What Trump’s Lawyer, “Breaking Bad,” and “The Godfather” Teach Us About Attorney-Client Privilege

President Trump’s private lawyer, Michael Cohen, recently had his home and office raided by federal agents. But wait, isn’t all of his information attorney-client privileged? If you’re confused at how a lawyer’s records could be raided, your instincts are right. We’ve all learned about the fourth amendment, which protects us against unreasonable search and seizure, and requires the government to obtain a warrant. But, lawyer records and client information is especially protected, and any old warrant won’t allow the government to search or seize a lawyer’s records. In the case of Trump’s private lawyer, Michael Cohen, the government was able to blow past attorney-client privilege by alleging and providing credible information that they suspected Mr. Cohen was part of criminal activity himself. So, what can upstanding business owners learn from the Michael Cohen saga? Well, quite a bit.

When planning your business and tax structure with your lawyer, it is important to understand what is privileged and what is not. Often times, clients divulge information to their lawyer and wonder whether that information is “attorney-client privileged” or not.  Attorney-client privilege is an important legal protection offered to persons, companies, and organizations who provide confidential information and who seek counsel from their lawyer or law firm. Under law, an attorney cannot be required to provide attorney-client privileged information to a plaintiff in a law suit (e.g. creditor) or to a government agency (e.g. the IRS) except under limited situations. Here are a couple of common situations where you may lose attorney-client privilege and some tips to make sure your confidential information provided to your lawyers doesn’t run into the exceptions.

Exceptions to the Attorney-Client Privilege Rule

1. Third-party non-lawyer present

Was a third-party present with your lawyer when the information you want to be privileged was discussed. For example, was your accountant or financial adviser present when discussing information you want to remain confidential and to privileged? Keep in mind that if a third-party is present in a meeting or on a conference call then that third-party may be required to provide information or documents from the meeting and that your accountant, consultant or adviser can’t raise the attorney-client privileged defense for you unless they’re actually your attorney. If a third-party professional does need to be hired (e.g. an accountant or CPA), that third-party can be hired or brought into the matter by the attorney and the privilege may remain intact. This is known as a “Kovel” hiring of the accountant, and stems from a case where a lawyer engaged an accountant for the client, and the accountant’s work was therefore covered under the lawyer’s attorney-client privilege.

Tip: For sensitive matters where you want information to remain confidential and privileged, do not involve outside parties as those outside parties or non-attorney advisers cannot raise the attorney-client privileged defense.

2. Only legal advice is attorney-client privileged

Only information exchanged when seeking legal advice is attorney-client privileged. This is especially tricky for companies who have their own “in-house” legal counsel who also offers business advice. Only the information exchanged that pertains to legal advice would be privileged. For example, was an organization chart of the company’s holdings “privileged” when provided to the company lawyer who also manages those assets for the business? Also, what if that lawyer disseminated that organization chart to accountants, property managers, or other non-lawyers? If they did, then that information is no longer attorney-client privileged.

Tip: If you have sensitive documents or information you want to keep in communication only with your lawyer, ask your attorney to identify the document as “Attorney-Client Privileged” and do not provide it to non-lawyers.

3. If the lawyer is on the crime, it is no longer attorney-client privileged

This tip comes compliments of the Michael Cohen case outlined at the beginning of this article. You may also think of “Breaking Bad’s” famed lawyer, Saul Goodman. Or maybe you’re “The Godfather” kind of person, and you think of the mafia lawyer, Tom Hagen. In the case of Goodman and Hagen, they were lawyers who were part of the criminal enterprise of their bosses. As a result, their records are not protected by attorney-client privilege.

Tip: While this third scenario is less likely applicable to our readers, I hope, it’s more fun to talk about than when your accountant can receive incriminating information.

Remember that not all information provided to your lawyer needs to be attorney-client privileged. Keep these tips in mind when communicating highly-sensitive information to your attorney, and let your attorney know before you provide the confidential information that you intend it to be privileged, so that they can ensure that your information is properly handled and so that non-lawyer third-parties are only involved when the privilege can be maintained.

Pitching Your Business or Deal with Kevin Harrington from Shark Tank

pitching-your-dealI had the pleasure of interviewing Kevin Harrington on our Refresh Your Wealth podcast last week. Kevin was an original shark on the hit TV Show Shark Tank and appeared on 160 episodes. He is also the founder of the infomercial, a pioneer of As Seen On TV, and a co-founder of Entrepreneur’s Organization (EO). He also took a $500M company public on the NYSE. In short, he’s the perfect person to ask on how to pitch your business, product, or investment. In the podcast you can hear Kevin provide his Top 9 tips for pitching your deal, business, or product. I’ve noted the Top 9 list below and you can check out the podcast here.

  1. Get Their Attention. Start strong and don’t get too far into the details.
  2. Show Problem. Why is your deal, product, or business needed?
  3. Show Solution. What is your solution to the need?
  4. Why are You Unique to Solve. What makes you so special? Why are you the person or company to solve this problem?
  5. Magical Transformation. Show me how this works. Wow me with how cool this is.
  6. Have Testimonials. Have testimonials of people who’ve experienced your company, product or service.
  7. Irresistible Offer. Make an irresistible offer. In the case of courting an investor, make me feel good about getting my money back first. Provide a term that I get paid back my cash investment first before you take any profit. For a product or service, give me a call to action.
  8. Use of Proceeds. If I’m investing money, tell me how the money is going to be used. Is it buying a property, inventory, funding R&D, or paying your salary? That makes big difference.
  9. Create an Invest or Buy Now Incentive. I may be interested but why should I do this now while you have my attention. Close the deal and give me comfort that this will be okay (money back guarantee, warranty, personal guarantee).

I’ve listened to plenty of clients explain their deal and/or business and found this list to be very insightful and practical. Enjoy!

You can find this interview as well as hundreds of other episodes on iTunes under Refresh Your Wealth or at refreshyourwealth.com. Pleas subscribe and tune in weekly for new episodes.