When Image Is Everything: PR Firms in White Collar Cases

Traditional Notions of Confidentiality

When the government issues a subpoena calling for witness testimony or the production of documents in a criminal case, the person whose testimony or documents is sought is required to comply with the subpoena. There are some exceptions to this rule. For example, a priest cannot be turned against his penitent, and a lawyer cannot be made to testify against a client. While there are limits to the confidentiality inherent even in those relationships, the basic point is that communications between a client and certain categories of professionals have been exempt from subpoenas and other devices for obtaining evidence. As a general matter, public relations experts have not been exempt.

However, a recent decision by a federal judge in Manhattan, Lewis A. Kaplan, has provided a roadmap for protecting communications among a lawyer, client and public relations firm hired to assist them in high- profile white collar cases. In Re Grand Jury Subpoenas Dated March 24, 2003 Directed To (A) Grand Jury Witness Firm and (B) Grand Jury Witness. The case illustrates the steps that should be taken by lawyers and their clients to protect communications with a PR firm.

The District Court's Decision

Because the case involved an ongoing grand jury investigation, the court's opinion did not use the parties' real names or identify the matter in which the dispute arose. The court explained only that the case involved “a high profile matter” and was the subject of “intense press interest and extensive coverage for months.” It arose when federal prosecutors served grand jury subpoenas for testimony and documents on a public relations firm and one of its employees. The firm and its employee refused to provide the requested testimony or documents on grounds that the information was protected from disclosure by the privilege that attaches to communications between lawyers and their clients, and because the information reflected the attorneys' thought processes. On the particular facts of this case, the court agreed and declined to order the release of almost all of the information and documents sought by the government.

Certain factors were critical to the court's conclusion that the work of the public relations firm was privileged. First, in contrast to cases in which a public relations firm's efforts are directed at affecting public opinion generally, in this case the evidence showed that the firm had been retained specifically to help reduce the risk that prosecutors or government regulators would feel compelled to bring charges against the putative defendant. Thus, the “target audience” for the firm's services was not the public-at-large, but prosecutors and regulators responsible for making charging decisions in the matter under investigation. In the court's view, this fact took the firm's services out of the realm of general PR advice and identified them more closely with work that criminal defense lawyers typically do, ie, helping the client avoid being charged in the first place.

The court strongly endorsed the notion that defense lawyers and their clients have a legitimate right to try to affect the public relations climate in which a government investigation occurs. The court wrote that “the media, prosecutors, and law enforcement personnel in cases like this often engage in activities that color public opinion, certainly to the detriment of the subject's general reputation but also, in the most extreme cases, to the detriment of his or her ability to obtain a fair trial.” The court added that it would be “unreasonable to suppose that no prosecutor ever is influenced by an assessment of public opinion in deciding whether to bring criminal charges, as opposed to declining prosecution or leaving matters to civil enforcement proceedings, or in deciding what particular offenses to charge[.]” And, in trying to affect a prosecutor's decision whether to bring charges, the court recognized that a putative defendant will require the services of a public relations professional, for “ dealing with the media in a high profile case probably is not a matter for amateurs.”

The second factor critical to the court's holding was that the PR firm had been engaged not by the client, but by the law firm representing the client. On at least two occasions the court explicitly said that communications between the client and the PR firm would not have been privileged if the client had hired the PR firm directly. But, by having the law firm retain the PR firm, the client was able to show that the purpose of the arrangement was to have the PR firm assist the lawyer in defending the client against possible prosecution. While the court acknowledged “a certain artificiality” in saying that a privilege exists only where the lawyer hires the PR firm, it held that such a rule was appropriate to limit the privilege to those instances “where the lawyer needs outside help” to represent the client.

Roadmap for Future Cases

What emerges from this decision is a roadmap for using the services of a public relations firm while, at the same time, maximizing the likelihood that communications among the lawyer, client and PR firm will remain confidential notwithstanding government efforts to uncover them. The starting place is a retainer agreement between the lawyer and the PR firm that makes clear that the firm is being retained to provide advice and assistance to the lawyer and to enable the lawyer to provide advice to the client. Such a retainer agreement must make clear that it is the lawyer, and not the client, that is engaging the PR firm. Next, the engagement letter should make clear that the purpose is to assist the lawyer in obtaining a favorable charging decision by affecting the climate in which prosecutors will make that decision and not, more generally, to affect public opinion concerning the client.

By following these guidelines, defense lawyers, clients and PR professionals should be able to make a strong claim of privilege in the event the government seeks discovery of their communications. Practically speaking, with an engagement letter that defines the PR firm's role as set forth above, it is hard to imagine any public relations services intended for defense purposes that wouldn't also benefit the client's public reputation in general. To some extent, then, the court's recent decision elevates form over substance. But, as the district court's decision explicitly recognizes, formalistic rules such as those described above are inevitable in a system in which communications with certain professionals are, as a policy matter, deemed exempt from disclosure while others are not.

Conclusion

The district court's opinion reflects a sophisticated understanding of how high-profile white-collar cases are defended and the role that public opinion plays in the government's charging decisions. Because the prosecution and defense of so many white-collar cases are played out on the public stage, the services of a public relations expert are crucial to the defense. If followed by other courts, Judge Kaplan's decision will provide a roadmap for defense attorneys who need the assistance of a PR expert but worry about how to keep the expert's work privileged.

You are a public figure whose ability to earn a living depends upon your reputation for integrity and talent. Almost without warning, you become caught up in a highly publicized business scandal that threatens your livelihood and public image. The media's fascination with the details of the scandal has caused a public furor and led federal officials to open parallel criminal and civil investigations. You hear rumors that a Congressional committee is about to hold public hearings. You need help – and fast.

Although you are a sophisticated businessperson who deals with lawyers all the time, you have never been in trouble before and don't know many criminal defense lawyers. While your corporate counsel gathers recommendations, you turn immediately to your longstanding public relations firm and engage them to fight back in the court of public opinion. To get them up to speed, you tell them the true story behind what has been reported in the press. Days later, you finally hire a criminal defense lawyer and tell her the same version of events. When she asks whether you have told this tale to anyone else you say “only to my PR firm.” Your lawyer turns green and looks for the nearest window to jump out. She then explains that you have made a terrible mistake because nothing you said to your PR advisers is privileged.

While your lawyer's analysis is absolutely correct, does that mean there is no way to get confidential help from a public relations expert in mounting your defense? Not necessarily. A recent decision by a federal judge in Manhattan is helping lawyers and clients understand the rules that govern how these issues should be resolved in high-profile white collar cases.

Traditional Notions of Confidentiality

When the government issues a subpoena calling for witness testimony or the production of documents in a criminal case, the person whose testimony or documents is sought is required to comply with the subpoena. There are some exceptions to this rule. For example, a priest cannot be turned against his penitent, and a lawyer cannot be made to testify against a client. While there are limits to the confidentiality inherent even in those relationships, the basic point is that communications between a client and certain categories of professionals have been exempt from subpoenas and other devices for obtaining evidence. As a general matter, public relations experts have not been exempt.

However, a recent decision by a federal judge in Manhattan, Lewis A. Kaplan, has provided a roadmap for protecting communications among a lawyer, client and public relations firm hired to assist them in high- profile white collar cases. In Re Grand Jury Subpoenas Dated March 24, 2003 Directed To (A) Grand Jury Witness Firm and (B) Grand Jury Witness. The case illustrates the steps that should be taken by lawyers and their clients to protect communications with a PR firm.

The District Court's Decision

Because the case involved an ongoing grand jury investigation, the court's opinion did not use the parties' real names or identify the matter in which the dispute arose. The court explained only that the case involved “a high profile matter” and was the subject of “intense press interest and extensive coverage for months.” It arose when federal prosecutors served grand jury subpoenas for testimony and documents on a public relations firm and one of its employees. The firm and its employee refused to provide the requested testimony or documents on grounds that the information was protected from disclosure by the privilege that attaches to communications between lawyers and their clients, and because the information reflected the attorneys' thought processes. On the particular facts of this case, the court agreed and declined to order the release of almost all of the information and documents sought by the government.

Certain factors were critical to the court's conclusion that the work of the public relations firm was privileged. First, in contrast to cases in which a public relations firm's efforts are directed at affecting public opinion generally, in this case the evidence showed that the firm had been retained specifically to help reduce the risk that prosecutors or government regulators would feel compelled to bring charges against the putative defendant. Thus, the “target audience” for the firm's services was not the public-at-large, but prosecutors and regulators responsible for making charging decisions in the matter under investigation. In the court's view, this fact took the firm's services out of the realm of general PR advice and identified them more closely with work that criminal defense lawyers typically do, ie, helping the client avoid being charged in the first place.

The court strongly endorsed the notion that defense lawyers and their clients have a legitimate right to try to affect the public relations climate in which a government investigation occurs. The court wrote that “the media, prosecutors, and law enforcement personnel in cases like this often engage in activities that color public opinion, certainly to the detriment of the subject's general reputation but also, in the most extreme cases, to the detriment of his or her ability to obtain a fair trial.” The court added that it would be “unreasonable to suppose that no prosecutor ever is influenced by an assessment of public opinion in deciding whether to bring criminal charges, as opposed to declining prosecution or leaving matters to civil enforcement proceedings, or in deciding what particular offenses to charge[.]” And, in trying to affect a prosecutor's decision whether to bring charges, the court recognized that a putative defendant will require the services of a public relations professional, for “ dealing with the media in a high profile case probably is not a matter for amateurs.”

The second factor critical to the court's holding was that the PR firm had been engaged not by the client, but by the law firm representing the client. On at least two occasions the court explicitly said that communications between the client and the PR firm would not have been privileged if the client had hired the PR firm directly. But, by having the law firm retain the PR firm, the client was able to show that the purpose of the arrangement was to have the PR firm assist the lawyer in defending the client against possible prosecution. While the court acknowledged “a certain artificiality” in saying that a privilege exists only where the lawyer hires the PR firm, it held that such a rule was appropriate to limit the privilege to those instances “where the lawyer needs outside help” to represent the client.

Roadmap for Future Cases

What emerges from this decision is a roadmap for using the services of a public relations firm while, at the same time, maximizing the likelihood that communications among the lawyer, client and PR firm will remain confidential notwithstanding government efforts to uncover them. The starting place is a retainer agreement between the lawyer and the PR firm that makes clear that the firm is being retained to provide advice and assistance to the lawyer and to enable the lawyer to provide advice to the client. Such a retainer agreement must make clear that it is the lawyer, and not the client, that is engaging the PR firm. Next, the engagement letter should make clear that the purpose is to assist the lawyer in obtaining a favorable charging decision by affecting the climate in which prosecutors will make that decision and not, more generally, to affect public opinion concerning the client.

By following these guidelines, defense lawyers, clients and PR professionals should be able to make a strong claim of privilege in the event the government seeks discovery of their communications. Practically speaking, with an engagement letter that defines the PR firm's role as set forth above, it is hard to imagine any public relations services intended for defense purposes that wouldn't also benefit the client's public reputation in general. To some extent, then, the court's recent decision elevates form over substance. But, as the district court's decision explicitly recognizes, formalistic rules such as those described above are inevitable in a system in which communications with certain professionals are, as a policy matter, deemed exempt from disclosure while others are not.

Conclusion

The district court's opinion reflects a sophisticated understanding of how high-profile white-collar cases are defended and the role that public opinion plays in the government's charging decisions. Because the prosecution and defense of so many white-collar cases are played out on the public stage, the services of a public relations expert are crucial to the defense. If followed by other courts, Judge Kaplan's decision will provide a roadmap for defense attorneys who need the assistance of a PR expert but worry about how to keep the expert's work privileged.