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    Wisconsin Lawyer
    January 09, 2019

    Ethics
    Lawyer-Board Members' Business Advice Likely Is Not Privileged

    Lawyers who serve on company boards must be careful to distinguish between their provision of business advice and legal advice.

    Dean R. Dietrich

    Question

    I serve on the board of directors of a nonprofit organization. Are the communications from the CEO of the nonprofit organization to me considered privileged and protected?

    Answer

    The answer to this question is really more related to interpretation of the Wisconsin Statutes regarding the attorney-client privilege than to interpretation of the Wisconsin Rules of Professional Conduct. Anything learned or received by a lawyer during the course of representing a client would be considered confidential but, in this situation, a decision must be made whether the lawyer was actually representing the nonprofit organization simply by serving on the board.

    Dean R. DietrichDean R. Dietrich, Marquette 1977, of law firm of Dietrich VanderWaal Law Group SC, Wausau, is chair of the State Bar Professional Ethics Committee.

    A recent decision from the Tennessee Supreme Court provided some limited guidance on this topic. In response to discovery demands in an employment dispute, a nonprofit organization argued that communications from the chief executive of the nonprofit organization to the board were privileged because they were sent to a board member who was a lawyer.

    The court did not accept this argument because there was no proof that the lawyer-board member was actually serving as legal counsel for the board and the organization. The court held that there was no proof of a specific attorney-client relationship between the organization and this lawyer-board member, even though the lawyer-board member was expected, as part of his board member role, to provide legal advice to the organization. The court held that the communications would be subject to the discovery demand.

    This decision highlights the importance of a lawyer-board member being very clear about what role he or she is serving when making comments or discussing legal matters with a nonprofit organization’s board. If the board member is discussing general legal concepts as part of his or her board contributions, such action is considered a business activity of the board member and not subject to the attorney-client confidentiality requirements or the attorney-client privilege. If the lawyer-board member is offering specific legal advice to the board in some sort of attorney-client relationship, that information should be communicated with a reference to attorney-client confidentiality and privilege, and the communication should be clearly identified as legal advice being provided by the lawyer-board member in a representation capacity.

    Lawyers must be careful to properly identify information and communications that are being offered in a legal representation capacity to preserve the confidentiality requirements and the privilege requirements of that communication.

    Of course, this is a fine line; lawyers often are asked, while serving on a board, to give legal advice about a particular matter, even though the lawyer-board member is not representing the organization in that particular legal matter. In those instances, the lawyer-board member should be very careful and explain that he or she is only providing general legal advice and that the information being provided is not protected under either the attorney-client confidentiality requirements or the attorney-client privilege.

    Lawyers are often asked to serve on organizations’ boards. Lawyers are expected to offer their legal insights as well as their business acumen when serving in that capacity. Lawyers must be careful to properly identify information and communications that are being offered in a legal representation capacity to preserve the confidentiality requirements and the privilege requirements of that communication.

    Need Ethics Advice?

    As a State Bar member, you have access to informal guidance and help in resolving questions regarding Wisconsin’s Rules of Professional Conduct for Attorneys.

    Ethics Hotline: To informally discuss an ethics question, contact State Bar ethics counselors Timothy Pierce or Aviva Kaiser. They can be reached at (608) 229-2017 or (800) 254-9154, Monday through Friday, 9 a.m to 4 p.m.




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