Ethics in Brief

Ethics in Brief is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association for SDCBA members.

Considerable Care Must Be Taken By An Attorney To Protect Attorney-Client Confidential Information During Discovery Of Client’s Electronically Stored Information (“ESI”)

Rule 3-100 states:  “A member shall not reveal information protected from disclosure by Business and Professions Code section 6068 (e)(1) without the informed consent of the client, or as provided in paragraph (B) of this rule.” 

Bus. & Prof. Code section 6068(e)(1) provides California attorneys with an express duty “to maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.”

The duty of confidentiality arises from the relationship of trust between an attorney and a client, and has rare exceptions absent the informed consent of the client to reveal the confidential information.  This inviolate duty should remain intact in the rapidly evolving area of the discovery of a client’s electronically stored information (“ESI”). 

In Kilopass Technology Inc. v. Sidense Corp. (N.D.Cal. 2012) 2012 WL 1534065, the Court focuses on the attorney’s duty to preserve client secrets and suggests that considerable care must be taken at every step of the ESI discovery, including but not limited to, selecting the outside vendor, providing appropriate search terms and other instructions to the vendor, and reviewing the vendor’s work product before producing the material to the opposing party. The more steps the Court finds have been inadequate, the more likely the Court is to deem that any privileges over material disclosed to the opposing party have been waived - precisely what the Court found in Kilopass.

There, the attorney contracted with an outside vendor to search and sort electronic documents for privilege.  The attorney provided the list of prior lawyers and law firms to the vendor.  However, the vendor failed to run the privilege search across all batches of documents and the attorney failed to include all names of prior lawyers and firms.  After receiving the production batches from the vendor only a few days before the deadline for production, the attorney did not review the vendor’s work but conducted only “spot checks” for privileged documents, with the assistance of other attorneys and paralegals.  As a result, over 1000 privileged documents were produced in a batch of 55,000 documents.  Based on the party’s failure to take “reasonable steps to prevent disclosure” the Court ruled that the privilege over the documents had been waived.

The duty of competence pursuant to Rule 3-110 provides “(A) A member shall not intentionally, recklessly, or repeatedly fail to perform legal services with competence. (B) For purposes of this rule, “competence” in any legal service shall mean to apply the 1) diligence, 2) learning and skill, and 3) mental, emotional, and physical ability reasonably necessary for the performance of such service…” The duties set forth in Rule 3-110 include the duty to supervise the work of subordinate attorney and non-attorney employees or agents, which also includes outside vendors.

Therefore, an attorney’s reliance on outside vendors or subordinate attorneys and paralegals to screen privileged documents, does not abdicate the attorney’s duty of competence with regard to his or her client’s screening procedures, and the attorney risks waiver of privilege over confidential documents.

Once the attorney has been diligent in implementing reasonable screening procedures in identifying and preserving privileged documents, it would be prudent for the attorney to take an additional step, particularly if the ESI discovery consists of a large batch. The attorney should enter into an agreement prior to the production, that if any privileged material is inadvertently disclosed, then the opposing party will notify the producing party’s attorney immediately of such disclosure, return the disclosed material to the producing party’s attorney, and not use any confidential material for any purpose.

In today’s rapidly evolving area of the discovery of a client’s electronically stored information (“ESI”), the attorney’s duties of confidentiality and competence should remain paramount.  Otherwise, the horrendous fate that befell counsel in Kilopass may await counsel.

-- Rayna A. Stephan, Deputy City Attorney, Office of the San Diego City Attorney

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**