David Keyko Comments on Shaky Attorney-Client Privilege

As part of its attempt to prove Rutherford used her old company’s trade secrets against it, Schlumberger was allowed to conduct limited discovery and to depose the ex-employee. During the deposition, Rutherford cited attorney-client privilege in refusing to answer nearly 20 questions concerning conversations she had had with executives at Acacia.

Harris County District Judge R.K. Sandill ruled that, given that Acacia is a patent-holding company, client-attorney privilege would not apply since any conversations between Rutherford and her employer regarding patents to acquire and companies to sue were business discussions and not legal strategies.

The ruling serves as an important reminder of how crucial it is to keep the distinction between business communication and legal advice crisply defined, and how wearing two hats might not just impinge upon attorney-client privilege—it can erase it altogether.

“One of the more dangerous issues inside counsel face is that courts may not find that there’s been a privilege waiver, but that there is no privilege at all,” said David Keyko, a partner in the Litigation practice of Pillsbury Winthrop Shaw Pittman LLP.

Judges will rarely grant blanket privilege in such cases, and, Keyko went on to add, given how busy most judges are, a lawyer wearing two hats—as both counsel and management—is best off clearly documenting from the get-go which communications are legal advice.

“Judges are busy, and discovery disputes are low down on the list,” Keyko said. “It’s important to make things appear as what they are. We learn in law school that substance is more important than form, but you have to be conscious of appearance as well.”