Business owners who engage an attorney should understand confidentiality and privilege in the attorney-client relationship and take steps to ensure that matters they wish to keep confidential are not inadvertently disclosed to third parties. It is often a misconception that all information disclosed to your attorney will be confidential. This is not always the case.
When you engage an attorney, that attorney is bound by an ethical code that exists to protect the client and assure that matters between the client and the attorney are confidential. This is at the foundation of the lawyer-client relationship. That said, there are limited exceptions under most state ethical rules. For example, under the Michigan Rules of Professional Conduct an attorney may disclose a client confidence: (i) with informed consent of the client; (ii) to the extent necessary to rectify fraud or illegal conduct by the client in the course of the engagement; (iii) if the client has communicated an intention to commit a crime; (iv) if required by law or court order; or (v) as necessary to collect a fee or to defend against allegations of wrongful conduct.
In contrast, attorney-client privilege is an evidentiary rule that also protects confidentiality, but with different standards. The attorney-client privilege generally applies when:
- The communication is between a client and a certified attorney.
- The communication is confidential when made.
- The communication is for the purpose of giving legal advice.
A communication that may be protected under the basic ethical standard of client-attorney confidentiality, may not receive the same confidentiality status in the courts. For example, the following circumstances may result in the communication not meeting the standard for attorney-client privilege:
- If there is a third-party present when the communication is made.
- If the client had already shared the communication with a third party or the communication was already public knowledge.
- If the communication does not relate directly to the purpose of obtaining legal advice or assistance. For example, if the client sends facts in a vacuum to the client’s legal counsel, these are not automatically protected under the attorney client privilege.
- If the attorney is acting outside of his or her role as a lawyer–working as a business advisor to a corporate board, as an example.
Note that the attorney-client privilege applies to the communication. It may not apply in court to notes, email and other work product related to the communication, although these underlying documents may be protected under the attorney work product doctrine.
The following are some common best practices to follow to ensure confidentiality.
Engagement letters: Terms of confidentiality should be clearly spelled out in all engagement letters with legal counsel. All matters relating to the client are confidential and should not be discussed or disclosed to anyone outside the law firm, without the express written permission of the client.
Meetings: Care should be taken to ensure that there are no third parties privy to the discussions in client-lawyer meetings. Owners of businesses should identify internally who may communicate with outside counsel and streamline such communications. Including employees of the business on attorney calls who do not have a need to know the information may waive the privilege. Business owners should also take care that meetings with legal counsel are private. For this reason, speaker phone calls, in which a third party may inadvertently be present, should be used with great caution.
Email and other forms of electronic communication: Digital communication of any kind is never as private as a face-to-face meeting between the client and the attorney. Information included in emails and texts may create evidence that could be discoverable and damaging in subsequent litigation. Caution should always be taken when discussing opinions or conclusions about a legal matter in email. As well, sensitive communications between the client and the lawyer through email should, as a matter of routine, be kept to a minimum.
Social Media: With all of the digital methods of communication (email, cloud-based document sharing, social media, web posts) creating increasingly informal and instantaneous means of communication, client-attorney confidentiality is more difficult to protect. Facebook, twitter and Instagram have all become daily communications tools. But they are not private spaces, regardless of how your privacy settings are configured, and the information is easily discoverable. For example, if a business owner or employee shares information on social media, which has also been shared with her attorney, that information may no longer be subject to protection under the attorney client privilege. Business owners should have a clear social media policy to avoid inadvertent disclosure of sensitive information by employees.
In summary, confidentiality between a client and an attorney is essential to good legal representation. Maintaining the attorney-client privilege for such communications is also critical to protecting your position in court. When entering into sensitive discussions with your attorney, understanding the differences between what may be considered confidential by the client and the attorney, and what may be considered confidential by the courts, may be critical to maintaining confidentiality.