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August-15-Meeting-Attorney-Client-Privilege

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					    EFFECTIVE IN-HOUSE
   COMMUNICATIONS AND
 PRESERVING THE PRIVILEGES

               Presented By:   John Eldridge
                                Haynes and Boone, LLP
                                (713) 547-2229
                                       and
                                Chris Chaffin
                                BMC Software


August, 2006
                                                        1
               PRIVILEGES
                (FRE 501)

• Attorney Client (Tx Rule 503)
• Work Product Doctrine (TRCP 192)
• Against Self-Incrimination (5th Amendment)
• Husband – Wife (Tx Rule 504)
• Communications to Clergy (Tx Rule 505)
• FRE 501
• Statutory Basis (States) and Common Law Basis
  (Federal)
• In Diversity Cases, State Law
                                                  2
General Overview of the Attorney-
 Client Communication Privilege
    In order to establish the attorney-client
    communication privilege , there must be a:
•   Communication
•   between a Lawyer
•   and Client
•   that was Confidential
•   and remained Confidential
•   for the purpose of seeking or giving Legal Advice,
    not business advice.

                                                         3
Who is the Lawyer?




                     4
           Who is the Lawyer?
•   Rule 503
•   Corporate Counsel
•   Corporate Counsel, Licensed in any State
•   Foreign Attorneys
•   Outside Counsel




                                               5
         Who is the Lawyer?
• Rule 503 of the Texas Rules of Evidence:
  A “lawyer” is a person authorized, or
  reasonably believed by the client to be
  authorized, to engage in the practice of law
  in any state or nation.



                                                 6
           Who is the Lawyer?
    Agents or “Representatives” of the Attorney

•   Accountants
•   Investigators
•   Consultants
•   Patent Agents
•   Special Counsel
•   Paralegals



                                                  7
         Who is the Lawyer?
• A “representative of the lawyer” is:
  (A) one employed by the lawyer to assist
  the lawyer in the rendition of professional
  legal services; or
  (B) an accountant who is reasonably
  necessary for the lawyer‟s rendition of
  professional legal services

                                                8
In-House Counsel as Client
       or Attorney




                             9
        Business Advice versus
            Legal Advice

• Where in-house counsel is also involved in the
  business matters of the company, e.g. as an
  officer of the company, the company must show
  that the advice was given when the lawyer was
  wearing the lawyer’s hat


                                              10
        Negotiating a Contract
• When in-house counsel is negotiating a contract,
  privilege not likely
• Negotiation is viewed more as business function
• Case specific decisions by courts
• Use outside counsel or have a business person
  involved in the negotiation
• Prepare a memo describing roles of the
  participants



                                                     11
            Who is the Client?
•   Rule 503
•   Agents or Representatives of the Client
•   Employees
•   Consultants & Independent Contractors
•   Accountants
•   Appraisers
•   Insurance Agents




                                              12
           Who is the Client?
• Rule 503 of the Texas Rules of Evidence
  A “client” is a person, public officer, or
  corporation, association, or other
  organization or entity . . . who is rendered
  professional legal services by a lawyer, or
  who consults a lawyer with a view to
  obtaining professional legal services from
  that lawyer.
                                                 13
          Who is the Client?
• A “representative of the client” is:
  (A) a person having authority to obtain
  professional legal services, or to act on
  advice thereby rendered, on behalf of the
  client; or
  (B) any other person who, for the purpose
  of effectuating legal representation for the
  client, makes or receives a confidential
  communication while acting in the scope of
  employment for the client.
                                             14
Not all Corporate Employees
        are “Clients”

* Corporate clients can share their knowledge
  of legal advice under some circumstances
  with other employees.


* Dissemination of legal advice beyond those
  who “need to know” may waive the
  privilege.

                                                15
       Corporate Employees
– “Control Group” rejected by Supreme Court –

– Texas Rule 503

– “Subject-matter Test”
   • The Control Group test was arbitrary.
   • “Need to Know” is appropriate guideline

– Restrict distribution of sensitive material

                                                16
           Consultants and
       Independent Contractors
• Is disclosure of attorney client communication
  “reasonably necessary” in order to inform the attorney
  of all pertinent facts.

• Insurance Agent
• Accountant
• Appraiser



                                                       17
    Inter-Corporate Communications
• Legal advice disseminated to wholly owned
  subsidiaries held not to be a waiver
• Parent corporation and subsidiaries share a unity of
  interest such that the parent (as well as the
  subsidiary) is the „client‟ for purposes of the
  attorney-client privilege
• Documents from subsidiary‟s in-house counsel to
  parent‟s in-house counsel, prepared for the purpose
  of obtaining legal advice or opinions, are
  privileged communications between client and
  attorney or as communications among counsel
                                                     18
      Common Interests
• “Joint Defense” privilege
• Rule 503 of the Texas Rules of Evidence:
  Confidential communications between a
  client or lawyer and another lawyer
  representing a party in a pending action and
  concerning a matter of common interest.


                                             19
          Common Interests
  (Joint clients who later become adverse)
• Rule 503 of the Texas Rules of Evidence
  provides that “there is no privilege as to
  communications relevant to a matter of
  common interest between or among two or
  more clients if the communication was
  made by any of them to a lawyer retained or
  consulted in common, when offered in an
  action between or among any of the
  clients.”
                                            20
       What is a Confidential
        Communication?
• Rule 503 of the Texas Rules of Evidence:
  A communication is “confidential” if not
  intended to be disclosed to third persons
  other than those to whom disclosure is made
  in furtherance of the rendition of
  professional legal services to the client or
  those reasonably necessary for the
  transmission of the communication.
                                             21
  Confidential Communication?
• Communications often privileged if joint
  defense, but not if business enterprise
• Former employees - - may reveal
  information to others (e.g., new employer);
  treated as failed waiver
• Communications with auditors generally
  not privileged
• Presence of other people
                                                22
    What Communications are
          Privileged?

• Non-Confidential Information Provided to
  Attorney
  – Information that is not privileged when communicated
    to the attorney does not become privileged merely
    because it is communicated to an attorney
• Privilege Attaches to the Communication Itself
  – The privilege does not attach to the facts communicated,
    it attaches to the communication itself

                                                           23
    What Communications are
          Privileged?
• Transacting the General Business of the
  Company
  – Routine, non-privileged communications
    between employees transacting the general
    business of the company do not attain
    privileged status merely because an attorney is
    “copied” on the correspondence or memoranda


                                                  24
      What Communications are
            Privileged?
•   Client’s Recording of Facts
•   Business Advice vs. Legal Advice
•   Legal Advice Discussed by Clients
•   Patent Work



                                        25
  What Communications are
        Privileged?
•Drafts prepared by counsel or circulated to
counsel for legal advice are privileged if for the
purpose of giving or obtaining legal advice.
• If draft is provided to a third party, no
privilege.
• If draft is not in connection with litigation it is
not Work Product. Can only claim Attorney
Client Privilege.
                                                     26
  The Work Product Exemption
• Rule 192.5 of the Texas Rules of Civil
  Procedure defines Work Product:

  (1) Material prepared or mental impressions
  developed in anticipation of litigation or for
  trial by a party or a party’s representatives,
  including the party’s attorneys, consultants,
  sureties, indemnitors, employees, or agents;
Or


                                                   27
  The Work Product Exemption
• Rule 192.5
Or
  (2) a communication made in anticipation
  of litigation or for trial between a party and
  the party‟s representatives or among a
  party‟s representatives, including the party‟s
  attorneys, consultants, sureties, indemnitors,
  insurers, employees or agents.

                                               28
Examples of Documents that are
     Not Work Product
• Topic outline prepared by in-house counsel
  for an oral presentation.
• Consultant documents submitted to
  regulatory authorities
• Materials prepared in the ordinary course of
  business or pursuant to public requirements
  unrelated to litigation.

                                             29
 Examples of Documents that are
      Not Work Product
• Draft contract prepared by transactional
  attorney
• Internal memorandum from one attorney to
  another reviewing transaction for client
• Attorney notes made before litigation was
  contemplated

                                              30
Examples of Documents that are
     Not Work Product
• Litigation Disclosures concerning experts,
  trial witnesses, witness statements,
  contentions
• Trial exhibits
• Identification of potential parties and
  potential witnesses
• Photographs to be offered into evidence
Rule 192.5 of the Texas Rules of Civil Proc.
                                               31
     Examples of Work Product
• Attorney notes from interview of witness in
  anticipation of litigation or in connection with
  litigation
• Documents prepared in connection with litigation
  that has concluded.




                                                     32
 Ethical Issues – Texas Disciplinary
              Rule 1.05
• “Confidential Information” includes “privileged
  information”
• Rule refers to FRE 501, TRE 503
• Lawyer obligated not to reveal confidential
  information, except:
   –   when authorized by client
   –   when client consents
   –   to client representatives
   –   to comply with Court orders
   –   to prevent crime or fraud (by client)

                                                    33
           Electronic Data and
            Communications
•   Same rules apply as to paper documents
•   Identify attorneys
•   Identify all recipients
•   Be careful to designate as confidential
•   Encryption
• Limit distribution
• Segregate factual information

                                              34
          Protecting E-mails
• Use an appropriate subject line referencing
  the litigation or subject matter
• Write your emails like you would a letter
  instead of like a phone call
• If your client‟s email could be read out of
  context, clarify your client‟s email in your
  response

                                                 35
   Protecting Emails, continued

• Use language that clearly shows you are
  providing advice or responding to a request
  for advice
• Limit the dissemination of your email and
  advise your client not to forward emails
  from attorneys to non-attorneys or to non-
  employees.
• Be careful to reply to the correct email, not
  the email that was attached
                                                  36
           Waiver of the Privilege
• Intent -
   – If communication was intended to be communicated to a third party, it
     will not be protected by the attorney-client privilege
• Voluntary/Consensual Disclosure -
   – if the holder of the privilege, i.e. a client representative, voluntarily
     discloses or consents to disclosure of any significant part of a
     communication, the privilege is waived
• Subject Matter v. Communication -
   – Disclosing a subject discussed with an attorney does not waive the
     privilege; waiver occurs if the person discloses part of the
     communication itself
• Selective Disclosure
   – Disclosure of part of a privileged communication may waive the
     attorney-client privilege as to the whole communication
                                                                                 37
          Electronic Discovery
• New Federal Rules (12/06) will address some
  issues on privilege (Rules 26, 16)

• Costs of E-Discovery can be huge

• Parties should agree about privilege claims (e.g.,
  that inadvertent disclosure can be reviewed)




                                                       38
     Making it Easier to Claim
            Privilege
• Inform your clients of the rules
• Mark your privileged communications as
  privileged.
• Don‟t mark your non-privileged
  communications as privileged
• Make sure you include a signature block
  with information that shows you are an
  attorney
                                            39
        Internal Investigations
• Highly sensitive information – need to establish
  privilege and work product protections
• Voluntary waiver by corporations is more frequent
  (DOJ guidelines regarding corporation)
• Waivers can lead to private litigation and
  “torched” employees
• Selective waiver not favored by courts


                                                  40
          International Issues
• Privileges not as robust in most other
  countries
• Europe accords protections primarily to
  outside counsel, not inside, but this could be
  changing
• Difficult for in-house counsel to count on
  confidentiality in Europe

                                               41

				
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