What you need to know:
The highest court in Massachusetts has upheld the attorney-client privilege for in-house counsel in law firms. This is the first such decision in the nation.
What you need to do:
All US law firms should review the four requirements outlined by the Court.
The Supreme Judicial Court of Massachusetts rendered a trailblazing decision on July 10 in RFF Family Partnership v. Burns & Levinson. Stating clear and strong analysis, the Court firmly upheld the attorney-client privilege for in-house counsel providing advice in a law firm. This is the first time the issue has been resolved by the highest court in any US jurisdiction.
Choate filed an amicus brief in the case on behalf of the Boston Bar Association urging that the attorney-client privilege should be recognized on three stated conditions. The Supreme Judicial Court of Massachusetts adopted these conditions nearly verbatim, and added a fourth that is consistent with them. The Court stated its holding as follows:
The issue presented on appeal is whether confidential communications between law firm attorneys and a law firm’s in-house counsel concerning a malpractice claim asserted by a current client of the firm are protected from disclosure to the client by the attorney-client privilege. We conclude that they are, provided that (1) the law firm has designated an attorney or attorneys within the firm to represent the firm as in-house counsel, (2) the in-house counsel has not performed any work on the client matter at issue or a substantially related matter, (3) the time spent by the attorneys in these communications with in-house counsel is not billed to a client, and (4) the communications are made in confidence and kept confidential.
In-House Counsel Play an Important Role
In recent years, the role of in-house counsel has grown increasingly important in all sectors of the US economy, the Court emphasized. Where the officers or employees of an organization need legal advice on the spot, the attorney-client privilege encourages them to speak candidly with in-house counsel. Law firms are no exception. Partners and associates in law firms often need advice on how to carry out their ethical obligations, and clients benefit when this advice is obtained promptly. Some lower court opinions, however, had cast doubt on whether consultations inside a law firm are protected by the attorney-client privilege.
The RFF Case in Massachusetts
The highest court in Massachusetts has now clarified this issue. A real estate developer, RFF Family Partnership, LP, accused its law firm of malpractice, but insisted that the law firm continue providing services. The partners serving this client faced a tough question – should they keep on working, or should they withdraw? They consulted the firm’s designated in-house counsel. The real estate developer later filed suit and sought to ask deposition questions about the firm’s internal discussions.
The Supreme Judicial Court of Massachusetts took the case on an expedited appeal. The Court reasoned that the lawyers did the right thing by seeking the advice of in-house counsel, and that the protection of the attorney-client privilege would encourage them to make these consultations “fully informed”.
Good News for All US Law Firms
Massachusetts is the first jurisdiction in the nation where the highest court has addressed the attorney-client privilege for in-house counsel in law firms. Thus the RFF ruling has nationwide significance. The Court’s careful reasoning is persuasive, and its holding states a clear rule. This is good news for the legal profession.