One subtle but critically important issue involving the attorney-client privilege is whether the presence of an agent such as an accountant during an attorney-client communication prevents the privilege from arising or waives the privilege. Generally, an accountant hired by the lawyer to help the lawyer provide legal advice is inside the attorney-client relationship, while an accountant hired by the client to give the client advice is outside the attorney-client relationship (so the accountant’s presence waives the privilege).
In Ampa Ltd. v. Kentfield Capital LLC, No. 00 Civ. 05008 (NRB)(AJP), 2000 U.S. Dist. LEXIS 11638, at *1 (S.D.N.Y. Aug. 16, 2000), the court held that the attorney-client privilege that would otherwise have covered discussions at a corporation’s board of directors meeting “was waived by the presence of [the corporation’s] outside accountant, who was not involved in the legal issue that was discussed in his presence, and whose presence therefore waives the privilege.”
Many lawyers fail to appreciate this important distinction, or neglect to ask all participants in meetings to identify themselves—an exercise which can identify client agents whose presence might vitiate the privilege.