It's a Privilege

The fallout from the financial fraud explosion a few years back has been broad and deep, not the least of which is the assault on the attorney-client privilege.

Emboldened prosecutors are now routinely seeking a waiver of this fundamental privilege as part of investigations into alleged corporate wrongdoings.

Surely we need vigilant investigators aggressively hunting down illegal transactions that benefit only the corrupt few. But the assault on the attorney-client privilege goes beyond efficient enforcement of the law. It threatens the ability of companies to get effective counsel – which is pretty much in the hall of fame of fundamental “rights” in American jurisprudence.

The government, as they say, has gone too far.

The political heat is rising for the Department of Justice to back off a bit in demanding waivers from companies as a condition of getting “lenient” treatment or avoiding prosecution altogether.

The federal Sentencing Commission is seemingly getting the message.

It recently took the unusual step of reversing itself. The Commission rescinded a portion of the federal Sentencing Guidelines that had encouraged the DOJ, as part of sentencing negotiations, to demand waivers of the attorney-client privilege as a way to get “thorough” and “pertinent” information from companies under investigation.

In this issue, we take a look at how varied interest groups – including the Association of Corporate Counsel, the U.S. Chamber of Commerce and the American Civil Liberties Union – have created an unusual alliance to pressure top officials and lawmakers into bolstering the attorney-client privilege.

The political winds are ever shifting, so it’s unclear how this effort will pan out. But it appears for now that the proverbial pendulum has perhaps begun to swing back in favor of companies and their attorneys.

But we’re not a “one-issue” publication. Be sure to take a look at the other articles throughout these pages, including a possible move by the Securities and Exchange Commission to exempt smaller companies from portions of Sarbanes-Oxley, and a piece detailing an unusual strategy of some in-house counsel in hiring plaintiffs’ lawyers to handle certain types of cases.

As always, we hope you find our articles interesting and informative. Be sure to give me a shout ([email protected]) should you have a story idea or have any concerns at all about In-House.

Paul D. Boynton
Publisher