By Jason Wiener and Nathan Sisodia

Clients often make assumptions about their communications with attorneys and their other advisors – including accountants, financial advisors, and consultants – about what communications are protected by the relationship inherently, whether the client can share information related to the representation or if it needs to be kept confidential, whether involving a non-attorney advisor in a legal conversation risks destroying those protections, and whether the attorney can share any information. Attorney-client privilege, the rule that generally keeps your communications with your lawyer from being used against you, is one of the most misunderstood concepts in law, even among people who have been through a lawsuit or business deal. It is also frequently confused with a lawyer’s duty of confidentiality. The purpose of this blog post is to provide some clarity around attorney-client privilege and confidentiality and to explain the differences between them.

 

Privilege vs. Confidentiality: Not the Same Thing

Sometimes people use these words interchangeably, but they are legally distinct.

Confidentiality: is an ethical duty that comes from the rules of professional conduct that govern attorneys. Under these rules, an attorney is professionally obligated not to disclose what a client tells the attorney in almost any context, subject to narrow exceptions (such as to prevent death or serious bodily harm, to prevent crime or fraud, to resolve conflicts of interest, or to comply with law or a court order, among others). The attorney must keep the communications confidential. Confidentiality is broader than attorney-client privilege.

Privilege: is an evidentiary rule, and while it relates to an ongoing client right, it practically comes into play when a legal dispute, investigation, or audit  arises. In general, privilege prevents communications between a client and attorneys from being disclosed and discoverable as evidence. Privilege is enacted when certain elements are met: there is a communication; it is made between privileged persons; it is made in confidence; and it is made for the purpose of seeking, obtaining, or providing legal assistance to the client. It comes from rules of evidence and is rooted in common law.

Accordingly, because the privilege rules require that the communications must be confidential, and confidentiality rules apply broadly to almost any communication, everything privileged is confidential but not everything confidential is privileged. For example, a lawyer might keep something confidential as a matter of professional ethics, although a court could still compel its disclosure pursuant to privilege rules at another given time if a legal dispute arises.

 

Confidentiality and What it Protects

While this blog post will focus on privileged communications below, it is still worth exploring confidentiality a bit further for context. In practice, the attorney’s duty of confidentiality means that almost everything a client tells an attorney stays between the two of them. The attorney generally cannot repeat it to a client’s business partner, family, other advisors, opposing counsel, or other third party without the client’s consent. This duty covers casual conversations, emails, and documents alike; not just formal legal advice. Importantly, this ethical duty of confidentiality is specific to attorneys – non-attorney advisors such as accountants, financial consultants, or business advisors are not governed by the same Rules of Professional Conduct and generally do not owe the same broad duty, though they may be subject to their own professional ethical codes or contractual confidentiality obligations. Clients should not assume that sharing sensitive information with a non-attorney advisor carries the same protections as sharing it with counsel. One precaution is to ensure that a comparably durable duty of confidentiality is included in your services agreements with all advisors and consultants. This confidentiality also applies whether or not a lawsuit ever happens, and it continues even after the representation ends. The client can destroy confidentiality of a communication by giving informed consent to its disclosure, or through their own conduct if the client shares the information with a third party or discusses it in front of someone outside the relationship. In either case, that information may no longer be treated as confidential. Confidentiality is a duty for the attorney and an option for the client – if the client wants to talk about their representation with a friend, they can do so freely; by contrast, the attorney cannot talk about the subject of the representation or even the identity of the client without the client’s consent.

 

Privilege and What it Protects

Privilege is an evidentiary protection that shields confidential communications between a client and their attorney made for the purpose of seeking or providing legal advice from compelled disclosure (such as in legal proceedings or when a legal dispute arises).  Attorney-client privilege exists for a simple policy reason: society wants people to get full, honest legal advice, and that only happens if clients can speak freely without fear that candor will be used against them. Without privilege, clients would sanitize what they tell their attorneys out of fear of it being disclosed, and legal advice would become far less useful because attorneys would be operating on incomplete information.

For example, imagine a business owner meets privately with her attorney and admits, “I think we may have missed a required disclosure in last year’s filings,” and they face legal action for this failure. Because that statement was made in confidence, to their lawyer, for the purpose of getting legal advice, it is privileged, and neither the owner or attorney can be forced to reveal that information in that later dispute. If, however, the owner made the same admission to their accountant or in an email copying a business partner, the communication would likely fall outside the privilege and may be discoverable by the opposing party, an investigator or a regulator.

 

Who Does the Privilege Belong To?

Who the privilege protections belong to is often misunderstood. The privilege belongs to the client, not the attorney. The attorney can assert it on a client’s behalf, and they’re barred from waiving it without their client’s consent, but the right to the privilege is with the client.

This distinction is important for a few reasons. If a business is the client, the privilege generally belongs to the business, not to any individual employee or officer, even though they will be the ones having conversations with counsel. Only authorized agents of the business can therefore waive privilege, like making any other important business decision. If client is an individual, the privilege is theirs personally, and (subject to some exceptions) can survive their death. The attorney cannot waive the client’s privilege on their behalf without their authorization, even if they think it would help their case.

 

Third Parties and “Derivative” Privilege

Privilege generally only protects communications between the client and the lawyer. The moment a client brings a third party into the communication, such as an accountant, a business partner, a spouse, a consultant, etc., the client risks waiving privilege because the communication is no longer confidential between just the client and their attorney. This is because the “made in confidence” element of privilege requires that the communication be limited to the privileged persons – the client and the attorney. The presence of a non-attorney advisor, even one the client trusts implicitly, generally defeats this element unless a recognized exception applies.

There are exceptions, though, that extend privilege to certain third parties when they’re functionally necessary to the legal representation. Their privilege is derivative of the attorney-client privilege:

• Non-lawyer experts (Kovel doctrine): this exception, rooted in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), extends privilege to non-lawyer experts, like accountants or financial consultants, retained by the lawyer (not retained directly by the client) who are involved to help the lawyer understand technical information necessary to render legal advice. The key is that the expert is working for the lawyer, in service of the legal advice, not providing independent services to the client. To preserve the protection, the attorney should formally retain the advisor under a Kovel engagement letter that documents the purpose and scope of the arrangement. Courts scrutinize these arrangements closely: if the advisor is performing work that the client would have needed regardless of the legal representation – such as routine tax preparation or general business consulting – the arrangement is unlikely to qualify. The advisor’s role must be genuinely necessary to translate or interpret complex information so the attorney can provide informed legal advice.
• Corporate representatives: under the framework established in Upjohn Co. v. United States, 449 U.S. 383 (1981), privilege generally extends to communications between counsel and current employees when those communications relate to the employee’s duties and are made for the purpose of obtaining legal advice for the company. Some jurisdictions apply a narrower “control group” test that limits privilege to senior management. Courts are divided on whether privilege extends to communications with former employees. In all cases, it is the company’s privilege, not the employee’s, and the company can waive it even over that employee’s objection.
• Common interest / joint defense privilege: this exception protects communications shared among multiple parties (and their separate lawyers) who share a common legal interest, for example, co-defendants in litigation, or parties to a complex transaction who are aligned on strategy. To rely on this exception, parties should enter into a written common interest or joint defense agreement documenting the shared legal interest and the terms under which communications will be exchanged – informal alignment is generally insufficient, and courts may decline to apply the doctrine absent a clear written record. Additionally, privilege may extend to other agents necessary for the attorney-client relationship to function – such as interpreters, investigators retained by counsel, or litigation support consultants – where the agent’s involvement is essential to the communication or the delivery of legal services, and the communication remains confidential.

These exceptions are narrow and fact-specific. Simply cc’ing a third party on a privileged email, without a structured basis like the ones above, is one of the most common ways privilege gets accidentally destroyed. Equally dangerous is a client receiving privileged legal advice and then forwarding it to a consultant or business advisor for their input or to guide implementation – the forward itself can constitute a waiver, even if the original communication was properly privileged. That brings us to the broader question of how privilege gets waived in the first place.

 

Who Can Waive Privilege, and What Happens When They Do

Because the privilege belongs to the client, only the client (or, for a business, someone with authority to act for the business) can waive it. Waiver can happen a few ways:

• Express waiver: the client voluntarily discloses the privileged communication or authorizes its disclosure. This, for example, can happen when cc’ing a third party on an email that would otherwise be privileged. A common scenario is copying a financial advisor, accountant, or business consultant on an email thread seeking legal advice. Unless the advisor is covered under a recognized exception such as a Kovel arrangement, that cc alone may be enough to waive privilege over the entire communication.
• Implied waiver: the client takes an action inconsistent with maintaining confidentiality. For example, this can happen with how privileged communications are stored and handled. Saving privileged emails, memos, or notes in a shared drive, a common inbox, a collaboration platform, or any location accessible to people outside the privileged group can undermine the confidentiality the privilege depends on, and an inadvertent disclosure from such a location can support an argument that privilege was waived. As a practical matter, privileged materials should be clearly identified, access should be limited to those who need it, and they should be kept separate from broadly accessible business files.
• Subject matter waiver: waiver as to one communication on a subject can operate as waiver of all related communications on that same subject. This means a client can’t selectively disclose the parts of a conversation that help them while shielding the parts that hurt them. This is precisely why clients should talk to counsel before disclosing any piece of a privileged communication, even one that seems harmless in isolation.

 

Why Privilege Matters in Transactions Today, and Not Just Disputes Tomorrow

Because privilege is an evidentiary rule, it is only ever invoked in a proceeding, such as litigation, a regulatory investigation, an audit, or a subpoena. That leads many people to treat it as a “litigation thing” they can worry about later. But whether privilege will exist when you need it is determined by how a client handles communications now, often long before any dispute is on the horizon. A client cannot retroactively create privilege over a communication that was not privileged when it was made, and cannot restore a privilege it already waived through careless sharing. The protection is asserted during a dispute, but it is preserved or destroyed in the ordinary course, including in the middle of a transaction.

That makes privilege a real, and often underappreciated, concern in transactional work. Deals can be filled with non-lawyers (such as accountants, financial advisors, and consultants) and looping them into legal communications can waive privilege unless a recognized basis applies, such as a Kovel-type arrangement where the advisor is retained by the attorney to support the legal advice rather than to provide independent business services. As a practical matter, deal teams should consider maintaining separate communication threads for legal advice and business discussion, clearly labeling privileged communications, and establishing Kovel arrangements at the outset of an engagement rather than trying to retrofit them after communications have already been shared. Where a meeting or call necessarily includes both attorneys and non-attorney advisors, the privileged portion of the discussion should be segregated – for example, by having the attorney conduct the legal advice portion of the call with only privileged persons present. Counterparties are another trap: a buyer and seller are adverse, not aligned, so sharing legal analysis across the table generally is not protected, because the common interest doctrine requires a shared legal interest, not merely a shared commercial interest in closing.

Furthermore, attorneys often give a mix of business and legal advice in transactions, and only communications made for the purpose of obtaining legal advice are privileged. Accordingly, having a lawyer on the email is not enough if the communication is not made primarily for the purpose of obtaining legal advice. This problem is compounded when non-attorney advisors are on the same thread: even if the attorney is providing legal advice, a court may find that the primary purpose of the communication was business rather than legal if the same information was being shared with consultants or financial advisors for business decision-making purposes. The more non-attorney participants in a communication, the harder it becomes to demonstrate that the communication’s dominant purpose was to obtain legal advice. The practical lesson here is the same one that applies in litigation: the time to protect privilege is while you are creating and sharing communications, not after a dispute makes you wish you had.

 

The Practical Takeaway

Confidentiality is broad and durable – an attorney’s ethical duty covers almost everything the client shares and it holds by default, though clients should remember that non-attorney advisors do not necessarily owe the same duty. Privilege is narrower and far more fragile: it protects only communications made to obtain legal advice, and it’s easy to waive by accident, such as by forwarding an email to the wrong person, cc’ing a non-lawyer advisor, discussing legal advice in front of a colleague who isn’t part of the privileged group, or storing privileged communications somewhere they might be shared broadly. And because privilege is preserved or destroyed in real time, the danger isn’t limited to litigation – it is just as live in the middle of a deal, where non-lawyers, counterparties, and a blur of business and legal advice can quietly strip away protection you’ll wish you had later. If your deal or matter involves accountants, financial advisors, or other consultants, talk to your attorney at the outset about how to structure those relationships and communications to preserve privilege – including whether a Kovel arrangement or other formal structure is appropriate. If you’re not sure whether something you’re about to share, forward, or discuss might waive your privilege, that’s the kind of question worth a quick call to your attorney before you act, not after.

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This post is intended as general education, not legal advice. Privilege rules vary by jurisdiction and by the specific facts of a situation. If you have a real question about your own circumstances, talk to counsel directly.