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Ethics Byte

Balancing a fix with client rights

By Diane Karpman

Diane KarpmanLast month we discussed the attorney-client privilege in the intra-firm context. It has become, in a sense, “discretionary,” if it exists at all, if the party requesting the information was a current client of the firm at the time the documents or emails were drafted. Usually, when you or your associates realize a mistake is made (and because you are lawyers), you generate emails. These documents are subject to discovery in subsequent litigation. These smoking guns have forced many firms to settle invalid claims because of the possible harsh glare of media scrutiny. At the end of last month’s column, it was suggested that an advance consent clause be inserted in the fee agreement, granting privacy and privilege to the firm before problems occur (see suggested language below).

In the ethics community, advance consents are hot button items. There is actually an ethics opinion, COPRAC 1989-115 that maintains they are not per se unethical, which inferentially suggests that some may think this is an issue. Therefore, suggesting a “work-around” or advance consent for intra-firm privilege is a controversial position, and ethics authorities do not necessarily agree. 

Ethics attorney Robert Sall (Orange County) maintains that it is antithetical to our fundamental fiduciary duties to avoid or evade disclosure obligations to clients when the firm is discussing matters that may be adverse to their interests. Remember this is a current client of the firm, so an advance consent to intra-firm privilege may be viewed as a contractual attempt to possibly avoid or impair the fiduciary obligation of communication, candor and fair disclosure.

Another ethics maven, Joel Mark (Ventura) suggested that a claim of work product privilege for these hot AK-47 emails or intra-firm banter would be defeated, because of CCP 2018.080, and because a lawyer can’t claim work product against a client.

There is substantial support for lawyers consulting about ethics issues: “[I]n‑house counsel faced with these ethical questions should not be required to fend for themselves based on their own research and what they can remember from a State Bar ethics program. Instead, they should be permitted to seek out independent, candid, professional advice about their ethical duties under their particular circumstances.” Fox Searchlight v. Paladino (2001) 89 Cal. App. 4th 294. (Fn. 52)  Lawyers are permitted to consult with ethics counsel without impairing the client’s confidentiality. Actually, the court suggested that early consultation would best protect the confidences of the client.

Many of you emailed and asked just what should be included in that clause? Some of the biggest firms in the county use the type of clause below.

Waiver: In‑Firm Privilege

“The occasion might arise for us to consult regarding our engagement for the Company with our own counsel — our General Counsel or other firm lawyers working with our General Counsel who do not perform work for the Company on the Subject Matter, or with our own outside counsel — at our expense, of course. To the extent that we are addressing our own rights or responsibilities, a conflict of interest might be deemed to exist between us and the Company as to such consultation or resulting communications, particularly if a dispute were to arise between us and the Company regarding the Subject Matter. A condition of this engagement is that, in such circumstances, the Company hereby consents to such consultation occurring, and waives any claim of conflict of interest based on such consultation or resulting communications that could otherwise disqualify us from continuing to represent the Company or from acting in our own behalf, even if doing so might be deemed adverse to the interests of the Company. The Company acknowledges that such communications are protected by our own attorney‑client privilege from disclosure to the Company.”

These are difficult issues. Whenever a fiduciary duty is impaired, it’s a good rule to obtain a consent/waiver from the client. Here, we are balancing our most fundamental obligation, the duty of loyalty to a current client, versus encouraging lawyers to openly discuss and attempt to fix an error. Most of the authorities agree that if outside counsel is retained, communications to them are privileged, but if there is a minor mistake or hiccup, outside counsel may not be available. Is it better to fix the problem or allow a festering wound to grow?

Legal ethics expert Diane Karpman can be reached at 310-887-3900 or at