Legal Professional Privilege in a Regulatory Environment

Paper presented by Dr Steven Stern, Professorial Associate, Victoria Law School, Victoria University to the Corporate Law Teachers Association Conference 2007 Work in Progress Introduction This paper focuses on recent developments which highlight the importance of legal professional privilege in a regulatory environment and for effective corporate governance, with a particular eye to the situation involving use of an in-house lawyer. It examines what are their ramifications and the implications for protecting legal professional privilege when in-house lawyers are involved. This paper maintains that, on the existing authorities, it is clear that an in-house lawyer attracts legal professional privilege. Moreover, in the abstract, the general principles that apply are substantially the same as with use of external lawyers engaged in private practice. However, in applying those general principles, this paper maintains that use of an in-house lawyer has special features, so that in demonstrating the necessary professional independence and other conditions required to sustain a claim for legal professional privilege, compliance with the general principles present unique challenges. This paper seeks to identify those special features and to analyse how they may impact upon corporate governance and management. For example, how does the requirement for independence impact upon appointing lawyers to Boards and on reporting lines? Can in-house lawyers assume non-legal duties or executive positions overseeing non-legal duties without putting legal professional privilege at risk? What are the ramifications for the position of General Counsel which frequently incorporates the role of Company Secretary?