Board throws weight behind attorney-client privilege bill.

Saying it reflects the profession's core values, the Bar Board of Governors has endorsed a U.S. Senate bill aimed at protecting the attorney-client relationship during a government investigation and adopted other recommendations from the Bar's Attorney-Client Privilege Task Force.

Acting at their June 1 meeting in Key West, board members gave strong support for the task force's work and recommendations. They also expressed concerns over governmental policies, especially from the U.S. Department of Justice, that have infringed on the attorney-client privilege.

"This is a core issue," said board member Jesse Diner. "This is a no-brainer and I hope we can adopt these [task force recommendations] unanimously because this goes to the very heart of what we do as lawyers."

Board member Steve Chaykin, who served on the task force, said government infringements on the privilege have not shown any counterbalancing benefits.

"There's no evidence that the waiver of the attorney-client privilege or the work product privilege had any effect on any legitimate law enforcement techniques," he said. "It was being done because they could do it. There is no evidence it will hamstring any legitimate law enforcement investigation."

By unanimous voice vote, the board:

* Approved a new Bar legislative position supporting the attorney-client privilege and opposing any legislation or policy that erodes it. The position particularly cites the necessity for the privilege to promote following the law through effective counseling, ensuring effective advocacy, ensuring access to justice, and promoting the proper and effective operation of the justice system. That action also allows the Bar to support S. 186, introduced by U.S. Sen. Arlen Specter, R-Pa., that would prevent the federal government from seeking a waiver of the privilege or access to attorney work product in exchange for favorable treatment or consideration.

* Approved a resolution from the task force opposing policies that erode the privilege and work product protections and the routine seeking by government agents of a waiver of the privilege or the work product doctrine in exchange for favorable treatment during an investigation.

* Approved a resolution that the government should not determine how it will treat the subject of an investigation depending on whether that subject provided counsel to employees, entered into a joint defense, information-sharing, and common interest agreement with an employee, shared records or other information involving the investigation with an employee, or fired or otherwise sanctioned an employee for invoking Fifth Amendment rights in connection with the investigation.

* Approved a resolution that the attorney- client privilege and the work product doctrine should not be infringed on during a company's financial audit. Board member Ian Comisky said there have been problems with auditors demanding to see internal corporate investigations conducted by attorneys before the auditors sign off on a corporate audit.

"There is no limited waiver so the privilege is completely waived" if the auditors get access to that investigation, he added.

Overall, board members said there have been many problems with prosecutors as a condition for stipulating that a corporation cooperated with an investigation asking the company for a waiver of the privilege and work product doctrine. But that step can create problems for attorneys and their clients. Corporate employees might become reluctant to cooperate with an attorney's internal investigation for fear it will be made public, or corporate executives might be hesitant to have frank discussions with their attorneys because the privilege may be waived.

"Those of us who practice in this area see this over and over again. This puts us in a terrible quandary," board member David Rothman said. "This is a strong step forward."

Outgoing President Hank Coxe praised the task force's work, saying, "What took place in the past year was one of the more remarkable efforts of hard work and commitment."

Miami attorney Marcos Jimenez, a former U.S. attorney for the Southern District of Florida, is chair of the task force and presented its interim report at the June meeting. He said in response to corporate fraud, federal investigators began seeking more information from corporations and offering incentives to get it. A series of U.S. Department of Justice memorandums in the 1990s and since 2000 have set out a series of policies for seeking that information. Those policies have allowed prosecutors to require corporations to waive attorney-client and work product privileges as a condition of stipulating that the corporation cooperated with the federal investigation.

Other policies, Jimenez said, could punish corporations if they paid for executives' or employees' legal representation, entered into joint defense agreements, or failed to discipline or fire employees who refused to cooperate with the investigation.

The momentum has begun to swing against intrusive investigative techniques, he said. The Specter bill has gotten the attention of the Justice Department, as did a ruling from a federal judge.

The judge, Jimenez said, held that the efforts to get a corporation to withhold agreed-upon legal fees for employees and to terminate employees who failed to cooperate with an investigation violated those employees' Fifth and Sixth Amendments rights. That prompted the issuance of a new memorandum to guide when federal prosecutors could seek a waiver.

"The new memo acknowledged the past policies impacted the attorney-client relationship," Jimenez said. "The Department of Justice introduced stricter guidelines for waivers of the privilege, but still allowed it to be waived."

That hasn't satisfied the ABA, which has led efforts to ban offering any incentive for corporations to waive the privilege, but still allowing a voluntary waiver.

Other interim recommendations of the task force that will be referred to appropriate Bar committees, include:

* Refering the issue of protection of expert draft reports and communications to the Florida Rules of Civil Procedure Committee and the Code and Rules of Evidence Committee for review and consideration.

* Asking the two rules committees to consider rules that adopt the ABA's position on inadvertent waiver and set forth a procedure for inadvertent waiver claims.

* Refraining from pursuing an amendment to Rule 4-3.8(e) of the Rules of Professional Conduct that would restrict prosecutors from subpoenaing a lawyer in a grand jury or other criminal proceeding to present evidence about a past or present client. Jimenez said the task force concluded it was not proper to address that issue using ethical rules.

The task force is continuing to work on issues related to the crime-fraud exception to the attorney-client privilege, as well as other attorney-client and work product matters.

Gary Blankenship

Senior Editor