Lawyers: Waivers Causing Clients To Be Less Candid

Corporations are less likely to seek legal counsel and corporate lawyers are less likely to take notes or keep a paper trail because of increasing pressure - even coercion - from prosecutors to waive their attorney-client privilege during investigations, panelists at yesterday's annual meeting of the New York State Bar Association said.

"As a practical matter, corporations who are under threat of indictment if they don't cooperate are making essentially a compelled disclosure of privileged information" in practice if not in law, an eminent legal ethicist at Fordham University, Bruce Green, said.

The problem, panelists said, is a set of guidelines laid out in a 2003 memorandum by the deputy attorney general at the time, Larry Thompson, that counted waiving the privilege as one of the things a corporation could do to cooperate with an investigation - and perhaps avoid indictment or lessen its penalties.

"The current breed of prosecutors are so conditioned to ask viscerally for attorney-client privilege and work-product materials that they're impatient with the process" of receiving regular updates from corporations' lawyers, an attorney who has studied attorney-client privilege, David Brodsky, said.

The U.S. attorney for the Southern District of New York from 1993 to 2002, Mary Jo White, contrasted this "new breed" with what she called the long gone "fairness school" of prosecution.

Another problem is the amount of information prosecutors demand, panelists said. "Prosecutors are asking for attorney-client privilege waivers for legal advice given two years ago," a noted defense lawyer who specializes in white collar crime, Theodore Wells Jr., said. The result: "People aren't as candid with their lawyers."

One of the two prosecutors on the panel, the criminal division chief in the U.S. attorney's office for the Southern District of New York, Lev Dassin, said, "The requested waivers are not automatic and they're not required." He added that attorneys for many corporations are less forthcoming than those on the panel would be, but that prosecutors carefully weigh and discuss the merits of asking for a waiver of privilege.

Panelists opposed to the waivers said they thought Mr. Thompson's memo should be repudiated, prosecutors should be reined in, and legislation allowing partial waivers of privilege should be passed.