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Attorney-client privilege in corporate settings

Communications with an attorney are privileged. No one other than the attorney’s client has authority to disclose them, and in all but the rarest cases, no one can compel that disclosure. 

But there are also limits to the attorney-client privilege that can create pitfalls for the unwary in a business setting. Here are two important considerations for business leaders to keep in mind when retaining and interacting with legal counsel.

Privilege applies only to legal advice

One common misconception is that anything someone says with their lawyer present is privileged. Business leaders sometimes make the mistake of thinking, for example, that an email chain is privileged so long as they always CC or BCC an attorney on it. 

Not so. Attorney-client privilege applies only to communications with an attorney in which a client seeks or receives legal advice. Inviting a lawyer to every meeting, or copying a lawyer on every email, will only shield those discussions if they at least implicitly (and preferably explicitly) call for the lawyer’s legal input. 

Similarly, the mere fact that a corporate executive is a licensed attorney does not bestow a blanket privilege on all of that executive’s internal communications. That’s especially so if the executive’s role within the business is not as its attorney, but even the communications of an inside general counsel who also functions as a purely commercial decision-maker may not always have privilege protection. 

Corporate general counsel represent corporations, not individuals

Another common pitfall is mistaking a corporate general counsel as a personal attorney or blurring the lines between the two. This can easily happen in a business with a relatively small leadership team in which the general counsel is an active participant.

It’s important to remember, however, that a corporate general counsel’s obligations run to the corporation and its shareholders, not to individual executives. It’s risky for a business leader to ask corporate general counsel for personal legal advice, and for general counsel to give it, when it comes to any matter in which the individual’s interests may not align with the corporation’s. 

If a corporation faces a circumstance in which its interests and those of members of its leadership team diverge, everyone should ideally retain separate outside counsel. This can occur, for example, when a corporation engages in a commercial transaction with an entity owned or controlled by one of its executives or faces litigation in which both the corporation and its individual executives are named as defendants.