|A recent unpublished case, McCormick, Barstow v. Superior Court, 1998
Cal. App. LEXIS 1102, is sending shock waves through risk management committees and
management consultants of law firms. Even plain lawyers are looking over their shoulders.
It is being "published" informally, online, by fax, and in hushed tones among
the legal community, because the reasoning is surprising.
Most firms have in-house
ethics committees or risk management groups which set and implement policy and monitor the
performance of lawyers. One obvious reason is that we are a self-policing profession. It
also makes economic sense, given the exorbitant cost of a full defense against a claim of
malpractice, compared to addressing the problem at its inception. It may also avoid the
potential embarrassment of media coverage, a la Weeks V. Baker & McKenzie (1998) 63
Cal. App. 4th 1128.
they are lawyers, the members of these committees generate memoranda, reports and other
documents in anticipation of litigation. Since they are lawyers, they may believe that
these documents, between members of the firm, are privileged, or, at a bare minimum
confidential and protected from future exposure. After all, they could assert that they
had an affirmative duty to investigate client complaints and concerns.
The presumption of attorney-client privilege attaching to this type of internal
document was recently dealt an astonishing blow in the unpublished McCormick case, which
is extremely interesting because it demonstrates a court's harsh view of lawyers engaged
in self-defense. There, the firm was preparing its own defense, after retaining outside
counsel for the contemplated malpractice litigation. The court of appeal allowed the
former client to discover these sensitive internal documents, conceivably exposing the
authors to a more active role (hours of depositions as percipient witnesses) in the
litigation than they had anticipated.
The court, in denying the existence of an attorney-client privilege in a protracted
analysis, fell back on a conventional generic ethics inquiry, (who was the client?), which
then led to the other prosaic query, (who was the lawyer?). The court held that since the
internal documents produced by persons inside the firm were directed to others in the
firm, and not to outside counsel, they were not protected by the attorney-client
A serious tangential issue was raised by the fact that three of the attorneys were
named as individuals. Although the court seems to dispose of this issue in a perfunctory
manner, those lawyers may have believed that since they could incur personal liability,
their firm could represent their interests. They may have assumed that they were creating
conventional attorney-client relationships, which of course can be implied in fact
according to historic contractual principles.
This case would appear to militate against a duty of investigation (i.e., repair) and
seems contrary to public policy that would support early resolution of possible
litigation. Isn't it better to deal with a bullet early, rather than deal with a cruise
missile later, assuming there are any left?
Diane Karpman represents attorneys before the
State Bar. She can be reached at email@example.com
or at 310/887-3900.