Are Communications with Experts Privileged? Maybe

In general, the attorney-client privilege protects confidential communications between an attorney and her client when made for the purpose of obtaining or providing legal advice.  The AC privilege applies not only to individual clients, but also to corporations.  In the case of corporations, courts have held that the AC privilege may extend to third parties hired by legal counsel when necessary for the effective consultation between the attorney and the corporate client.  However, the “agent of attorney” exception to the privilege is not unlimited, and may lead to the unintended discovery of information when used for an improper purpose.

The USDC for the Southern District of New York recently considered this issue in a discovery dispute involving an HR consultant report.  The case involved a class action lawsuit against a national restaurant chain for alleged violations of the FLSA and state minimum wage laws.  During discovery, the restaurant chain provided the plaintiffs with a privilege log outlining is claims of AC privilege for documents prepared by a human resources consultant that had been hired by the restaurant’s legal counsel during the litigation.  The restaurant argued that the documents were privileged because defense counsel retained the consultant as his agent to help him assess a legal issue involved in the case.

In analyzing this claim, the court noted that, under certain circumstances, the AC privilege may be applied to a non-lawyer employed by a law firm where the non-lawyer agent is necessary for the effective consultation between the client corporation and its attorneys.  However, in order to invoke the privilege, the communication must be made in confidence for the purpose of obtaining legal advice from the lawyer.  Thus, the AC privilege may attach to reports of third parties, such as accountants or technology experts, made at the request of the attorney or client where the purpose of the report is to take information from the client and express it in understandable form that may be employed in litigation.

Applying this standard, the court determined that the restaurant chain had not met its burden of establishing the HR consultant report fell within the scope of the privilege.  In particular, the restaurant failed to show that its attorneys engaged the HR consultant for any purpose other than factual research and to assist the restaurant in making business decisions.  Further, the restaurant failed to show that the consultant assisted counsel in their communication with the restaurant or with its rendering of legal advice.  Accordingly, the court held that the documents were not privileged, and that they must be produced to the plaintiffs in discovery.

Attorneys should exercise caution when hiring third-party consultants to assist in litigation involving a corporation.  The mere fact that the consultant was hired by a law firm to assist counsel does not ensure that the communications will be protected from discovery.  Instead, where confidentiality is a concern, counsel must be prepared to establish that the consultant was hired for the specific purpose of assisting in effective consultation between attorney and client.  Communications that fail to meet this standard risk being discovered, which could unintentionally expose confidential client information.