March 19, 2019

March 18, 2019

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New Hampshire Begins To Articulate The Scope Of “In-House Privilege”

In 2013, the Massachusetts Supreme Judicial Court gave Massachusetts law firms a clear set of rules for conducting privileged communications with their in-house counsel.  As the SJC ruled in RFF Family Partnership, LP v. Burns & Levinson, LLP, 465 Mass. 702 (2013), the privilege attaches where:

    The law firm has designated in-house counsel within the firm;

    The designated attorney did not work on the client matter at issue or a substantially related matter;

    The time spent communicating with in-house counsel is not billed to the client; and

    The communications are made in confidence and kept confidential.

Firms in New Hampshire are still waiting for their high court to recognize an “in-house privilege,” but a New Hampshire trial court recently took a crack at it.  And while the court in Moore v. Grau, No. 2013-CV-150 (N.H. Super. Ct., Merrimack County, Dec. 15, 2014), adopted much of the reasoning from RFF, it opted away from a strict four-factor test in favor of the “flexible approach” articulated by the Georgia Supreme Court in St. Simons Waterfront, LLC v. Hunter, MacLean, Exley and Dunn, PC, 746 S.E.2d 98, 103-04 (Ga. 2013). 

The Moore court viewed the RFF factors as tailored to “very large, multi-office firms with full-time general and/or ethics counsel.”  This does not square with the legal landscape of New Hampshire, where approximately 60% of firms have less than five attorneys.  While the bright-line RFF test would be easier to apply, the court felt its rigidity could “result in the in-house attorney-client privilege being unavailable to New Hampshire lawyers.” 

Under St. Simons, however, communications are privileged so long as:

There is a genuine attorney-client relationship between the firm's lawyers and in-house counsel;

The communications in question were intended to advance the firm's interests in limiting exposure to liability rather than the client's interests in obtaining sound legal representation;

 The communications were conducted and maintained in confidence; and

 No exception to the privilege applies.

Adopting that test, the Moore court found that the defendant law firm had made a prima facie showing that communications between the responsible attorney (Grau) and in-house counsel (Hilliard) were privileged.  Although Hilliard was never formally appointed as ethics counsel, he had functioned as the firm's “de facto ethics counsel” for 10 years.  And contrary to the RFF test, it was not determinative that Hilliard had billed a small amount of time to the plaintiff early in the representation or that Grau had billed the plaintiff for conversations with Hilliard about the underlying case.  The court noted that in New Hampshire, “it is common for lawyers in small and medium-sized firms to consult with other lawyers about the facts of a case on a formal or informal basis” and therefore was “not surprising” that Grau had consulted with Hilliard.

Because Hilliard was not exclusively an in-house counsel and maintained his own active practice, the court cautioned that the privilege would only attach so long as Hilliard's advice remained within the purposes articulated in RFF and St. Simons:  “to advance the firm’s interests in limiting exposure rather than the client's interests in obtaining sound legal representation.”  The court proposed to review each of the 17 emails at issue in camera to determine whether this was indeed the case.  

While the St. Simons flexible approach theoretically gives firms more wiggle room, the bright-line approach articulated in RFF provides the certainty and clear guidance that lawyers generally prefer.  Until New Hampshire firms receive a definitive statement on the scope of “in-house privilege,” they should tread carefully in seeking advice from in-house counsel and keep the reasoning behind RFF and St. Simons in mind.  Draw a clear line between communications concerning the client’s interests and those concerning the interests of the firm, especially when those communications are in writing. 

© 2019 SHERIN AND LODGEN LLP

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Sherin and Lodgen counsels and represents lawyers and law firms on firm management, law firm disputes, ethics, professional liability, malpractice and bar discipline.

The representation of lawyers and law firms in a variety of matters is a highly specialized field involving the intersection of ethics, professional standards of practice and malpractice. The involvement of an insurer only adds to the complexities.  We have represented some of the most demanding and sophisticated  lawyers and law firms in the country. Sherin and Lodgen’s Professional Liability  Group has exceeded the...

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