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Are In-House Communications Privileged?

| May 14, 2013 | Firm News

The Georgia Supreme Court is poised to review a case that could substantially affect the attorney-client privilege and the relationship a firm has with its in-house counsel. The essential issue of the case is “whether communications between lawyers and in-house counsel are protected by the attorney-client privilege and the work product doctrine when a dispute arises between the firm and a client.”

After a dispute with a client, the law firm in this case immediately began bracing for a malpractice suit by consulting with in-house counsel and preparing a defensive strategy. However, while this preparation was occurring, the firm continued to represent the client for another three months. When the malpractice suit was eventually filed, the firm sought to claim attorney-client privilege on all internal communications regarding the dispute with the client.

When deciding whether to allow the privilege, the court will have to balance two competing interests: preserving the sanctity of the attorney-client privilege or ensuring all ethical and fiduciary duties toward the client are upheld. Allowing the privilege encourages firms to be more candid with in-house counsel and to always seek their advice when questions of misconduct or malpractice arise. However, when preparing for a malpractice claim, a firm is acting adverse to the client’s best interests and cannot adequately represent them because of the conflict. This leads to the impression that the firm is secretly plotting against their client and hiding the evidence from them.

At the trial court level, production of the protected documents was compelled because of the firm’s failure to notify the client of the conflict of interest. However, the appeals court reversed on the grounds that the in-house counsel was so isolated from the work for the client that no conflict arose. Several amici curiae have been filed with the Georgia Supreme Court with some arguing for complete evisceration of the privilege when the client is not informed of the conflict while others say a limited privilege should always be enforced no matter the circumstances. However the issue is decided, the court’s decision will have an impact on the relationship between a firm and its client and affect how a firm handles and prepares for malpractice litigation.

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