The attorney-client privilege is one of the most sacrosanct concepts at law. Courts will often take steps to maintain and protect the privilege and confidences between a client and their lawyer, absent instances of waiver or fraud.

But what happens if a lawyer is a defendant to a lawsuit and their defense primarily rests on privileged information? What the lawyer is permitted to disclose often depends on what the lawyer is accused of and by whom.

Waiver of Privilege in a Legal-Malpractice Lawsuit

When a client sues a lawyer for legal malpractice, that typically operates as a waiver of privilege by the client. Per comment [10] to the ABA Model Rules of Professional Conduct 1.6, where a lawyer is accused of misconduct in their representation of a client, “the lawyer may respond to the extent the lawyer reasonably believes necessary to establish a defense.” This policy reflects the fact that otherwise it could be fundamentally unfair for a client to sue the lawyer or accusing the lawyer of misconduct while simultaneously preventing the lawyer from defending the accusations due to confidentiality.

Notably, the implicit waiver of privilege arising from accusations of legal malpractice is generally understood to be narrowly tailored to the facts or representation at issue. Indeed, per comment [16], “disclosure should be made in a manner that limits access to the information to the tribunal or other persons having a need to know it.” The Rules also call for lawyers to seek appropriate protective orders so that the information still remains as confidential as possible.

Does Privilege Tie the Lawyer’s Hands in Mounting a Defense?

The most common scenario in which a lawyer is called to defend themselves using privileged information is when they are sued for legal malpractice or otherwise accused of wrongdoing by a client. However, there are occasions in which a lawyer will be accused of wrongdoing but nonetheless cannot defend themselves without disclosing the confidences of a different client. In those situations, there may be grounds for dismissal because the lawyer is unable to defend themselves without disclosing confidences that have not otherwise been waived.

Some courts who have reviewed this scenario have framed it as a due process issue. In those situations, courts have found that it is fundamentally unfair to keep a lawyer in a lawsuit as a defendant when they are not permitted to offer evidence in their defense because it is protected by privilege.

A few examples from case law make the point. In one appellate decision, a lawyer sought independent legal counsel from a law firm to advise him on how he was handling his underlying attorney-client representations. That lawyer later sued the law firm for legal malpractice, but the underlying clients (non-parties) objected to the disclosure of their privileged information. The court concluded that dismissal of the law firm was appropriate because the jury would otherwise be unable to hear what facts the lawyer had provided to that law firm about the underlying representations. In that way, the trier of fact would be unable to fully consider whether the law firm had breached its duties because it could not hear all the facts. The court cited to due process and prejudice against the lawyer in affirming the dismissal.

This situation can also arise in intra-corporate disputes. In another appellate decision out of California, a minority shareholder of a company sued the majority shareholder and the corporation’s outside counsel, accusing them of self-dealing and conversion. Because the lawyer was unable to defend himself without disclosing privileged communications with the majority shareholder, the court affirmed the dismissal of the lawyer. The court found that the communications were otherwise “highly material” such that it would be “fundamentally unfair” to proceed against the lawyer.

Similarly, where a shareholder brings a legal malpractice suit against a corporation’s outside counsel, that lawsuit may not operate as a waiver of privilege. Unlike a traditional legal-malpractice action, in which a client sues their attorney directly, courts have focused on the fact that a shareholder is typically standing in the shoes of the corporation for such an action. That may mean that the corporation itself will not be deemed to have waived privilege, which may result in dismissal of the claim.

Although Rule 1.6(b)(5) permits a lawyer (within reason) “to respond to allegations in any proceeding concerning the lawyer’s representation of the client,” lawyers should still be mindful of whether such disclosures are necessary and whether they could harm their clients’ interests (particularly where the client is not trying to exploit the rules to cover up their own wrongdoing).

In those situations, the lawyer may consider whether the rules of confidentiality essentially deprive the lawyer of a defense, which could support dismissal of litigation.

Lawyer as Third-Party Witness

Separately from the above, a lawyer may be called to act as a third-party witness in a matter. For example, a lawyer may be served with a subpoena to testify or produce documents in a legal dispute over a transaction in which they acted as counsel to one of the parties. Where there are no allegations of wrongdoing by the lawyer, the lawyer typically must continue to maintain client confidences and the privilege when acting as a witness, absent instruction from the client or a court order.

The lawyer is generally permitted to provide non-privileged discoverable information as a third-party. For example, the lawyer may testify about the facts of a meeting they had with the other party to a transaction (which would otherwise not be privileged) or they may produce the final executed version of the deal that is being litigated.

But the lawyer typically must otherwise abide by the instructions of the client to maintain privilege for other subjects (such as the lawyer’s communications with the client), absent a court order to the contrary.

When lawyers become defendants to or witnesses in litigation, it can make issues of attorney-client privilege complicated. Being aware of the rules can help lawyers navigate a difficult situation.