Protecting the Attorney-Client Privilege in Corporate Compliance Matters

Compliance Today September 2018

Richard W. Westling, Member of the Firm in the Health Care & Life Sciences and Litigation practices, in the firm’s Nashville and Washington, DC, offices, and Clay T. Lee, Associate in the Health Care & Life Sciences practice, in the firm’s Nashville office, co-authored an article in the HCCA’s Compliance Today, titled “Protecting the Attorney-Client Privilege in Corporate Compliance Matters.”

Following is an excerpt (see below to download the full article in PDF format):

For more than a decade, the corporate attorney-client privilege has been eroding. The nature of the corporate privilege — belonging to an entity that is only able to conduct business through the collective actions of individual directors, managers, or employees — seemingly makes government enforcers and, in some cases, the courts uneasy. This reaction likely results from a sense, whether justified or not, that the privilege is used, all too often, to shield questionable corporate activities from government scrutiny.

The attorney-client privilege is the oldest privilege. It protects confidential communications, and applying it to the traditional relationship of an individual client and his/her attorney is relatively straightforward. In contrast, in the corporate setting, applying the privilege and determining its contours can be complex, because the privilege can potentially cover communications across a large group of individuals and often involves attorneys who work directly for the entity and provide regular legal and business advice. As one court has noted:

It is often difficult to apply the attorney-client privilege in the corporate context to communications between in-house corporate counsel and those who personify the corporate entity because modern corporate counsel have become involved in all facets  of the enterprises for which they work. As a consequence, in-house legal counsel participates in and renders decisions about business, technical, scientific, public relations, and advertising issues, as well as purely legal issues. 

Whether the skepticism about the corporate attorney-client privilege is justified or fair, it is a reality for corporations, their in-house attorneys, compliance officers, and outside counsel. It has become commonplace for the government and other litigants to challenge corporation’s assertion of corporate attorney-client privilege or to argue that privilege has been waived or otherwise abrogated. Given this practical reality, vigilence in protecting the privilege is more important than ever.