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In-House Counsel Must Maintain Active Bar Membership to Preserve Attorney Client Privilege

Recently, the U.S. District Court for the Southern District of New York held in a discovery order that the attorney-client privilege does not apply to communications between a client-corporation and its in-house attorney when the in-house attorney was an inactive member of his state bar. In that case, Gucci America, Inc. v. Guess?, Inc., et al., 2010 U.S. Dist. LEXIS 65871, Case No. 09-CV-04373 (S.D.N.Y. June 29, 2010), United States Magistrate Judge Cott held that an inactive attorney is not an “attorney” for purposes of attorney-client privilege, and therefore the attorney-client privilege did not apply to communications between that attorney and his client-company. The court held that the attorney-client privilege could still apply if the client reasonably believed that the attorney was authorized to practice law; however, the court held that the privilege did not apply here because the client-company did not make a reasonable effort to ascertain the attorney’s qualifications and status.

This case is significant for companies that employ in-house counsel. In order to maximize the protection afforded by the attorney-client privilege, in-house counsel must maintain their active bar status to avoid any argument that the privilege should not apply to the in-house counsel. Prior to hiring an attorney as in-house counsel, a company should conduct a background check into the attorney’s qualifications as an attorney and the attorney’s state bar membership status. A company that already employs in-house counsel should establish a procedure to verify annually that their in-house attorneys’ bar status is active. The company should also require in-house counsel to immediately disclose to the company if their state bar membership expires.

Most state bar websites provide a way to quickly verify whether an attorney is an active member of the state bar. For example, a Wisconsin attorney’s license can be verified here. An Illinois attorney’s license can be verified here.

©2020 MICHAEL BEST & FRIEDRICH LLPNational Law Review, Volume , Number 250

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About this Author

S. Edward Sarskas, Michael Best Law Firm, Litigation Attorney
Partner

Ed serves as a trusted advisor and counselor to business clients in various stages of the dispute resolution process. Taking a creative and practical approach, he helps clients evaluate and manage risk, execute strategic initiatives, and resolve disputes. His strategic perspective extends beyond the dispute to his client’s overall goals and mission. He recognizes that his success is measured by his client’s ultimate success in the marketplace.

Ed’s practice includes complex litigation matters involving trademarks, patents, copyrights,...

414-223-2521
Adam Witkov, Michael Best Law Firm, Finance and Banking Attorney
Partner

Adam is a relentless advocate for his clients in the areas of complex commercial and financial services litigation. Clients value Adam’s judgment, creative solutions, and results-driven approach to resolving their most pressing business needs.    

Adam regularly counsels and represents financial institutions related to loan workouts, prosecuting breach of contract and breach of guaranty claims, and defending claims and counterclaims, including declaratory judgment, promissory estoppel, misrepresentation, and claims under the Fraudulent Transfer Act, the Wisconsin Consumer Act, and the Fair Debt Collection Practices Act.

414-225-8292