Keep Your Third-Party Communications Privileged

Corporations increasingly rely on third parties in global bribery investigations, data security incidents and other investigations. The extent to which communications with these third parties are privileged can significantly shape the course of an investigation and litigation that may follow. Any time an otherwise privileged attorney-client communication is disclosed to a party outside the corporation, there is a danger it could waive the privilege. This article examines circumstances where the privilege may be protected and suggests steps to maximize the likelihood.

Courts have found that the privilege may extend to third parties in two circumstances. First, where a third party provides services to counsel necessary for effective representation of the client’s interests. A separate line of cases supports claims of privilege when a contractor or consultant is so integrated in the company as to become the “functional equivalent” of an employee.

Outside counsel should dictate and monitor the investigation process. Specify that documents produced during an investigation are being created at the direction of legal counsel with the clearly stated purpose of providing legal advice. Memoranda documenting interviews of corporate employees should reflect counsel’s impressions and not merely transcribe. Engagement letters should document that consultants are working under counsel’s direction in order to facilitate legal advice and document confidentiality obligations.

Followed rigorously, these practices can maximize the possibility that communications with non-lawyer consultants and others will fall under the attorney-client privilege.