Friday, September 4, 2009
BigLaw Loses One!
"A little-publicized ruling is a recent case involving the [IRS] is causing lawyers for big companies some sleepless nights. Last week, in a widely anticipated ruling, a federal appeals court in Boston said the IRS could gain access to documents created by a defense-contracting firm, to determine whether the company's calculation of its tax liabilities would pass muster during a possible IRS audit. The decision in US v. Textron Inc. reversed a January ruling by a smaller panel of judges on the same court. ... In its ruling, the First Circuit Court of Appeals said the documents at Textron weren't protected under the [work-product] doctrine becase they weren't specifically prepared 'for use' in litigation. The ruling 'eviscerates the work-product doctrine,' says Frederick Krebs, president of the Association of Corporate Counsel, an organization for in-house corporate lawyers. ... Some tax experts say the concern in misplaced. Corporate lawyers are 'trying to expand the work-product doctrine far beyond its original intent,' says Dennis Ventry, a law professor at the University of California, Davis, whose analaysis of the Textron case was cited by the court in its opinion", Amir Efrati at the WSJ, 20 August 2009, link: http://online.wsj.com/article/SB125072397055744533.html.
I agree with Ventry. Lawyer-client and work-product privilege abuse is endemic to BigLaw practice. Attorneys routinely attend meetings or prepare documents to attempt to abuse these privileges. Good show, First Circuit.