We begin our analysis of the privilege with the obvious: before the privilege exists, there should be an attorney-client relationship. As elementary as this idea appears, many consumers assume the connection exists and mistakenly depend on the protection of the privilege, however the privilege doesn't exist till the connection is firmly established. typically speaking, the attorney-client privilege doesn't take hold till the parties have agreed on the illustration of the consumer.

In the majority of cases, the determination that the attorney-client relationship exists isn't a laborious endeavor, for additional typically than not, the attorney has expressly acknowledged illustration of the consumer. Such an categorical acknowledgment is also demonstrated by an engagement letter, a fee contract, or perhaps an oral agreement on the scope of the illustration. An attorney-client relationship may additionally  be expressly acknowledged by the “appearance” of the attorney on behalf of the consumer, together with filing pleadings in court for the consumer, drafting documents on behalf of the consumer, or showing in court because the representative of a litigant.11

Unfortunately, it's not invariably therefore clear when an attorney-client relationship exists. Suppose Sally Smith contacted David Jones, an attorney, by phonephone. throughout the course of the conversation, Smith explained to Jones that she is concerned in an exceedingly dispute with the inner Revenue Service regarding a tax savings arrangement devised for bound business objectives. She discloses necessary facts and highly sensitive info throughout the conversation, then asks Jones for his legal opinion. is that the content of this conversation privileged? It depends.

An categorical contract isn't necessary to make an attorney-client relationship; the connection is also implied from the conduct of the parties. However, the connection cannot exist unilaterally within the mind of the potential consumer absent a “reasonable belief” that the attorney-client relationship exists. The implied relationship is also evidenced by many factors, including, however not restricted to, the circumstances of the conversation, the payment of fees to an attorney, the degree of sophistication of the would-be consumer, the request for and receipt of legal recommendation, and also the history of legal illustration between the alleged consumer and also the practitioner. whereas this list of things is illustrative, none of those factors, standing alone, can affirmatively establish the existence of an attorney-client relationship.12

In our example higher than, while not additional, a confidential relationship doubtless doesn't exist unless there's some history of former illustration. Of course, if the conversation continued, and Jones proceeded to dispense legal recommendation, then Smith may need an affordable belief that the connection exists. This affordable belief would be strengthened by proof that Smith and Jones mentioned payment, potential courses of action, and alternative details concerning the longer term handling of the matter.

The waters become additional murky when the potential consumer could be a business entity. within the company context, the attorney-client privilege exists between outside counsel and also the corporation. essentially, however, the invocation of this right by a company is additional advanced than when a private is concerned, as a company is a man-made “person” created by law and is merely ready to act through a representative, together with officers, administrators and workers.

The courts have faced the daunting task of determining when the attorney-client privilege applies when a company is that the consumer. For years, courts utilized one amongst 2 “tests” to form this determination: the topic matter take a look at13 and also the management cluster test.14 this trend, however, focuses on whether or not the matters mentioned are encompassed by the company duties and responsibilities of the worker.

Take, for instance, our hypothetical from before. Suppose that Sally Smith known as not on her own behalf, however on behalf of her corporation, ABC Company (ABC). Smith is that the president or chief monetary officer of ABC, and discusses with Jones, the attorney, the tax exposure or potential liability of ABC. as a result of Smith is that the president of the corporation, the privilege clearly extends to those communications. If, however, the decision was created by Jane Edwards, the accounting manager, the solution becomes less clear. based mostly upon this trend of the courts, Edwards’ conversations with the attorney are privileged farewell because the problems she discusses with the attorney are directly associated with her responsibilities inside the corporate.

What is the result, however, when an employee like Smith seeks recommendation in her individual capability, as critical {the company|the company} one? The courts can extend the attorney-client privilege to corporate officers, while a private, as long as there's clear proof that the company officer communicated with counsel within the officer’s individual capability regarding personal matters like potential individual liability. Not surprisingly, the showing needed of the company employee during this regard could be a additional stringent one. Moreover, even though the requisite showing is created, bound info may produce a conflict of interest for the company attorney. In that case, the company attorney should finish the conversation and advise the company employee to hunt separate counsel.15

One final thought arises within the context of in-house counsel. A communication regarding company legal matters between a corporation’s in-house counsel and also the corporation’s outside counsel is generally subject to the privilege.16 However, when the communication is between a representative of the corporation and also the in-house counsel, the excellence is a smaller amount clear. as a result of in-house counsel typically wears many hats, courts have struggled with the applying of the privilege.17 The privilege would extend to any legal recommendation rendered, however it doesn't shield communications that are strictly business-related.18 issues arise when the communication contains each legal and business recommendation, and also the courts take totally different approaches in determining whether or not or to not apply the privilege. At the terribly least, it seems that the court can 1st arrange to confirm what role in-house counsel plays inside the corporate — that of a lawyer or that of a company government. From there, several courts can examine the content of the communication, and this examination can yield varying results.19 As such, the in-house lawyer ought to use caution to separate his legal recommendation from his business opinions.