Dallas Bar Association

The Hot Seat: Ethics When In-House Counsel Testifies

by Amy E. Davis and Tasha Stringer Grinnell

In Shelton v. American Motors Corp., the Eighth Circuit noted that “the practices of taking the deposition of opposing counsel has become an increasingly popular vehicle of discovery.” Practitioners and courts agree–the practice has only gained momentum in the 15 years since.

Several trends have opened the door for adversaries to depose or otherwise compel the testimony of in-house lawyers. For instance, in response to the economic downturn, some in-house legal departments have increased the scope and type of matters handled internally, including the responsibility to oversee production of electronic data in litigation. At the same time, and often for the same reasons, in-house attorneys more often serve a dual role as both legal and business counselors.

Corporate counsel called to testify should keep in mind the ethical implications that can make taking the oath, as a deponent or trial witness, feel more like taking the hot seat. Well before testifying, counsel should carefully consider their duties and professional responsibilities.

These duties arise primarily from Texas Disciplinary Rule of Professional Conduct 1.05. That rule prohibits a lawyer from revealing the confidential information of a current or former client without express consent except in extraordinary, specifically enumerated situations, such as when a lawyer needs the information to defend a suit brought by a former client. Confidential information clearly includes attorney-client and work-product privileged information. But it also includes some unprivileged information. 

While a duty to protect attorney-client information is intuitive, what constitutes an attorney-client communication can be tricky for in-house lawyers. To start, it is difficult to determine who the client is and whether discussions with front-line employees constitute communications with a client. Texas Rule of Evidence 503(a)(2)(B) defines “representative of the client” to mean “any person who, for the purpose of effectuating legal representation for the client, makes or receives a confidential communication while acting in the scope of employment for the client.” Texas case law provides further guidance. Communications are protected if made (1) at the request of a supervisor; (2) for the purpose of legal advice to the company; (3) regarding a subject matter within the employee’s scope of corporate duties; and (4) they remain confidential.

It is unclear whether a communication containing both legal and business advice is protected as privileged. The Texas Supreme Court has held if any part of a communication is attorney-client privileged, the entire communication is protected from disclosure. See Huie v. DeShazo, 933 S.W.2d 920 (Tex. 1996). Federal courts, on the other hand, construe the privilege more narrowly even when applying the same Texas evidentiary rule, declining to apply the attorney-client privilege to documents that were not clearly made for the sole purpose of obtaining and providing legal advice. See Navigant Consulting, Inc. v. Wilkinson, 220 F.R.D. 467 (S.D. Tex. 2004).

The work-product privilege, although not as sacrosanct as the attorney-client privilege, broadly protects an attorney’s thought process and analysis but only once litigation is anticipated. A corporate attorney, then, should carefully consider timing before testifying as to mental impressions and evaluation. That is, was the observation made before or after the client reasonably anticipated the litigation at hand?

An in-house attorney’s professional obligations do not end there. Rule 1.05 encompasses unprivileged confidential information defined in the rule only as information relating to or furnished by a client during the course of or by reason of the representation. One Texas Ethics Opinion concluded a government attorney’s phone records constituted unprivileged confidential information under Rule 1.05, even though the information was otherwise subject to the Texas Opens Records Act. It follows that a corporate lawyer’s phone records or similar information could also be confidential information as it is defined in Rule 1.05.

Without close attention to these ethical duties, in-house lawyers may inadvertently disclose a client’s privileged or confidential information while on the hot seat. This, in turn, may result in a myriad of disastrous outcomes. For this reason, at least one court has observed these situations “personally burden the attorney in question,” unnecessarily add to the costs of litigation, and potentially deter frank communications between attorney and client. N.F.A. Corp. v. Riverview Narrow Fabrics, Inc., 117 F.R.D. 83 (M.D.N.C. 1987).

Ultimately, an in-house attorney’s ethical duties under Rule 1.05 may be unclear at best. To protect the witness and the corporation, it is wise for the attorney witness and the corporate client to have separate counsel when testifying.

Amy E. Davis is a business and employment litigation partner with Rose Walker, LLP in Dallas. Tasha Stringer Grinnell is an Employment and Litigation Counselor for Dean Foods Company based in Dallas. They can be reached at adavis@rosewalker.com and Tasha_grinnell@deanfoods.com, respectively.

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