Privilege Issues When Attorneys Consult with Attorneys

Attorneys need help too. When issues arise during an attorney-client relationship, attorneys may consult with colleagues about the representation. Some firms rely upon outside counsel to serve this function. Other firms maintain an internal team of attorneys designated to address such issues. Either practice is considered good risk management. But, the application of the attorney-client privilege to these communications is not entirely clear and may vary amongst the jurisdiction. We discussed this issue previously, here. In a recent decision, the Oregon Supreme Court held that such internal communications were not discoverable in a malpractice action.

In Crimson Trace Corp. v. Davis Wright Tremaine, LLP, 2014 Ore. LEXIS 433 (May 30, 2014), a former client filed a malpractice claim arising from a patent infringement lawsuit. During the underlying representation, one of the attorneys became concerned about a potential conflict of interest and sought guidance from the firm’s internal Quality Assurance Committee. The firm’s QAC was a group of the firm’s lawyers who were designated by firm leadership to serve as its in-house counsel. When the client subsequently filed a malpractice claim, which included allegations involving the perceived conflict of interest, she requested all internal communications regarding the conflict including those between and amongst the firm’s QAC. The firm responded that those materials were protected from disclosure pursuant to the attorney-client privilege.

The plaintiff responded that no attorney-client relationship existed amongst the attorneys and the QAC. Moreover, the plaintiff claimed that the communications were discoverable under the so-called fiduciary exception to attorney-client privilege.

The Supreme Court ruled in favor of the law firm. First, the court concluded that there was an attorney-client relationship between attorney and the QAC. Next, the court evaluated the fiduciary exception to the attorney-client privilege and held that it did not apply. The fiduciary exception precludes a fiduciary, in some cases an attorney, from asserting the attorney-client privilege against beneficiaries who seek disclosure of fiduciary-attorney communications. The court held that Oregon’s statutory scheme did not recognize such an exception and did not compel the firm to produce the materials in question.

Oregon’s conclusion supports the general trend that in-firm communications may be protected by the attorney-client privilege. However, this decision also highlights the potential that these materials are discoverable in those jurisdictions that recognize the fiduciary exception.