Attorney-client privilege at risk for in-house counsel not reporting to the general counsel

A lawyer who reports to a business unit executive faces a presumption AGAINST being able to assert the privilege. This according to the May/June 2005 issue of Business Law Today (pg. 23), quoting from a 1998 case:”[t]here is a presumption that a lawyer in the legal department or working for the general counsel is most often giving legal advice…” [Rees Morrison: what about tax counsel reporting to the CFO?]

By contrast, paraphrasing the same decision, the article explaines that if the in-house counsel “also works under a business unit of the corporation or otherwise acts in some management role… then the opposite presumption arises – the communication was not for the purpose of obtaining legal advice.”

Jeopardizing the attorney-client privilege argues for having all practicing lawyers report up to the general counsel. Even so, does the risk darken the advantages of having lawyers dedicated to support particular business units? Is that “working under a business unit?” At the extreme, where inside lawyers want a seat at the table of management, does this pull the chair of privilege out from under them?