Carlsmith Ball LLP Confidentiality Issues and Outside Counsel Deborah Bjes October 22 nd, 2015

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes Now what? Potential issue with outside counsel? 2

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes May or may not be privileged from client Internal firm communications 3

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes Ethical duties to client trump attorney- client privilege vs. No ethical exception to attorney-client privilege Courts split on nature of internal communications 4

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes  State v. federal court  Role of consulting attorney  Statutes governing privilege Considerations 5

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes Model Rule 1.4: Communications (a) A lawyer shall:… (3) keep the client reasonably informed about the status of the matter.… (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. The duty to disclose 6

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes Loyalty and independent judgment are essential elements… Concurrent conflicts of interest can arise from the lawyer's responsibilities to another client …or from the lawyer's own interests. Comment: ABA Model Rule 1.7 7

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes "Lid“ on intra-firm communications "lifted." Thelen, Reid & Priest LLP V. Marland 2007 WL (N.D. Cal. February 21, 2007) No privilege 8

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes Privilege must give way to …current clients who may be harmed by the conflict. When a law firm represents itself, it runs the risk of creating an impermissible conflict of interest. In re SonicBlue, Inc WL (N.D.Cal. May 19, 2010). No privilege 9

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes Privilege exists, but law firm must factually establish attorney-client relationship. Court noted: -Consultations are not always adverse to client. -Firms often employ ethics & claims attorneys. -Privilege does not excuse duty to report claim. Palmer v. Superior Court 231 Cal. App.4 th 1214 (2014). California's statutory privilege 10

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes The attorney-client privilege guarantees the confidentiality necessary to ensure that partners, associates and employees provide information needed for sound legal advice. RFF Family Partnership, LP v. Burns & Levinson, LLP 465 Mass. 702, 991 N.E.2d 1066 (2013) Upholds privilege 11

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes  Withdraw as counsel  Obtain consent of client  Disclose conflict to client RFF Family Partnership, LP v. Burns & Levinson, LLP Client argued, for privilege to apply, lawyer seeking advise had to first: 12

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes Withdraw from representation unnecessarily Withdraw without protecting client's interest Not obtain advice on potential conflict Sugar-coat facts Incur extra expense to retain outside counsel RFF Family Partnership, LP v. Burns & Levinson, LLP Court disagrees: Without the privilege, law firm may: 13

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes “dysfunctional” both to the client and the law firm. RFF Family Partnership LP v. Burns & Levinson, LLP Court characterized client’s assertions as… 14

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes  Did lawyer consult with general counsel?  Did consulting attorney work on the file?  Have you been billed for the consult?  Has firm maintained confidentiality? Communications Are they privileged? 15

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes  Will this create tension with a firm that generally supports your business?  Is the firm’s work generally excellent?  Will a request create conflicts?  Are you curtailing a plan to assist? Internal Communications Do you really require them? 16

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes ©2015 Swiss Re Corporate Solutions. All rights reserved. You are not permitted to create any modifications or derivatives of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re Corporate Solutions. Although all the information used was taken from reliable sources, Swiss Re Corporate Solutions does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re Corporate Solutions or its Group companies be liable for any financial and/or consequential loss relating to this presentation. Disclaimer 17

Carlsmith Ball LLP | October 22, 2015 | Deborah Bjes Thank you! 18