In fact, the risks associated with consulting are inherent to all businesses. Your landscaper may advise you to plant a specific tree or shrub that is dying, or your plumber may advise you to fix your leaky pipe with a “permanent seal” that won`t end up being as permanent. Nevertheless, lawyers are held to very high standards and it is believed that they have all the answers. Laymen should not expect or understand that law is not a science and that there are no perfect solutions to a single legal problem. In addition, clients can expect a lawyer to provide both legal advice and a general counsel. And we provide that legal counsel on a regular basis without thinking about it. Click here to learn more. Start by looking at the purpose of the document against the customer`s needs. Has the client specifically requested management advice or is he simply seeking legal advice? If the client has requested both, you must clearly categorize the types of advice or take steps to distinguish between what constitutes legal advice and what constitutes management advice.
As the Court noted, the dividing line between legal and management advice is “not always clear,” and lawyers provide legal advice “when they rely on their legal training and apply legal principles to their client`s particular situation.” Therefore, a separate categorization or distinction could help guide a court`s analysis to determine the predominant purpose of the document. For example, the Court found that the privilege included a full editorial team because it clearly included counsel`s advice on the likely success of patent applications, patent expiration, and exclusivity periods. But on another document, the court analyzed each point and ruled: As a business lawyer, you have a unique opportunity to add value to your client`s business and stand out from other lawyers by providing valuable information beyond mere legal advice. However, it is important to remember that business counsel may not be subject to solicitor-client privilege (especially in the context of an in-house lawyer) and should only advise you on matters for which you have the knowledge and skills to provide competent advice. Oh, the privileged landmines that often accompany legal advice from a corporate lawyer. When the purported privileged communication of a corporate lawyer ended up in a business document, the question arose as to whether the company had waived the privilege. To win the problem, in-house counsel first had to overcome federal and state election laws, and then consider whether a legal advice opinion remains privileged if it is ultimately incorporated into a company-related document. Holley v. Gilead Sciences, Inc., 2021 WL 2371890 (ND Cal.
June 10, 2021). You can read the decision here. Let`s see how it went. It`s also important to know your limits and not give advice if you`re not competent to do so. California Rule 3-110 states that an attorney must have the “knowledge and skills” to competently provide the services, or that he or she must work with another attorney who does so. This rule applies to legal advice, but so does any advice you give to your client. In addition, ABA Model Rule 2.1[4] provides that “matters that go beyond purely legal matters may also fall within the domain of another profession. If consulting a professional in another field is itself something that a competent lawyer would recommend, the lawyer should make such a recommendation.
At the same time, at best, a lawyer`s advice is often to recommend a course of action in the face of conflicting recommendations from experts. The question of privilege before the courts was therefore whether solicitor-client privilege protected in-house counsel who appeared in business documents disclosed to non-lawyers. The dispute arose when Polaris hired a lawyer to conduct an audit of its security processes and policies following a recall in 2016. The information gathered as part of the audit was communicated to the consultant through an audit report entitled “Privileged and Confidential: Protected by Legal Privilege and Product of Legal Work”. The audit report included legal and business advice, including “recommendations in the areas of security, engineering, design, and business practices.” The other (less obvious) risk is that advising companies could potentially blur the lines between advice that is subject to solicitor-client privilege and advice that is not. In most cases, if you are acting as an external (as opposed to internal) advisor, your communication with your client will be preferred. In principle, however, solicitor-client privilege only applies if the relevant communication between a lawyer and a client serves as legal advice and is expressed confidentially. The application of this rule can become somewhat slippery if in-house counsel acts in a commercial capacity (e.g., as a corporate secretary) and provides commercial or strategic advice. Although the lawyer remains subject to codes of ethics that prohibit him from sharing these conversations with third parties, the communication itself may not be privileged.
The court therefore generally held that Gilead`s in-house counsel did not waive the privilege because the Development Committee included the in-house counsel`s advice in its documents. However, the registered in-house counsel had not yet proved that the communications at issue did contain legal advice relating to the expiry of the patents and Gilead`s exclusivity periods. Here you have a situation of pushing and pulling. You want your client to be happy so they can continue to keep you, while making sure you don`t lose solicitor-client privilege. If a lawyer has an interest in the client or his business and provides business advice, this management advice could be excluded from coverage. Consult their Professional Liability Insurance – Business Exclusion for more details. “What is crucial for privilege is that the communication is confidential in order to obtain legal advice from the lawyer.” 2 Therefore, if the advice sought is not a matter of trade policy or judgment as law, it is not necessarily protected by privilege and communications may be disclosed even if a lawyer is the source of the opinion. This article was written in support of CNA by: Loren R. Barron, Esq. Loren Baron is a partner at Elzufon Austin & Mondell, P.A., in the Litigation and Professional Liability Division.
Migration to the field of commercial advice may also impact a lawyer`s professional liability coverage by excluding the commercial enterprise from the policy. This exclusion may apply if a lawyer offering legal advice has control or an interest in the company, or if the lawyer represents both the corporation and the individual shareholder.3 In a recent Minnesota Supreme Court decision in In re Polaris, Inc., ___ N.W.2d ___, 2021 WL 5913633 (Minn. Dec. 15, 2021), the court addressed the following question: whether a document containing both legal and business advice could be protected by solicitor-client privilege. Applying the preponderant purpose test, the Court held that where a document contains both legal and commercial advice, the primary purpose of solicitor-client privilege must be to provide legal advice. Taking this rule further, the Court held that the predominant purpose of a document is a question of fact subject to the clear standard of error. Suffice it to say, however, that Gilead has won and lost a few. The real idea is the detail with which the court analyzed each document and the legal advice subsections in each. In order to be able to advise on legal issues, the lawyer must know the details of the client`s legal issue. This awareness can only occur when a client communicates the sensitive facts and circumstances surrounding the subject matter with full transparency.1 Therefore, the protection of the evidence surrounding this disclosure is high, but lawyers enter dangerous territory when offering advice outside the scope of the law. **This article is published for informational purposes only and does not contain or provide legal advice. The information contained herein should not be relied upon in relation to any particular fact or circumstance without first consulting a lawyer.
All opinions expressed are those of the author alone and not those of Devwa or its Business and Corporate section.** Lawyers must get used to the risk of advice. The role and duty of a lawyer is to give advice – advice that may not be well received, advice that, if followed, may not lead to the best outcome, advice that, even if objectively correct, puts the lawyer in a defensive attitude. It is simply the cost of doing business, the business of law. 4. What are the advantages of a management consulting firm? Of course, every time you give advice, you expose yourself to a certain risk. There is always a chance that things will go wrong, that the client will blame you, and that you will defend your decision. However, this is a risk in any business and law firm that you need to assess based on your own comfort level. In 2017, Polaris was sued for tort theories related to injuries sustained by a customer of one of the recalled vehicles.
