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Seek independent legal advice when the issue is personal

Attorney-client privilege is something in the American legal system that is held very dear. However, that privilege can get muddled in certain situations -- especially when the attorney is the counsel for your business.

For example, the recent criminal trial of the director of the Institute for International Sport showed how murky the issue can become when the director tried to assert privilege over his communications with the Institute's attorney. The court denied his claim and the attorney was obliged to testify. In essence, the court agreed with the prosecution that the attorney couldn't represent both the corporation and the individual accused of defrauding that corporation -- even if he did offer the director private legal advice from time to time.

With that in mind, here are some rules any business professional should remember before confiding in the company attorney:

-- The in-house counsel generally cannot represent both the company and private individuals within the company, especially over the same issues.

-- Not every written communication that passes to your in-house counsel is protected by attorney-client privilege. For example, minutes of a meeting of the Board of Directors could be given to the in-house counsel, but privilege doesn't automatically attach and protect that communication. If a business meeting isn't about legal issues, it isn't likely to be privileged.

-- If the attorney acts in a dual role -- both business and legal -- the court may examine which role the attorney was fulfilling at the time of the communication to decide if privilege is involved. If the attorney was acting in a business capacity and not a purely legal capacity, everything he or she did at that time could be subject to discovery.

-- Only some of the company's employees can represent the company to the in-house counsel. Generally speaking, courts have held that either only the controlling executives can represent the company or the subject matter being communicated has to be of a legal nature and important to the company.

-- If communication that is privileged is ultimately shared with another employee, that will destroy the attorney-client privilege.

If you run a business, don't rely on the company attorney for legal advice, especially in criminal issues or concerns about something's legality. Seek independent advice from a criminal lawyer instead.

Source: Findlaw, "In House Counsel and the Attorney Client Privilege," accessed March 15, 2017

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