In-House Counsel Pointers For Preserving Atty-Client Privilege

The attorney-client privilege is a cornerstone of legal practice, designed to foster open and honest communication between clients and their attorneys. However, for in-house counsel, navigating the complexities of this privilege can present significant challenges. Unlike external legal advisers, in-house attorneys often operate at the intersection of legal and business functions, complicating their ability to assert privilege over communications. Recent rulings — such as the U.S. District Court for the Western District of Washington’s September 2024 ruling in Garner v. Amazon.com Inc.,[1] and the U.S. District Court for the Northern District of California’s December ruling in Epic Games Inc. v. Apple Inc.[2] — illustrate the challenge and dispute of attaching attorney-client privilege for in-house attorneys. This article explores the intricate landscape of attorney-client privilege as it pertains to inhouse counsel, examining key considerations such as the definition of the client, the distinction between legal and business advice, and the imperative of confidentiality. Further, it provides practical best practices to help in-house attorneys safeguard their communications and effectively assert their privileges in an increasingly scrutinized corporate environment.

The Elements and Considerations of Attorney-Client Privilege for In-House Counsel

Generally, the attorney-client privilege only protects (1) communications made in confidence; (2) between privileged persons, i.e., the attorney, client, or in some cases, an agent; and (3) for the purpose of obtaining or providing legal assistance for the client.

Who is the client?

The first requirement of attorney-client privilege is that a relationship exists in the first place between an attorney and a client. In the context of in-house counsel, the client is the corporation itself, not the individual employees within it. However, because corporations act through people, a critical question arises: Which individuals within the organization can be considered clients for the purposes of applying the attorney-client privilege? Courts typically utilize two primary tests to define the client in this context. Subject-Matter Test This test allows the privilege to apply if “[t]he communications concern[] matters within the scope of the employees’ corporate duties,” and the employees understand the discussions with counsel occurred so “the corporation could obtain legal advice,” as articulated by the U.S. Supreme Court in its 1981 Upjohn Co. v. U.S. decision.[3] It is especially important to note here that the test is focused on the employee’s Daniel Garrie understanding of the discussions. In-house counsel is responsible for making sure employees understand when the lawyer is providing legal advice for the corporation….