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Although a great stir has been made about the "McNulty memorandum" and the pressure it can put on companies under investigation to waive the attorney-client privilege, an equally important question in probes of alleged corporate wrongdoing is whether there even remains a privilege that can be asserted, said Jenner & Block Partner Andrew Weissmann during a breakout session today on "The Changing Privilege Landscape" at InsideCounsel's SuperConference.
Asked Mr. Weissmann: "How do you make sure that you even have a privilege for discussions with in-house counsel?" If the privilege was not carefully guarded, he said, "the whole fuss over the McNulty memorandum will be irrelevant, and there will be nothing to fight over."
Mr. Weissmann, the former head of the U.S. Department of Justice's Enron Task Force, addressed nearly 60 people while serving on a panel that also included John Howard, senior vice president and GC of W.W. Grainger Inc., and Arthur Cambouris, assistant GC of the New York Power Authority.
The privilege applies only to legal discussions with inside counsel, not to discussions that focus on business decisions. But that line is very hard to draw, all three panelists noted, and various courts have frequently found that a company has acted so as to lose the privilege.
Mr. Weissmann gave an example from his Enron days. When Enron entered bankruptcy, he noted, it waived attorney-client privilege. It turned out that the company's minutes showed that its policy was not to start a business meeting unless an in-house lawyer was present -- precisely so that the privilege could be claimed even when it clearly didn't apply.
"To the jury, that looked horrendous," Mr. Weissmann told the audience. "It looked as if they had something to hide."