1. Attorney-Client Privilege: Pitfalls and Pointers for Transactional Attorneys Moderator: B.T. Atkinson (Partner, Nelson Mullins, Charlotte) Panelists: Tom Hooper (Partner, Nelson Mullins, Charlotte) and Cory Manning (Partner, Nelson Mullins, Columbia, SC) ACC CLE March 10, 2016 Moderator: B.T. Atkinson (Partner, Nelson Mullins, Charlotte) Panelists: Tom Hooper (Partner, Nelson Mullins, Charlotte) and Cory Manning (Partner, Nelson Mullins, Columbia, SC) ACC CLE March 10, 2016 1

2. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: Pitfalls and Pointers for Transactional Attorneys  Attribution: The title of this presentation was taken from a helpful article in the ABA's Business Law Today in 2008. That article can be found at https://apps.americanbar.org/buslaw/blt/2008-03- 04/sweigart.shtml. https://apps.americanbar.org/buslaw/blt/2008-03- 04/sweigart.shtml  The presentation will build and expand upon some of the concepts discussed in this article. 2

3. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: Definition  Four elements:  A communication  Between attorney and client  Made in confidence  For the purpose of seeking, obtaining, or providing legal advice 3

4. Nelson Mullins Riley & Scarborough LLP A Communication 4

5. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: A communication  A communication (from attorney or client) may be oral or written.  Gestures (such as a nod from a client) can be considered a communication.  Attorneys' notes memorializing confidential conversations and meetings with clients are communications subject to protection under the privilege.  Content of documents controls—Would disclosure of document reveal substance of client's confidential communication? 5

6. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: A communication  Communications not within the privilege:  Facts  Existence of attorney-client relationship  Identity of a client  Fact and reasons why attorney was retained  Foundational matters: who, what, when, how long  Fee arrangements generally not protected 6

7. Nelson Mullins Riley & Scarborough LLP Between Attorney and Client 7

8. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: Between attorney and client  Attorney-client relationship must exist for privilege to attach.  Relationship can be express or implied.  The client is a person or entity intended to be the recipient of legal advice—the purpose of the relationship defines it.  Generally, client's subjective understanding governs whether there is a relationship. 8

9. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: Between attorney and client  Corporations can be clients.  Upjohn Test:  Not a specific test to determine the limits of privilege.  Instead: List of factors used in determining whether privilege applies.  North Carolina recognizes this test. 9

10. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: Between attorney and client  Upjohn Test: Elements  Is the information needed to supply legal advice?  Did communications fall within employee's corporate duties?  Did employee know he/she was being questioned so corporation could obtain legal advice?  Was communication intended to be confidential? 10

11. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: Between attorney and client  Other Test(s): "Control Group" Test  Under this test, only upper level management is considered a client for purposes of the attorney-client privilege. Communications by lower-echelon employees to corporate counsel are unprotected.  Still recognized in some states. See, e.g., Illinois. 11

12. Nelson Mullins Riley & Scarborough LLP In Confidence 12

13. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: In confidence  Made within an attorney-client relationship.  Made with expectation of confidentiality. 13

14. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: In confidence  Inter-corporate communications that go through numerous employees do not defeat the "in confidence" requirement.  Communications with third-party experts hired to assist attorneys in providing legal advice to the corporation are considered "in confidence" if they concern the subject matter of the intended legal advice.  Other third-party communication also can be protected under theory of Common Interest or Joint Defense. 14

15. Nelson Mullins Riley & Scarborough LLP For the Purpose of Seeking or Providing Legal Advice 15

16. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: For the purpose of seeking/providing legal advice  A privileged communication must have been made for the primary purpose of obtaining legal advice or services from an attorney.  An implicit request for legal advice is sufficient.  Non-legal business information conveyed to attorneys to "keep them informed" is normally not subject to privilege protections. 16

17. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: For the purpose of seeking/providing legal advice  The Corporate or In-House Lawyer:  Corporate or in-house lawyer acting in a legal-advisor capacity with respect to the corporation will have the privilege protection for his or her communications.  But if corporate or in-house lawyer is acting in a business-advisor capacity with respect to the corporation, then the privileged nature of those communications is called into question. 17

18. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: For the purpose of seeking/providing legal advice  The Corporate or In-House Lawyer:  Corporate or in-house lawyer often wears two hats: a business hat and a legal hat. Which one is critical to the privilege question.  For example, whether a privilege will apply in a transactional setting is dependent upon whether the transactional lawyer is deemed to be functioning solely or primarily as a business advisor rather than a legal advisor.  In general, a lawyer performs primarily as a business advisor when services provided by the lawyer are separate from legal issues and could have been provided by a non- lawyer. 18

19. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: For the purpose of seeking/providing legal advice  The Corporate or In-House Lawyer:  Courts look to the "dominant purpose" of communication(s) to determine whether the attorney- client privilege applies. 19

20. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: For the purpose of seeking/providing legal advice  Dominant Purpose Discussion: Attorney as...  Document Drafter—drafts not automatically protected  Document Repository—no protection simply because sent to or kept by the attorney  Corporate Committee Member—careful not to blend  Business Advisor—Where is the line? Business advice alone not privileged.  Business Agent—Easier question than advisor 20

21. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: For the purpose of seeking/providing legal advice  Dominant Purpose Discussion (Con't): Attorney as...  Negotiator—is legal component of negotiation sufficient enough to predominate?  Consultant—legal capacity?  Lobbyist—such activities don’t become privileged because done by a lawyer.  Investigator—investigation conducted in ordinary course of business? For rendering legal advice? 21

22. Nelson Mullins Riley & Scarborough LLP Waiver 22

23. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege: Waiver  Privilege belongs to the client and not the lawyer; only client can waive privilege.  Presence of third parties creates waiver opportunities.  Waiver can result from careless, unintentional, or inadvertent actions. 23

24. Nelson Mullins Riley & Scarborough LLP Attorney-Client Privilege Questions/Discussion 24

25. Nelson Mullins Riley & Scarborough LLP Contact Information  B.T. Atkinson: (704) 417-3039 bt.atkinson@nelsonmullins.com  Tom Hooper: (704) 417-3107 tom.hooper@nelsonmullins.com  Cory Manning: (803) 255-5524 cory.manning@nelsonmullins.com 25