Moderator BT Atkinson Partner Nelson Mullins Charlotte Panelists Tom Hooper Partner Nelson Mullins Charlotte and Cory Manning Partner Nelson Mullins Columbia SC ACC CLE March 10 2016 ID: 630809
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Attorney-Client Privilege: Pitfalls and Pointers for Transactional Attorneys
Moderator: B.T. Atkinson (Partner, Nelson Mullins, Charlotte)Panelists: Tom Hooper (Partner, Nelson Mullins, Charlotte) and Cory Manning (Partner, Nelson Mullins, Columbia, SC)ACC CLE March 10, 2016
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Attorney-Client Privilege: Pitfalls and Pointers for Transactional Attorneys
Attribution: The title of this presentation was taken from a helpful article in the ABA's Business Law Today in 2008. That article can be found at https://apps.americanbar.org/buslaw/blt/2008-03-04/sweigart.shtml. The presentation will build and expand upon some of the concepts discussed in this article.
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Attorney-Client Privilege: Definition
Four elements:A communicationBetween attorney and clientMade in confidenceFor the purpose of seeking, obtaining, or providing legal advice
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A Communication
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Attorney-Client Privilege: A communication
A communication (from attorney or client) may be oral or written.Gestures (such as a nod from a client) can be considered a communication.Attorneys' notes memorializing confidential conversations and meetings with clients are communications subject to protection under the privilege.Content of documents controls—Would disclosure of document reveal substance of client's confidential communication?
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Attorney-Client Privilege: A communication
Communications not within the privilege:FactsExistence of attorney-client relationshipIdentity of a clientFact and reasons why attorney was retained
Foundational matters: who, what, when, how long
Fee arrangements generally not protected
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Between Attorney and Client
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Attorney-Client Privilege: Between attorney and client
Attorney-client relationship must exist for privilege to attach.Relationship can be express or implied.The client is a person or entity intended to be the recipient of legal advice—the purpose of the relationship defines it.Generally, client's subjective understanding governs whether there is a relationship.
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Attorney-Client Privilege: Between attorney and client
Corporations can be clients.Upjohn Test: Not a specific test to determine the limits of privilege.Instead: List of factors used in determining whether privilege applies.
North Carolina recognizes this test.
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Attorney-Client Privilege: Between attorney and client
Upjohn Test: ElementsIs the information needed to supply legal advice?Did communications fall within employee's corporate duties?Did employee know he/she was being questioned so corporation could obtain legal advice?
Was communication intended to be confidential?
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Attorney-Client Privilege: Between attorney and client
Other Test(s): "Control Group" TestUnder this test, only upper level management is considered a client for purposes of the attorney-client privilege. Communications by lower-echelon employees to corporate counsel are unprotected.Still recognized in some states. See, e.g.
, Illinois.
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In Confidence
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Attorney-Client Privilege: In confidence
Made within an attorney-client relationship.Made with expectation of confidentiality.
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Attorney-Client Privilege: In confidence
Inter-corporate communications that go through numerous employees do not defeat the "in confidence" requirement.Communications with third-party experts hired to assist attorneys in providing legal advice to the corporation are considered "in confidence" if they concern the subject matter of the intended legal advice.Other third-party communication also can be protected under theory of Common Interest or Joint Defense.
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For the Purpose of Seeking or Providing Legal Advice
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Attorney-Client Privilege: For the purpose of seeking/providing legal advice
A privileged communication must have been made for the primary purpose of obtaining legal advice or services from an attorney.An implicit request for legal advice is sufficient.Non-legal business information conveyed to attorneys to "keep them informed" is normally not subject to privilege protections.
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Attorney-Client Privilege: For the purpose of seeking/providing legal advice
The Corporate or In-House Lawyer:Corporate or in-house lawyer acting in a legal-advisor capacity with respect to the corporation will have the privilege protection for his or her communications.But if corporate or in-house lawyer is acting in a business-advisor capacity with respect to the corporation, then the privileged nature of those communications is called into question.
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Attorney-Client Privilege: For the purpose of seeking/providing legal advice
The Corporate or In-House Lawyer:Corporate or in-house lawyer often wears two hats: a business hat and a legal hat. Which one is critical to the privilege question.For example, whether a privilege will apply in a transactional setting is dependent upon whether the transactional lawyer is deemed to be functioning solely or primarily as a business advisor rather than a legal advisor.
In general, a lawyer performs primarily as a business advisor when services provided by the lawyer are separate from legal issues and could have been provided by a non-lawyer.
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Attorney-Client Privilege: For the purpose of seeking/providing legal advice
The Corporate or In-House Lawyer:Courts look to the "dominant purpose" of communication(s) to determine whether the attorney-client privilege applies.
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Attorney-Client Privilege: For the purpose of seeking/providing legal advice
Dominant Purpose Discussion: Attorney as . . .Document Drafter—drafts not automatically protectedDocument Repository—no protection simply because sent to or kept by the attorneyCorporate Committee Member—careful not to blend
Business Advisor—Where is the line? Business advice alone not privileged.
Business Agent—Easier question than advisor
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Attorney-Client Privilege: For the purpose of seeking/providing legal advice
Dominant Purpose Discussion (Con't): Attorney as . . .Negotiator—is legal component of negotiation sufficient enough to predominate?Consultant—legal capacity?Lobbyist—such activities don’t become privileged because done by a lawyer.
Investigator—investigation conducted in ordinary course of business? For rendering legal advice?
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Waiver
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Attorney-Client Privilege: Waiver
Privilege belongs to the client and not the lawyer; only client can waive privilege.Presence of third parties creates waiver opportunities.Waiver can result from careless, unintentional, or inadvertent actions.
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Attorney-Client Privilege
Questions/Discussion
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Contact Information
B.T. Atkinson: (704) 417-3039bt.atkinson@nelsonmullins.com
Tom Hooper: (704) 417-3107
tom.hooper@nelsonmullins.com
Cory Manning: (803) 255-5524
cory.manning@nelsonmullins.com
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