FALL 2019 TODAY’S GENER AL COUNSEL
PRIVILEGE PLACE
Subsidiaries, Affiliates and Privilege Protection By Todd Presnell
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n-house legal departments are often the legal hub of an organization’s various affiliated entities. On any given day, in-house lawyers provide legal advice to their company’s wholly owned subsidiaries, majority or minorityowned affiliated entities, or even the parent organization. To do so, they necessarily communicate with these affiliated companies’ employees or agents. The question arises (or should arise) whether the attorney-client privilege protects these communications from discovery. The privilege generally protects communications between an entity’s in-house lawyers and its employees, but does the privilege protect communications between an entity’s in-house lawyers and an affiliated company’s employees? The answer requires summoning the privilege’s foundational elements, understanding the joint client and common interest doctrines, and applying them correctly — before the communication occurs. It is a judge, of course, who ultimately determines whether the privilege protects a particular communication from
Todd Presnell is a partner in Bradley’s Nashville office. He is a trial lawyer, and creator and author of the legal blog Presnell on Privileges (www. presnellonprivileges. com). He provides internal investigation and privilege consulting services to in-house legal departments. tpresnell@bradley.com
compelled disclosure to an adversary. The communication an in-house lawyer creates today will not come under the judge’s microscope until an event occurs that gives rise to a legal claim and a party files a lawsuit, requests documents that include the lawyer’s emails, and files a motion to compel. This road to privilege determination can take several months, sometimes years. Yet the lawyer must understand and implement the privilege elements at the time of the
communication’s creation, or else face the judge’s decision with insufficient and late arguments. To prove the privilege at judicial decision time, the in-house lawyer must prove that an attorney–client relationship exists and that the employee communicated with the lawyer in a confidential manner for the primary purpose of assisting the lawyer in providing legal advice. The establishment of the attorney–client relationship is key. If an in-house lawyer