Case Highlights the Risk of Not Precisely Defining the Attorney-Client Relationship

January 14, 2009

Not surprisingly, any attorney-client privilege analysis begins with properly defining the attorney-client relationship. Despite the outcome-dispositive nature of the issue, some lawyers still do not address it carefully enough.

In Nichols v. YJ USA Corp., Civ. A. No. 3:-6-CV-2366-L, 2008 U.S. Dist. LEXIS 91639 (N.D. Tex. Nov. 12, 2008), plaintiff Nichols acted as a consultant for defendant YJ when it purchased assets from a third party. When there was a falling out between Nichols and YJ, both claimed ownership of communications between Nichols and a law firm with whom he had dealt during the transaction. The magistrate judge had analyzed all the facts and concluded that the law firm had represented YJ rather than Nichols. The district court judge also carefully weighed all the facts and reversed the magistrate judge. Among other things, the district court took at face value the law firm’s explanation that its letter to YJ thanking the company “for the opportunity to represent you in this matter” resulted from the law firm’s inadvertent duplication of language in the firm’s letter to Nichols. Id. at *12.

Lawyers should never put their clients in the position where they have to litigate the identity of the client.