Corporate Lawyers Launch Attack on “Culture of Waiver”
20 Corporate Crime Reporter 11(1), March 6, 2006

Corporate lawyers will launch an attack tomorrow on what they are calling the “culture of waiver” they believe is weakening the corporate attorney-client privilege.

The attack is being spearheaded by a number of major big business groups – including the American Chemistry Council, the Business Roundtable, the Financial Services Roundtable, the National Defense Industrial Association and the U.S. Chamber of Commerce.

And it’s being coordinated by the National Association of Criminal Defense Lawyers (NACDL) and the Association of Corporate Counsel (ACC).

Tomorrow, the House Judiciary Committee Subcommittee on Crime, Terrorism and Homeland Security will hold a hearing on the matter.

Three of the four witness – Dick Thornburgh of Kirkpatrick & Lockhart, William Sullivan of Winston & Strawn, and Thomas Donahue, the CEO of the U.S. Chamber of Commerce -- will present the corporate side of the issue.

Associate Attorney General Robert McCallum will present the government’s side – which is, in a nutshell – we don’t demand waivers of corporate attorney/client privilege.

The centerpiece of the corporate attack is a survey of NACDL’s 13,000 members and ACC’s 4,700 members.

The survey was put together by Stephanie Martz of the NACDL and Susan Hackett of ACCA.

Martz said that the Crime Subcommittee hearing grew out of a conference held in November 2005 by the NACDL and the U.S. Chamber of Commerce.

At the conference, Judiciary Committee Chairman F. James Sensenbrenner (R-Wisconsin) expressed interest in a hearing on the subject of waiver of corporate attorney-client privilege.

When asked whether legislation was in the offing, Martz said – “not so far.”

“But oversight by House and Senate Judiciary Committees will certainly have some effect,” Martz said. “I don’t know whether they would ask for more reporting, or request better guidelines. Our preliminary conversations with members of the Crime Subcommittee indicate that more hearings are probably in the offing.”

The survey found that almost 75 percent of both inside and outside counsel agreed that a “‘culture of waiver’ has evolved in which governmental agencies believe it is reasonable and appropriate for them to expect a company under investigation to broadly waive attorney-client privilege or work product protections.

The survey also found that:

* Fifty-two percent of in-house respondents and 59 percent of outside respondents said they believe that there has been a marked increase in waiver requests as a condition of cooperation.

* Of the respondents who confirmed that they or their clients had been subject to investigation in the last five years, approximately 30 percent of in-house respondents and 51 percent of outside respondents said that the government expected waiver in order to engage in bargaining or to be eligible to receive more favorable treatment.

* Of those who have been investigated, 55% of outside counsel responded that waiver of the attorney-client privilege was requested by enforcement officials either directly or indirectly. Twenty-seven percent of in-house counsel confirmed this to be true.

The survey results directly contradict a 2002 survey conducted by Mary Beth Buchanan, the U.S. Attorney in Pittsburgh, of all 94 U.S. Attorney’s offices.

That survey found that waivers were requested in only a handful of cases.

“The survey results indicate that requests for waivers simply are not the norm,” Buchanan wrote in 2004. “In contrast, those who argue that waivers are required frequently do so on the basis of anecdotes without any supporting data.”

How can the results of both surveys be true?

“It could be that the truth is somewhere in between,” Martz said. “Inside and outside lawyers feel such pressure to waive that they waive whenever there is a problem and before waiver is requested.”

“But I would still lay the blame at the door of the government,” Martz said. “In its survey, the government asked the U.S. Attorneys – do you formally request privilege waivers on a routine basis?”

“Well, they could all say no and still be asking on a periodic basis,” Martz said. “Or they could say to themselves – I didn’t ask, but I did emphasis the Thompson factors. Or, I didn’t ask, but I did explain that they might get more favorable treatment if they waived.”


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