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

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-counsel.

The law also recognizes the application of the attorney-client privilege principle to communications between co-counsel. 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 cocounsel, 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.

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).