Lawyer-clientprivilege is a legal concept that protects communication between alawyer and his client. This principle prevents the lawyer fromtestifying against the client in a court based on thesecommunications. The privilege enables full and frank communication toenable the lawyer to give the most appropriate advice to the client.The principle is applicable when the lawyer is acting primarily as anattorney.
Thelawyer-client privilege is applicable for both general counsel andoutside counsel. The privilege applies for all confidentialcommunication between the lawyer and client. However, thecommunication must be aimed at getting legal advice from the lawyer.Additionally, the communication must meet the requirements for aprivilege.
Thereare instance in which the privilege can be waived. This includes whenthe rules that apply are not followed. These rules provide guidelinesand boundaries of communications that are protected by the privilege.For example, the disclosure by the client should not be aimed athelping the client commit a crime or fraud. The waiver can also beused to support the interests of the attorney, for example to demandpayment. The privilege can also be waived if the material of thecommunication is public knowledge.
Mr.Mayopoulos is an experienced lawyer. He therefore understood theprovisions of the lawyer-client privilege. This is the reasons why herefused to share any information with a third party. Probably, thebank could have sued him if he shared confidential clientcommunications. He therefore decided that the bank should make adecision to share or not to share the information with a third party.
Theevents that led up to the merger are not known. Probably, the legalimplications of nondisclosure of financial position of Merrill Lynchto the bank’s shareholders were discussed. Mr. Mayopoulos may havegiven the bank the correct advice, but the executives made a decisioncontrary to the advice. This can explain why they settled the fine of150 million dollars and did not blame the counsel in the shareholderlitigation.
Jennings,M. (2014). BusinessEthics: Case Studies and Selected Readings.Stanford, CT: Cengage Learning.