A critical skill for any corporate counsel is the ability to assess which internal conversations are protected by attorney-client privilege and take steps to ensure that privilege remains unbroken. For decades, courts have used various common law tests to determine whether attorney-client privilege applies to conversations between corporate counsel and a company's former employees, such as the multi-factor analysis established by the Upjohn decision in 1981. But a ruling from Washington state last fall turned the long-accepted doctrine on its head. The Washington Supreme Court decision in Newman v. Highland School District adopts a blanket rule that privilege does not extend to communications with employees who have left the company. In light of this and the risk of similar privilege-limiting decisions from other jurisdictions, any privileged communication with the employee should occur before the employee departs, if possible, and any communications with a former employee should be handled as if it is not privileged.

Danger of Wearing Two Hats

Although in-house lawyers are increasingly involved in a company's business operations, attorney-client privilege only applies to legal advice. Corporate counsel's participation in business operations creates the opportunity for opposing parties to challenge this privilege in corporate communications. To make this determination, courts evaluate whether the primary purpose of the communication was for legal advice. The burden of establishing the primary purpose lies with the party asserting the privilege—the corporation. Privilege may only be invoked properly if the in-house lawyer was wearing an attorney hat when the communications were made.