Recognizing and Protecting the Privileges Held by Your Attorney Client’s Clients

The legal profession is a case study in information overload. Attorneys and their staff receive staggering amounts of email and client records, in addition to the ever growing mountain of e-discovery responses.

Legal malpractice defense attorneys often find themselves in the unique position of having access to their client’s records, as well as the records of their client’s clients.

This topic was addressed at the Fall National Legal Malpractice Conference at a panel titled, My Client’s Clients: Protecting the Privileges Held by Your Lawyer Client’s Clients. The engaging panel of defense attorneys included Jeremy Boeder, a director at Trigbler Orpett & Meyer P.C., Marta Alcumbrac, an attorney with Robie & Mathia PC, and Bryan Feldhaus, a shareholder at Lommen Abdo.

Attorney-Client Privilege

Boeder reminded the audience of attorneys that attorney–client privilege is the oldest privilege protecting confidential communications. “Attorney-client privilege is the bedrock of attorney-client relationships; providing clients with the peace of mind to speak candidly with their attorneys,” said Boeder. Attorney-client privilege is limited in that it protects communications between an attorney and the client from disclosure to third parties when the purpose of the communication was for the provision or receipt of legal advice.

However, Boeder cautioned that attorney-client privilege is not absolute and is susceptible to intentional and unintentional waiver. At times it is unclear whether a waiver has occurred. To solidify the concept, Boeder provided examples of disclosures that are commonly seen in the legal malpractice context. Specifically, intentional waiver occurs when the client discloses the communications he or she had with the attorney during the process of the client suing the attorney for malpractice and establishing the attorney’s breach of the standard of care.

Alternatively, inadvertent disclosure can occur when emails from a client are produced by the attorney while responding to an e-discovery request. Judicial treatment of inadvertent disclosure is evolving from a broad view to a multi-faceted analysis of whether a waiver occurred and the scope of the waiver. Important factors being considered when addressing inadvertent disclosures include efforts to remediate the disclosure, and fairness of preserving or reinstating the privilege after an inadvertent disclosure.

In the context of defending a legal malpractice lawsuit, retention of attorney-client privilege and waiver can be murky at best. Boeder explained that while it is generally accepted that once a client sues his or her attorney the attorney-client privilege is waived as to the subject matter of the malpractice litigation pursuant to the self-defense exception. The exception allows the attorney to use otherwise confidential communications to refute allegations that the attorney has breached his or her duties to the client.

As Boeder explained, the scope of information the attorney can use in his or her defense presents fact specific challenges. Intense disputes regarding the information that can be disclosed by the attorney are common, especially when the attorney has represented the client for a long period of time, across many matters, but only one matter is at issue in the legal malpractice lawsuit.

Client Confidentiality

Client confidentiality under ABA Model Rule 1.6 governs the use, disclosure and maintenance of client information during and after a representation. Boeder explained that although similar to the attorney-client privilege, Rule 1.6 client confidentiality differs in three important ways—Rule 1.6 confidentiality is broader than the attorney-client privilege; Rule 1.6 confidentiality has more exceptions than the attorney-client privilege; and Rule 1.6 imposes a “reasonableness” standard relative to an attorney’s efforts to prevent unauthorized disclosure of client information.

Rule 1.6 confidentiality applies all matters relating to the representation of a client, which as Boeder explained includes any information obtained in the course of the representation. Several exceptions to Rule 1.6 confidentiality allow for the disclosure of confidential information, including with client consent; when necessary to facilitate the representation; or when permitted pursuant to one of the enumerated exceptions provided in Rule 1.6(b). Boeder explained that the third difference between attorney-client privilege and Rule 1.6 confidentiality is that Rule 1.6 requires the attorney to make “reasonable efforts to prevent the unauthorized disclosure of client information.”

Privilege and Confidentiality in Legal Malpractice Actions

Beyond understanding the applicability of the attorney-client privilege and Rule 1.6 confidentiality, Alcumbrac explained that it is imperative for defense counsel in a legal malpractice action to understand how to protect privilege and confidentiality of the client’s clients during each stage of litigation. Alcumbrac’s vast experience in litigating legal malpractice actions was evident in her ability to provide real world examples and practical recommendations for practitioners.

During the initial investigation and document collection phase of litigation, it is essential for the defense attorney to invest the time to identify, locate and maintain all of the attorney’s client file material, including electronically stored information (ESI). Alcumbrac strongly recommended that defense attorneys consider the use of an ESI vendor to ensure all relevant materials are properly collected, preserved and produced.

But, Alcumbrac cautioned that blindly hiring a vendor is not enough. The defense attorney must consider the legal malpractice action, the records at issue and the role the vendor will play within the case. Every law firm is unique and representation of attorneys in legal malpractice actions requires close attention to the firm’s level of sophistication and technological acumen. Alcumbrac regaled the audience with examples of cases where failure to properly handle the initial investigation and document collection resulted in less than ideal outcomes.

Alcumbrac acknowledged that the use of ESI vendors can dramatically increase litigation costs. She noted that prompt evaluation of the need for an ESI vendor can facilitate the client and insurance carrier understanding both the need for an ESI vendor and the cost savings of onboarding a vendor early in litigation. In some situations, joint retention of an ESI vendor to collect, maintain and produce ESI may be necessary or even court ordered.

Alcumbrac explained that this is often the case when a large volume of relevant ESI from the underlying proceedings is involved, and the cost of maintaining the data for one party is burdensome. “In these situations, it is critical that the parties meet and confer on an ESI protocol,” said Alcumbrac.

At the conference the parties should address search methodology and terms, proportionality and costs, custodians likely to have discoverable ESI, phasing and timing of deadlines, how to identify documents withheld on privilege grounds, separating and segregating privileged documents, and how the inadvertent production of privileged information is to be handled. Alcumbrac stressed that ESI discovery in legal malpractice actions is not “one size fits all.” Close attention to ESI rules in the jurisdiction can also assist attorneys through the process.

Maintaining the Privilege

Feldhaus addressed issues that arise when there is a prior, existing relationship between the attorney client and defense counsel, such as when the attorney client was formerly an adverse party or adverse counsel. While such a relationship does not require the defense counsel to decline the representation, Feldhaus explained that the defense counsel should institute additional measures to protect privilege and confidentiality concerns of the attorney client and prevent the unintentional disclosure of any privileged or confidential information.

For example, if the attorney client was formerly an adverse party or adverse counsel in a prior case, Feldhaus recommended that the defense attorney use extreme caution and consider the use of an ESI vendor for the collection of documents from the attorney client to prevent inadvertent disclosure of client materials unrelated to the legal malpractice action being defended. It may also be necessary for the ESI vendor to build a segregated client database for the attorney client during the pendency of the legal malpractice action. Feldhaus explained that a segregated database would protect the information from the attorney client from becoming commingled with defense counsel’s other files or systems.

Additionally, restricting access to the files maintained in the segregated database would add an additional layer of protection.

Protecting the Privilege and Client Confidentiality in Discovery

Feldhaus cautioned that the need to protect the privilege and confidentiality of the attorney client’s clients continues beyond the initial investigation and document collection phase of litigation. Discovery presents an opportunity for the inadvertent disclosure of protected information.

However, Feldhaus reassured the audience that thoughtful and deliberate efforts during the initial investigation and data collection phase, coupled with ongoing application of the attorney-client privilege and Rule 1.6 confidentiality analyses described by Boeder and Alcumbrac will provide the defense attorney with the tools necessary to address individual issues as they arise.