D.C. Case Serves as Reminder To Involve Outside Counsel in Every Stage of Internal Investigation for Privilege Purposes

If maintaining privilege over the documents generated by an internal investigation is a concern, the involvement of outside lawyers in every step of the process is strongly suggested.  The U.S. District Court for the District of Columbia recently provided a reminder of this best practice when analyzing the privilege status of internal investigation documents in a qui tam action.  The court, which later characterized the privilege calls as “not close,” held that privilege did not apply to this internal investigation because the majority of the work was conducted by non-attorneys, the internal investigation was undertaken in the normal course of business to ensure regulatory compliance by federal defense contractors, the attorneys in charge were in-house lawyers, and the internal investigation was not conducted to assist with the rendering of legal advice or in anticipation of litigation.  As in any case examining privilege, the application of both the attorney-client privilege and work product doctrine depend heavily on the fact-specific circumstances.  To maximize the likelihood of privilege applying, other best practices in internal investigations include engaging outside counsel early, ensuring Upjohn warnings are issued, requiring interviewees to verify in writing that they received an Upjohn warning, clarifying at all opportunities that the investigation is being conducted by outside counsel for the purpose of rendering legal advice, documenting potential litigation, and ensuring that all documents and communications regarding the investigation are confined to members of the investigation team.