The Appellate Division of the Supreme Court of New York has reversed a lower court’s Order that emails between firm lawyers and their in-house counsel were not protected under attorney-client privilege. The reversal follows a national trend as the highest Courts in Massachusetts, Oregon, and Georgia have also reached similar decisions.
The case involved an employee who hired a firm to negotiate a separation agreement with his former employer. After consulting with lawyers at the firm, the employee initiated a lawsuit in federal court and instituted arbitration proceedings against the employer. Just prior to the arbitration, the employer advised that they intended to call one of the employer’s attorneys to testify. The attorney had met with in-house counsel regarding his ethical obligations. The employee lost his arbitration and then settled the federal court case for a nominal amount.
Two years later, the employee initiated a legal malpractice action against the firm. During discovery, a firm attorney claimed that discussions in emails between him and in-house counsel were protected under attorney-client privilege. The employee moved to compel production of the emails, which the lower court granted.
The Appellate Division reversed, reasoning that the purpose of consultation with in-house counsel is to ensure that attorneys adhere to their ethical obligations in giving testimony. The Court sought to encourage firm members to obtain early advice regarding their duties to clients, to correct mistakes, and to prevent increased costs of litigation. The court also indicated that the same decision should be reached, whether legal advice was being obtained from in-house or outside counsel.
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