Archive for July, 2012


New Court of Appeals opinions allows for privileged in-house advice under certain circumstances

A law firm is representing a client when an issue arises that might result in a claim against the law firm.  Does the law firm have the right to seek privileged legal counsel from in-house (or even outside) counsel while the attorney-client relationship is ongoing?  Or does such advice arise under a presumptive conflict-of-interest situation in which the client is entitled to discovery the communication and advice given?

How do you make sure this stamp works?

The Georgia Court of Appeals addressed this question in Hunter, Maclean, Exley & Dunn v. St. Simons Waterfront, LLC, A12A0716, 2012 WL 2866299 (Ga. Ct. App. July 13, 2012).  The answer is, of course, it depends.

In this case of first impression, the Court rejected a per se rule prohibiting a law firm from seeking privileged in house legal advice about a potential claim by a current client.   The approach chosen by the Court of Appeals relies heavily upon a law review article by Elizabeth Chambliss, The Scope of In-Firm Privilege, 80 Notre Dame L. Rev. 1721 (2005).

In reversing the trial court, which had held such consultations essentially a per se conflict of interest, the Georgia Court of Appeals concluded “that whether a law firm may claim privilege to legal advice regarding duties to a current client from in-house counsel ‘depends on whether there is a conflict of interest between firm counsel’s duty to the law firm and firm’s counsel duty to the outside client.'”

In order for the communications to be confidential, the Court identified three important factors:  (1) that the attorney not be involved in the representation of the client; (2) that the conflict or potential conflict be disclosed; and (3) client consent to continued representation.

The first factor is best achieved in firms that have a full time general counsel that is salaried and not involved in the representation of outside counsel.  This of course is a luxury for only firms of sufficient size.  The Court permitted the option of a designated general counsel that represents outside counsel but is not involved in the representation of the client at issue.  For those firms that appoint counsel on an ad hoc basis, the firm will bear the burden of establishing “that an attorney-client relationship was established before the in-firm communication occurred” and “to show that the identity and role of ‘firm counsel’ was clearly defined.”

 Under either approach, the key factor is that “in-house counsel . . . remain completely separate from any representation of the [firm’s] client, except for the limited purpose of gathering information” to provide the necessary advice. The firm must also provide “adequate notice to the client of the firm’s potentially adverse interests.”  The firm must then obtain consent to the firm’s ongoing representation, though the opinion suggests that such consent may be implied by the client’s conduct or silence after disclosure.  If these factors are not accomplished, “the firm has no argument for waiver of firm counsel’s imputed conflict.”

The Court of Appeals refused to protect “work product” — the only protections would be to privileged communications within the context of the in-house advice and representation.The Court of Appeals remanded the case to the trial court to make the requisite findings of fact consistent with the opinion.

The case lays out the roadmap for obtaining privileged communications with in-house or outside attorney about potential claims while continuing to represent the client.  First, disclose the conflict or potential conflict to the client and obtain a waiver of that conflict in order to continue the representation.  Preferably this is in writing.  Second, “retain” your in-house or outside counsel with the equivalent of a retention agreement.  This is easiest when the firm has designated general counsel, but if that is not the case, be sure to enter into a written retention agreement and create a file.  Finally, ensure that the in-house attorney is not involved in any work on behalf of the firm’s client.  The counsel should be careful to only put mental impression in privileged communications, as the Court of Appeals declined to recognize a work product protection under even these circumstances.

As the Court of Appeals recognized, these same safeguards can be accomplished by the retention of outside counsel.  The attorneys at Hawkins Parnell Thackston & Young, LLP provide this type of advice to lawyers engaged in the ongoing representation of existing client with potential claims.


Mortgage fraud convictions result in disbarment

An attorney that was found guilty of participating in a mortgage fraud scheme was disbarred by the Supreme Court.  While the result was not surprising, the opinion is valuable in that the Court discussed various mitigating and aggravating factors while evaluating whether the criminal conviction should result in  disbarment.

Mitigating and Aggravating Circumstances Are an Important Part of a Bar Defense

Among the factors favoring leniency were a lack of disciplinary history, good character and reputation (evidenced by various letters and character references), the wrongdoing was an isolated incident, he cooperated with the bar, he was involved in mentoring young people and lawyers, and he showed remorse.  

Aggravating factors included selfish motive, wrong doing in the practice of law, wrong doing directed at a client, and experience in the practice of law.

The opinion supports focusing argument that addresses the factors recognized by the Supreme Court in mitigation and aggravation of penalties.  Although felony convictions arising out of the practice of law are tough to overcome, this is an important strategy in closer cases.


Supreme Court rejects unopposed voluntary discipline

In a new discipline case, the Georgia Supreme Court rejected the petition for voluntary discipline filed by an attorney accused of violating Rules 1.4 (communication) and 1.16(d) (termination of representation).

The attorney sought a review panel reprimand.  The maximum penalty for the two violations of the attorney are public reprimand.  Despite the slight difference in maximum penalties, and despite no objection from the State Bar of Georgia, the unanimous Supreme Court rejected the petition.

The Supreme Court cited the attorney’s two prior disciplinary penalties, an investigative panel reprimand and a letter of admonition.  All of the Justices concurred.

More and more voluntary discipline petitions are being rejected by the Supreme Court, even in cases in which the State Bar is not opposing the proposed discipline.  The trend, while not unanimous, remains that the Supreme Court is often seeking harsher penalties than the State Bar.

Kim Jackson Cleans Up The Mess

Follow Attorney Defender on Twitter

Post Topics