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Maintaining Attorney-Client Privilege Over Communications with Consultants Involved in Internal Investigations

When a company retains outside counsel to conduct an internal investigation of alleged wrongdoing, attorney investigators sometimes need or require the assistance of outside consultants, such as forensic accountants or technology specialists, to effectively represent and communicate with their client. While the extension of the attorney-client privilege to communications between counsel and such outside consultants has been recognized, the consultant must be integral to counsel’s ability to perform the investigation and convey and discuss the results to the client, and privileged communications with the consultant should be narrowly restricted.

In a recent case, SEC v. Navellier & Assocs., Civil Action No. 17-11633-DJC (D. Mass. Jan. 22, 2019), the court held that the attorney-client privilege did not extend to an outside consultant hired as part of an internal company review to assist counsel in advising clients regarding possible future litigation with the Securities and Exchange Commission regarding exchange traded funds. According to the court, the third party “must be ‘necessary, or at least highly useful, for the effective consultation between the client and the lawyer which the privilege is designed to permit.’” The court emphasized that the third-party consultant’s involvement must be nearly indispensable or serve some specialized purpose in facilitating the attorney-client communications. The court found that the consultant’s role in that case, while helpful in assisting counsel, did not rise to the required level of necessity; thus, communications between counsel and consultant were not privileged. The Navellier decision serves as a reminder to both companies and counsel to analyze as a threshold matter whether the consultant is truly necessary or merely helpful or convenient, and tailor communications with the consultant accordingly.

©2020 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume IX, Number 326


About this Author

john f fullerton III, epstein becker green, new york, financial services

JOHN F. FULLERTON III is a Member of the Firm in the Labor and Employment practice in the New York office of Epstein Becker Green, where he co-leads the Financial Services strategic industry group.

Mr. Fullerton's practice currently focuses on representing employers in whistleblower compliance and litigation defense in retaliation cases brought pursuant to the Sarbanes-Oxley Act, Dodd-Frank Act, the False Claims Act, as well as state law whistleblower statutes. In this capacity, he has represented a variety of publicly traded...