Unitek argued that Casey should be treated as its lawyer for purposes of privilege. First, Casey received court notices from Unitek’s registered agent and engaged and communicated with outside counsel in her litigation management role. Second, Casey attended quarterly litigation update meetings, at which she received confidential communications from outside counsel regarding the status of certain claims.
The district court disagreed with Unitek’s characterization of Casey’s job responsibilities, describing Casey’s position as “quasi-legal.” The court highlighted Casey’s “total lack of legal experience” and noted a law degree was not required to do her job. The court viewed Casey more as a client to outside counsel than inside counsel to Unitek.
Bright-Line Tests versus Employee’s Function
A risk management position is an example of a role that, even when filled by a lawyer, frequently involves both legal and non-legal work. “Attorneys can be hired in a myriad of roles not requiring their status as attorneys,” says Richard T. Seymour, Washington, D.C., former chair of the ABA Section of Labor and Employment Law. When determining whether a dual-role employee is acting as legal counsel and thus invoking attorney-client privilege protection, courts should focus on function more than title. “Status is not the same thing as role,” Seymour believes. “While [a risk manager’s] views may be partially influenced by their legal degrees, their employer is not necessarily looking for legal advice, as opposed to business advice.” The Casey decision “drew a sensible distinction between business advice and legal advice,” according to Seymour.
The Casey court observed that Unitek’s risk management positions were not part of the company’s legal group and did not require a law degree. But those criteria may not necessarily reveal the risk manager’s true and complete role. “I have some concern about the court's analysis that, solely because of the job title and lack of J.D. requirement, the risk management director did not function as in-house counsel. The determination of whether the risk manager is functioning as in-house counsel is not a bright-line test,” opines Gail G. Holtzman, Tampa, FL vice-chair of the Section of Labor and Employment Law.
Rather than focusing on labels and bright-line tests, the emphasis should be on how the company utilizes risk management employees. “There is a lot at stake [in determining the applicability of privilege], so the focus should be on whether the company’s employees are reaching out to the risk management director to seek legal advice. Risk managers can be dealing with important legal issues,” observes Holtzman.
Bringing Risk Managers Within the Privilege
If the applicability of privilege to a risk management employee is driven by function rather than form, then companies should consider how to characterize and implement those functions. “Companies should give serious thought to dual-role employees like risk managers. The intent to preserve privilege cannot be assumed—the company needs to be specific that legal advice is being sought,” says Holtzman. The court emphasized this principal in finding that Unitek presented no evidence that “it sought Ms. Casey’s legal advice or opinion with regard to any of the insurable claims.”
Bringing risk management employees within the privilege requires planning and foresight. “Place [risk management departments] under the supervision and control of their general counsel, and have the general counsel issue instructions to them,” Seymour suggests. Operational changes may also help a court see the department as more legal than business. These could include: (i) modifying risk mangers’ job descriptions to state that the position will involve the company seeking legal advice with respect to matters they handle; (ii) requiring risk managers to keep separate files for legal and non-legal matters, and (iii) limiting email discussions on legal matters only to those who need to be involved in legal discussions.
Daniel P. Elms, Litigation News Contributing Editor