While the management of attorney-client privilege is not strictly a matter of ethics, I decided to dedicate two columns to that topic as it’s widely misunderstood by in-house counsel and their business partners. If you and your in-house colleagues are not proficient in this dynamic subject, then you are underserving the organization and likely compromising your company’s investigations and litigation.

The best evidence of this knowledge gap is recent case law where courts have been forced to remind us of the following fundamental points:

1. Conversations are not privileged simply because a lawyer is in the meetings.

2. E-mails are not privileged because a lawyer is copied on the e-mail.

3. Communications are not privileged when a lawyer serves as a conduit for the communication.

Clearly, some lawyers don’t understand the privilege basics. Even if your in-house team grasps the essentials of privilege I’m offering, your business partners do not. Accordingly, over two articles I offer five action items to assure that the in-house team and the organizational constituents are managing privilege. The first two challenges are covered this month.

First, call your team to action with training. If you manage a team, ask one of your team members to take responsibility for refreshing the group on the law. One of your law firms would be happy to handle this training. Create a “privileged or not” game to drive home the lessons from recent cases. Jenner & Block publishes a handy compendium of cases relating to privilege on its Web site.

A root cause of the mismanagement of privilege is confusion over the identity of the “client.” The Supreme Court in Upjohn Co. v. United States held that the company could invoke attorney-client privilege to protect communications made between company lawyers and nonmanagement employees. The court identified several factors that need to be present for privilege to apply:

1. The information is necessary to provide legal advice to the corporation or was ordered to be communicated by a superior;

2. The information was not available from “control group” management;

3. The communications concerned matters within the scope of the employees’ duties;

4. The employees were aware that they were being questioned in order for the corporation to secure legal advice;

5. The communications were considered confidential when made and kept confidential.

When each of these elements is met, a lower-echelon employee is considered a client under the attorney-client privilege. The Upjohn decision reflects federal law; states follow either Upjohn or other tests. If these concepts and tests are not familiar, you have some work to do.

Second, educate your business teams to improve management of the attorney-client privilege. Many corporate constituents labor under the belief that the in-house counsel is their personal lawyer and anything they share will remain confidential. In-house lawyers don’t help matters by cavalierly using the term “client” when speaking to our business teams. Worse yet, in-house counsel often market themselves as the business team’s lawyer. We fail to appreciate the significance of those words to nonlawyers.

One approach to educating the business teams is to publish a brief white paper explaining privilege to nonlawyers. For example, the Office of General Counsel of the California State University has published an excellent employee-focused primer of the attorney-client privilege.

I will continue this topic in my next article.