Understanding Privilege: Attorney-Client Relationship

It is very easy to get confused about what is and is not protected by the attorney client privilege. If it feels like I have been a bit obsessed with privilege as of late it’s because I have been. Privilege questions have played an outsized role in cases recent investigations.    

Here is a real-world example of how complicated these questions can be. At a meeting with an insurance company a compliance professional takes detailed notes on the insurer’s position on some controversial payment issues. The person realizes that the legal department is likely interested in what the insurer said at the meeting, so they forward the notes to legal. Are those notes protected by the attorney client privilege?

In that scenario the notes are almost certainly not privileged. The fact that they were sent to counsel is almost certainly protected from discovery, but the notes themselves are not. Generally speaking, work done by someone other than a lawyer will only be protected if the lawyer initiated the work and directed it. 

Merely sending already existing information to a lawyer does not protect the information from discovery.  However, when someone seeks advice from a lawyer, outsiders generally can’t discover what the person was seeking advice about. The likely result is the fact that the notes exist isn’t protected. What they say isn’t confidential, but the fact that they were sent to counsel probably is shielded from discovery.

Now let’s change the facts a bit. A lawyer calls someone and says “I understand you have a meeting with an insurance company tomorrow. I would like you to take good notes at the meeting so you can report back to me. I can’t attend and I want you to serve as my eyes and ears.” 

In this situation legal counsel is directing the notes. There Is a much stronger argument that the notes are protected by privilege. An attorney sought the work for their own benefit.

Here is where things can take a turn for the surprising. I think most people would think before going to a meeting and taking notes, a smart person will check with counsel first so they can request it, and then the notes are protected, because it is always better to have things protected by privilege. It is that last statement, the belief that it is always better to have things protected by privilege, that I want to challenge. I totally understand the impulse. In fact, I have shared it. But I have seen many situations where having notes privileged turned out to be a problem. 

Let’s say that the insurer makes a key admission at the meeting. They say, “For the last five years we have insisted you were billing improperly. But it turns out you were right! So, we are changing our position.” Then, a few weeks later, despite that admission at the meeting, that they would audit you on the past claims. During the appeal of that audit, it would be very useful to produce those notes. And you can. But if you do, there is a real risk you will be waiving the attorney client privileged for all communications on the same subject. 

Some courts will allow limited waivers and permit you to provide the notes without opening the door to the discovery of all communications on the same topic, but many will not. It may be that the broad waiver is harmless. But if there are some other communications you want to protect, you may find yourself on the horns of a dilemma: wishing you had never had the original notes protected so you could produce them without the risk or imperiling other communications. In that case, the privilege has created a huge headache. 

A practical solution is to take the notes without their being privileged, but if you have an impressions or thoughts about the meeting, put those in a separate and privileged communication. Then you can, in essence, have your cake and eat it too.