A malpractice case against Schnader Harrison Segal & Lewis in Manhattan Supreme Court has raised a broader issue for large firms: whether communications between a firm's general counsel and its attorneys are privileged from clients.

On Dec. 5, Acting Supreme Court Justice Melvin Schweitzer in Stock v. Schnader Harrison Segal & Lewis, 651250/13, ordered Schnader to hand over to a former client internal firm communications between its general counsel and its attorneys. Schnader is appealing that decision, saying the issue of “in-house law firm attorney-client privilege” is a matter of first impression in New York state courts and deserves a second look.

Howard Elman, a managing member at Matalon Shweky Elman who frequently defends law firms and who is not involved in this case, said this is a sensitive concern for firms.