This caught my eye, partly because I sat on a panel recently discussing the fiduciary exception to the attorney-client privilege in the context of ERISA litigation. This, in this case, is a Bloomberg BNA ethics webinar on “Attorney-Client Privilege and Work Product Doctrine Issues,” which includes, of particular note to me, “[t]he surprising narrowness and fragility of the attorney-client privilege[,] the nuances of privilege protection in a corporate setting [and the] great risks involved in relying on common interest/joint defense agreements.” Each of these topics is absolutely worthy of review, and each, for various reasons, rings a significant bell for me.
Initially, the need to discuss the narrowness and fragility of the privilege immediately made me think of the old saying that “what’s old is new again.” For my whole career, I am pretty sure, I have periodically been reading articles and reports, sometimes alarmist, about threats to the sanctity of the privilege. But the privilege has never been absolute and was never intended to be, and its exact contours have always been shifting, no different than the beach line on the elbow of Cape Cod. We see this clearly in the ERISA context with the development of the fiduciary exception to the privilege, which leaves open to disclosure many plan communications with counsel to an ERISA plan that occur in a non-litigation setting.
The real issue is not the scope of the privilege or the fact that the scope changes, but that practitioners need to understand the parameters of the privilege as well as the changes to it, and account for them. In speaking engagements, I often reference a particular high dollar value top hat dispute litigated in the district court in Massachusetts in which a prominent law firm’s somewhat caustic comments communicated to the corporate client eventually ended up in evidence at trial, simply because outside counsel did not understand certain loopholes in the privilege. While not outcome determinative in the case, the email in question certainly didn’t help the client’s defense when it went into evidence, something made clear by the fact that the judge quoted it in her opinion. This is why the second part of the webinar’s list of topics caught my attention, with its reference to the “nuances of privilege protection in the corporate setting;” the privilege is in fact nuanced and not absolute, and in-house and outside counsel to corporations need to understand those nuances to avoid exactly the type of embarrassing and harmful exposure of communications that occurred in the case I mentioned above, which I routinely use as my abject lesson for teaching this point.
Finally, the reference to the great risks inherent in common interest and joint defense agreements caught my eye for much the same reason, which is simply this. As with the privilege itself, lawyers and their clients often place too much blind faith in such agreements, believing they safely and fully insulate work done jointly by all those on one side of the “v” in a case. This is not, however, an accurate way to understand it or to approach the issue, as there are a number of variables that can come into play with regard to whether such protection applies and, if so, to what extent, in a particular case. Lawyers and clients need to understand that, and to know what they are, in making use of such agreements and approaches to the privilege, and not simply assume that communications among those parties are all privileged.