Sunday, June 26, 2005
The American Bar Association formed a Task Force on the Attorney-Client Privilege in response to the recent push by the Department of Justice and federal regulatory agencies, primarily the SEC, in demanding that corporations which are the subject of criminal and civil investigations waive their attorney-client privilege and the protections afforded by the work product doctrine and turn over the results of their internal investigations. Of particular concern has been the DoJ's Thompson Memorandum on the principles regarding whether to charge a corporation with a crime, which views waiver of the confidentiality protections as an important sign of the corporation's cooperation in the investigation. The ABA has expressed concern that this will lead to an erosion of the confidentiality protections afforded to the attorney-client relationship. The Task Force Report (here) notes one effect of this perceived erosion:
The Task Force heard consistently the concern that from the perspective of a corporation faced with a legal problem, the willingness to retain counsel and confide candidly and truthfully in counsel will be reduced because of the risk that government agencies, subject to scant internal standards, safeguards and guidelines, may later demand and obtain access to confidential communications with counsel, thereby in turn making those communications accessible to private litigants. Some submit that the perception that corporate lawyers have been, in effect, "deputized" by government agencies to develop evidence for those agencies’ use will not only discourage disclosures but will undermine the trust and confidence in counsel that have historically been recognized as fundamental to an effective attorney-client relationship.
I wonder whether this perception by corporate counsel (in-house and law firms) is in fact what is going on in corporations. If corporate officers are avoiding making disclosures to counsel, then there's no way to know about that because there has been no communication on which to base the perception. The criticism may also miss the mark because corporations are not individuals who can always control the flow of information to an attorney. Corporations communicate with counsel through a number of different officers, and it is unlikely that all would decide to withhold important information at once, unless there were a broad conspiracy of silence to keep counsel in the dark about particular transactions. If that were the case, then it would likely mean the corporation is going down the road to a potentially criminal course of conduct. Whether counsel can stop a concerted effort to violate the law is a difficult question.
The Task Force's Recommendations (here) are so vague that they communicate little to the government beyond a broad admonition to tread lightly. Here's the second recommendation:
FURTHER RESOLVED, That the American Bar Association believes that, although the protections arising from the attorney-client privilege and work-product doctrine may be voluntarily waived in particular instances by the holders of the protections, waiver should occur only under circumstances that do not erode those protections . . .
In other words, waiver should occur only when it is not bad, and waiver should not occur when it is bad. This is hardly an effective position to advocate to the DoJ, which would probably happily accede to such a resolution and state that prosecutors will be scrupulous in avoiding any erosion of the privilege. But that's the whole point, that the Thompson Memo's policy is undermining the privilege and work product doctrine, not just particular instances of waiver. (ph)