1

Source: The Betrayed Profession (1994), p. 11 Middle.

 Indeed, even today we have significant areas of law where lawyers must pledge not to do what their clients would wish them to do. Judges will often agree to order the opponents of a party to a lawsuit to let that party's lawyers interrogate them and scour their files in unsupervised "discovery" proceedings prior to trial. Such access to the other party's secrets may, how- ever, be hedged with a "confidentiality agreement" by which the lawyer promises not to communicate the contents of those files to anyone, including his clients. House counsel for corporations will be limited in what they can do when litigation requires this sort of discovery [emboldening mine], because courts will be reluctant to give mere employees of the company, whether or not they have law degrees, access to confidential files of its rival.

  1. Why does the bolded sentence refer only to house counsel? Doesn't this limitation include external counsel too?

  2. What does 'they can do' mean exactly? No benefits from this unsupervised "discovery" to house counsel? House counsel's inability to thwart the counterparty's counsel from benefitting from this "discovery"?

4

In-house counsel is presumed to be intimately familiar, in a way that retained counsel is not, with both the day-to-day operations of the business and its longer-term strategic planning.

So imagine that you're in an R&D intensive industry, and you've been sued by a competitor. The competition's in-house counsel has served you a request to produce documents relating to the research that you're working on, your plans to monetize it, your assessments of the market, etc. Do you want someone to reviewing those documents on their way in to C-suite conference?

Courts recognize that providing those documents to in-house counsel creates an almost unavoidable risk that that information will be (mis)used for purposes beyond the litigation. If you've only got your in-house counsel on the case, you can expect a court to be much more reluctant to enforce those kinds of discovery requests than it would be if you had outside counsel who isn't involved in the business.

Vorys wrote a good article about this in 2004: http://ccbjournal.com/articles/4159/exclusion-house-counsel-discovery-sensitive-data

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1

The text means that lawyers can be allowed by the court to examine documents that are going to be kept confidential to their client. The lawyer examines the document and demands to make public (for the lawsuit) those that are relevant. This way, the lawyer's client can be sure that no data is hidden, and the other party does not need to give its internal data to someone who could abuse it (a competitor, a customer...), because the lawyer is expected to keep the unrelated data confidential.

But, the issue is courts must trust that the lawyer will not provide that confidential data to the customer. And the text says that house counsel would be considered as "more dependant" (mere employees) of their customer (i.e. their bosses) than an external lawyer. So then the courts would typically trust them less to keep the confidentiality. So the courts would be more reluctant to give these lawyers access to the other party's confidential documents.

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