The VLW Blog

An in-house lawyer’s warning that he represented the company, not its employees or CEO, meant the CEO could not use the attorney-client privilege to keep the lawyer from testifying before a federal grand jury.

In an unpublished decision June 11 in U.S. v. Investment Properties of America LLC, the 4th U.S. Circuit Court of Appeals upheld denial of a motion to quash by Richmond U.S. District Judge Robert Payne.

A federal grand jury issued the subpoena in August 2007 to Eric Perkins, the former chief legal officer for commercial real estate company Investment Properties of America LLC, as part of an investigation of the misuse of funds by the LLC and its CEO, Edward H. Okun. With support from outside counsel, IPA’s legal staff had begun its own investigation of alleged improper loans in October 2006, and Perkins prepared a series of memoranda for the corporation in which he repeatedly referred to himself as “in-house counsel” and recommended actions IPA should take going forward.

In a Nov. 21, 2006, memo, Perkins stated he was “obligated to advise the company that continuing this course of conduct will likely result in both civil and criminal liability,” and that, as in-house counsel, he “represent[ed] the company as opposed to its sole owner, officers, managers, or individual employees.”

Okun nevertheless asserted that Perkins represented him personally and could not talk to the grand jury. The district court didn’t buy Okun’s claim that he believed Perkins was his personal lawyer. Even if Okun had that subjective belief, Payne said, it was not reasonable.

Nor could Okun muzzle Perkins with assertion of a “common interest” privilege, the 4th Circuit panel said. The record showed that Okun likely refused to cooperate with Perkins’ internal investigation, and Okun could not show any ongoing legal enterprise or strategy.

By Deborah Elkins

“How’m I doing?” was former New York City Mayor Ed Koch’s trademark greeting to his constituents.

Lawyers may ask themselves the same question.

Lawyers who labor in a law firm often use the almighty billable hour as their primary measure of productivity.

But an attorney who works for a corporation may come at that billable-hour standard from the opposite direction. For the in-house counsel who hires and manages an outside law firm, the less time that law firm bills, the more readily the in-house lawyer can demonstrate her productivity.

A group of corporate lawyers is attempting to develop their own metrics, or performance standards, for corporate legal departments. Two of these lawyers described their “Open Legal Standards Initiative” yesterday to the Virginia Bar Association’s Corporate Counsel Fall Forum in Richmond.

Steve Lauer said he and Nena Wong co-founded OLSI “to help the in-house profession improve its business practices” and to develop methodology that lets corporate lawyers document performance in order to make comparisons within the legal field and within a particular industry.

In-house lawyers may know “they’re winning cases and handling transactions,” but their corporate bosses want to know “how much it costs and how long does it take?” Lauer said.

OLSI is a voluntary organization dedicated to developing uniform approaches to measure how law departments function, with the ultimate goal of using the data to improve performance.

Gathering good data can help lawyers learn “what can you do to reduce the number of lawsuits against your company, what can you do to reduce the cycle time for drafting contracts,” Wong said. And maybe, as a byproduct, you can “decrease the number of lawyer jokes” you have to hear from the non-legal types in the company.

The OLSI Web site identifies the top 25 “key performance indicators” that help measure cost effectiveness, staff productivity, process efficiency and cycle time. Tracking in-house time shouldn’t be the record-keeping burden that drove many lawyers from firm practice into corporate legal departments. Once law departments establish the right record-keeping habits, all they have to do is “rinse and repeat,” Wong said.