawyer's services;
(3) to prevent, mitigate or rectify substantial injury to the financial interests or property of
another that is reasonably certain to result or has resulted from the client's commission of a
crime or fraud in furtherance of which the client has used the lawyer's services;
(4) to secure legal advice about the lawyer's compliance with these Rules;
(5) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer
and the client, to establish a defense to a criminal charge or civil claim against the lawyer
based upon conduct in which the client was involved, or to respond to allegations in any
proceeding concerning the lawyer's representation of the client; or
(6) to comply with other law or a court order.
c) A lawyer shall reveal information relating to the representation of a client to the extent the lawyer
reasonably believes necessary to prevent reasonably certain death or substantial bodily harm.

14. Protection of Confidences
Model Rule 1.6(c): "A lawyer shall make
reasonable efforts to prevent the inadvertent or
unauthorized disclosure of, or unauthorized
access to, information relating to the
representation of a client."
14

15. What Are "Reasonable" Precautions
15

16. Evaluation of Safeguards
• Factors to be considered in determining the reasonableness
of the lawyer's efforts include, but are not limited to,
– the sensitivity of the information
– the likelihood of disclosure if additional safeguards are not
employed
– the cost of employing additional safeguards
– the difficulty of implementing the safeguards (and)
– the extent to which the safeguards adversely affect the lawyer's
ability to represent clients (e.g., by making a device or
important piece of software excessively difficult to use)
16

17. Two Additional Caveats
• A client may require the lawyer to implement special security
measures not required by this Rule or may give informed
consent to forgo security measures that would otherwise be
required by this Rule.
• Whether a lawyer may be required to take additional steps to
safeguard a client's information in order to comply with other
law, such as state and federal laws that govern data privacy or
that impose notification requirements upon the loss of, or
unauthorized access to, electronic information, is beyond the
scope of these Rules.
17

18. Attorney-Client Privilege
18

19. Attorney-Client Privilege
§ A communication
§ Between a lawyer and client or prospective client,
or other "privileged persons,"
§ That the client reasonably believes is confidential
§ And whose purpose is to seek or to provide legal
advice or legal services
Restatement (Third) of the Law Governing Lawyers
19

20. Attorney-Client Privilege
20
Client Lawyer
Regarding Legal
Representation

21. Corporate Constituents
• Scope of the privilege
• "Functionality" test (Upjohn)
• Control group test
• Relayed advice
21

22. "Necessary" Agents – Kovel
Client Lawyer
Agent
22

23. Keys to "Kovel"
• "Agent" should serve as an interpreter for
communications between lawyer and client
– Not used to obtain information from third parties
• "Agent" must be "reasonably necessary" for
communications
• Communications must be confidential as to
third parties
23

24. Ownership of Corporate Privilege
• Privilege usually transfers with ownership or
control of the company
• Transfer upon
– Sale of company (stock versus assets)
– Bankruptcy or receiver
24

25. Protections for Privilege
• Confidential?
– Disclaimer
– Limited circulation
• Between client and legal counsel?
– Identify role in signature block
• Contain legal advice?
– Make references to law, role as counsel, etc.
25

26. Communications with Constituents:
“Upjohn” Warning
• Identity of client – and that constituent is not a client
– Possibility of hiring personal counsel
– Who might pay for personal counsel
• Interview is privileged and confidential
– Need generally to maintain confidentiality
– Company controls and may waive
• Anti-retaliation protection
26

27. Common-Interest Privilege
27

28. Common-Interest Privilege
• Also known as the "joint defense" or "joint
prosecution" privilege
• Not a new or separate privilege
• Expands who is in the "cone of privilege" –
with whom may lawyers and clients speak
without waiving privilege
28

29. Joint Representation
Client 1 Client 2
Lawyer
29

30. Joint Defense/Common Interest Privilege
Client 1 Client 2
Lawyer 1 Lawyer 2
30

31. Common Interest Agreement?
• Not required for privilege
• May suggest action in concert
• Benefits
– Memorialize intent
– Deal with handling of information
31

32. Work Product Protection
32

33. Work Product Protection – MO Rule 56.01(b)(3)
• Subject to the provisions of Rule 56.01(b)(4), a party may obtain discovery
of documents and tangible things otherwise discoverable under Rule
56.01(b)(1) and prepared in anticipation of litigation or for trial by or for
another party or by or for that other party's representative, including an
attorney, consultant, surety, indemnitor, insurer, or agent, only upon a
showing that the party seeking discovery has substantial need of the
materials in the preparation of the case and that the adverse party is
unable without undue hardship to obtain the substantial equivalent of the
materials by other means. In ordering discovery of such materials when
the required showing has been made, the court shall protect against
disclosure of the mental impressions, conclusions, opinions, or legal
theories of an attorney or other representative of a party concerning the
litigation.
33

34. Rule 56.01(b)(3) Parsed
§ [A] party may obtain discovery of documents and tangible things
otherwise discoverable under Rule 56.01(b)(1) and
§ prepared in anticipation of litigation or for trial
§ by or for another party or by or for that other party's representative,
including an attorney, consultant, surety, indemnitor, insurer, or agent,
§ only upon a showing
– that the party seeking discovery has substantial need of the materials
in the preparation of the case and
– that the adverse party is unable without undue hardship to obtain the
substantial equivalent of the materials by other means.
34

35. Work-Product Protection
A lawyer's involvement is
not required
35

36. Federal Rule 26(b)(3)(A)
Documents and Tangible Things. Ordinarily, a party may not discover
documents and tangible things that are prepared in anticipation of
litigation or for trial by or for another party or its representative
(including the other party's attorney, consultant, surety, indemnitor,
insurer, or agent).
But, subject to Rule 26(b)(4), those materials may be discovered if: (i)
they are otherwise discoverable under Rule 26(b)(1); and (ii) the party
shows that it has substantial need for the materials to prepare its case
and cannot, without undue hardship, obtain their substantial
equivalent by other means.
36

37. Attorney-
Client
Privilege
Work-Product
Protection
37

38. Two Types of Work Product
• "Ordinary" work product
• "Opinion" work product
38

39. Opinion Work Product – Full
Protection under Rule 56.01
In ordering discovery of [work product] when
the required showing has been made, the court
shall protect against disclosure of the mental
impressions, conclusions, opinions, or legal
theories of an attorney or other representative
of a party concerning the litigation.
39

40. Opinion Work Product under Federal
Rule 26(b)(3)(B)
• Protection Against Disclosure. If the court
orders discovery of those materials, it must
protect against disclosure of the mental
impressions, conclusions, opinions, or legal
theories of a party's attorney or other
representative concerning the litigation
40

41. 41
Notes on Illinois Work Product
• No protection of "ordinary" work product
• No protection of "non-attorney" work product
• Only "attorney opinion work product" is
protected

42. "Loss" of Privilege
42

43. Waiver
§ Attorney-Client Privilege
– Express waiver
– At-issue waiver
– Disclosure
• Work Product
– Express waiver (by client
or firm)
– At-issue waiver
– Disclosure – where
inconsistent with
purpose or litigation
advantage
43

44. 44
Example
§ Martha Stewart is being investigated for insider trading
§ Stewart prepares chronology of events around ImClone stock
sale
– Stewart sends chronology to her lawyers
– Stewart sends chronology to her daughter
§ Is attorney-client privilege waived?
§ Is work-product protection waived?

45. Crime-Fraud Exception
• Key – communications are not (really) for the
purpose of giving or receiving legal advice, but
to commit a crime
• US v. Williams (8th Cir. 2013) – defendant
asked lawyer to smuggle cell phone into
prison
45

46. Application
46

47. 47
"Test"
§ Legal counsel receives word that hospital may
be sued for patient care
§ Legal counsel requests investigation of what
occurred
– Records are gathered
– Witnesses are interviewed
– Scan results are cordoned for preservation

48. State ex rel. Koster v. Cain (Mo App
WD 2012)
• Garnishment action
• Interrogatories required law firm to identify
amount of client money in firm's possession
• Court held these interrogatories did not seek
privileged information
• Also, information did not become privileged
simply through transfer to attorney
48

49. Neal v. Denney (W.D. Mo. 2013)
§ Defendant pleads guilty, then challenges guilty
plea by claiming ineffective assistance of
counsel
§ May lawyer testify against defendant?
§ May lawyer defend against ineffective
assistance challenge and continue the
representation?
49

50. Two Quotes from Denney
• Conflict – "it would be unrealistic to impose an obligation on trial counsel
to withdraw every time a criminal defendant complains about counsel's
representation. Nor can we demand . . . that trial counsel remain silent in
response to a client's accusations of ineffective assistance when counsel
would be free in a post-conviction proceeding to defend the accusations
without recrimination."
• Privilege – "The duty of confidentiality is indistinguishable from the duty
to maintain the attorney-client privilege. . . . "
50

51. Carr v. Anheuser-Busch Cos. (8th 2012)
• Carr challenged denial of severance benefits
under A-B's ERISA plan
• Discovery issues
– Emails relating to "procedural duties" owed to
plan beneficiary – A-B required to produce
– Emails relating to "substantive merits" of Carr's
claims – A-B not required to produce
• Emails were not related to plan administration
• Emails were sent after Carr had become adverse to the
plan
51

52. ABA Opinion 473
• Provide notice and consult with client
– May obtain informed consent to respond
• If no consent, challenge subpoena
– Non-frivolous arguments
• Appeal
– Cooperate if client requests
– Not required if no client communication
• Pay for work?
52

53. Michael Downey
Downey Law Group LLC
(314) 961-6644
(844) 961-6644 toll free
mdowney@DowneyLawGroup.com
Thank You