Corporate Exec’s Communications with Outside Counsel Not Privileged
A federal magistrate has ruled that a corporate officer cannot assert attorney-client privilege with the company’s outside law firm unless the officer has executed a specific engagement letter and paid the law firm out of her own funds.
The defendant argued that the outside law firm represented both the company and her in several intellectual property matters. In response to a motion, the Court held that attorney-client privilege did not protect her communications with the law firm because (i) she did not sign an engagement letter or otherwise make it clear that she sought representation in her individual capacity, (ii) she did not pay the law firm from her own accounts, (iii) the communications occurred in the presence of other corporate officers, thereby suggesting that she did not intend them to be confidential, and (iv) the contested documents did not address her individual legal interests. The Court further noted that only the company could assert privilege, which it waived as part of the proceedings.
If you are a C-suite executive confronted with litigation or a government enforcement action, make sure you know who the law firm you retain represents. To make sure you’re properly represented, execute a specific engagement letter where the firm agrees to represent you in an individual capacity. Then, pay the law firm out of your own funds, and seek indemnification later, if appropriate.
Read order here.