The attorney-client privilege is a cornerstone of legal practice. It exists to foster open and honest communication between a client and its lawyers. For in-house counsel, that simple premise turns out to be deceptively hard to live by. In-house attorneys operate at the intersection of legal and business functions, and that position complicates almost every element of the privilege analysis. Recent decisions in matters such as Garner v. Amazon.com and Epic Games v. Apple illustrate just how often the assertion of privilege by in-house lawyers is challenged, and how often those challenges find traction.
The privilege protects only a narrow class of communication: communications made in confidence, between privileged persons, for the purpose of obtaining or providing legal assistance. Each of those three requirements carries a trap for in-house counsel, and the volume of corporate ESI makes every trap larger. A single misjudgment about who the client is, or whether a given email rendered legal advice, can expose an entire thread to discovery.
Who is the client?
The first requirement is that an attorney-client relationship exists at all. In the corporate context, the client is the corporation, not any individual employee. But corporations act through people, which forces the question of which individuals can be treated as the client for privilege purposes. Courts answer with two main tests.
Under the subject-matter test, the privilege applies where communications concern matters within the scope of the employee's corporate duties and the employee understands the discussion is occurring so the corporation can obtain legal advice. That phrasing comes from the Supreme Court's 1981 decision in Upjohn Co. v. United States. The point that often gets lost is that the test turns on the employee's understanding. It is in-house counsel's job to make sure employees actually know when counsel is giving legal advice to the corporation. The narrower control-group test, articulated in Consolidation Coal Co. v. Bucyrus-Erie Co., extends the privilege only to decision-makers and those who substantially influence corporate decisions, which in practice means controlling executives and key managers.
Legal advice versus business advice
Not every communication with a corporation's lawyers is privileged. To be protected, a communication must be made in furtherance of the rendition of professional legal services. When a lawyer supplies business advice rather than legal advice, the privilege does not attach. In-house counsel routinely serve a dual role as legal and business advisor, and that dual function is exactly what makes the determination difficult.
When a communication serves both purposes, courts have split on how to evaluate it. In United States v. ChevronTexaco, the court applied the because-of test in the work-product context, asking whether the document was created because of anticipated litigation and would not have been created in substantially similar form but for that prospect. That test does not ask whether litigation was the primary or secondary motive. The competing primary-purpose test asks instead whether the communication's primary purpose was to give or receive legal advice. The Second, Fifth, Sixth, and Ninth Circuits follow the primary-purpose test, while the D.C. Circuit will recognize privilege where one significant purpose of the communication is legal.
In 2023 the Supreme Court dismissed In re Grand Jury, which had asked the Court to clarify the standard for dual-purpose communications. The dismissal left the circuit split intact. For in-house counsel drafting and receiving thousands of mixed-purpose communications, that unresolved split means the protection of a given message can depend on the circuit in which it is later litigated.
Confidentiality and the limits of cc
The communication must also be intended to remain confidential. Even a communication between a lawyer acting as legal advisor and an individual inside the corporate client group loses protection if the parties do not behave as though they intended it to stay confidential. Courts have been explicit that a corporation cannot insulate its files from discovery by copying or cc-ing in-house counsel.
A corporation cannot insulate its files from discovery simply by copying in-house counsel. Labeling an email privileged does not make it so.
The antitrust ruling in United States v. Google is the cautionary tale. Beyond the antitrust questions, the court addressed the plaintiff's request for sanctions over Google's systemic destruction of documents and its alleged misuse of privilege. The misuse charge grew out of Google's communicate-with-care initiative, under which employees were told to add in-house attorneys to certain antitrust-related emails and mark them as attorney-client privileged. Several initially withheld emails were predominantly non-privileged, distinguished only by a single line noting that an attorney had been cc'ed for legal advice. The court declined to sanction Google, but warned that the company had to take rigorous steps to ensure that documents labeled privileged were in fact substantively privileged.
Practical steps to avoid forfeiting privilege
A few disciplines go a long way. Keep legal and business communications in separate emails where feasible, and where they must mix, expressly identify the legal theories and conclusions and set them apart from the business discussion. Control the copying: train employees that cc-ing an attorney does not, by itself, confer privilege. Label documents accurately to reflect their confidential and privileged status, and make clear that counsel is acting in a legal capacity. And educate the business. Headers like Privileged and Confidential should be used judiciously, because overuse dilutes their meaning and gives an adversary an easy waiver argument. When there is any doubt, in-house counsel should remind an employee that counsel represents the corporation and not the individual, particularly once the individual begins disclosing something sensitive.
These are not exotic measures. They are habits, and habits are what survive the scale of modern ESI. When a privilege dispute does land in front of a tribunal, the same discipline pays off again. A neutral asked to referee a privilege fight, whether sitting as a special master over a contested log or as a forensic neutral examining how documents were created and routed, can resolve far more quickly when the corporation's privilege practices were principled rather than reflexive. The cases above show what scrutiny looks like when they were not. For in-house counsel, the work of protecting privilege is done long before the dispute, in the ordinary discipline of how legal advice is sought, given, and recorded.