Defining Attorney-Client Privilege and Its Role in Internal Investigations

When a company or a business engages in an internal audit, they hire attorneys and CPAs who are prone to know the financials. It makes them a key professional who holds important information about the businesses. For that, they need to go through the agreement where they are managing critical information and keeping it discreet to maintain the confidentiality of the brand.

Here comes the condition for the attorney-client privilege, where an attorney is not liable to share information about their clients to a third party, and the authorities also need to respect that, and with only court orders, they can charge the attorneys for sharing information.

In this blog, we will look into the role of the IRS audit attorney and their roles in maintaining the attorney-client privilege and how they can conduct a proper internal investigation for the company.

Defining Attorney-Client Privilege

The privilege is a simple legal arrangement in which the client can share critical information with the lawyer that will help the lawyer give the client legal advice. This helps the firm set the right terms with the authorities and protects the company from any legal fines and penalties.

Here, a company creates a contract with this agreement that solidifies the trust and allows the clients to share information about the firm without fear of information leakage. In the attorney-client privilege, the burden lies with the party that invokes the other party who signed the agreement.

Criteria of Attorney-Client Privilege and What to Maintain

The legal protection for this agreement is something for which the majority of the firms go for these contracts when they bring outsider lawyers for internal audits. The legal privilege of this contract is that the content of the meeting or discussion between an attorney and the client is immune to the information-gathering process, and that makes the information-gathering agency take a different route.  

1.      Confidential Communication

The first advantage that a company has while doing an internal audit is to check the information and the books of the company and keep it behind closed doors. Here, a company needs to file the information, and for that, it needs the entities of lawyers.

The contract of this privilege with them gives a company the perfect immunity to any information leakage. Thus, a firm can ask for a tax audit attorney in San Diego or at another location who can look at the financials of a company.

2.      Communication Must Be Done Related to Legal Advice

Another aspect of this agreement is that the information which is legal advice must be protected, and for that, one needs to stick with the terms of the agreement. In a client-attorney privilege, a company must only seek legal advice from the attorney and not business advice. It makes the information which is legal only to be protected.  

The Purpose of the Attorney-Client Privilege

The main purpose of this privilege is that it protects the parties at both ends of the contract from sharing such information on the grounds of client-attorney privilege. The rules get waived when there are serious allegations against one party, and in that case, one can no longer use the privilege.