The Attorney-Client Privilege for In-House Counsel When Negotiating Contracts: A Response to Georgia-Pacific Corp. v. GAF Roofing Manufacturing Corp.

Traditionally, executives in need of legal advice turned to private, outside law firms. Today, however, executives increasingly are seeking legal advice from corporate or attorneys.(1) Studies estimate that ten percent of all practicing attorneys work for corporations.(2) The work of these attorneys has changed significantly in recent years. They routinely perform more substantive work, including litigation.(3) Corporations have found that in-house counsel can provide fast, effective legal advice for less cost than outside law firms because an in-house counsel has greater knowledge of the corporation and the issues that it routinely faces.(4) Corporations turn to in-house counsel, as they do with all attorneys, in part because of the assurance that the attorney-client privilege will guard from public view communications between attorneys and executives.(5) For in-house counsel, however, defining and maintaining that privilege involves unique risks and problems.(6) In-house counsel often perform dual roles, acting as both executives and attorneys.(7) Additionally, attorneys without formal business duties often intermingle business advice with legal advice.(8) Although courts have held that the attorney-client privilege does not protect business advice provided by an attorney,(9) these same courts have failed to articulate clearly when the privilege protects communications containing mixed legal and business advice.(10) Apart from vague generalities and vacuous oracular statements,(11) courts have failed to establish a useful set of principles that would enable attorneys and clients to determine when the attorney-client privilege will shield mixed legal and business communications.(12) in-house counsel's plight is even more precarious because courts are reluctant to presume that the attorney-client privilege will protect an in-house counsel's communications--a presumption enjoyed by outside attorneys.(13) Given the difficulty defining what is a protected mixed business and legal discussion and the apparent judicial prejudice against in-house counsel, corporations and their in-house counsel confront great uncertainty about the scope of the attorney-client privilege. effective evidentiary privilege cannot exist in a sea of uncertainty. As then-Justice William Rehnquist stated in his majority opinion in Upjohn Co. v. United States:(14) An uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all.(15) The uncertainty surrounding the attorney-client privilege for in-house counsel threatens to vitiate the benefits of the privilege for clients and to lessen the benefits corporations receive from maintaining in-house legal departments.(16) The uncertainty faced by in-house counsel was highlighted by the Georgia-Pacific Corp. v. GAF Roofing Manufacturing Corp.(17) decision. Georgia-Pacific held that the attorney-client privilege did not apply to conversations between officers and an in-house counsel who negotiated a complex environmental liability provision of a commercial contract.(18) This decision sent shock waves through the legal community,(19) raising new concerns about an attorney's ability to serve as a negotiator while retaining the protections of the attorney client privilege.(20) This Note examines the Georgia-Pacific decision and argues that courts should adopt a new standard for determining when the attorney-client privilege protects a mixed business and legal discussion between a client and an in-house counsel serving as a negotiator. After exploring the history and rationale for the attorney-client privilege,(21) this Note identifies the unique problems faced by corporations and in-house counsel.(22) This discussion is followed by an outline of the decisions applying the attorney-client privilege to corporations and in-house counsel. …