In recent years, corporate in-house counsel has grappled with the complexities and challenges of joint-defense and common-interest agreements when companies become the subject of government investigations. These situations often involve a government subpoena requiring an employee to provide testimony, resulting in the employee retaining separate legal counsel to engage with the government under a proffer agreement. In such circumstances, a joint-defense agreement (JDA) may be explored as a legal tool to preserve attorney-client privilege while fostering a cooperative defense strategy.
As discussed on JD Supra, one scenario unfolds when the subpoenaed employee and their counsel reach out to the company’s outside legal counsel to get insights into the government’s theories of liability, key documents, and other relevant information. This interaction can lead to potential JDA, facilitating an exchange of information that otherwise may lead to waiver of privilege. However, it’s crucial to understand the implications and best practices associated with these agreements.
When reviewing JDAs, it is important for in-house counsel to weigh the agreements’ advantages against their potential risks. On the plus side, they can foster cooperation amongst parties that share common legal interests while also preserving privilege over the shared information. However, on the downside, these agreements can potentially expose a corporation to unexpected risks, especially when relationships among joint defendants may later sour or a party might later become a government witness. Therefore, careful navigation and strategic thinking are fundamental during the process.
Moreover, in-house counsel should focus on minimizing the risks associated with potential conflicts of interest in these agreements, particularly when there’s an ongoing government investigation. A common practice is to set limits on the breadth and duration of these agreements to mitigate risks.
In conclusion, while JDAs and common-interest agreements can be beneficial tools in the context of government investigations, they should be treated with caution. Prudent in-house counsel will take careful steps to ensure these tools are utilized effectively to shield privileged material while also safeguarding the corporation’s overall interests.