Inside counsel, even counsel who are bound by codes of ethics and subject to professional discipline, are unable to effectively deal with conflicts between their professional legal obligations and the aims of their client-employers. They are, in other words, incapable of exercising any professional independence, given their employment relationship with their client. So said the European Court of Justice in its recent decision, Akzo Nobel Chemicals v. Commission, Case C-550/07 P that held that the "legal professional privilege" does not apply to communications between organizations and their in-house attorneys.
In 2003, the European Commission formally launched an antitrust investigation into, among others, Akzo Nobel Chemicals and one of its subsidiaries. During the course of that investigation, the Commission seized, over protest, emails that had been exchanged between the subsidiary's general manager and a member of Akzo's legal department who served as its coordinator for competition law. That lawyer was a "legal advisor" to Akzo and never held a management position. He was a member of the Netherlands bar, which imposed on him professional and ethical rules, and his employment agreement with Akzo stated that his allegiance to his employer would be trumped by his obligations of independence and compliance under the rules of the Netherlands bar.