We all have a lawyer friend whom we consult when we have legal questions, and when it comes to a particularly sensitive issue, we often use phrases like “what I am going to tell you should remain covered by attorney-client privilege." These kinds of statements, sometimes said in jest or sometimes because the situation truly warrants it, stem from a deeply ingrained societal belief that lawyers have an inviolable obligation to keep consultations strictly confidential, to the extent that not even a judicial authority can override it. Therefore, we feel confident in revealing all our secrets to our trusted lawyer, under the premise of attorney-client privilege.
However, this idea, so popularized in movies, series, and literature, is not absolute and can play tricks on us in the business realm. This article aims to explain how the exercise of attorney-client privilege has been understood concerning lawyers who work within companies, known as in-house lawyers.
In principle, attorney-client privilege applies to any lawyer, regardless of how they practice their profession. This has been made clear by the jurisprudence of the Constitutional Court. For example, in C200 of 2012, it first highlights the constitutional protection of this duty enshrined in Section 74 of Colombian Constitution, which states that "Professional secrecy is inviolable." It then defines it as the "secrecy that arises when a person turns to another, as a confidant of their secrets, due to their profession." It develops this precept by arguing that "The practice of certain professional activities implies knowing parts of a person's private, public, or commercial life, which are considered intimate and should not be known by third parties. Indeed, these revelations are made because they are essential for the professional to understand the problem and respond appropriately to the expected solution. From this, a duty of loyalty arises toward the one who trusts them."
From the above, the Constitutional Court does not restrict the application of attorney-client privilege to any lawyer, whether they are independent, firm-based, or in-house. However, in several rulings by the Superintendence of Industry and Commerce, such as Resolutions 34255 of 2017, 7676 of 2017, or 51905 of 2019, among many others, there has been a tendency to support the positions of the European Commission and the European Court of Justice regarding the modulation of attorney-client privilege. The premise is that in-house lawyers are not covered by this guarantee and therefore are not subject to this duty.
This stance in European courts arises from the idea, well summarized by Daniel Orduz Salazar, that in their interpretation, in-house lawyers lack independence due to the existence of an employment relationship with their client, as they are paid a salary and are supervised by them. Therefore, this type of lawyer is obliged to follow the orders of their employer, and their duty of loyalty arises not from the attorney-client relationship but from the employment relationship.
In the Colombian case, the Superintendence of Industry and Commerce has stated, for example, in Resolutions 34255 and 7676 of 2017, that a legal opinion issued by an in-house lawyer is not covered by attorney-client privilege since these lawyers do not have the independence of external legal advisors, and thus the protection was inapplicable. Similarly, in Resolution 51905 of 2019, the same entity goes further and asserts that information exchanges between employees of the same company, even if it comes from their legal advisors, lose the protection of attorney-client privilege.
In this last case, two employees of a company shared WhatsApp messages containing information from a legal opinion by the company's legal advisors. However, since these messages did not come directly from the advisors, they lost their protected status under attorney-client privilege.
These types of situations undoubtedly place companies in a very difficult position. This is because, for various reasons, companies are interested in protecting certain internal information, not because of deceit or trickery to mislead authorities, but because they want to protect certain know-how, keep market strategies confidential, or retain information from internal investigations stemming from alert situations within the company.
Therefore, regardless of whether the position taken by Colombian jurisprudence on the modulation of attorney-client privilege for in-house lawyers is correct, companies must consider this aspect when protecting their information. Consequently, companies must take necessary measures to properly protect information they wish to keep under attorney-client privilege. For example, when understanding the legal implications of certain business policies or conducting internal investigations requiring maximum confidentiality, it is ideal to contact trusted external advisors and carry out necessary tasks through them.
Likewise, access to information shared by external advisors should be as limited as possible within the company to avoid situations like the one exposed in Resolution 51905 of 2019, where information subject to attorney-client privilege lost its protection due to how it was shared.
Measures like these can save companies headaches when required by administrative or judicial entities to deliver certain information.