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AMERICAN BAR ASSOCIATION
TORT TRIAL & INSURANCE PRACTICE SECTION
SECTION OF BUSINESS LAW
REPORT TO THE HOUSE OF DELEGATES
RESOLUTION
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RESOLVED, That the American Bar Association urges all federal, state, tribal, territorial, and
local legislative, judicial and other governmental bodies to support the following principles that:
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(a) the attorney-client privilege applies to protect from disclosure confidential communications
between law firm personnel and their firms’ designated in-house counsel made for the purpose of
facilitating the rendition of professional legal services to the law firm (including any legal advice
provided by such counsel) in the same way as such confidential communications between law
firm personnel and the firm’s outside counsel would be protected;
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(b) any conflict of interest arising out of a law firm’s consultation with its in-house counsel
regarding the firm’s representation of a then-current client and a potentially viable claim the
client may have against the firm does not create an exception to the attorney-client privilege, at
least so long as the client is appropriately and timely informed of the potentially viable claim;
and
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(c) any “fiduciary exception” to the attorney-client privilege (for a fiduciary’s communications
seeking legal advice regarding ordinary affairs of the fiduciary office), if recognized in the
jurisdiction, should not be applied to otherwise privileged communications between law firm
personnel and the firm’s in-house or outside counsel regarding the law firm’s own duties,
obligations, and possible liabilities, even if those communications implicate the ongoing
representation of a current client.
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REPORT
I. Law Firm In-House Counsel Serve a Valuable Function.
In recent years, attorneys have faced an increasingly complex array of legal and ethical
duties arising from complicated regulatory regimes, changes in rules of professional conduct, and
heightened disclosure obligations under the Sarbanes-Oxley Act and similar legislation. The
ABA Model Rules of Professional Conduct recognize that lawyers may need to obtain
confidential legal advice about client representation.1
To guide attorneys on complex ethical issues and assist them in reaching the right
decision, in-house counsel have become fixtures at law firms.2 Indeed, many law firms have
created general counsel positions and/or formed professional responsibility committees.
Specialization among attorneys has only increased the importance of these advisers, especially
with the growth of law firms and the increasingly complex representations they undertake. The
availability of in-house legal and ethical advice, without the extra cost and inconvenience of
seeking a non-firm lawyer, benefits the firm’s clients and the legal system, as well as the lawyers
and their firms, and “may dramatically improve the quality of firms’ self-regulation.”3
The availability of in-house counsel “encourages lawyers to raise questions that they
might otherwise ignore.”4 And in-house counsel can provide assistance in navigating and
reconciling obligations, including potential disclosure obligations to the client and public, and
can provide ready advice in response to client behavior or a lawyer’s mistakes that may avoid or
alleviate harm to clients.5 As a result, the attorney-client privilege for consultations with in-house
counsel is critical to ensuring that attorneys and other law firm personnel receive the best
possible advice on complicated legal and ethical issues. It is therefore in the public interest for
the law to encourage and facilitate the use of law firm in-house counsel.
MODEL RULES OF PROF’L COND., R. 1.6(b)(4) & cmt. [9] (“A lawyer’s confidentiality
obligations do not preclude a lawyer from securing confidential legal advice about the lawyer’s
personal responsibility to comply with these rules.”) (2011); id. Rule 5.1 & cmt. [3] (recognizing
law firm procedures permitting lawyers to make confidential reports on ethical issues to
designated firm counsel) (2011). The Illinois rules are in accord. ILL. R. PROF’L COND., R.
1.6(b)(4) & cmt. [9] (2010); id. Rule 5.1 & cmt. [3].
2
Susan Saab Fortney, Law Firm General Counsel as Sherpa: Cchallenges Facing the In-Firm
Lawyer’s Lawyer, 53 U. KAN. L. REV. 835 (2005); Elizabeth Chambliss & David B. Wilkins, The
Emerging Role of Ethics Advisors, General Counsel, and Other Compliance Specialists in Large
Law Firms, 44 ARIZ. L. REV. 559 (2002); Peter R. Jarvis & Mark J. Fucile, Inside an In-House
Legal Ethics Practice, 14 NOTRE DAME J.L. ETHICS & PUB. POLICY 103 (2000).
3
Elizabeth Chambliss, The Scope of In-Firm Privilege, 80 NOTRE DAME L. REV. 1721, 1757
(2005).
4
Id.
5
See generally, id. at 1722-24.
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II. A Number of Federal District and Bankruptcy Courts Have Denied Attorney-Client
Privilege for Consultations between Law Firm Personnel and the Firm’s In-House Counsel.
Lawyers commonly consult their firms’ in-house counsel on conflict of interest and other
issues regarding obligations to current clients and on claims or potential claims by current
clients. If and when such clients later sue the law firm, it has become common for them to seek
discovery regarding the law firm’s communications with in-house counsel during the firm’s
representation of the client (by now, usually a former client).
A few federal district courts have held that the firm has no privilege for such
communications.6 Others have largely agreed, but with some qualifications.7 One has disagreed.8
The first two appellate decisions on that issue have now been rendered by the Illinois Appellate
Court, in Garvy v. Seyfarth Shaw LLP.,9 and the Georgia Court of Appeals in Hunter, Maclean,
Exley & Dunn v. St. Simons Waterfront, LLC.10 Both upheld the privilege, though the Georgia
decision is under review by the Georgia Supreme Court. The issue has now come before the
Massachusetts Supreme Judicial Court after a trial court upheld the privilege and the Oregon
Supreme Court after a trial court denied the privilege.11
III. Consultations of Law Firm Personnel Seeking Legal Services from the Firm’s
Regularly Designated In-House Counsel Should Be Privileged.
In the words of the United States Supreme Court, “the attorney-client privilege is the
oldest of the privileges for confidential communications known to the common law. It
6
E.g., In re Sunrise Sec. Litig., 130 F.R.D. 560, 595-98 (E.D. Pa. 1989); Bank Brussels Lambert
v. Credit Lyonnaise (Suisse), S.A., 220 F.Supp. 283, 287 (S.D.N.Y 2002); Koen Book Distribs.
v. Powell, Trachtman, Logan, Carrle, Bowman & Lombardo, P.C., 212 F.R.D. 283, 284-85 (E.D.
Pa 2002); Asset Funding Group, LLC v. Adams & Reese, LLP, 2008 WL 4948835, 2008 U.S.
Dist. LEXIS 96505 (E.D. La. Nov. 17, 2008); see Burns v. Hale & Dorr LLP, 242 F.R.D. 170,
172-73 (D. Mass. 2007) (following the foregoing cases to deny privilege as to beneficiary of
trust to whom law firm and its client owed fiduciary duties).
7
Thelen Reid & Priest LLP v. Marland, No. C 06-2071 VRW, 2007 WL 578989, at *7, 2007
U.S. Dist. LEXIS 17482, at *16-21 (N.D. Cal. Feb. 21, 2007); SonicBlue Claims LLC v.
Portside Growth & Opportunity Fund (In re SonicBlue Inc.), Adv. No. 07-5082, 2008 WL
170562, at *9-10,2008 Bankr. LEXIS 181, at *31, 34 (Bankr. N.D. Cal. Jan. 18, 2008). Cf.
VersusLaw Inc. v. Stoel Rives, LLP, 111 P.3d 866, 878-79 (Wash. Ct. App. 2005) (noting the
issue without making a substantive ruling).
8
TattleTale Alarm Sys. v. Calfee, Halter & Griswold, LLP, 2011 WL 382267, *4-10, 2011 U.S.
Dist. LEXIS 10412, *8-29 (S.D. Ohio Feb. 3, 2011) (rejecting cases cited in nn.6-7, supra, and
holding communications privileged).
9
Garvy v. Seyfarth Shaw LLP, 966 N.E.2d 523 (Ill. App. Ct. 2012). The same division of that
court followed its own holding in MDA City Apartments LLC v. DLA Piper LLP (US), 2012 WL
975634, 967 N.E.2d 424 (Ill. App. Ct. 2012). That case does not add significantly to the analysis,
so it will not be discussed. The Illinois Supreme Court has denied review in both cases
10
Hunter, Maclean, Exley & Dunn v. St. Simons Waterfront, LLC., 730 S.E.2d 608 (Ga. Ct.
App. 2012). The Georgia Supreme Court has granted review.
11
RFF Family Partnership v. Burns & Levinson LLP, No. SJC-11371 (Mass.); Crimson Trace
Corp. v. Davis Wright Tremaine, LLP, No. S061086 (Ore.).
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encourages full and frank communication between attorneys and clients and thereby promotes
public interests in the observance of law and administration of justice.”12 It does this “‘“by
removing the fear of compelled disclosure of information.”’”13 Recognizing a corporation’s need
to comply with a “vast and complicated array of regulatory legislation,” the Court concluded that
the privilege must extend to communications between a corporation’s in-house counsel and
individual corporate employees.14
Many courts have recognized that communications between attorneys in a law firm and
the firm’s in-house counsel are privileged.15 But, as already noted, some courts have refused to
recognize the privilege as to consultations with law firm in-house counsel with respect to the
ongoing representation of a current client, when that client later sues for malpractice and seeks
discovery.
The ABA strongly supports the preservation of the attorney-client privilege and work
product doctrine as essential to maintaining the confidential relationship between client and
attorney required to encourage clients to discuss their legal matters fully and candidly with their
counsel so as to (1) promote compliance with law through effective counseling, (2) ensure
effective advocacy for the client, (3) ensure access to justice and (4) promote the proper and
efficient functioning of the American adversary system of justice.16 ABA policy also “supports
the principle that the attorney-client privilege for communications between in-house counsel and
their clients should have the same effect as the attorney-client privilege for communications
between outside counsel and their clients.”17 These principles should apply to protect the
confidential communications between law firms and their in-house counsel to the same extent
that such communications are protected as between law firms and their outside counsel.
IV. Seeking Prospective Advice Regarding the Law Firm’s Legal or Ethical Obligations
and Future Conduct Does Not Create any Conflict, Nor Does It Require Consultation with
or Consent by any Current Client Whose Ongoing Representation May Be Implicated.
Cases which abrogate the privilege for law firm consultations with in-house counsel
assume that the law firm creates a conflict when it consults its in-house counsel with respect to
an ongoing representation of a client.18 But that is not true as to all such consultations, so even if
12
Upjohn Co. v. United States, 449 U.S. 383, 389 (1981) (citation omitted).
Fischel & Kahn, Ltd.. v. Van Straaten Gallery, 727 N.E.2d 240, 243 (Ill. 2000).
14
Id. at 392.
15
E.g., United States v. Rowe, 96 F.3d 1294 (9th Cir. 1996); Hertzog, Calamari & Gleason v.
Prudential Ins. Co. of Am., 850 F. Supp. 255, 255 (S.D.N.Y. 1994).
16
ABA, 2005 Report with Recommendation #111 (Policy adopted Aug., 2005), available at
http://www.americanbar.org/content/dam/aba/directories/policy/2005_am_111.authcheckdam.pd
f
17
ABA, 1997 Report with Recommendation #120 (Policy adopted Aug., 1997) (“ABA 1997
Report”), available at
www.americanbar.org/content/dam/aba/directories/policy/1997_am_120.authcheckdam.pdf,
Report at 2-3, quoting Georgia Pacific v. GAF, 93 Civ. 5125, 1996 U.S. Dist. LEXIS 671, *1011 (S.D.N.Y. 1996).
18
See E-Pass Technologies, Inc. v. Moses & Singer, LLP, 2011 WL 3794889, *3, 2011 U.S.
Dist. LEXIS 96231, *9-10 (N.D. Cal. Aug. 26, 2011) (denying privilege on ground that firm had
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a conflict were considered to preclude privilege, that preclusion would not apply to all
consultations during a representation.
Both the ABA and the New York State Bar Association have concluded that consultation
with law firm in-house counsel about a current representation involves no inherent conflict of
interest. As the ABA Standing Committee on Ethics and Professional Responsibility has
explained:
A lawyer's effort to conform her conduct to applicable
ethical standards is not an interest that will materially limit the
lawyer's ability to represent the client. On the contrary, "it is
inherent in that representation and a required part of the work of
carrying out the representation. It is, in other words, not an interest
that 'affects' the lawyer's exercise of independent professional
judgment, but rather is an inherent part of that judgment." For
example, a lawyer who is asked by a client to undertake a course of
action that the lawyer fears might be criminal or fraudulent would
be well-advised to consult with in-house ethics counsel on the
propriety of following the client's direction. Although the lawyer
has an interest in avoiding conduct that will violate her own ethical
duties, the consultation also serves the legitimate purpose of
enabling the lawyer to advise a firm client about the legality and
wisdom of the proposed course of action and about other available
options. In situations such as this, where the lawyer is seeking
prophylactic advice to assist in her representation of the client,
there is no significant risk that the lawyer's ability to consider,
recommend, or carry out an appropriate course of action for the
client will be materially limited by the lawyer's interest in avoiding
ethical misconduct.19
a conflict in separately representing itself on sanctions motion directed at both firm and client);
Asset Funding Group, LLC v. Adams & Reese, LLP, 2008 WL 4948835, *4, 2008 U.S. Dist.
LEXIS 96505, *( (E.D. La. Nov. 17, 2008) (privilege “vitiated” when “the seeking of legal
advice by one lawyer from another lawyer inside the firm ‘implicates or creates a conflict of
interest.’”); Koen Book Distribs. v. Powell, Trachtman, Logan, Carrle, Bowman & Lombardo,
P.C., 212 F.R.D. 283, 286 (E.D. Pa. 2002) (neither privilege nor work product immunity can
“shield a lawyer’s papers from discovery in a conflict of interest context.”); In re Sunrise Sec.
Litig., 130 F.R.D. 560, 595 (E.D. Pa. 1989) (“[W]hen a law firm seeks legal advice from its in
house counsel, the law firm’s representation of itself (through in house counsel) might be
directly adverse to, or materially limit, the law firm’s representation of another client, thus
creating a prohibited conflict of interest.”); SonicBlue Claims LLC v. Portside Growth &
Opportunity Fund (In re SONICblue Inc.), Adv. No. 07-5082, 2008 WL 170562, *9, 2008
Bankr. LEXIS 181, *27-28 (Bankr. N.D. Cal. Jan. 18, 2008) (relying on conflict created by
firm’s self-representation).
19
ABA STANDING COMM. ON ETHICS & PROF’L RESP., FORMAL OP. 08-453, at 2-3 (footnotes
omitted). Accord N.Y. ETHICS OP. 789, 2005 WL 3046319, at 12 (Oct. 26, 2005).
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V. A Law Firm’s Knowledge of a Current Client’s Potentially Viable Claim May Create
a Conflict with That Client and--to the Extent that the Primary Goal of Consultations with
the Law Firm’s In-House Counsel Concerns Ways of Defending Against such a Claim—the
Consultations May Implicate That Conflict
The preceding analysis applies to advice sought to determine whether a conflict has
arisen requiring the lawyer to withdraw or to seek the client’s informed consent for continued
representation. But, once the firm has concluded that a client may have a potentially viable
malpractice claim against it, the law firm must consult with the client about the implications of
that possibility and the conflict it may create for the lawyer’s continued representation. 20
As the ABA opinion summarizes:
Consent of the client is not required before a lawyer consults with
in-house ethics counsel, nor must the client be informed of the
consultation after the fact. The consultation does not give rise to a
per se conflict of interest between the firm and its client, although
a personal interest conflict will arise if the principal goal of the
ethics consultation is to protect the interest of the consulting
lawyer or law firm from the consequences of a firm lawyer's
misconduct. In that event, the representation may continue only if
the client gives informed consent.21
While, as the ABA opinion notes, a conflict may arise from efforts to protect the law firm
from the consequences of a firm lawyer’s error or misconduct, not all such efforts create
conflicts. Firm counsel may, without conflict (1) consider possible ways to correct or cure any
error or to mitigate any harm, if necessary at firm expense, (2) consider the possible full or
partial responsibility of third-party service providers, and (3) investigate and marshal the facts in
preparation for accurate disclosure to the client.
VI. A Conflict Regarding a Then-Current Client’s Potentially Viable Claim Against a
Law Firm Does Not Create an Exception to the Attorney-Client Privilege, at Least So Long
as the Client Is Appropriately and Timely Informed of the Potentially Viable Claim.
Courts piercing a law firm’s privilege for communications with its counsel have relied
significantly on existence of a conflict of interest for the in-house counsel who provides advice
to the firm, concluding that such a conflict vitiates any privilege.22 In other contexts, other courts
and the Restatement have concluded that the privilege is not impaired by such a conflict.
See, e.g., Benjamin P. Cooper, The Lawyers’s Duty To Inform His Client of His Own
Malpractice, 61 BAYLOR L. REV. 174 (2009); ABA FORMAL OP. 08-453, at 2.
21
ABA FORMAL OP. 08-453, at __.
22
See E-Pass Technologies, Inc. v. Moses & Singer, LLP, 2011 WL 3794889, *3, 2011 U.S.
Dist. LEXIS 96231, *9-10 (N.D. Cal. Aug. 26, 2011) (denying privilege on ground that firm had
a conflict in separately representing itself on sanctions motion directed at both firm and client);
Asset Funding Group, LLC v. Adams & Reese, LLP, 2008 WL 4948835, *4, 2008 U.S. Dist.
LEXIS 96505, *( (E.D. La. Nov. 17, 2008) (privilege “vitiated” when “the seeking of legal
advice by one lawyer from another lawyer inside the firm ‘implicates or creates a conflict of
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The Restatement rejects the “conflict” theory by concluding that a law firm ought to be
able to assert the attorney-client privilege against existing clients:
[a] lawyer may refuse to disclose to the client certain law firm
documents reasonably intended only for internal review, such as a
memorandum discussing whether a lawyer must withdraw because
of the client’s misconduct or the firm’s possible malpractice
liability to the client. The need for lawyers to be able to set down
their thoughts privately in order to assure effective and appropriate
representation warrants keeping such documents secret from the
client involved.23
These conclusions are supported by well-reasoned cases that have considered the effect
of a conflict on the privilege, albeit not in the context of a law firm’s counsel. A leading case is
Eureka Investment Corp. v. Chicago Title Insurance Co.24 Chicago Title had insured the title of
an apartment building Eureka wished to convert to condominiums; the insurance covered the
enforcement or attempted enforcement of certain tenants rights’ legislation. Eureka was
represented in the condo conversion by its long-time counsel, Fried Frank. Tenants obtained an
injunction and Chicago Title agreed to Fried Frank’s retention to handle the litigation, thereby
becoming a joint client with Eureka in that litigation. Chicago Title wanted to defend the
litigation, and Eureka wanted to settle and get on with the conversion. Eureka settled and sued
Chicago Title. Chicago Title contended that Eureka had breached its duty of cooperation by
colluding with Fried Frank to settle and sue Chicago Title, at a time when Fried Frank was
representing Chicago Title and owed it a duty of loyalty. It contended that the district court had
erred in sustaining privilege for Eureka’s communications with Fried Frank about settling. In
essence, it claimed that Fried Frank’s conflict of interest vitiated the privilege.
The D.C. Circuit disagreed. It framed the dispute as one regarding application of two
principles stated by Wigmore. One the one hand, “’a communication by A to X as the common
attorney of A and B, who afterwards become party opponents, is not privileged as between A and
B since there was no secrecy between them at the time of communication.’”25 On the other hand,
interest.’”); Koen Book Distribs. v. Powell, Trachtman, Logan, Carrle, Bowman & Lombardo,
P.C., 212 F.R.D. 283, 286 (E.D. Pa. 2002) (neither privilege nor work product immunity can
“shield a lawyer’s papers from discovery in a conflict of interest context.”); In re Sunrise Sec.
Litig., 130 F.R.D. 560, 595 (E.D. Pa. 1989) (“[W]hen a law firm seeks legal advice from its in
house counsel, the law firm’s representation of itself (through in house counsel) might be
directly adverse to, or materially limit, the law firm’s representation of another client, thus
creating a prohibited conflict of interest.”); SonicBlue Claims LLC v. Portside Growth &
Opportunity Fund (In re SONICblue Inc.), Adv. No. 07-5082, 2008 WL 170562, *9, 2008
Bankr. LEXIS 181, *27-28 (Bankr. N.D. Cal. Jan. 18, 2008) (relying on conflict created by
firm’s self-representation).
23
RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS, § 46 cmt. c (2000); accord ILL.
ADVISORY ETHICS OP. 94-13, 1995 WL 874715, at *4 (Jan. 1995) (quoting draft of the
RESTATEMENT).]
24
Eureka Inv. Corp. v. Chicago Title Ins. Co., 743 F.2d 932 (D.C. Cir. 1984).
25
Id. at 936-37 (quoting J. WIGMORE, EVIDENCE, § 2312, at 603-09 (McNaughton rev, ed 1961)).
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[a] communication by A to X as A's attorney, X being then also the
attorney of B, now become the party opponent, is ordinarily
privileged because of the relation of X toward A. Nor does the fact
of A's knowledge that X is already B's attorney, nor the fact of B's
being already adversely interested destroy the privilege. This is so
because, although X ought not to undertake to act for both in any
matter where there is a possibility of adverse interests, nonetheless
A is protected by reason of the relation.26
The D.C. Circuit concluded that the second principle applied in Eureka:
First, Wigmore's first principle presupposes the absence of
secrecy between the parties at the time of communication. Here,
although there was no secrecy with respect to the defense of tenant
claims, Eureka assuredly was concealing from CTI its
consideration of legal action against the latter. Second, and closely
related, Wigmore's first principle presupposes that the
communication at issue was made in the course of the attorney's
joint representation of a “common interest” of the two parties.
Here, although Fried, Frank was representing Eureka and CTI in a
matter of common interest at the time the communications at issue
were made, those communications were not made in the course of
its representation on that matter; indeed, they were made in the
course of representation distinctly not in the interest of CTI. The
policy behind Wigmore's first principle--to encourage openness
and cooperation between joint clients--does not apply to matters
known at the time of communication not to be in the common
interest of the attorney's two clients.27
Accordingly, the court concluded, “[g]iven Eureka's expectations of confidentiality and
the absence of any policy favoring disclosure to CTI, Eureka should not be deprived of the
privilege even if, as CTI suggests, the asserted attorney-client relationship should not have been
created.”28
Eureka was followed by In re Teleglobe Communications Corp.29 This was a dispute
between subsidiaries (the “Debtors”) of a bankrupt corporation, Teleglobe, and Teleglobe’s
former parent, Bell Canada Enterprises (“BCE”), regarding BCE’s decision to cease funding
Teleglobe projects. That decision resulted from of a review known as “Project X.” BCE’s inhouse counsel had represented Teleglobe on various matters where Teleglobe and BCE had
common interests, but only advised BCE on Project X. Teleglobe sought to discover privileged
communications relating to Project X, but the Third Circuit reversed an order to produce,
applying
26
Id. at 937 (quoting J. WIGMORE, supra, at 608).
Id.
28
Id.
29
In re Teleglobe Comm’c’s Corp., 493 F.3d 345 (3rd Cir. 2007).
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[t]he guiding principle of Eureka …that when an attorney errs by
continuing to represent two clients despite their conflicts, the
clients--who reasonably expected their communications to be
secret--are not penalized by losing their privilege. Indeed, Eureka
is merely one in a line of cases that hold that communications
outside the scope of the joint representation or common interest
remain privileged.30
In Hunter, Maclean, Exley & Dunn v. St. Simons Waterfront, LLC,31 the Georgia Court of
Appeals concluded that the law ought not to place clients “in the perilous position of having their
lawyers withdraw prematurely or without careful advice”32
A lawyer who has a nonwaivable conflict of interest with a client
no doubt must withdraw, but a firm concerned with whether a
client has a malpractice claim against it will often need to carefully
consider that question. Yet, a lawyer who must withdraw clearly
cannot do so in a way that violates his ethical obligations to the
client. What then is a conflicted lawyer to do when there are
multiple on-going representations and, despite the lawyer's
reasonable efforts, replacement counsel is unable to quickly step in
and take over the representation? In such a situation, the conflicted
lawyer finds himself in the awkward position of either hastily
withdrawing in violation of the professional rules of conduct,
having to consult with (and hire) outside counsel, or risk waiver of
the privilege.33
VII. One Court Has Pierced the Privilege Where the Client Demanding Discovery Was
Not Informed of the Conflict; This Resolution Takes No Position on That Issue.
In re SONICblue Inc.34 was a bankruptcy. Pillsbury Winthrop Shaw Pitman, LLP
(“PWSP”), had been SONICblue’s general corporate, securities, and litigation counsel since
30
Id. at 381. Accord Douglas R. Richmond, Law Firm Internal Investigations: Principles &
Perils, 54 SYRACUSE L. REV. 69, 100-01 (2004) (footnotes omitted). (“To be sure, a firm that
attempts to continue to represent a client in a matter after being threatened with malpractice
liability or otherwise being accused of misconduct may suffer a disqualifying conflict of interest.
But the consequences of the firm's conflict of interest ought to be limited to its withdrawal from
the representation and the financial detriment that surely accompanies the cessation of work for
the client; the disgorgement or forfeiture of fees earned in the representation, perhaps enhanced
tort liability, disciplinary action against deserving lawyers by the appropriate professional
authorities, or some combination of these” (footnotes omitted)).
31
Hunter, Maclean, Exley & Dunn v. St. Simons Waterfront, LLC., 730 S.E.2d 608 (Ga. Ct.
App. 2012). The Georgia Supreme Court has granted review.
32
Hunter, 317 Ga.App. at 15.
33
Id.
34
SonicBlue Claims LLC v. Portside Growth & Opportunity Fund (In re SONICblue Inc.), Adv.
No. 07-5082, 2008 WL 170562, 2008 Bankr. LEXIS 181, at *31, 34 (Bankr. N.D. Cal. Jan. 18,
2008).
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approximately 1989. In that capacity, PWSP had given certain opinions relating to offers of debt
securities (“Notes”). After SONICblue filed for bankruptcy reorganization, the Noteholders sued
the company’s officers and directors. The D&O insurer denied coverage based on failure to
disclose in the application for coverage demands that had been received from the Noteholders;
settlement was reached in which the Noteholders agreed to look only to the insurance for
payment. The directors and officers then made demand on PWSP (apparently regarding the
insurance application) and entered into a tolling agreement.35 That created a conflict for PWSP
which was not adequately disclosed to the court.36
SONICblue also had disputes with joint venture partners VIA Technologies and S3
Graphics, and the Noteholders participated in negotiations regarding those disputes. The joint
venturers agreed to a $12.5 million settlement from SONICblue, subject to the creditors’
approval. The Noteholders conditioned their approval on a Senior Indebtedness Waiver that
would improve their position at the expense of the general unsecured creditors. PWSP’s analysis
of claims against the estate and prosecution of objections to them brought to light certain issues
which might provide the Noteholders a claim against PWSP based on its opinions. Because the
Senior Indebtedness Waiver would benefit the Noteholders, its approval would reduce the
amount of their possible claim against PWSP. That created a conflict for PWSP which was not
adequately disclosed to the court.37
SonicBlue Claims LLC (“SBClaims”) brought the conflicts to light, leading the United
States Trustee to move for PWSP’s disqualification. PWSP was disqualified as counsel for the
Debtor and a trustee was appointed. The court ordered the Trustee to investigate the
nondisclosures and propose a remedy. SBClaims brought this proceeding against the Noteholders
to equitably subordinate their claims. The Trustee and SBClaims then sought discovery from
PWSP to better understand the firm’s conduct and motives, with the Trustee waiving
SONICblue’s attorney client privilege. PWSP then asserted its own privilege for communications
with its in-house counsel.38
The court relied on the cases abrogating the privilege for law firm in-house counsel39 to
conclude that PWSP could not “use the attorney–client privilege or the work product doctrine to
shield its communications with in–house counsel after its conflict of interest became apparent.”40
35
Id. at *1-4, 2008 Bankr. LEXIS 181 at *4-14.
Id. at *6-7, 2008 Bankr. LEXIS 181 at *23-24
37
Id. at *5-7, 2008 Bankr. LEXIS 181 at *14-24.
38
Id. at *7-8, 2008 Bankr. LEXIS 181 at *19-23.
39
See E-Pass Technologies, Inc. v. Moses & Singer, LLP, 2011 WL 3794889, *3, 2011 U.S.
Dist. LEXIS 96231, *9-10 (N.D. Cal. Aug. 26, 2011) (denying privilege on ground that firm had
a conflict in separately representing itself on sanctions motion directed at both firm and client);
Asset Funding Group, LLC v. Adams & Reese, LLP, 2008 WL 4948835, *4, 2008 U.S. Dist.
LEXIS 96505, *( (E.D. La. Nov. 17, 2008) (privilege “vitiated” when “the seeking of legal
advice by one lawyer from another lawyer inside the firm ‘implicates or creates a conflict of
interest.’”); Koen Book Distribs. v. Powell, Trachtman, Logan, Carrle, Bowman & Lombardo,
P.C., 212 F.R.D. 283, 286 (E.D. Pa. 2002) (neither privilege nor work product immunity can
“shield a lawyer’s papers from discovery in a conflict of interest context.”); In re Sunrise Sec.
Litig., 130 F.R.D. 560, 595 (E.D. Pa. 1989) (“[W]hen a law firm seeks legal advice from its in
9
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But the court also recognized that “public policy encourages lawyers to consult with inhouse counsel to understand and comply with their professional responsibilities and ethical
restraints.”41 Accordingly, it agreed with Thelen Reid & Priest LLP v. Marland 42 that the law
should “allow[]the privilege to be asserted until such time as the firm has, or should have,
determined that dual representation of itself and an outside client should not continue without the
informed consent of the outside client.”43
While there was “some inking of impending ethical issues … when e-mails among
several lawyers in the firm expressed concern over the ramifications of the coverage dispute,” no
conflict had been shown to exist at that time.44 A potential conflict clearly arose when the
directors requested a tolling agreement; PWSP clearly knew of a conflict no later than the time it
executed the tolling agreement, so its ability to withhold communications regarding the
insurance conflict was impaired no later than that date.45 PWSP knew it had another conflict no
later than the date the Noteholders made their indemnification demand. By January, 2007, it
knew that accusations of malpractice created yet another conflict.46 Thus, the court ruled that
“PWSP has no right to claim privilege for any communications with in-house counsel between
September 7, 2006 [when it signed the tolling agreement] and March 26, 2007 [when the
disqualification motion was filed].”47
SBClaims also sought discovery regarding PWSP’s communications with its outside
counsel, retained to respond to the allegations of impropriety. The court found no basis for
denying the privilege between a law firm and its outside counsel, unless the crime-fraud
exception applied. As of the time of the decision, the record did not establish applicability of that
exception.48
The cases on which SONICblue relied themselves relied on unsound views of either the
fiduciary exception to the attorney-client privilege49 or the effect of a conflict.50 This Resolution
takes no position on whether a proper basis could be constructed.
house counsel, the law firm’s representation of itself (through in house counsel) might be
directly adverse to, or materially limit, the law firm’s representation of another client, thus
creating a prohibited conflict of interest.”); SonicBlue Claims LLC v. Portside Growth &
Opportunity Fund (In re SONICblue Inc.), Adv. No. 07-5082, 2008 WL 170562, *9, 2008
Bankr. LEXIS 181, *27-28 (Bankr. N.D. Cal. Jan. 18, 2008) (relying on conflict created by
firm’s self-representation).
40
SONICblue, 2008 WL 170562, *8, 2008 Bankr. LEXIS 181 at *32 (some capitalization in
original omitted).
41
Id. at *9, 2008 Bankr. LEXIS 181 at *27 (citation omitted).
42
Thelen Reid & Priest LLP v. Marland, No. C 06-2071 VRW, 2007 WL 578989, at *7-8, 2007
U.S. Dist. LEXIS 17482, at *20-21 (N.D. Cal. Feb. 21, 2007).
43
Id. (citation omitted).
44
Id. at *10, 2008 Bankr. LEXIS 181 at *30.
45
Id. at *10, 2008 Bankr. LEXIS 181 at *31.
46
Id.
47
Id. at *10, 2008 Bankr. LEXIS 181 at *31-32.
48
Id. at *11, 2008 Bankr. LEXIS 181 at *33-34.
49
See Report on Resolution B.
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VIII. If a Client Chooses To Continue to be Represented by a Law Firm after the Client
Learns of a Potentially Viable Claim against the Law Firm, that Client Conduct Should Be
Considered as a Factor in Determining whether the Client Has Waived any Conflict
regarding the Firm’s Preparation To Defend that Claim.
Courts allowing a then-current client to pierce a law firm’s privilege for communications
with its counsel have not addressed the issue whether the client’s decision to continue the
representation after learning of a possible claim against the law firm waives any conflict
regarding the firm’s preparation to defend that claim.51
This possibility may be illustrated by the facts in Garvy v. Seyfarth Shaw LLP.,52 where a
waiver was found. That malpractice case was one result of a chancery action by Peter Garvy’s
siblings against Peter regarding conduct of a family business, of which Peter was formerly
president. The law firm of Seyfarth Shaw LLP (“Seyfarth”) had advised Peter and the business
regarding various of the matters at issue in the suit. Seyfarth immediately sent a very detailed
letter on November 3, 2004 addressing those claims and their relation to Seyfarth's work. If the
allegations of the complaint were correct, Seyfarth’s conduct would arguably have constituted
malpractice. The letter further explained that and explained the resulting conflicts that would be
entailed in representing Peter in the suit. 53
Seyfarth asked Peter to review the issues with independent counsel before determining
whether to continue to use Seyfarth.54 That counsel asserted legal malpractice claims arising
from Seyfarth’s advice to Peter but asked Seyfarth to continue representing Peter in the chancery
action and waived any conflict.55 When the settlement negotiations in the chancery action broke
down, Seyfarth withdrew, over Peter’s objection.56
As to the conflict that supposedly vitiated the privilege, even under the cases relied upon
by Peter, the law firm could avoid loss of its privilege by either withdrawing from the
representation or obtaining client consent to the conflict. Seyfarth had fully disclosed the
conflicts (including the possible malpractice claim) and had recommended that Peter consult
independent counsel. After Peter did so, his independent counsel asked Seyfarth to continue the
representation.57 According to the Garvy court, that waived any conflict:
[Peter] cannot have it both ways. He cannot insist that Seyfarth
continue to represent him in the chancery litigation while he has
50
See part II of this Report.
See Koen Book Distribs. v. Powell, Trachtman, Logan, Carrle, Bowman & Lombardo, P.C.,
212 F.R.D. 283 (E.D. Pa. 2002) (client continued representation by firm through a scheduled
hearing after stating that it was considering a malpractice action; possible waiver not addressed).
Other cases denying the privilege do not appear to have involved continued representation after
the client was aware of a conflict between itself and the firm.
52
Garvy v. Seyfarth Shaw LLP, 966 N.E.2d 523 (Ill. App. Ct. 2012).
53
Id. at 528 (emphasis by Seyfarth).
54
Id. at 528.
55
Id. at 529.
56
Id. at 529.
57
Id. at 536-38.
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malpractice claims pending against Seyfarth, but then use that
continued representation to insist that Seyfarth produce all
documents related to legal advice sought in relation to the
malpractice claims generated during that time.58
If a conflict has been validly waived, it can provide no basis for denying attorney-client
privilege, even if a conflict might otherwise do so.
IX.
The Fiduciary Exception to the Attorney-Client Privilege, if Recognized in the
Jurisdiction, Should Not Be Applied to Otherwise Privileged Communications Between
Law Firm Personnel and the Firm’s In-House or Outside Counsel Regarding the Law
Firm’s Own Duties, Obligations, and Possible Liabilities, even if those Communications
Implicate the Ongoing Representation of a Current Client.
Courts allowing a then-current client to pierce a law firm’s privilege for communications
with its in-house counsel have relied significantly on the so-called fiduciary exception to the
privilege.59 But they have simply assumed that the fiduciary duty exception eliminates the
privilege between fiduciary and beneficiary. In other contexts, courts have applied the fiduciary
duty exception more narrowly, but that was apparently overlooked by the courts relying on that
exception to deny privilege with respect to law firm in-house counsel.
The fiduciary duty exception and its limitations have been succinctly described as
follows:
58
Id. at 537.
See, In re Sunrise Sec. Litig., 130 F.R.D. 560, 595 (E.D. Pa. 1989), relying on Valente v.
Pepsico, Inc., 68 F.R.D. 361, 368-69 (D. Del. 1975); E-Pass Technologies, Inc. v. Moses &
Singer, LLP, 2011 WL 3794889, *3, 2011 U.S. Dist. LEXIS 96231, *9-10 (N.D. Cal. Aug. 26,
2011) (rejecting “unprecedented argument that notwithstanding its fiduciary duty, at the same
time it was representing E-Pass on the motion it could engage in intra-firm communications
relating to how to protect itself from liability on the motion and then withhold those
communications from E-Pass”); Cold Spring Harbor Laboratory v. Ropes & Gray, LLP, 2011
WL 2884893, *!, 2011 U.S. Dist. LEXIS 77824, *2 (D. Mass. July 19, 2011) (“R&G's fiduciary
duty to CSHL overrides any claim of privilege”); Burns v. Hale & Dorr LLP, 242 F.R.D. 170,
173-74 (D. Mass. 2007) (following Koen Book Distributors and Bank Brussels Lambert, which
followed Sunrise Securities); Thelen Reid & Priest LLP v. Marland, No. C 06-2071 VRW, 2007
WL 578989, *4-8, 2007 U.S. Dist. LEXIS 17482, *17-20 (N.D. Cal. Feb. 21, 2007) (following
Sunrise Securities); Koen Book Distribs. v. Powell, Trachtman, Logan, Carrle, Bowman &
Lombardo, P.C., 212 F.R.D. 283, 286 (E.D. Pa. 2002) (following Sunrise Securities and
Valente); Bank Brussels Lambert v. Credit Lyonnais (Suisse), S.A., 220 F. Supp. 2d 283, 287-88
(S.D.N.Y. 2002) (following Sunrise Securities); SonicBlue Claims LLC v. Portside Growth &
Opportunity Fund (In re SONICblue Inc.), Adv. No. 07-5082, 2008 WL 170562, *9, 2008
Bankr. LEXIS 181, *27-28 (Bankr. N.D. Cal. Jan. 18, 2008) (relying on fiduciary exception to
privilege). Valente relied on Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1990), permitting,
in some circumstances, shareholder plaintiffs bringing a derivative suit to discover the
corporation’s privileged communications.
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English courts first developed the fiduciary exception as a
principle of trust law in the 19th century. The rule was that when a
trustee obtained legal advice to guide the administration of the
trust, and not for the trustee's own defense in litigation, the
beneficiaries were entitled to the production of documents related
to that advice. The courts reasoned that the normal attorney-client
privilege did not apply in this situation because the legal advice
was sought for the beneficiaries' benefit and was obtained at the
beneficiaries' expense by using trust funds to pay the attorney's
fees.60
But, in Garvy v. Seyfarth Shaw LLP,61 the Illinois Appellate Court relied on a key
limitation of the fiduciary duty exception to uphold the privilege for communications with law
firm in-house counsel. The fiduciary-duty exception would not have applied in Garvy, even if
Illinois recognized it, because the exception “is limited by the requirement that the subject of the
communications with the attorney was the ordinary affairs of the trust or corporation: if the
communications concern the personal liability of the fiduciary or were made in contemplation of
adversarial litigation, the [fiduciary duty] exception does not apply.”62 All of the
communications at issue in Garvy “concern[ed] the personal liability of the [law firm],” and they
were made after the potential for liability had been identified and disclosed to the client.
Moreover, for purposes of the fiduciary duty exception, it does not matter if the same
lawyer provided both trust administration advice and advice on liability of the fiduciary. The
Ninth Circuit so held in United States v. Mett, 63 reversing a criminal conviction because the
district court improperly admitted privileged communications. The law firm had represented a
corporation, its employee benefit plan, and corporate executives (including the sole shareholder).
The executives were also pension plan trustees, and they transferred plan assets into the
corporation’s accounts (purportedly as a loan). They then consulted the law firm about the
personal consequences of their conduct. They were later prosecuted for embezzlement, and those
communications with counsel were admitted into evidence under the fiduciary exception.
The Ninth Circuit observed that the English case which was the origin of the fiduciary
exception distinguished between two pieces of advice from the same lawyer, requiring the
lawyer to produce advice on the propriety of the trustees’ paying advances to the testator’s
childen, but permitting him to withhold advice, received after suit was brought, addressing “’how
60
United States v. Jicarilla Apache Nation, 131 S. Ct. 2313, 2321 (2011) (emphasis added,
citation omitted). Accord Riggs Nat’l Bank v. Zimmer, 355 A.2d 709, 712-14 (Del. Ch. 1976),
recognized as the leading American case on the fiduciary exception by 131 S. Ct. at 2321-22.
61
Garvy v. Seyfarth Shaw LLP, 966 N.E.2d 523 (Ill. App. Ct. 2012). The Illinois Supreme Court
has denied review. Illinois has not yet adopted the fiduciary exception to the privilege. Id. ¶ 35.
Rather than deciding whether to adopt that exception, the court concluded that, even if adopted,
it would not apply on the facts in Garvy.
62
Mueller Industries, Inc. v. Berkman, 927 N.E.2d 794, 807 (2010) (emphasis added), citing
United States v. Mett, 178 F.3d 1058, 1063-64 (9th Cir. 1999). Garvy relied upon this analysis in
Mueller. Garvy, 966 N.E.2d 523, ¶ 35.
63
Mett, 178 F.3d at 1063.
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far they were in peril.’”64 Thus, while otherwise-privileged communications about the ordinary
affairs of the fiduciary res are available to the beneficiary, “[w]hen a legitimate personal interest
does emerge--such as when a corporate manager is sued by shareholders--the manager then
becomes entitled to legal advice which is not discoverable by the shareholders.”65 In Mett, the
content of the relevant communications was “plainly ‘defensive on the trustees’ part.’”66 In no
way was it advice regarding the administration of the plan.
The government urged application of the fiduciary exception to defeat the privilege
whenever the advice relates to fiduciary matters. The Ninth Circuit rejected that argument,
because the exception would then threaten to swallow the privilege and so broad an exception
would be unmoored from the rationale for limiting the privilege. It reasoned that “where the
attorney-client privilege is concerned, hard cases should be resolved in favor of the privilege, not
in favor of disclosure,” because “‘[a]n uncertain privilege, or one which purports to be certain
but results in widely varying applications by the courts, is little better than no privilege at all.’”67
Additionally, denying the privilege would likely lead ERISA trustees to forego legal advice, and
that might hurt plan beneficiaries, because well-counseled trustees who understand their duties
can better comply with those duties.
Nor could the trustees be deemed to have waived protection of the privilege by not using
an independent counsel, who did not also represent the benefit plan:
the application of the fiduciary exception is not simply a question
of conflict of interest, resolved “by multiplying the number of
lawyers.” In other words, it is not the terms of an engagement
letter, but rather the nature of the particular attorney-client
communication that is dispositive. This communication-bycommunication analysis, while perhaps untidy, is crucial if the
attorney-client privilege and the fiduciary exception are to coexist.
On the one hand, the attorney-client privilege demands that a
communication, obtained for a trustee's own protection, be
shielded from disclosure. The force of this general proposition is
undiminished, irrespective of whether the attorney consulted also
did work for the plan. By the same token, the beneficiaries are
entitled to inspect communications regarding plan administration,
whether or not the attorney dispensing the advice is generally
consulted regarding nonfiduciary matters. In the words of the
Second Circuit, “[a]n employer's retention of two lawyers (one for
fiduciary plan matters, one for non-fiduciary matters) would not
frustrate a plan beneficiary's ability to obtain disclosure of
attorney-client communications that bear on fiduciary matters.”68
64
178 F.3d at 1063, quoting Talbot v. Marshfield, 12 L.T.R. 761, 762 (Ch. 1865).
Wachtel v. Health Net, Inc., 482 F.3d 225, 232 (3d Cir. 2007).
66
Id. at 1063 (quoting Riggs Nat’l Bank v. Zimmer, 355 A.2d 709, 711 (Del.Ch.1976)).
67
Id. at 1065 (quoting Upjohn Co. v. United States, 449 U.S. 383, 393 (1981)).
68
Id. at 1065-66 (citations omitted) (quoting Becher v. Long Is. Lighting Co. (In re Long Is.
Lighting Co.), 129 F.3d 268, 272 (2d Cir. 1997)). Accord Gill v. Bausch & Lomb Supplemental
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There is also a related rule that might often lead to the same conclusion. In formulating
the fiduciary exception, the Restatement provides that the fiduciary exception applies only where
the relevant attorney-client “communication occurred prior to the assertion of the charges
[against the fiduciary].”69 Thus, once a client has asserted a possible claim against a law firm, the
“fiduciary exception” would not apply to any later consultation regarding that possible claim.
It should be emphasized that, even under the authorities just discussed, the privilege is
not inconsistent with the law firm’s fiduciary duty to disclose all material facts regarding the
representation to its client. As the United States Supreme Court pointed out in Upjohn v. United
States70: “[a]pplication of the attorney-client privilege … puts the adversary in no worse position
than if the communications had never taken place. The privilege only protects disclosure of
communications; it does not protect disclosure of the underlying facts by those who
communicated with the attorney.”71 The former client is entitled to full disclosure of all of the
underlying facts regarding the representation. But that does not necessarily entitle the former
client to disclosure of everything that its former lawyers said about those facts in confidential
communications with their own counsel.
None of the cases barring the application of the attorney-client privilege to confidential
communications between law firm personnel and the firm’s in-house counsel have made more
than conclusory analysis nor have they considered the implications of the limits to the fiduciary
exception developed in the case law just described. Those cases ought not to be followed.
X.
Conclusion
Prudence in assuring that all appropriate legal and ethical duties arising in a
representation are followed may require attorneys to consult in-house counsel about the
obligations to the client. The laudatory practice of such consultation, however, should involve
the same protections of confidentiality that would occur if consulting outside counsel. Any
distinction between in-house and outside counsel in this regard elevates form over substance. It
is in the public interest for the law to encourage and facilitate the use of law firm in-house
counsel and, by this resolution, the American Bar Association recognizes that client
representation will be advanced by permitting confidential consultation in this manner.
Ret. Income Plan I, 284 F.R.D. 84, 88 (W.D.N.Y 2012) (“The beneficiaries are not entitled,
however, to disclosure of their communications on non-fiduciary matters even if the employer
and counsel have also communicated about fiduciary matters.”); Baker v. Kingsley, 2007 U.S.
Dist. LEXIS 8375, *8-9 (N.D. Ill. Feb. 5, 2007) (“The same attorney may advise an employer in
both its fiduciary and non-fiduciary capacities at different times….The fiduciary exception to the
attorney-client privilege does not apply to documents which relate to non-fiduciary matters
only.”);
69
RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS, § 85(2) (2000).
70
Upjohn v. United States, 449 U.S. 383 (1981)
71
Id. at 395. Accord Sterling Finance Management, L.P. v. UBS PaineWebber, Inc., 782 N.E.2d
895, 905 (Ill. App. Ct. 2002).
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Respectfully submitted,
Dick Semerdjian, Chair
Tort Trial & Insurance Practice Section
Martin E. Lybecker, Chair
Section of Business Law
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GENERAL INFORMATION FORM
Submitting Entities: Tort Trial & Insurance Practice Section; Section of Business Law
Submitted By
1.
Dick Semerdjian & Martin E. Lybecker, Chairs
Summary of Resolutions
The Resolution sets forth principles that should be applied in determining the availability
of attorney-client privilege for law firm consultations with in-house counsel. In general,
and in accordance with ABA policy for other in-house counsel, these should be the same
principles applied to consultations with outside counsel. Any conflict of interest arising
out of a law firm’s consultation with its in-house counsel regarding the firm’s
representation of a then-current client and a potentially viable claim the client may have
against the firm does not create an exception to the attorney-client privilege, at least so
long as the client is appropriately and timely informed of the potentially viable claim.
while some jurisdictions recognize an exception to the attorney-client privilege for a
fiduciary’s communications seeking legal advice regarding ordinary affairs of the
fiduciary office, that “fiduciary exception” should not be applied to otherwise privileged
communications between law firm personnel and the firm’s in-house or outside counsel
regarding the law firm’s own duties, obligations, and possible liabilities, even if those
communications implicate the ongoing representation of a current client.
2.
Approval by Submitting Entity
April 6, 2013 (Business Law); April 28, 2013 (TIPS)
3.
Has this or a similar resolution been submitted to the House or Board previously?
No
4.
What existing Association policies are relevant to this Resolution and how would they be
affected by its adoption.
This Resolution builds upon and extends 1997 Report with Recommendation #120 and
2005 Report with Recommendation #111. Neither would be affected in its current
applications.
5.
What urgency exists which requires action at this meeting of the House?
This issue has lingered for many years in the federal district and bankruptcy courts. Only
in 2012 were there any appellate decisions, both by state intermediate courts. In 2013,
the issue has come before three state supreme courts. The ABA was able to file amicus
briefs, but was limited by the lack of specific policy on key issues. This Resolution is
necessary to provide policy to support stronger briefs in the future, in cases that may now
arise at any time and with little advance notice before a brief must be filed.
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103
6.
Status of Legislation (If applicable)
N/A
7.
Brief explanation of plans for implementation of the policy, if adopted by the House of
Delegates
The Amicus Curiae Committee will be asked to recommend briefs as appropriate. If
these issues were to come before rulemakers or legislators, appropriate advocacy would
be requested. During the last few months, two amicus briefs were filed on behalf of the
ABA on this issue.
8.
Cost to the Association (Both direct and indirect costs)
Costs of filing amicus briefs or of presenting positions regarding any proposed rules or
legislation.
9.
Disclosure of Interest (if applicable)
N/A
10.
Referrals
This Resolution has been sent to other ABA entities requesting support or cosponsorship:
Standing Committee on Ethics and Professional Responsibility
Standing Committee on Lawyers’ Professional Liability
Standing Committee on Professional Discipline
Section on Dispute Resolution
Section of Litigation
Senior Lawyers Division
11.
Contact Name and Address Information (Prior to the meeting)
William T. Barker
Dentons U.S. LLP
233 S. Wacker Drive
Chicago IL 60606
Phone: 312-876-8140
Fax: 312-876-7934
E-Mail: william.barker@dentons.com
or
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TIPS Delegate Robert Peck
Center for Constitutional Litigation, PC
777 6th Street, N.W.
Suite 520
Washington, DC 20001
Phone: 202-944-2874
Fax: 202-965-0920
Email: robert.peck@cclfirm.com
Business Law Delegate Maury L. Poscover
Husch Blackwell LLP
190 Carondelet Plaza
Suite 600
St. Louis, MO 63105-3433
Phone: 314-480-1717
Fax: 314-480-1505
Email: maury.poscover@huschblackwell.com
12.
Contact Name and Address Information (Who will present the Report to the House)
TIPS Delegate Robert Peck
Center for Constitutional Litigation, PC
777 6th Street, N.W.
Suite 520
Washington, DC 20001
Phone: 202-944-2874
Fax: 202-965-0920
Email: robert.peck@cclfirm.com
Business Law Delegate Maury L. Poscover
Husch Blackwell LLP
190 Carondelet Plaza
Suite 600
St. Louis, MO 63105-3433
Phone: 314-480-1717
Fax: 314-480-1505
Email: maury.poscover@huschblackwell.com
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EXECUTIVE SUMMARY
1.
Summary of the Resolution
The Resolution sets forth principles that should be applied in determining the availability
of attorney-client privilege for law firm consultations with in-house counsel. In general, and in
accordance with ABA policy for other in-house counsel, these should be the same principles
applied to consultations with outside counsel. Any conflict of interest arising out of a law firm’s
consultation with its in-house counsel regarding the firm’s representation of a then-current client
and a potentially viable claim the client may have against the firm does not create an exception
to the attorney-client privilege, at least so long as the client is appropriately and timely informed
of the potentially viable claim. while some jurisdictions recognize an exception to the attorneyclient privilege for a fiduciary’s communications seeking legal advice regarding ordinary affairs
of the fiduciary office, that “fiduciary exception” should not be applied to otherwise privileged
communications between law firm personnel and the firm’s in-house or outside counsel
regarding the law firm’s own duties, obligations, and possible liabilities, even if those
communications implicate the ongoing representation of a current client.
2.
Summary of the Issue the Resolution
A number of federal district and bankruptcy courts have made an exception for
consultations regarding ongoing representations of clients who later sue the firm for malpractice.
One federal district court has disagreed. Only last year was this issue first decided by an
appellate court, and both the Illinois Appellate Court and the Georgia Court of Appeals have now
upheld the in-firm privilege, though the Georgia Supreme Court is now reviewing the issue, as
are the Massachusetts and Oregon Supreme Courts.
3.
Please Explain How the Proposed Policy Will Address the Issue
The Resolution will continue ABA leadership in protecting and advancing the attorneyclient privilege and will provide the necessary support for strong ABA briefs in future cases
raising this issue.
4.
Summary of Minority Views
We are aware of no ABA entity opposed to this Resolution. We assume that the
plaintiffs’ legal malpractice bar would be opposed.
20