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Litigation: Upjohn warnings and external consultants

When consultants are equivalent to employees, companies are required to warn them that privilege belongs to the company, not the individual

Corporate counsel conducting internal investigations have relatively little instruction on whether to interview the company’s third-party consultants and, if so, whether an Upjohn warning is necessary. But courts have recently addressed two related concepts:

  1. The importance of providing pre-interview Upjohn warnings to corporate employees
  2. The corporate attorney–client privilege covers consultants considered the “functional equivalent” of corporate employees

Together these concepts provide corporate counsel informed guidance when interviewing consultants as part of an internal investigation.

The functional equivalent of employee decisions should lead counsel to give the Upjohn warning to third-party consultants prior to interviewing them as part of an internal investigation. But should the Model Rules of Professional Conduct. Rule 1.13(a) provides that corporate counsel represent the corporation “acting through its duly authorized constituents.” This language necessarily excludes an attorney–client relationship between corporate counsel and the corporation’s constituents. And the rule’s comments explain that the term “constituents” includes officers, directors, employees, shareholders and positions equivalent to officers, directors, employees and shareholders. So, while there is a dearth of case law interpreting this rule and its comments, it is reasonable to conclude that corporate counsel may represent the corporation through a person equivalent to an employee. This conclusion comports with the functional equivalent of employee test applied for purposes of the corporate attorney–client privilege.

In sum, so long as a third-party consultant may be deemed the functional equivalent of an employee, ethical rules declare the corporate counsel represents the corporation through the consultant but not the consultant individually. And the corporate attorney–client privilege should cover the consultant’s communications with corporate counsel. Consequently, the better practice is for counsel to provide the Upjohn warning when interviewing consultants during an internal investigation.

Contributing Author

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Todd Presnell

Todd Presnell is a partner in the Nashville office of Bradley Arant Boult Cummings, LLP. He is licensed in Georgia and Tennessee and represents...

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