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June 19, 2018

Proceed With Caution: Navigating the Attorney - Client Privilege in the Corporate World

By N. Vincent Pulignano III

ACC North Florida Chapter’s Q2 Newsletter

It’s another Tuesday at the office when Jim, the CFO of your company, strolls into your office asking for legal advice.  You, as General Counsel of the company, oblige and listen as Jim begins admitting to you that he has embezzled funds from the company, and he now wants to return the funds and pretend it never happened.  How do you advise Jim?

The attorney-client privilege applies when a client requests, in confidence, legal advice from an attorney who is acting in his or her capacity as an attorney.  The attorney-client privilege keeps communications between the attorney and the client private; however, this becomes more complicated in the corporate context when the client is a company.  Which communications with which employees are protected?  The U.S. Supreme Court attempted to answer this question in Upjohn Co. v. United States.[1]   The Court decided that the attorney-client privilege extends to any employee who is seeking legal advice on the company’s behalf (known as the “subject matter test”).  In doing so, the Court rejected the “control group test,” which states that only upper-level employees are protected under the privilege.