Whether corporate or organizational internal investigations are protected by the attorney-client privilege

1. Attorney-Client Privilege
&
Internal Investigations
Kathleen Clark
Brian D. Miller
ABA Public Contract Law Section – State & Local Procurement
November 21, 2014

2. Why do we care?
• We want companies doing business with the
federal, state, and local government to be
responsible.
• A responsible company has a compliance
program.
• Internal reviews and investigations are part of
compliance.
• Companies may not conduct thorough reviews
and investigations if A-C privilege is
jeopardized.

3. Does
A-C privilege
cover
a company’s
internal
investigation?

4. primary
purpose
test

5. compliance
v
legal advice

6. HHS IG guidance:
separate
compliance
&
legal
functions

7. Perspective
US ex rel Barko v KBR
2014 US Dist LEXIS 36490
(D. D.C. 2014)

8. Perspective
internal
investigation
not
privileged

9. Perspective
In re KBR
756 F.3d 754
(D.C. Cir. 2014)
mandamus

10. Perspective
no
rigid distinction
between
legal & business
purpose

11. Perspective
a
significant
purpose

12. Perspective
KBR’s
confidentiality
agreement

13. “I am Pperorshpiebcittieved from
discussing ... the subject
matter discussed
during the interview,
without specific
advance authorization of
KBR General Counsel. ...

14. Perspective
… unauthorized
disclosure of information
may be grounds for
disciplinary action
up to and including
termination”

15. 17 CFR P§er2sp4e0c.t2iv1eF-17(a)
SEC
Dodd-Frank
whistleblower
regulation

16. No personP emrsapye tcatkiev eany action
to impede someone
from communicating directly
with Commission staff
about a possible
securities law violation,
including …
threatening to enforce a
confidentiality agreement …

17. • According to a recent article in the Financial Times, there is
a widespread concern in the banking industry over the
effect of regulation on business performance.
• Douglas Flint, HSBC’s chairman, noted that there was “an
observable and growing danger of disproportionate risk
aversion creeping into decision-making in our business as
individuals, facing uncertainty as to what may be criticized
with hindsight and perceiving a zero tolerance of error, seek
to protect themselves and the firm from future censure.”
Adding that HSBC is experiencing “fatigue within critical
functions” as a result of regulatory demands.
• Additionally, and according to the article, JP Morgan is
“encouraging” staff to ask for approval for business
opportunities and to “identify ‘creeping’ bureaucracy.”
17
Compliance vs. Getting it Done

18. 18
Compliance vs. Getting it Done

19. 19
Compliance vs. Getting it Done

20. 20
Compliance vs. Getting it Done

21. Attorney-Client Privilege
&
Internal Investigations
Brian D. Miller
Kathleen Clark
ABA Public Contract Law Section – State & Local Procurement
November 21, 2014