10.02.02.01. Communication in the Organizational Context

Corporations have lawyers and consult with those lawyers. The challenge in the corporate context is the identification of the corporate “client” for the privilege. Unlike an individual client, who can act and make decisions on their own, a corporation can only act through employees and make decisions through duly authorized agents. So, the challenge is to determine who in the corporate family tree is the “client” whose conversations are protected?   

There are two primary answers to this question.  The first, known as the control group test, says that the privilege only exists between organizational lawyers and those at the organization who make the decisions for the corporation.  This approach has a logic to it.  It attempts to define the privilege in the same way it is defined in the individual context.  The second approach, known as the subject matter test, focuses not on who is speaking, but what is being discussed.  If the communications are for the purpose of obtaining legal advice for the company, then the communications are privileged even if they are between the lawyer and employees below the decision-making ranks.  The United States Supreme Court held in United States v. Upjohn (in Readings) that the subject matter test would be applied in federal court.  Some states still apply the control group test, so it is important to know both.