The good news for in-house counsel is, per Upjohn Co. v. U.S., 449 U.S. 383 (1981), the attorney-client privilege exists between corporate counsel and their employers/clients. The bad news is, it’s not always easy to assert the privilege in the real world.
“When I first started in-house, the roles were much more segregated. Businesspeople would walk into the in-house counsels’ office and say ‘We’re doing this project, and there’s a legal issue we want you to look at,” said Patricia M. Whaley, general counsel for Rexnord LLC in Milwaukee. “Now we’re brought in much earlier in the process, and they really look to us to be a business partner.”
It’s great to wear both a business and legal hat, she added — you’re that much more valuable to the company, plus it’s more fun, challenging and fulfilling.
But making it clear which hat you’re wearing can become tiresome, according to Jerome D. Okarma, general counsel at Johnson Controls Inc. in Milwaukee.
“It’s tough. Clients do not want us saying, ‘Now I’m putting on my legal hat so whatever I’m saying is privileged.’ It gets old about the second time you say it. They don’t want the whiplash of, ‘Now Jerry’s got this hat or whatever hat on.’ They’re looking for a combination of business and legal advice from me,” he said.
It’s especially tricky the higher up you are in the chain of command, Okarma adds. It’s something an entry-level attorney in a large, in-house legal department probably doesn’t have to think about nearly as often as the person heading the department.
Training is critical
For starters, when you first take on the in-house role, get used to the notion that you’ll constantly be making risk assessments about when you’d want the privilege to apply. It’s a new and different mindset if you’re coming from private practice, said Lisa Martinez, corporate counsel at Bucyrus International Inc. in South Milwaukee.
Whaley said she has taught herself to be very cautious in the way she phrases oral and written communication. She’ll begin expressing her views with, “From the legal perspective,” or, “The legal risks are …”.
Others need training as well. Maurice D. Jones, general counsel of the Manitowoc Company in Manitowoc, said the training of his nonlawyer colleagues has been so thorough that it’s almost become second nature for them to be concerned with when they’d want a conversation to be privileged.
“It becomes familiar territory. I think business executives are aware of it, too — not just the lawyers.
Hopefully we’ve trained them well enough where they know when to be careful. I have even heard board members say, ‘This is an area where we want to preserve the privilege if we can.’”
Use Appropriate Labels
When Whaley is giving legal advice in an e-mail to executives or board members, she writes in the subject line, “Privileged attorney-client legal advice,’ or the like.
But also, returning to the point on training, Whaley said, “We explain to the business people that you can’t put ‘attorney-client privilege’ on your e-mails that you’re sending to three other people, and then later you forward to us. Because there is no attorney-client privilege unless we’re involved in the communication and providing advice. We train people so they’re not overreaching on it.”
Use Outside Counsel and Make a Record
Patricia M. Hanz of the Briggs & Stratton Corporation in Milwaukee said, “If it’s something that’s a very sensitive matter, the best way to preserve it is to bring in outside counsel.
“I make sure the people who are involved in the discussion need to be involved, from the business decision-making perspective, and I make sure the paperwork clearly documents that there was a discussion in which legal advice was provided.”