I usually write about Asset Protection, Tax Planning and Financial Privacy, so I thought I would discuss a somewhat related topic; the Attorney-Client Privilege. The Attorney-Client Privilege is a legal concept that protects certain communications between a client and an attorney and keeps those communications confidential. This privilege is “owned” by the client, and it protects the communications even if the client is only a prospective client.
For a communication to be considered privileged (that is protected from disclosure) three (3) things must be established:
- The holder of the privilege is a client or a prospective client;
- The communication is made confidentially with a licensed attorney or subordinate; and
- The communication is made with the intent securing legal advice and/or representation.
This privilege is one of the most important concepts in Western legal studies. However, it is also one of the most misunderstood issues even among lawyers.
As with all rules, it is in the exceptions that we find the heart of the matter.
The communication must be with an attorney. There is no such thing as an Accountant-Client Privilege. If you describe a troubling situation regarding past tax returns with an attorney, the attorney will most likely be required to keep the communications confidential. Even upon subpoena the attorney would be required to refuse to answer questions. However, an accountant in the same situation may be required to report what the client said to the authorities as the accountant’s foremost duty is to the taxing authority.
A communication is only privileged if it was intended to be confidential. Speaking in front of 3rd parties destroys the privilege, so attorneys and clients should avoid those elevator conversations. No one wants to hear what you are saying anyway!
The communication is privileged, not the facts. So if you toss a bloody knife onto your attorney’s desk and ask, “What should I do if I just killed my wife with that knife?” the question is privileged as is the possible answer, but the fact that you had a bloody knife in your possession is not protected.
The privilege does not apply in the face of an ongoing or prospective criminal activity or conspiracy. Telling your attorney about your criminal activities in the past may be protected, but if you describe how you intend to continue with such activities the attorney may have a duty to the courts to inform the authorities. A very troubling situation to be in if you are an attorney. If the attorney is not careful he may be considered an accessory or even a co-conspirator to a crime if he fails to disclose the information, or he may be held in violation of his duty to the client if he discloses it inappropriately.
The privilege can also be waived by the client. Remember, the privilege is “owned” by the client. If the client chooses to disclose the content of the communication that is privileged, well it is not privileged anymore. Now this raises an interesting issue (at least to me): to what degree does a partial disclosure of privileged communications waive the remaining undisclosed communications? Under some rules partial disclosure by a client waives the entire privilege, and under other rules partial disclosure only serves as a narrow waiver regarding the exact facts that were disclosed. For instance, let us say that the client files a grievance/complaint against the lawyer. Obviously, the lawyer has the right to defend himself. In Texas, this waiver of privilege is limited to those communications that serve to defend the attorney’s interests, and does not serve to waive the privilege in regards to other forums. However, if the client discloses confidential communications in open court before the Federal Courts, this disclosure may result in a broad and universal waiver of ALL communications between the client and the attorney. OUCH!
The Attorney-Client Privilege is a powerful right that gives people the ability to speak candidly to their attorney even if they do not end up retaining the attorney. But it is not as simple as some believe, and it certainly does not cover everything you say to an attorney. As always, caution is the rule!