05 July 2021 | By Eric Gardner de Béville
Why Legal Professional Privilege is in the interest of all concerned
While much of the legal and business world has been in slow-motion through the Covid pandemic over the past 18 months, the issue of the LPP -or Legal Professional Privilege- has been center-stage of recent political, legislative and case law proceedings in France, Spain and the Netherlands.
In 2020, the French Minister of Justice proposed that corporate France experiment the notion of an avocat en entreprise but the proposal has since been “shelved”. In Spain, the Royal Decree 135/2021 of 2 March 2021 clearly and unequivocally confirmed the LPP for In-house lawyers, and in The Netherlands, the Shell-Etosha decision from the Rotterdam District Court has upheld the LPP for In-house lawyers.
The applicability of Legal Privilege to In-house lawyers when they advise their management on specific corporate legal matters has, in many countries, been a “no-brainer” while in other countries it has been a long-lasting and recurrent opposition with local law firm lawyers.
Such a position is quite surprising because it is truly in the interest of all parties concerned to recognize the real-world advantages of LPP and its intrinsic value for each party involved. This applies to the independence of the corporate lawyers, the national government finance authorities’ control over corporate transactions, and the fear of national bar organizations.
Corporate Management can only benefit from In-house lawyers’ independence
The claim that In-house lawyers are not “independent” from corporate Management is premised on the false assumption that Management sees lawyers as “yes-men”. This is doubly false in that if Management wanted yes-men, they would not need lawyers, and also that all surveys and studies clearly and unequivocally indicate that Corporate Managers want lawyers that tell them the law “as it is” and outline acceptable business risks.
In addition, alleging that In-house lawyers are not independent is also premised on the notion that an employee lawyer is dependent upon his employer because of the salaried relationship. If this were true, it would likewise apply to the ever-increasing number of salaried lawyers in law firms who are employees and separate from private practitioners. It is of course untrue that law firm lawyers who are employees of the firm are “dependent”, exactly the same way as it is untrue that In-house lawyers lack independence.
National finance authorities should also support LPP for local In-house lawyers
The belief that LPP may in some way “hide” the truth and prevent national finance authorities -or any other for that matter, including anti-trust officials- is plainly and simply unfounded. LPP is not a “blanket cover-up” to allow corporate Management to act undetected in illegal operations. To think otherwise is an insult to legal integrity and decency.
The fundamental purpose of LPP is to allow lawyers to advise Management on the best course of action, in total honesty and with the clearest presentation of all pros and cons. Much the same way as a doctor is protected by medical privilege when telling his patient exactly what the diagnosis and probabilities are, the lawyer does the same with his or her clients.
Law firms and sole practitioners should welcome LPP for In-house lawyers
Of the slightly more than 70.000 lawyers in France in 2020, some 36% are sole practitioners. Many of them have a no more than a handful of major clients on which they “depend” for a living or even survival. Many of these lawyers are in the banking and industry sector. With only a few strong, powerful and faithful clients, the relationships between the lawyers and the clients are likewise strong and faithful. In many cases, the end result is that the lawyers are so “dependent” on their clients that they are no longer “independent” when it comes to providing legal advice.
One should not look at the splinter in the brother’s eye and not the beam in one’s own eye. In-house lawyers are true professionals who execute their legal obligations and provide legal advice with honesty, integrity and independence, just like law firm lawyers. No more and no less.
Opinion paper submitted by Eric Gardner de Béville, previously General Counsel at Coca-Cola France, Spain & Portugal, consultant and member of the Cercle Montesquieu