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Be Mindful of Joint RepresentationBe Mindful of Joint Representation

Take steps to protect attorney-client privilege.

Martin M. Shenkman

October 17, 2017

2 Min Read
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Caution is in order when multiple clients are considering hiring the same law firm to represent them in a matter. If the clients’ interests are aligned, a dual or joint representation might be possible. The clear incentive for the clients is cost savings. But, the mere fact that this case occurred suggests caution in trying to economize on legal costs in this manner.

IRS Audit

In Micro Cap KY Insurance Company, Inc., DC Ky. April 5, 2017, two physicians sought advice from an attorney who assisted them in forming C corporations that elected tax treatment as Internal Revenue Code Section 831(b) captive insurance companies. In 2014, the Internal Revenue Service began auditing the captives, as well as the physician’s practices. As part of its audit, the IRS issued a summons directing the physicians to produce several categories of documents for examination. The physicians produced all of the documents requested in the summons, except for a series of email communications exchanged between the physicians and their attorneys, which they stated were protected by the attorney-client privilege.

Emails Protected

The court held that certain emails were protected from disclosure to the IRS because of the attorney-client privilege. The IRS claimed that the privilege was waived as a result of the two taxpayers sharing documents. The court held that taxpayers hadn’t not waived the privilege, as they had jointly retained counsel. It found that the two taxpayers had a clear commonality of interests. Practitioners should be mindful that the terms of the engagement letter or retainer agreement might prove quite important in protecting the privilege.

The court reasoned that the physicians had properly invoked the attorney-client privilege, because each email predominately involved legal advice within the retention of counsel.

Exactly how much legal advice an email must contain to become privileged is left maddeningly unclear. With emails being so frequently sent without careful thought or consideration, or with laypersons sending emails without understanding potentially negative legal implications of what to them seemed an innocuous email, attorneys should exercise caution.

About the Author

Martin M. Shenkman

www.shenkmanlaw.com

www.laweasy.com

Martin M. Shenkman, CPA, MBA, PFS, AEP (distinguished), JD, is an attorney in private practice in Fort Lee, New Jersey and New York City. His practice concentrates on estate and tax planning, planning for closely held businesses, estate administration.  


A widely quoted expert on tax matters, Mr. Shenkman is a regular source for numerous financial and business publications, including The Wall Street Journal, Fortune, Money, The New York Times, and others. He has appeared as a tax expert on numerous public and cable television shows including The Today Show, CNN, NBC Evening News, CNBC, MSNBC, CNN-FN, and others. He is a frequent guest on radio talk shows throughout the country and has a regular weekly radio show on Money Matters Financial Network.

Mr. Shenkman is a prolific author, having published 42 books and more than 1,000 articles.

Mr. Shenkman is an editorial board member of CCH (Wolter’s Kluwer) Co-Chair of Professional Advisory Board, CPA Journal, and the Matrimonial Strategist. He has previously served on the editorial board of many other tax, estate and real estate publications.

Mr. Shenkman has received numerous awards, including: The 1994 Probate and Property Excellence in Writing Award; The Alfred C. Clapp Award presented in 2007 by the New Jersey Bar Association and the Institute for Continuing Legal Education for excellence in continuing legal education; Worth Magazine’s Top 100 Attorneys (2008); CPA Magazine Top 50 IRS Tax Practitioners (April/May 2008); The “Editors Choice Award” in 2008 from Practical Estate Planning Magazine for his article “Estate Planning for Clients with Parkinson’s;”  The 2008 “The Best Articles Published by the ABA” award for his article “Integrating Religious Considerations into Estate and Real Estate Planning;” New Jersey Super Lawyers, (2010-16); 2012 recipient of the AICPA Sidney Kess Award for Excellence in Continuing Education for CPAs; 2013 Accredited Estate Planners (Distinguished) award from the National Association of Estate Planning Counsels; Financial Planning Magazine 2012 Pro-Bono Financial Planner of the Year for efforts on behalf of those living with chronic illness and disability;

Mr. Shenkman's book, Estate Planning for People with a Chronic Condition or Disability, was nominated for the 2009 Foreword Magazine Book of the Year Award. He was named the lead of Investment Adviser Magazine's “all-star lineup of tax experts” on its April 2013 cover. On June 2015, he delivered the Hess Memorial Lecture for the New York City Bar Association.

Mr. Shenkman is active in many charitable and community causes and organizations. He founded ChronicIllnessPlanning.org which educates professional advisers on planning for clients with chronic illness and disability and which has been the subject of more than a score of articles. He has written books for the Michael J. Fox Foundation for Parkinson’s Research, the National Multiple Sclerosis Society and the COPD Foundation. He has also presented more than 60 lectures around the country on this topic for professional organizations, charities and others. More than 50 of the articles he has published have addressed planning for those facing the challenges of chronic illness and disability. Additionally, he is a member of the American Brain Foundation Board, Strategic Planning Committee, and Investment Committee.

Mr. Shenkman received his Bachelor of Science degree from Wharton School, with a concentration in accounting and economics. He received a Masters degree in Business Administration from the University of Michigan, with a concentration in tax and finance. He received his law degree from Fordham University School of Law, and is admitted to the bar in New York, New Jersey and Washington, D.C. He is a Certified Public Accountant in New Jersey, Michigan and New York. He is a registered Investment Adviser in New York and New Jersey.

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