The Golden State’s Second District Court of Appeal has joined state courts in Oregon, Illinois, Georgia and Massachusetts in finding that attorney-client privilege also applies to in-firm legal advice. The court held in Palmer v. Superior Court (2014) 231 Cal.App.4th 1214 that communications between a firm’s lawyer and in-house counsel regarding a former client who was suing for legal malpractice were protected from discovery requests.
As Drew Dilworth of Cooper White & Cooper posted, the court not only rejected the notion that the privilege is invalidated by “fiduciary” or “current client” exceptions, but also declined to follow federal decisions. The court found that applying such exceptions would be contrary to state law. Furthermore, in order for privilege to apply, a “genuine attorney-client relationship” must exist between the attorney and in-firm counsel.
According to the ABA, the court listed four factors that should be considered when determining privilege:
* The law firm must have designated attorneys to be in-house or ethics counsel.
* If a current client has threatened to file suit against the firm, the in-house counsel must not have worked on any matter involving the client.
* The in-house communications must not have been billed to the current client.
* The communications must have been confidential.
The ABA includes advice for firms from Eric B. Levasseur, Cleveland, OH, co-chair of the ABA Section of Litigation’s Motion Practice and Discovery Subcommittee of the Pretrial Practice & Discovery Committee and Carey L. Menasco, New Orleans, LA, co-chair of the Section of Litigation’s Professional Services Liability Litigation Committee.
“It is important to know who serves as the firm’s loss-prevention counsel. If you are seeing storm warnings from a client, you need to understand who you can talk to within the firm so that your communications can be kept private.”
“You must talk to someone who is not involved in the matter and make sure that your conversations are set up to be confidential.”
According to Menasco, this may be more difficult for smaller firms who may “not have the benefit of general counsel.” Thus, the firm “may need to retain outside ethics counsel.”