Question Presented
Is confidential information
passed on to Indian attorneys working for LegalEase, by US
attorneys, protected under the attorney client privilege and
the work product exception?
Short Answer
Yes. Both US and Michigan
case law reveal that services provided by LegalEase are of
a nature similar to services provided by temporary/contract
attorneys and/or paralegals and secretarial staff, and as
such, any information passed to LegalEase and any work prepared
by LegalEase, would be covered by the attorney client privilege
and work product exception.
Discussion
A. Introduction
The primary concern with
outsourcing legal activities is security, and how to deal
with issues of attorney-client privilege. Since there is no
clear precedent with respect to the issue of the applicability
of the attorney client privilege to outsourcing legal work,
one can be inferred by referring to how US Courts treat information
passed from US attorneys to persons in similar positions as
LegalEase Indian attorneys. USCS Fed Rules Evid R 501 (2004)
is the general rule that deals with the subject of privileges.
It prescribes the common-law privileges as they may be interpreted
by the Courts of the United States in the light of reason
and experience for most cases. However, if in a civil case
a claim, defense, or an element of either a claim or defense
is governed by state law, state rules of privilege apply.
Various Courts have ruled
that the purpose of the attorney-client privilege “is
to
encourage full and frank communications between attorneys
and their clients and thereby promote broader public interests
in the observance of law and administration of justice.”
See Upjohn Co. v. United States, 449 U.S. 383, 389, 66 L.
Ed. 2d 584, 101 S. Ct. 677 (1981); In re Grand Jury Investigation
No. 83-2-35, 723 F.2d 447, 450 (6th Cir. 1983), cert. denied
sub nom. Durant v. United States, 467 U.S. 1246, 82 L. Ed.
2d 831, 104 S. Ct. 3524 (1984); Fed. R. Evid. 501; Fisher
v. United States, 425 U.S. 391, 48 L. Ed. 2d 39, 96 S. Ct.
1569 (1976).
The privilege applies:
- Where legal advice of any kind is sought
- From a professional legal adviser in his capacity as
such,
- The communications relating to that purpose,
- Made in confidence
- By the client,
- Are at his instance permanently protected
- From disclosure by himself or by the legal adviser,
- Except the protection be waived.
See United States v. Goldfarb,
328 F.2d 280, 281 (6th Cir. 1964), cert. denied, 377 U.S.
976, 12 L. Ed. 2d 746, 84 S. Ct. 1883 (1964), quoting 8 Wigmore,
evidence § 2292, at 554. Humphreys, Hutcheson and Moseley
v. Donovan, 755 F.2d 1211, 1219 (6th Cir. 1985); United States
v. United Shoe Mach. Corp., 89 F. Supp. 357 (D. Mass. 1950).
B. Applicability of the attorney
client privilege/work product exception
1. Communications made to
employees of the attorney
The attorney-client privilege
is not lost where a law firm shares privileged information
with its associates, legal assistants, and secretaries {Jack
B. Weinstein, Margaret A. Berger, Weinstein’s Federal
Evidence § 503.07[1], at 503-26 (2d ed. 1997)} The attorney-client
privilege protects communications made to attorney’s
staff, consultants, and other agents employed in rendering
services.
It has never been questioned
that the privilege protects communications to the attorney’s
clerks and his other agents (including stenographers) for
rendering his services. The assistance of these agents being
indispensable to his work and the communications of the client
being often necessarily committed to them by the attorney
or by the client himself, the privilege must include all the
persons who act as the attorney’s agents. See 8 J. Wigmore,
EVIDENCE § 2301 at 538 (McNaughton Rev. Ed.) 1961)
In In re Fischel (1977,
CA9 Cal) 557 F2d 209, the Court held that attorney-client
privilege extends to those papers, prepared by attorney or
by attorney’s agent or assistant at attorney’s
request for purpose of advising client, which would tend to
reveal client’s confidential communications.
In Dabney v Investment Corp.
of America (1979, ED Pa) 82 FRD 464, 28 FR Serv 2d 105. the
Court held:
“Attorney-client
privilege applies only to members of bar or their subordinates;
protected subordinates include any law student, paralegal,
investigator or other person acting as agent of duly qualified
attorney under circumstances that would otherwise be sufficient
to invoke privilege; but no privilege exists for law student
who performs duties of attorney, is regarded and treated
as attorney, and is made privy to certain confidential information
that would have been disclosed only to an attorney, where
law student is acting on his own.”
In Reed Dairy Farm v. Consumers
Power Company, 1998 Mich. App. LEXIS 29, the Court considered
the scope of applying the attorney-client principle to paralegals
and held:
“Our first inquiry
is whether the paralegal was an agent of defendant, acting
in a representative capacity and authorized to speak on
its behalf. We are not persuaded that the paralegal, who
merely signed his name to the interrogatories, had first
hand knowledge of the answers to which he affixed his signature,
nor that he was privy to the confidential communications
in which defendant engaged with its attorney. Moreover,
there is no indication that the paralegal participated in
trial strategy or preparation to the extent that he revealed
confidential information to counsel on behalf of defendant.
Therefore, although he may be an employee of defendant,
we do not find that the paralegal was defendant’s
agent, authorized to speak on its behalf. Id., at 121- 122.”
In Grubbs v K Mart Corp,
161 Mich. App. 584, 589; 411 N.W.2d 477 (1987) the Court held
that the attorney-client privilege attaches to direct communication
between a client and his attorney as well as communications
made through their respective agents.
2. Communications to an independent
contractor
These materials are copyrighted
and may not be distributed, modified, or reproduced, in whole
or in part, without the prior written consent of LegalEase
Solutions LLC. All rights reserved. In Compulit v. Bantec,
Inc. 1997 U.S. Dist. LEXIS 20045 the Court held that in its
judgment, the attorney-client privilege would not be lost
if a law firm used an outside document copy service or hired
an independent document copy service to copy privileged communications.
Likewise, the Court held that a law firm does not waive its
client’s privilege by contracting with an independent
contractor, to provide a necessary service that the law firm
feels it needs in order to effectively represent its clients.
Cf. United States v. Nobles, 422 U.S. 225, 237, 239-40, 95
S. Ct. 2160, 2170, 45 L. Ed. 2d 141 holding that the work
product rule protects material prepared by agents for an attorney
as well as those materials prepared by the attorney himself).
3. Communications between
co-counsels
The law also recognizes
the application of the attorney-client privilege principle
to communications between co-counsels. The instances in which
the attorney-client privilege was extended to communications
between attorneys reflect, at least for the most part, one
of two factual patterns: (1) The attorneys were co counsel,
that is, they represented the same client, or (2) they represented
clients whose interests in particular litigation, projected
litigation, or general business affairs were identical or
closely parallel.
These materials are copyrighted
and may not be distributed, modified, or reproduced, in whole
or in part, without the prior written consent of LegalEase
Solutions LLC. All rights reserved. A civil antitrust suit
was involved in United States v United Shoe Machinery Corp.
(1950, DC Mass) 89 F Supp 357, the opinion passing on objections
by the defendant to the introduction in evidence of almost
800 exhibits on the ground that they were privileged. Communications
sought to be excluded under privilege were, inter alia, those
between outside counsel for defendant among themselves, those
between attorneys on the defendant’s legal staff, and
those between the two groups of attorneys. The Court ruled
that these communications were all privileged to the extent
that they pertained to an opinion of law or legal services
and contained information or opinions based on information
furnished in confidence by the defendant. It was also the
judge’s opinion that communications to or from attorneys
in the defendant’s patent department were likewise privileged,
but only to the extent that they were to or from outside counsel
or the general counsel and his staff, and fulfilled the criteria
outlined above for communications
between the groups of attorneys involved therein.
4. The work product exception
The work product rule is
embodied in Fed. R. Civ. P. 26(b)(3), and provides a qualified
protection to documents and things prepared in anticipation
of litigation or trial by or for a party or his representatives.
Various Courts have held
that the attorney work product doctrine is distinct from and
broader than the attorney-client privilege. United States
v. Nobles, 422 U.S. 225, 238, n.11, 95 S. Ct. 2160, 2170,
45 L. Ed. 2d 141 (1975). Advance Publications, Inc. v. United
States (In re Antitrust Grand Jury), 805 F.2d 155, 163 (6th
Cir. 1986). The Supreme Court articulated the essential nature
of the doctrine in Hickman v. Taylor, 329 U.S. 495, 510-11,
91 L. Ed. 451, 67 S. Ct. 385 (1947). It is clear from Hickman
that work product protection extends to both tangible and
intangible work product.
Furthermore, the Court held
that this protection extends beyond materials prepared by
an attorney to include materials prepared by an attorney’s
agents and consultants. As the Supreme Court also explained.
“Attorneys often
must rely on the assistance of investigators and other agents
in the compilation of materials in preparation for trial.
It is therefore necessary that the [work product] doctrine
protect materials prepared by agents of the attorney as
well as those prepared by the attorney himself.”
See Nobles supra.
Similarly, in explaining
Rule 26(b)(3), the Advisory Committee on Civil Rules said:
“Subdivision
(b)(3) reflects the trend of the cases by requiring a special
showing, not merely as to materials prepared by an attorney,
but also as to materials prepared in anticipation of litigation
or preparation for trial by or for a party or any representative
acting on his behalf. The rule then goes on to protect against
disclosure the mental impressions, conclusions, opinions
or legal theories concerning the litigation of an attorney
or other representative of a party.”
5. E-mails as Confidential
information
In Chrysler Corporation
v. Paul V Sheridan 2001 Mich. App. LEXIS 2136 while recognizing
the principle that the common law attorney-client privilege
attaches to direct communications between a client and his
attorney and communications made through their respective
agents, the Court held that when an e-mail was intended as
a confidential communication between plaintiff’s agents
and counsel pertaining to ongoing and future litigation, it
is subject to the attorney-client privilege.
Conclusion
The long line of Federal
and Michigan court decisions interpreting the concept of the
attorney client privilege clearly establish that communications
made to stenographers, clerks, agents of an attorney, independent
contractors and communications between co- counsel, will be
protected by the attorney-client privilege. Moreover, the
work product exception would also cover any legal products
produced by LegalEase, for the benefit of its clients (US
attorneys).
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