1. 1 Compliance & Privilege Affecting In-House Counsel Moderator Prof. Carol Swanson Panelists: Dan Gerhan (Boston Scientific) Doug Hiatt (TCF Bank) Michael Pysno (Attorney/Mediator) Suzanne Taylor (Ameriprise Financial)

2. 2 Privilege Welcome! Compliance

3. Our Discussion Today: 3 Our Panelists: Context The Nature of the Challenge Best Practices

4. The Barko Debacle: 4 U.S. ex rel. Barko v. Halliburton Co. (D.D.C. Mar. 6, 2014)(internal investigation conducted under a corporate compliance program not “privileged”) Drastic & Extraordinary Relief: Vacated by writ of mandamus, In re Kellogg Brown & Root, Inc. (D.C. Cir. June 27, 2014)(relying on Upjohn).

5. The Barko Debacle: Harry Barko worked for defense contractor KBR; filed False Claims Act complaint alleging that KBR defrauded the U.S. while administering military contracts in Iraq. Barko sought documents related to KBR’s prior internal fraud investigation, conducted pursuant to KBR’s Code of Business Conduct and overseen by the Law Department. KBR: internal investigation was conducted for the purpose of obtaining legal advice. Barko: unprivileged business records. 5

6. The Barko Debacle: District Court (after in camera review): attorney-client privilege NOT applicable. KBR had not shown that “the communication would not have been made ‘but for’ the fact that legal advice had been sought.” KBR’s Internal investigation was “undertaken pursuant to regulatory law and corporate policy rather than for the purpose of obtaining legal advice.” 6

7. The Barko Debacle: District Court: Thus, “the primary purpose of” the internal investigation “was to comply with federal defense contractor regulations, not to secure legal advice.” “Distinguished” Upjohn: –Outside counsel not consulted before investigating –Many interviews were conducted by non-attorneys –Confidentiality agreements did not mention that the investigation’s purpose was to obtain legal advice. 7

8. Vacating the Barko Debacle: Circuit Court:. The District Court’s “but-for” approach to the primary purpose test is NOT the measure of attorney-client privilege. “[T]he primary purpose test, sensibly and properly applied, cannot and does not draw a rigid distinction between a legal purpose on the one hand and a business purpose on the other.” 8

9. Vacating the Barko Debacle: Circuit Court:. “Sensibly and properly applied, the test boils down to whether obtaining or providing legal advice was one of the significant purposes of the attorney- client privilege.” KBR’s assertion of privilege here is “materially indistinguishable” from the company’s assertion in Upjohn. 9

10. Our Discussion Today: 10 The Challenge Best Practices