Carlsmith Ball LLP
Confidentiality Issues and Outside Counsel
Deborah Bjes
October 22nd, 2015
Potential issue with
outside counsel?
Now what?
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Internal firm
communications
May or may not be
privileged from client
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Courts split on nature of
internal communications
Ethical duties to client trump attorneyclient privilege
vs.
No ethical exception to attorney-client
privilege
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Considerations
State v. federal court
Role of consulting attorney
Statutes governing privilege
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The duty to disclose
Model Rule 1.4: Communications
(a) A lawyer shall:…
(3) keep the client reasonably informed about
the status of the matter.…
(b) A lawyer shall explain a matter to the
extent reasonably necessary to permit the
client to make informed decisions regarding
the representation.
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Comment: ABA Model Rule 1.7
•Loyalty and independent judgment are
essential elements…
•Concurrent conflicts of interest can arise
from the lawyer's responsibilities to
another client …or from the lawyer's own
interests.
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No privilege
"Lid“ on intra-firm
communications "lifted."
Thelen, Reid & Priest LLP V. Marland
2007 WL 578989 (N.D. Cal. February 21, 2007)
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No privilege
Privilege must give way to …current clients
who may be harmed by the conflict.
When a law firm represents itself, it runs
the risk of creating an impermissible
conflict of interest.
In re SonicBlue, Inc.
2008 WL 170562 (N.D.Cal. May 19, 2010).
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California's statutory privilege
Privilege exists, but law firm must factually establish
attorney-client relationship.
Court noted:
-Consultations are not always adverse to client.
-Firms often employ ethics & claims attorneys.
-Privilege does not excuse duty to report claim.
Palmer v. Superior Court 231 Cal. App.4th 1214 (2014).
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Upholds privilege
The attorney-client privilege guarantees
the confidentiality necessary to ensure
that partners, associates and employees
provide information needed for sound
legal advice.
RFF Family Partnership, LP v. Burns & Levinson, LLP
465 Mass. 702, 991 N.E.2d 1066 (2013)
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Client argued, for privilege to
apply, lawyer seeking advise
had to first:
 Withdraw as counsel
 Obtain consent of client
 Disclose conflict to client
RFF Family Partnership, LP v. Burns & Levinson, LLP
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Court disagrees:
Without the privilege, law firm may:
• Withdraw from representation unnecessarily
• Withdraw without protecting client's interest
• Not obtain advice on potential conflict
• Sugar-coat facts
• Incur extra expense to retain outside counsel
RFF Family Partnership, LP v. Burns & Levinson, LLP
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Court characterized
client’s assertions as…
“dysfunctional” both to the
client and the law firm.
RFF Family Partnership LP v. Burns & Levinson, LLP
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Communications
Are they privileged?
Did lawyer consult with general counsel?
Did consulting attorney work on the file?
Have you been billed for the consult?
Has firm maintained confidentiality?
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Internal Communications
Do you really require them?
 Will this create tension with a firm that generally
supports your business?
 Is the firm’s work generally excellent?
 Will a request create conflicts?
 Are you curtailing a plan to assist?
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Disclaimer
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Thank
you!
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