What Every Business Owner Can Learn About The “Attorney-Client Privilege” From Donald Trump, Sean Hannity and Michael Cohen
Depending How It’s Used, The “Attorney-Client Privilege” Can Be a Protective Shield Made Out Steel or Glass
After twenty minutes of legal wrangling in open court, Judge Kimba Wood ordered Michael Cohen’s attorney, Stephen Ryan, to disclose the name of Cohen’s third client. Although Ryan didn’t want to, he eventually said the name “Sean Hannity” which shocked everyone in the courtroom.
As a business owner, you need to know what the attorney-client privilege is and how it works. Even more important, you need to know how to use this privilege to protect your confidential information. In this post, I share 32 years of tips that will help keep your protective shield hard and strong.
But first, let’s revisit last Monday’s hearing and what happened. In response to a court order, President Donald Trump’s attorney, Michael Cohen, aka “The Fixer” through his own attorney advised the world that his client list included three people. He listed (1) Donald Trump (most recently relating to Cohen paying adult film star, Stormy Daniels, who she alleges Trump had sex with, $130,000 in hush money), (2) Republican fundraiser Elliott Broidy relating to a $1.6 million payout in hush money to keep his affair with a Playboy playmate and subsequent pregnancy, and now, (3) Sean Hannity (by the way, if your attorney needs an attorney to protect himself, then both he and you probably have legal problems).
Now keep in mind that Cohen and his lawyers had more than 48 hours to think about, discuss, and come up with his client list. Sharing these three names wasn’t something that happened unexpectedly or at the spur of the moment. It was an intentional disclosure of information pursuant Judge Kimba Wood’s order. Cohen believes that Hannity is his client.
For obvious reasons, including Sean Hannity’s name on The Fixer’s short client list now has everyone talking. People are wondering why Hannity never revealed to his viewers his conflict with Cohen when reporting the “news.” Others are asking, despite Cohen’s list, if Hannity really is Cohen’s client and whether or not any communications between Hannity and Cohen are protected by the attorney-client privilege.
So many issues and so little time. Let’s get started.
The Attorney-Client Privilege and Exceptions
I’ve been practicing law for 32 years. In my world, the attorney-client privilege is generally defined as a “client’s right to refuse to disclose and to prevent any other person from disclosing confidential communications between the client and the attorney.” The American Bar Association Rules of Professional Conduct 1.6 and California Rule of Professional Conduct 3-100 confirm my understanding.
The reason we have the attorney-client privilege is to encourage clients to make “full and frank” disclosures to their attorneys, who are then better able to provide candid advice and effective representation. It allows for full and frank discussions and increases the chances that clients will obtain justice in law and equity.
What most people are not aware of are the basic elements necessary to have an attorney-client communication privilege. Keeping in mind that various state and federal laws slightly vary, for the attorney-client privilege to apply, you need all three of the following:
1. The asserted holder of the privilege is or wanted to become a client;
2. The person to whom the communication was made is a member of the bar of a court and acting as an attorney. This includes communications made to or before subordinates of such a member (law clerks, paralegals); and
3. The communication was for the purpose of securing legal advice.
Note that there’s nothing mentioned about a written agreement or payment between an attorney or client. If all of the elements are met, the attorney-client privilege can happen during a phone call, email exchange, or private Facebook message. It the substance of the relationship and not the form of the communication that matters.
Now here’s the kicker. There are several exceptions to the attorney-client privilege. In most jurisdictions, these exceptions include:
1. the communication was made in the presence of individuals who were not attorneys, subordinates of attorneys, or was disclosed by the client to such individuals,
2. the communication was made for the purpose of committing a crime (the crime-fraud exception can render the privilege moot when communications between an attorney and client are themselves used to further a crime); or
3. the client waives the privilege (for example by publicly disclosing the communication).
Whether or not all three elements of the attorney-client privilege apply to the Cohen and Hannity relationship will eventually be decided between Judge Kimba Wood, the lawyers involved in the case, or possibly the trier of fact. If the attorney-client privilege does apply, the existence of an exception such as the crime-fraud exception will also be determined in a similar fashion.
Tips for Business Owners
Business is complicated and most successful business people, and companies, have lawyers in their corner to help navigate the fast-moving legal and ethical currents and rapids. In fact, the attorney-client privilege is so misunderstood by many business owners, attorney Joey Vitale and I shared tips on this very topic last week during the LegalHour.live, our weekly live video show. You can watch it here or by clicking the image below.
As Joey and I touch upon in the video, to make sure your communications with your lawyer are protected by the attorney-client privilege, I recommend that in addition to making sure you follow the above guidelines, you also do the following:
1. Document your attorney-client relationship in writing (written retainer) with your lawyer and law firm. The retainer should describe in detail all legal matters that confirm that all communications between you and your lawyer and firm are protected by the attorney-client privilege. If a new matter takes place that requires legal counsel, include the name of that matter in the retainer. Furthermore, include language that specifies that your lawyer or firm may not disclose this information to any third party without your express written permission.
2. Never have a confidential communication with your lawyer when there are other people in the room who are not your lawyer or a subordinate of your lawyer. Other advisers, friends, and business associates sitting in on a meeting can be compelled to testify as to what was said and done during the meeting. Because of this, always ask your lawyer if what is discussed next is protected by the attorney-client privilege? We often ask third parties to leave the room when discussing confidential information with our clients.
3. Put a disclaimer on all correspondence to your lawyer as follows: “Attorney-Client Confidential and Privileged Communication.”
4. Do your due diligence when hiring a lawyer. Make sure he or she has an impeccable reputation and never allow your conversations or conduct to cross over into any of the exceptions I mentioned above.
In your capacity as a business owner, if both you and your lawyer follow the required steps in this post, your communications will be protected by the attorney-client privilege.
Mitch Jackson enjoys combining law, social media and technology to disrupt, hack, and improve his clients’ companies, causes, and professional relationships. He’s an award-winning 2009 Orange County Trial Lawyer of the Year and 2013 California Litigation Lawyer of the Year. Click here for interview and speaking inquiries.