--- url: 'https://www.fmjlaw.com/mixing-business-and-legal-attorney-client-communications/' title: '“Mixed” Messages: The Perils of Mixing Business and Legal Information in Attorney-Client Communications' author: name: Georgie Stocks url: 'https://www.fmjlaw.com/author/gstocks/' date: '2022-02-01T17:56:17+00:00' modified: '2022-02-17T15:12:29+00:00' type: post categories: - Article - Thought Leadership published: true --- # “Mixed” Messages: The Perils of Mixing Business and Legal Information in Attorney-Client Communications When Minnesota businesses hire lawyers, they expect to receive relevant, business-savvy legal advice that makes a measurable difference to their bottom lines. They also expect their communications with those lawyers to remain confidential under the attorney-client privilege. With the Minnesota Supreme Court’s recent decision in *In re Polaris* (No. A20-0427), however, those two expectations may now be in significant tension with one another. The decision serves as a warning that the presence of non-legal business advice in an attorney-client communication can jeopardize the privilege, and thus the confidentiality of the communication, particularly in pre-litigation contexts. ## A Discovery Dispute Reaches the Minnesota Supreme Court Facing scrutiny over alleged safety issues with some of its products, Polaris hired a law firm in May 2016 to audit its compliance with government safety regulations. The firm summarized its work in an audit report. As it was described later in court documents, the report was titled “Embracing Safety as a Business Priority.” It stated that the purpose of the safety audit was “to make the company better when it comes to dealing with safety concerns.” The report also called itself “privileged and confidential.” The following year, Polaris inadvertently produced the audit report to the plaintiff in a product liability lawsuit. After it discovered the error, Polaris argued the report was privileged and asked the district court to order the plaintiff to return it *in its entirety*. The court denied the request. Although the audit report contained some legal advice, the court found that its “predominant purpose” was business advice. As a result, Polaris was required to produce a new copy of the report that redacted only the legal advice and left the business advice unredacted. Seeking to recover the entire report from the plaintiff, Polaris appealed the district court’s decision to the Court of Appeals and then to the Minnesota Supreme Court. ## The Supreme Court’s “Predominant Purpose” Test for “Mixed” Documents In December 2021, Polaris lost its appeal. The Minnesota Supreme Court agreed with the district court that the document’s “predominant purpose” was business advice. It also affirmed the district court’s approach, requiring Polaris to produce a redacted copy of the report. Most notably, the Supreme Court formally adopted the “predominant purpose” test in Minnesota for attorney-client communications that contain a mix of legal advice and business advice: > “[W]hen a document contains both legal advice and business advice, for the attorney-client privilege to apply to the document in its entirety, the predominant purpose of the communication must be legal advice. The privilege does not protect the entirety of the document if legal advice is merely one purpose and not the primary purpose of the communication. We stress, however, that even when the predominant purpose of the communication is business advice, the attorney-client privilege will protect any portions of the document that contain legal advice.”(Opinion at 14) (citations omitted.) While the Supreme Court acknowledged that the line between legal advice and business advice is “not always clear,” it defined legal advice as those instances when lawyers “draw on their legal training and apply legal principles to the specific circumstances of their client.” (*Id*. at 18.) It delineated five factors to determine whether a document’s predominant purpose is legal or business advice, the most important of which appears to be the fifth factor: “whether legal advice permeates the document or whether any privileged matters can be redacted.” (*Id*. at 17.) ## What the Decision Means for Minnesota Businesses Strictly speaking, *In re Polaris *changes little about the attorney-client privilege in Minnesota. As before, an attorney’s legal advice to a client remains privileged, and non-legal advice is not privileged. Though the “predominant purpose” test is new in Minnesota, it does not constitute a clear departure from prior Minnesota law. From a practical standpoint, however, the “predominant purpose” test is important for businesses to understand, particularly if their leaders are under the mistaken assumption that all communications with counsel are privileged. Businesses generally expect their lawyers to provide legal advice that is relevant to their real-world circumstances and that materially aids their future success. To meet this expectation, their lawyers routinely provide legal advice in e-mails, memos, or reports, some of which may be mixed with discussions of a non-legal nature.  Businesses and their attorneys are now reminded that these “mixed” documents may not be fully protected by the attorney-client privilege. After *In re Polaris*, a mixed document that contains some legal advice but that is not “permeate[d]” by it may not be confidential in its entirety. (Opinion at 17.) In this way, the decision has the potential to create unintended, and perhaps, unfortunate outcomes in privilege disputes, not because the privilege should extend to cover business advice, but because the predominant purpose test may require the disclosure of mixed documents created by businesses or their lawyers before the test was adopted. The Supreme Court’s formulation of the “predominant purpose” test may also leave open important questions about how it will apply in future cases. First, the test gives limited guidance on how courts must treat communications sent from a business client to its lawyer. A key factor for determining a communication’s predominant purpose appears to be “whether legal advice permeates the document or whether any privileged matters can be redacted.” (Opinion at 17.) That factor may be more evident in documents that are created by a lawyer and then sent to the client, particularly when the legal advice is obviously contained in the document. But it may be less clear in documents created and sent *by the client *since those documents will likely not contain “legal advice.” Thus, it is uncertain how the predominant purpose test will apply to documents sent by clients to their lawyers, particularly in non- or pre-litigation contexts. We expect the Court to focus on the information contained in those client communications and whether legal advice is clearly being elicited. Second, the decision focuses narrowly on the categories of “legal advice” and “business advice” to the exclusion of other kinds of non-legal attorney-client communications. Not all litigants are businesses, and not all non-legal advice given by lawyers to clients concerns business issues. How, then, should Minnesota courts apply the predominant purpose test to the mixed attorney-client communications of individual, non-profit, or government litigants? Surely the predominant purpose test is not intended as a discovery tool that can be used *against* businesses but that cannot be used *by* businesses against other litigants.   ## How Minnesota Businesses Can Protect Attorney-Client Communication Going forward, Minnesota businesses should carefully consider their practices for communicating with counsel, particularly in pre-litigation contexts. While the “predominant purpose” test is already used in many states, further guidance from the courts is needed to determine how it will be used in future litigation in Minnesota. As they await that guidance, Minnesota businesses and their lawyers should consider taking the following steps to give their communications the full scope of protection available under the law: - ***Client relationships:*** The first and best step a business can take to protect its communications with a lawyer is to ensure they occur within the scope of an attorney-client relationship. When discussing the audit report, the Supreme Court noted that the law firm that authored it said that it “did not represent [Polaris]” in any legal proceeding but wrote the report for an “entirely different” business-related purpose. (Opinion at 19-20.) Businesses are strongly encouraged to sign an engagement letter with their law firm identifying the precise legal matters that they have hired the firm to address, and they should be cautious to make sure that their communications fall within the scope of that limited engagement. - ***Clear communication:*** Clients should always be clear with their attorneys about their intention to seek legal advice, the nature of the advice they are seeking and the precise legal problems they are looking to solve. That may be easier in some contexts than in others. For example, lawyers in transactional or corporate practice may regularly find themselves in wide-ranging discussions with their business clients about their future goals and aspirations. These conversations, and the individual documents containing them, may vary in the extent to which they are “permeate[d]” by legal discussion. While lawyers can certainly provide valued business advice in these contexts, clients and lawyers alike should be aware of the risk that these mixed communications may not be fully confidential in subsequent litigation. - ***Factual investigations: ***When a lawyer investigates facts for a client, both lawyer and client must carefully consider the purpose and goal of the investigation. When communicating facts to the client, lawyers should be clear that they have collected those facts for the purpose of providing a legal opinion. In any written communication about the investigation, the lawyer should make every effort to convey the significance of the facts to the different steps of her legal analysis, embedding citations to those facts and to legal precedent. A post-investigation report that separates its factual findings from its legal analysis may not be confidential in its entirety if its “privileged matters can be redacted.” (Opinion at 17.) - ***In-house counsel: ***The predominant purpose test may pose a particular challenge for in-house counsel, who are even more enmeshed in the day-to-day business operations of their clients than outside counsel. Many in-house lawyers serve in dual capacities as legal advisors and business advisors. In-house teams should think carefully about the *In re Polaris* factors and establish practices for clearly differentiating between the legal advice they communicate to their clients and other, non-legal counsel. ***If you have any questions about the implications of this decision for your business, FMJ’s [Litigation](https://www.fmjlaw.com/practice-area/litigation/) group is here to help. Please contact [Brad Hutter](https://www.fmjlaw.com/professional/bradley-r-hutter/) at [brad.hutter@fmjlaw.com](mailto:brad.hutter@fmjlaw.com) or [Shannon McDonough](https://www.fmjlaw.com/professional/shannon-m-mcdonough/) at [shannon.mcdonough@fmjlaw.com](mailto:shannon.mcdonough@fmjlaw.com) with your questions.*** [](https://www.addtoany.com/add_to/facebook?linkurl=https%3A%2F%2Fwww.fmjlaw.com%2Fmixing-business-and-legal-attorney-client-communications%2F&linkname=%E2%80%9CMixed%E2%80%9D%20Messages%3A%20The%20Perils%20of%20Mixing%20Business%20and%20Legal%20Information%20in%20Attorney-Client%20Communications)[](https://www.addtoany.com/add_to/twitter?linkurl=https%3A%2F%2Fwww.fmjlaw.com%2Fmixing-business-and-legal-attorney-client-communications%2F&linkname=%E2%80%9CMixed%E2%80%9D%20Messages%3A%20The%20Perils%20of%20Mixing%20Business%20and%20Legal%20Information%20in%20Attorney-Client%20Communications)[](https://www.addtoany.com/add_to/email?linkurl=https%3A%2F%2Fwww.fmjlaw.com%2Fmixing-business-and-legal-attorney-client-communications%2F&linkname=%E2%80%9CMixed%E2%80%9D%20Messages%3A%20The%20Perils%20of%20Mixing%20Business%20and%20Legal%20Information%20in%20Attorney-Client%20Communications)[](https://www.addtoany.com/add_to/linkedin?linkurl=https%3A%2F%2Fwww.fmjlaw.com%2Fmixing-business-and-legal-attorney-client-communications%2F&linkname=%E2%80%9CMixed%E2%80%9D%20Messages%3A%20The%20Perils%20of%20Mixing%20Business%20and%20Legal%20Information%20in%20Attorney-Client%20Communications)