The need for privilege between employees of a company and in-house counsel is obvious. Public policy dictates that employees should be able to speak freely to counsel in order to anticipate and address legal and ethical concerns. Attorney-client privilege and the work product doctrine both should apply in order to facilitate this open relationship.
But what about lawyers’ lawyers? Does the same policy apply to in-house counsel for law firms? That question is currently pending before the Georgia Supreme Court and it is not a obvious as it seems.
Obviously, lawyers facing a malpractice lawsuit have their own need for counsel. A law firm facing litigation has similar needs to a non-legal company facing litigation. But there is also a conflict of interest.
Some firms employ full-time in-house counsel. Others assign a staff member to handle in- house concerns part-time or on an as-needed basis. This means the latter group handle both client matters as well as in-house matters. When those clients sue, that attorney now represents two parties: the outside client and the in-firm clients. Even if that attorney doesn't directly represent the angry client, the conflict can be imputed to other members of the firm.
In the Georgia case, Hunter, Maclean, Exley & Dunn were retained by a real estate developer to handle the sale of expensive condominiums. The relationship soured and two attorneys working for the firm consulted in-house counsel, who began in internal investigation and preparations for a possible defense while the firm still represented the developer. Eventually, outside counsel was obtained and, as expected, the lawsuit commenced.
The developer sought to depose and obtain documents from both inside and outside counsel. The lower court held that communications with outside counsel were privileged, but not the inside counsel.
The Georgia Court of Appeals adopted the proposed framework of a Notre Dame Law Review article. That framework varies the scope of the privilege depending on the role of in-firm counsel.
- Full time - almost full privilege
- Part time - privilege applies if duties are formal, ongoing, and lawyer had no role in the outside representation at issue
- As needed - presumably no privilege unless identity and role of the in-firm counsel was pre-established
Even if this test is satisfied, the Court of Appeals noted that if the in-firm counsel directs the representation of the client after being consulted about the possible litigation, that can destroy the privilege as well.
The ABA, citing similar policy concerns as those that apply to non-legal companies, submitted their input to the Georgia Supreme Court last week in response to the court's request for amicus briefs. Oral arguments are tentatively scheduled for February 8.
- Hunter Maclean Exley Dunn v. St. Simons Waterfront LLC. (Court of Appeals of Georgia)
- Privilege Shields Law Firm's Internal Probe if Its Counsel Didn't Deal With Outside Client (Bloomberg BNA)
- Privilege protects lawyer conversations with their firm's in-house counsel, ABA brief says (ABA Journal)