Privileges and In-House Counsel: A User s Guide

Transcription

1 Privileges and In-House Counsel: A User s Guide William M. Bosch, Arnold & Porter Kaye Scholer Thomas C. Indelicarto, VeriSign Inc. Robert N. Weiner, Arnold & Porter Kaye Scholer January 11, 2017 apks.com Arnold & Porter Kaye Scholer LLP All Rights Reserved.

2 Contact Information William M. Bosch Thomas C. Indelicarto Robert N. Weiner

3 Everything I tell you is totally confidential, no matter how heinous, right? 3

4 Purpose of the Privilege to encourage full and frank communication between attorneys and their clients.... [S]ound legal advice or advocacy serves public ends and such advice or advocacy depends upon the lawyer's being fully informed by the client. Upjohn Co. v. United States, 449 U.S. 383, 389 (1981) BUT The privilege is an obstacle to the investigation of the truth. 8 J. WIGMORE, EVIDENCE 2291, at 554 (McNaughton Rev. 1982) 4

5 Elements of the Privilege A communication Made between privileged persons In confidence For the purpose of obtaining or providing legal assistance for the client Restatement (Third) of the Law Governing Lawyers 68 (2000) 5

6 Elements of the Privilege A communication 6

7 Communication "[T]he protection of the privilege extends only to communications, and not to facts. A fact is one thing and a communication concerning that fact is an entirely different thing. The client cannot be compelled to answer the question, 'What did you say or write to the attorney?' but may not refuse to disclose any relevant fact within his knowledge merely because he incorporated a statement of such fact into his communication to his attorney. Upjohn Co. v. U.S., 449 U.S. 383, (1981) quoting Philadelphia v. Westinghouse Elec. Corp. 205 F. Supp. 830, 831 (ED Pa. 1962) 7

8 Elements of the Privilege A communication Made between privileged persons 8

9 Privileged Persons the client..., the client s lawyer, agents of either who facilitate communications between them, and agents of the lawyer who facilitate the representation. Restatement (Third) 70. 9

10 Who is the Client? Control Group Test Subject Matter Test 10

11 Who is the Client? Rule 1.13(a) VIRGINIA RULES OF PROFESSIONAL CONDUCT: DC, VIRGINIA, MARYLAND A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents. 11

12 Who is the Client? Rule 1.13(a) Comment [2] DC, MD, VA RULES OF PROFESSIONAL CONDUCT When one of the constituents of an organizational client communicates with the organization s lawyer in that person s organizational capacity, the communication is protected by Rule 1.6. Thus, by way of example, if an organizational client requests its lawyer to investigate allegations of wrongdoing, interviews made in the course of that investigation between the lawyer and the client s employees or other constituents are covered by Rule 1.6. This does not mean, however, that constituents of an organizational client are the clients of the lawyer. The lawyer may not disclose to such constituents information relating to the representation except for disclosures explicitly or impliedly authorized by the organizational client in order to carry out the representation or as otherwise permitted by Rule

13 Former Employees A former agent is a privileged person under... if, at the time of communicating, the former agent has a continuing legal obligation to the principal-organization to furnish the information to the organization's lawyer. The scope of such a continuing obligation is determined by the law of agency and the terms of the employment contract. Restatement (Third) 73, comment e. 13

14 Whistleblowers 14

15 Who Decides? Who can invoke the privilege? Who can waive the privilege? 15

16 Subs and Affiliates Parent Subsidiary Subsidiary Joint Venture Subsidiary 16

17 Elements of The Privilege A communication Made between privileged persons In confidence 17

18 Rule 1.6(a) VA Rules of Professional Conduct A lawyer shall not reveal information protected by the attorney-client privilege under applicable law or other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraphs (b) and (c). 18

19 Rule 1.6(a), (b) DC Rules of Professional Conduct (a) Except when permitted under paragraph (c), (d), or (e), a lawyer shall not knowingly: (1) reveal a confidence or secret of the lawyer s client; (2) use a confidence or secret of the lawyer s client to the disadvantage of the client; (3) use a confidence or secret of the lawyer s client for the advantage of the lawyer or of a third person. (b) Confidence refers to information protected by the attorneyclient privilege under applicable law, and secret refers to other information gained in the professional relationship that the client has requested be held inviolate, or the disclosure of which would be embarrassing, or would be likely to be detrimental, to the client. 19

20 Rule 1.6(a) MD Rules of Professional Conduct A lawyer shall not reveal information relating to 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 paragraph (b). 20

21 Rule 1.6(a) Comment [3a] VA Rules of Professional Conduct The rules governing confidentiality of information apply to a lawyer who represents an organization of which the lawyer is an employee. 21

22 Confidentiality Three may keep a secret, if two of them are dead. Benjamin Franklin, Poor Richard's Almanack 22

23 Need to Know Disclosure allowed only to: a) privileged persons... ; and b) other agents of the organization who reasonably need to know of the communication in order to act for the organization. Restatement of the Law Governing Lawyers 73 23

24 Precautions 24

25 Precautions 25

26 The Cloud 26

27 Acting Competently to Preserve Confidentiality Model Rules 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. [18] The unauthorized access to, or the inadvertent or unauthorized disclosure of, confidential information does not constitute a violation of paragraph (c) if the lawyer has made reasonable efforts to prevent the access or disclosure. 27

28 Confidentiality in the Cyber-age Just be Reasonable 28

29 Cybersecurity 29

30 Reasonableness Factors Sensitivity of the information Likelihood of disclosure if additional safeguards are not employed Cost of employing additional safeguards 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) 30

31 Threats and Best Practices Social Media Cloud Services Personal Devices 31

32 Disclosures to Co-Defendants Community of Interest Joint Representation 32

33 Privilege Legend PRIVILEGED AND CONFIDENTIAL 33

34 Elements of the Privilege A communication Made between privileged persons In confidence For the purpose of obtaining or providing legal assistance for the client 34

35 Business v. Legal Advice [I]f in-house counsel is involved, the presumption is that the attorney's input is more likely business than legal in nature. As a result, most of these courts apply heightened scrutiny to communications to and from inhouse counsel in determining attorney-client privilege. Kincaid v. Wells Fargo Securities, LLC, 2012 WL (N.D. Okla. 2012), at *2. 35

36 Improving the Odds Use attorney s legal title rather than managerial title Include privilege legend, e.g., Privileged and Confidential Identify communication as legal advice or a request for it 36

37 Improving the Odds You have asked for legal advice on... In order to render legal advice to the company on the Maxwell project, I need... Because your current project implicates a number of legal issues, I am requesting your input on... 37

38 Improving the Odds Use attorney s legal title rather than managerial title Include privilege legend, e.g., Privileged and Confidential Identify communication as legal advice or a request for it Designate attorney as primary recipient, not a cc. Do not cc other employees unless necessary Clearly articulate the legal purpose of communications Frame facts and business aspects in the context of legal issues Avoid mixing legal and business questions 38

39 Improving the Odds... meeting with him in order to give legal advice to the Company, that our meeting was subject to the Company s attorney-client privilege, and that the Company customarily asserted the privilege over attorneyclient communications, but it was the Company s decision whether to do so here. I told him that he should treat our discussion as confidential. 39

40 In-House Counsel Privilege Internationally Country In-House Privilege? Australia China European Union France Germany India Japan South Korea Mexico Russia Turkey United Kingdom Yes Same basic rules as for outside counsel No No No Follows EU law No Follows EU law No Cannot practice as Advocates Yes Same basic rules as for outside counsel Yes If admitted to Korean Bar Yes Same basic rules as for outside counsel No But cannot disclose confidences to third parties No In-house lawyers not independent Yes Same basic rules as for outside counsel 40

41 Work Product Doctrine Protects from discovery documents or material things prepared: In anticipation of litigation or for trial; and By or for a party or by or for a party s representative 41

42 Work Product Doctrine Attorneys mental impressions receive greater protection 42

43 Work Product Doctrine I interviewed Mr. Trainwreck in anticipation of litigation regarding the [subjects discussed]. This memo does not reflect a verbatim transcript of our discussion, but rather reflects my legal judgment and mental impressions, including my selection of the legally salient parts of our conversation. 43

44 Your Obligation Seal up your lips, and give no words but mum: The business asketh silent secrecy. Henry VI, Part II, Act I, Scene 2 44

45 Questions & Discussion 45

46 Speaker Biographies William Bosch (Partner, Arnold & Porter Kaye Scholer) is an accomplished trial lawyer whose practice is largely focused on the representation of real estate owners and developers, as well as high-end funds that invest in real estate projects. He leads the firm s Real Estate Litigation practice and co-leads the firm's interdisciplinary Hospitality practice. Mr. Bosch has handled precedent-setting litigation and arbitration across the United States and internationally involving valuation issues, the enforcement and termination of hotel management agreements (including disputes involving most of the major hotel operators), complex lease structures, development agreements, and issues of fraud and racketeering, breach of contract, fiduciary duty, accounting, cost allocations, unfair trade practices, personal services, and agency. He also formulates and executes strategic plans to help clients navigate commercial and intellectual property challenges across a range of other industry sectors, including life sciences, IT, financial services, and consumer products. Thomas Indelicarto (Executive Vice President, General Counsel and Secretary, VeriSign Inc.) leads the law department in providing legal advice and services, as well as corporate secretarial support, to Verisign including the Board of Directors. Tom has held various positions within Verisign s law department since January Prior to that, he worked in private practice at law firms in Washington, DC and Pennsylvania, and before that he was a US Army officer for nine years. He holds a JD from the University of Pittsburgh and a BS from Indiana University of Pennsylvania. Robert Weiner (Partner, Arnold & Porter Kaye Scholer) has significant experience as a trial lawyer, appellate advocate, and legal strategist in complex litigation. He is skilled in developing creative legal approaches to bring cases to a quick, cheap, and successful resolution. Rob s long experience representing business and sovereign clients in litigation, and his three tours of duty as a government lawyer, have honed his ability to deal with the regulatory, tactical, and constitutional issues arising when the federal government is, or may become, a party in litigation. From , he was Associate Deputy Attorney General at the US Department of Justice, where his principal responsibility was to oversee the defense of the Affordable Care Act. He also handled sensitive negotiations with a foreign government involving bank secrecy, and dealt with or headed-off difficult issues across the range of the Department s matters. He also has served as Senior Counsel in the White House Counsel s Office, and as an Associate Independent Counsel. 46