In a high-profile case, your client will need both legal counsel and public relations advice. The question is this: Who — your law firm or the client — should retain the public relations firm to maximize the chance that communications with the public relations firm will be protected by the attorney-client privilege or work-product doctrine?
Six years ago, we were scratching our heads about this. Two cases had just spoken on the issue, and they didn’t make much sense. See Calvin Klein Trademark Trust v. Wachner, 198 F.R.D. 53 (S.D.N.Y. 2000) (Rakoff, J.); In re Copper Market Antitrust Litigation, 200 F.R.D. 213 (S.D.N.Y. 2001) (Swain, J.). In those cases, the privilege was found to apply where the client retained the PR firm (In re Copper Market Antitrust Litigation), but not to apply when the law firm retained the PF firm (Calvin Klein Trademark Trust). That seemed awfully odd to us. If anything, the privilege claim seems stronger when the law firm retains the PR firm.
A more recent decision out of the same court, In re Grand Jury Subpoenas Dated March 24, 2003, 265 F. Supp. 2d 321 (S.D.N.Y. 2003) (Kaplan, J.), addressed the same issue. There, an at-that-time unnamed former employee was a target of a grand jury investigation; the former employee’s attorneys hired a PR firm; and the Department of Justice subpoenaed the PR firm’s files and one of its employees. Later rulings show that the unnamed former employee was Martha Stewart. In re Grand Jury observed in dictum that “[n]o one suggests that communications between [Stewart] and [the PR] Firm would have been privileged if she simply had gone out and hired [the PR] Firm as public relations counsel” and that “there is no reason to question the stated rationale for her lawyers’ hiring of [the PR] Firm — that the lawyers viewed altering the mix of public information as serving [Stewart’s] interests by creating a climate in which prosecutors and regulators might feel freer to act in ways less antagonistic to [Stewart] than otherwise might have been the case.” In re Grand Jury sustained the privilege claims because, in that court’s view, “the ability of lawyers to perform some of their most fundamental client functions . . . would be undermined seriously if lawyers were not able to engage in frank discussions of facts and strategies with the lawyers’ public relations consultants.” It also observed that Stewart “would not have enjoyed any privilege for her own communications with [the PR] Firm if she had hired [the PR] Firm directly.” Further, it observed that claims could be sustained not only with respect to communications among the Target, her lawyers, and the PR firm, but as to those between Stewart and the PR Firm without the lawyers present. The facts of the particular lawyerless communications there, however, showed that those communications were not seeking or relating to seeking legal advice.
We thought that decision would bring some clarity to this area of law. And, in fact, other recent decisions have, in general, sustained claims of attorney-client privilege as to law-firm-retained PR firms. E.g., In re Vioxx Prods. Liab. Litig., MDL No. 1657, 2007 U.S. Dist. LEXIS 23164, *11 n.3 (E.D. La. Mar. 5, 2007) (sustaining attorney-client privilege and work-product claims as to communications involving PR firm retained by Debevoise & Plimpton). But there are contrary rulings, too. See, e.g., NXVIM Corp. v. O’Hara, 1:05-CV-1546, 2007 U.S. Dist. LEXIS 13660, *102 (N.D.N.Y. Feb. 9, 2007) (Treece, M.J.); Haugh v. Schroder Investment Management of N. Am., Inc., 92 Fair Empl. Prac. Cas. (BNA) 1043, 2003 U.S. Dist. LEXIS 14586, *9 (S.D.N.Y. Aug. 25, 2003) (Cote, J.).
So six years have passed, and we’re still scratching our heads. If your client needs public relations advice, who should retain the PR firm?
Despite the Calvin Klein Trademark Trust decision, we think the safer route is to have the law firm, rather than the client, retain the PR firm. That both increases the chance of protection under the attorney-client privilege and creates the work-product doctrine as an alternative basis upon which to avoid disclosure.
But we sure wish the law were clearer in this area, so we would have more comfort when we advise clients about this issue.