One of my students alerted me to this story, which reports that "the second highest court in the European Union ruled...that attorney-client privilege does not apply to communications between companies and their in-house counsel." The rationale was that "there is no privilege because in-house lawyers are loyal to their companies and don't offer independent legal advice."
I was intrigued by the last comment for a couple of reasons. First, on one level, the statement is odd, because all lawyers are supposed to be loyal to their clients. The EU court must be saying that in-house lawyers are not only loyal, but excessively loyal. Namely, the in-house lawyer is more likely to give improper advice because the lawyer's personal interests are so intertwined with the client's.
I actually think there is something to that reasoning, but I think it proves too much. I've always thought that in-house lawyers are not quite as free to exercise independent judgment as many outside counsel, because the in-house lawyer's job depends on pleasing a single client whereas outside counsel is still likely to keep her job even if a single client leaves.
Nevertheless, even outside lawyers can feel considerable (and excess) loyalty to a particular client, especially when the client is responsible for a significant portion of the lawyer's income. Similarly, lawyers who take contingency cases will have their interests signficantly intertwined with the clients' and would have the same incentive to engage in excessive loyalty at the expense of independent judgment. So if the EU court's rationale for rejecting the privilege is sound, the privilege is on shaky ground in a lot of contexts.
Another reason that the opinion is unusual is that Great Britain (and other EU countries?) allow multidisciplinary practices. The standard critique in the U.S. is that MDPs are problematic because lawyers in such entities will not offer independent legal advice and will be beholden to the interests of non-lawyer partners in the MDP. So the U.S. rejects MDPs and grants the privilege to in-house lawyers, and the EU takes the opposite approach.
In my mind, the EU and the U.S. both have it partially right. I think that the concerns raised by MDPs are not meaningfully different from the concerns that arise in the vast majority of practice settings. If we trust lawyers to act appropriately in a contingency case or when the lawyer's client is responsible for all of the lawyer's income, we can trust lawyers in MDPs. At the same time, in-house counsel can face the same kinds of conflicting incentives and constraints as lawyers in other settings. So treating them differently for purposes of the privilege doesn't make a lot of sense to me.