Establishing Attorney-Client Privilege Within Your Own Firm – Part 2

Learning some lessons from the recent Hunter Maclean v. St. Simons Waterfront appeal.

How do you protect your internal firm communications from discovery in a legal malpractice case? The recent Hunter Maclean opinion by the Georgia Court of Appeals provides at least a little direction after so many courts around the country have issued differing opinions.  Part 1 of this article presented some background information along with suggested ways to avoid conflicts of interest.

In Part 2, we look at the authoritative materials utilized by the Court of Appeals, as they provide tactics for effectively separating the client from the conflict.

Suggested Steps for Establishing Attorney-Client Privilege

In remanding the case to the trial court with instructions, the Georgia Court of Appeals relied upon two law review articles about establishing attorney-client privilege (ACP) between the general counsel (GC) and the firm. Here are some suggested tactics for creating an ACP with the firm’s internal GC and, therefore, protecting communications from disclosure to the suing client:

• Formally designate internal counsel. Whether by position, title or committee, the “attorney” side of the attorney-client privilege must be clearly delineated.
• Do not mix lawyers. Segregate lawyers providing the advice to the client with those lawyers receiving it so the “client” side of the attorney-client privilege is equally demarcated.
• Bill internal counsel’s time. Make it clear that the firm itself is the client for the advice rendered by the GC.  At least create a separate billing number and file.
• Keep it confidential. Give (and keep) advice in a confidential setting like you generally maintain for attaching and preserving the privilege with regular clients.
• Communicate. Inform appropriate firm employees about potential conflicts and the need to cooperate, while reiterating the importance of confidentiality.

The Georgia Court of Appeals makes it clear that the firm’s GC cannot avoid the conflict of interest if the GC has represented the complaining client in any capacity. Treat your GC as the functional equivalent of corporate in-house counsel, where communication with employees is considered privileged. If you have no GC or utilize ad hoc GCs (delegate matters to specific attorneys inside or outside the firm), you will need to show that an attorney-client relationship was established between the firm and ad hoc GC before the in-firm communications occurred.

The best decision may still be to contact outside counsel. Think about when you notify your E&O carrier of a potential legal malpractice incident or claim and receive the name of possible defense counsel. Those communications with outside defense counsel are protected.  Prior to notifying your carrier, hiring your own outside GC may be the only way to fully ensure internal communications are protected.

Stay tuned. There will likely be an appeal to the Georgia Supreme Court by one or both sides of the litigation, and who knows what will happen then.  At least we learned something from the case as it stands today.

For those of you with Daily Report subscriptions, you can read about the case here: http://www.dailyreportonline.com/PubArticleDRO.jsp?id=1202564095975&slreturn=20120728101844

The opinion authored by Judge Dillard can be found here: http://pdfserver.amlaw.com/dailyreport/Editorial/PDF/HUNTERMACLEANEXLEYDUNN.pdf