Is Mixed Legal And Business Advice Protected Under The Attorney Client Privilege?

Ralph Hall
June 5, 2008 — 1,075 views  

Modern healthcare lawyers, particularly in house counsel, are expected to provide clients with more than narrow legal advice. Today, lawyers commonly advise clients on the implications of various courses of actions, provide alternative approaches, address broad societal and business implications and help clients develop and implement new policies and procedures. As healthcare lawyers become more complete counselors to clients, the question of whether their communications are privileged becomes more complex as it is more difficult to separate "pure" legal advice from business advice. Given the breadth of modern discovery, this question is becoming more important.

Earlier this year, the Second Circuit addressed this question in In re the County of Erie, 473 F.3d 413 (2nd Cir. 2007).  In this case, the plaintiffs sought discovery of e-mails from a county attorney in which she addressed certain legal questions but also provided advice on policy matters, proposed alternative courses of actions and monitored the County's progress in implementing certain new policies.  Plaintiffs argued that because these e-mails included substantial non-legal advice, they were not privileged under the attorney client privilege.

The appellate court upheld the privilege and in doing so reminded us of some important lessons. First, for communications to be protected, the person has to be acting in the capacity of a lawyer, not a business person. Second, the communication must be predominately providing legal advice. Courts are always willing to simply redact incidental legal advice included in a document otherwise primarily dealing with non legal matters. Third, one must be careful in the dissemination of the communication to avoid a waiver issue. A policy statement sent to all employees will not be protected. Fourth, and most important, courts are willing to uphold the privilege of "mixed" communications if it is given in a legal context and deals with the implications of, or options surrounding, various legal courses of action.

The lessons from this and similar cases are clear.  If an in house lawyer fills both a legal and a non-legal position, the lawyer must be clear that he or she is acting in a legal capacity.  Second, lawyers can provide (and are often expected to provide) broader counseling that includes policy suggestions, societal implications and economic or philosophical factors.  The predominate purpose of the communication must be of a legal nature.  The courts are willing, however, to look beyond narrow definitions of what is legal counsel if the advice is related to the legal issues at hand.  Finally, the issue of waiver is always present.  If one works within these boundaries, legal advice that also includes policy suggestions and consideration of societal needs, public perception, economics or philosophy can be protected.

Ralph Hall

Baker & Daniels LLP