Assume you need to meet the primary-purpose test now that the U.S. Supreme Court has punted on the question of privilege when it comes to communications that are both legal and business-oriented, attorneys say.
The top court earlier this month, after hearing oral arguments for In Re Grand Jury, said it shouldn’t have taken up the case about privilege in mixed-purpose communication, because the circuit courts are handling the issue as they should.
As Justice Sonia Sotomayor put it, “I don’t see … courts in states or even federal courts saying, ‘I can’t figure this out.’”
The issue came before the court when the petitioner argued for a move away from what’s known as the primary purpose test because it made it difficult for lawyers to be confident of privilege if they combine legal with nonlegal advice.
Daniel Levin of Munger, Tolles & Olson, who argued for the petitioner, sought a significant-purpose test in which the communication is considered privileged if the legal component was significant, even if the bulk of the communication was nonlegal.
The problem with this test, said Masha Hansford, the assistant Solicitor General who argued on behalf of the government, is that entire communications could come under privilege protection simply by virtue of a lawyer making a good-faith claim that a legal component is present.
In effect, she said, a significant-purpose test would effectively collapse into a bona fide legal purpose test in which “any non-pretextual legal purpose, no matter how minor, will do.”
Assume primary purpose
Given the ambiguity, with some circuit courts applying a primary-purpose test and some applying what amounts to a significant purpose test, a best practice for in-house counsel wanting to protect privilege is to assume the communication must meet the primary purpose test, said Andrew Turnbull of Morrison Foerster.
“That is the most prudent, safest approach,” he said.
That can be straight-forward to do if your organization is conducting an internal investigation or audit by requiring at the start that all communications be conducted in a channel set up by in- house counsel.
“You can put that in your [channel] that this is for the purpose of providing legal advice,” Turnbull told Legal Dive.
It gets more complicated when communications are informal or start out as business-oriented and then veer into legal issues. But in these cases, although it will be burdensome, it makes sense to open a new channel and say specifically that it’s for the purpose of giving legal advice.
“This is … awkward to implement [and] ignores the reality that business strategy is often intertwined with legal and business considerations,” Mary-Christine Sungaila, a partner at the Complex Appellate Litigation Group, told Legal Dive in an email. “But in the face of uncertainty, it is the only day-to-day advice that can be given.”
Sungaila filed an amicus brief with the Supreme Court on behalf of the Federation of Defense and Corporate Counsel in support of the petitioner.
If it’s not practical to separate communications into legal and nonlegal channels, then try to bifurcate your advice within the same channel, Mike Muskat of Muskat, Mahony & Devine said in an email.
You can divide your communications into two, he said, by prefacing it with language that makes the difference clear: “The following paragraph constitutes legal advice in response to your question regarding [blank],” Muskat said.
Doing so, he said, could “allow a reviewing court to more easily conclude the legal advice portion of the communication should remain privileged (e.g., through redaction) while the non-legal portion is discoverable.”
In all cases, you should memorialize your efforts to identify what you believe in good faith to be legal advice.
That, Muskat said, will “hopefully help a court see it the same way and avoid the difficult task of having to parse written communications to determine a communications’ primary, significant, or other ‘purpose.’”