ABA continues its efforts to protect attorney-client privilege

“The attorney-client privilege—which belongs not to the lawyer but to the client—historically has enabled both individual and corporate clients to communicate with their lawyer in confidence. As such, it is the bedrock of the client’s rights to effective counsel and confidentiality in seeking legal advice,” said ABA President Karen J. Mathis in remarks [PDF] made earlier this month before the House of Representatives Committee on the Judiciary’s Subcommittee on Crime, Terrorism and Homeland Security. “From a practical standpoint, the privilege also plays a key role in helping companies to act legally and properly by permitting corporate clients to seek out and obtain guidance in how to conform conduct to the law.”

ABA President Karen J. Mathis

The ABA was invited to share its views during the March 8 hearing, “The McNulty Memorandum’s Effect on the Right to Counsel in Corporate Investigations.”

In describing the ABA’s concerns about the Justice Department’s recent McNulty Memorandum, and the earlier guidance offered as part of the Thompson Memorandum, Mathis mentioned the erosion of attorney-client privilege and work product doctrine, as well as concern about the erosion of employees’ constitutional and other legal rights, including the right to effective legal counsel and the right against self-incrimination.

Specifically about the McNulty Memorandum, Mathis stated, “Instead of eliminating the improper practice of requiring or encouraging companies and other organizations to waive …, the new ‘McNulty Memorandum’ merely requires high level department approval before formal waiver requests can be made. The memorandum also continues to allow prosecutors to grant cooperation credit for ‘voluntary,’ unsolicited waivers.”

In addition to its testimony, the ABA has contacted the Securities and Exchange Commission to urge it to consider modifying the commission’s policy relative to attorney-client privilege as outlined in the 2001 “Seaboard Report.” In a Feb. 5 letter [PDF] to SEC Chairman Christopher Cox, the ABA compared the SEC policies in the so-called Seaboard Report with similar policies outlined in the Justice Department’s 2003 Thompson Memorandum. The Seaboard Report was issued as a statement of the criteria the commission would consider in determining whether, and to what extent, companies under investigation should be granted credit for cooperating with commission staff as the agency decides whether and how to take enforcement action.

In urging Chairman Cox to consider revising the commission’s policies, the ABA offered specific proposed language the association believes would prevent the practice of requiring organizations or companies to waive the attorney-client privilege or to take actions against their employees as a condition for receiving cooperation credit, while not impairing the commission’s ability to gather the information it needs to enforce federal securities laws.

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