In re Grand Jury, a case closely watched by lawyers and in-house counsel, had the potential to fundamentally alter the scope of the attorney client privilege, which protects from disclosure to third parties certain communications between an attorney and their client that relate to legal advice. But the Supreme Court had other plans. In a single sentence, the justices dismissed the case on the ground that it had been "improvidently granted," and declined to address the scope of privilege in the context of dual-purpose communications. Why did this case command the attention of in-house counsel and lawyers for companies? Because it brought to the fore a common question that these stakeholders ask themselves on a regular basis: when is a communication that provides both business and legal advice protected by the attorney-client privilege?
A brief primer here is helpful. Dual-purpose communications, as the name suggests, are those delivered with both a business and legal purpose. Untangling the legal from the business portion of these communications is a difficult (if not often an impossible) task. In such cases, courts are often asked to consider whether and to what extent the attorney-client privilege covers the entire communication. To do so, most courts employ either the "primary purpose" test, where such a communication is privileged if its "primary purpose" is to provide legal advice, or the "significant purpose" test, under which a communication is privileged if one of the significant purposes of the communication was to obtain legal advice. Regardless of which test is applied, determining whether a dual-purpose communication is privileged is a thorny issue.
While the Supreme Court's dismissal of In re Grand Jury leaves the status quo in place, the decision and case gives us an opportunity to revisit some best practices that clients and lawyers might be wise to consider when trying to maintain privilege in all contexts, but especially where attorney is in a position to offer both legal and non-legal advice. Some notable considerations include:
- Avoid Comingling Legal and Business Advice. As the excerpt from the article suggests, lawyers should endeavor to ensure that legal advice is separate from business or other forms of advice. That said, don't let perfect be the enemy of good. At times, this will be impossible to accomplish, especially as lawyers take a more active role in business decisions. Nevertheless, this is an important step lawyers and in-house counsel can take to avoid privilege issues.
- Structure Internal Investigations to Protect Privilege. During the oral argument for In re Grand Jury, internal investigations were discussed as the "classic situation" where it is hard to disentangle the legal from non-legal purposes. While unavoidable in certain circumstances, a company can potentially avoid running head-first into the dual communication problem by looking to external counsel to conduct internal investigations, which allows for a more straightforward application of attorney-client privilege to any communications between the external counsel and company employees and/or in-house counsel. It also helps limit the number and frequency of dual-purpose communications, especially where in-house counsel serves both legal and business functions.
- Use "Privileged" Labels Where Appropriate. Emphasis on "where appropriate." Inappropriate labelling can lull people into a false sense of security and simply slapping "Attorney-Client Privileged" on an email or document that is decidedly not privileged will not save you, nor will it transform what is clearly business advice into privileged advice. Nevertheless, this is a good starting place and certainly a best practice.
- Lawyers are the Gatekeepers of Privilege. While non-legal corporate stakeholders should be aware or privilege considerations, the lawyers are ultimately the gatekeepers. It is incumbent upon counsel to ensure that written communications are cabined only to those individuals to whom counsel is providing advice; conversely, for meetings, counsel should be able to identify exactly why each individual is in the room or on the call to ensure that the advice remains protected by attorney-client privilege and is not disseminated to a wider audience than necessary.
These are but a few considerations that key stakeholders might want to revisit in the wake of In re Grand Jury. And while the Supreme Court failed to provide a unified or bright-line approach at this time, understanding that the status quo will now remain for the foreseeable future provides at least some guidance for in-house and external counsel to follow in navigating the increasingly complex world of attorney-client privilege.
More important for in-house lawyers and compliance professionals is, whenever possible, to separate business and legal advice. At a minimum, it’s important to clearly identify legal advice and privileged materials in situations where business and legal advice intertwine.