A Proposal for Protecting Executive Communications with Corporate Counsel after the Corporate Client Has Waived Its Attorney-Client Privilege
Gergacz, John W., Fordham Journal of Corporate & Financial Law
A corporation's communications with counsel may be protected by the attorney-client privilege.1 This privilege belongs to the corporate entity alone.2 The executives who communicate acquire no personal privilege.3
Consequently, if a corporation waives its privilege, its executives' communications become discoverable.4 Not only may those communications, thereafter, be used as evidence against the corporation, but they may also be asserted against the executive who made them.5 In a criminal investigation, for example, the corporation can strike a deal with prosecutors conditioned on full government access to corporate records, with a corresponding waiver of privilege.6 Subsequently, the executives who communicated, whether they understood the limits of corporate privilege confidentiality or not, might find that their statements formed the basis of criminal charges brought against them, as individuals.7
Executives thus face a dilemma. If they avoid cooperating with corporate counsel, they risk adverse job consequences. On the other hand, providing unreserved, frank, veracious information could leave them vulnerable if the corporation later waives its privilege. What are they to do? The law of attorney-corporate client privilege does not provide an adequate answer. This Article will suggest one.
At the outset the current law concerning executive-corporate counsel relationships will be examined. Although a personal attorneyclient privilege can arise for the executive, the conditions apply only in atypical situations.8 In most cases, the executive's dilemma remains.
Thus, a change in the law is warranted: one that provides protection for communicating executives while respecting the boundaries of the attorney-corporate client privilege. To that end, a proposal will be offered. This proposal will neither provide a separate communicating executive privilege nor will it ease the dual representation standards. Instead, this Article advocates limiting the scope of corporate privilege waiver. This limit recognizes the particular nature of corporate client privilege and the complex relationship that exists between executives and their corporate employers.
I. BRIEF OVERVIEW: ATTORNEY-CLIENT PRIVILEGE
The attorney-client privilege keeps certain otherwise relevant information from being disclosed. Its origins have been traced to Roman law and, within the common law, to Elizabethan England.9 It has always been a part of American law.10 Under the privilege, confidential communications between attorney and client are not discoverable.11 Thus, an adversary must build a case without access to the privileged information source.
Not every discussion involving an attorney and another person, however, qualifies as privileged. The often-cited United States v. United Shoe Machinery case sets forth a number of factors that distinguish privileged communications from non-privileged.12 These factors can be arranged around three elements. First, the communicators must be an attorney and a client. The attorney must be acting as a lawyer13 and the client must be seeking legal advice.14 Failure to establish either attorney or client status will disqualify the communications from attaining the privilege.15 For example, not all individuals who communicate with an attorney are considered clients. A waiter taking a lunch order is not a client, nor is a bank teller who receives a deposit. Even a witness, interviewed by counsel, falls outside the client requirement. Witnesses merely provide information. They do not do so in order to receive legal advice.16 Similarly, not every lawyer, when communicating, does so in a law-related role. A law professor might be licensed to practice in a given jurisdiction, but she communicates as a teacher while lecturing in the classroom. Further, no privilege arises when a lawyer works as an accountant.17 This lawyer would be communicating as a business adviser, not as a legal one. …