Steps taken by Telstra to protect the attorney-client privilege after an appellate court questioned the privilege

In 2007 Australia’s federal court called into question whether e-mails and documents prepared by in-house lawyers were subject to attorney-client privilege. In response to that threat, Telstra Corporation took a number of actions.  For example, it amended the employment contracts of each of its 150 lawyers “to make it crystal clear that each lawyer’s ethical obligations and duties to court prevailed over our duties to our employer.”  These are the words of Sue Laver, Telstra’s General Counsel, in Canadian Corporate Counsel Association Magazine (Autumn 2010) at 36. They promulgated a corporate policy to spell out that lawyers must give independent advice and prohibited internal clients from requesting a particular legal opinion. Further, Telstra created new compensation arrangements for its lawyers that were no longer tied to the stock performance of the company.

 

Telstra revised its organizational charts to reflect that lawyers act as lawyers – not commercial managers. They changed the titles of lawyers from “managing counsel” to “supervising counsel” to make a clear distinction between legal responsibilities and management responsibilities. All this because of the possibility that attorney-client privilege might not protect activities of internal lawyers.

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