Carlsmith Ball LLP Confidentiality Issues and Outside Counsel Deborah Bjes October 22 nd, 2015.

Carlsmith Ball LLPConfidentiality Issues and Outside Counsel Deborah BjesOctober 22nd, 2015

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes 2

Now what?

Potential issue with outside counsel?


May or may not be privileged from client

Internal firm communications


Ethical duties to client trump attorney-client privilege

vs.

No ethical exception to attorney-client privilege

Courts split on nature of internal communications


State v. federal courtRole of consulting attorneyStatutes governing privilege

Considerations


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.

The duty to disclose


•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.

Comment: ABA Model Rule 1.7


"Lid“ on intra-firm communications "lifted."

Thelen, Reid & Priest LLP V. Marland2007 WL 578989 (N.D. Cal. February 21, 2007)

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).

No 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).

California's statutory 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, LLP465 Mass. 702, 991 N.E.2d 1066 (2013)

Upholds privilege


Withdraw as counsel Obtain consent of client Disclose conflict to client

RFF Family Partnership, LP v. Burns & Levinson, LLP


Client argued, for privilege to apply, lawyer seeking advise had to first:


•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


Court disagrees:Without the privilege, law firm may:


“dysfunctional” both to the client and the law firm.

RFF Family Partnership LP v. Burns & Levinson, LLP

Court characterized client’s assertions as…


Did lawyer consult with general counsel?

Did consulting attorney work on the file?

Have you been billed for the consult?

Has firm maintained confidentiality?

CommunicationsAre they privileged?


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?

Internal CommunicationsDo you really require them?


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Carlsmith Ball LLP Confidentiality Issues and Outside Counsel Deborah Bjes October 22 nd, 2015.

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