3 Critical Steps to Protect Your Privilege After the Supreme Court's Internal Investigation Ruling

Redefining the Primary Purpose Test: Why Your Internal Investigation Emails Are Now Vulnerable

In my 25 years as a federal prosecutor, I witnessed countless privilege battles where corporations tried to shield internal investigation documents from grand jury subpoenas by invoking the attorney-client privilege. The Supreme Court's recent ruling in the internal investigation context has upended the traditional understanding of how privilege applies when legal and business advice become intertwined. The Court held that the "primary purpose" test must be applied with rigorous specificity, meaning that if a communication serves even a substantial business purpose alongside a legal purpose, the entire communication may lose its privileged status. This represents a dramatic shift from the more lenient "because of" standard that many federal circuits had previously adopted under the work product doctrine. The ruling directly impacts investigations conducted pursuant to SEC Rule 10A-2 and Department of Justice guidelines for corporate cooperation credit, where companies routinely blend legal advice with compliance directives. I have already seen federal prosecutors in the Southern District of New York cite this ruling to compel production of documents that would have been unquestionably privileged just six months ago. The practical effect is that every email chain involving in-house counsel, outside counsel, and business executives must now be scrutinized through this more demanding lens before any privilege assertion is made.

The Court's reasoning focused on the evidentiary burden placed on the party asserting privilege, requiring a showing that legal advice was not merely a component of the communication but its dominant and controlling purpose. This standard, rooted in the Court's interpretation of Federal Rule of Evidence 501 and the common law of privilege, effectively eliminates the "mixed purpose" safe harbor that many practitioners relied upon in internal investigation settings. During my years prosecuting white-collar cases, I frequently encountered corporate privilege logs that described documents as containing "legal advice regarding regulatory compliance" without further elaboration. Those vague descriptions will no longer withstand judicial scrutiny under this new framework. The ruling makes clear that the privilege log must identify the specific legal question being addressed, the legal expertise being applied, and the absence of any substantial non-legal purpose for the communication. For corporations conducting internal investigations under the shadow of potential False Claims Act liability or Foreign Corrupt Practices Act violations, this means that every interview memorandum, every legal hold notice, and every status update must be compartmentalized to separate legal analysis from factual investigation. Failure to do so invites a finding of waiver that could expose the entire investigation to discovery in subsequent civil or criminal proceedings.

Implementing a Strict Separation Protocol: The Only Way to Preserve Work Product Under the New Standard

The work product doctrine, codified in Federal Rule of Civil Procedure 26(b)(3), has traditionally provided broader protection for materials prepared in anticipation of litigation than the attorney-client privilege offers for communications generally. However, the Supreme Court's ruling explicitly extends its heightened scrutiny to work product claims arising from internal investigations, particularly where the investigation serves dual purposes of legal compliance and business risk management. In my experience as a federal prosecutor, I routinely argued that internal investigation materials were not protected work product because they were prepared in the ordinary course of business rather than in anticipation of litigation. The Court's ruling effectively adopts that prosecutorial argument as a presumption, requiring the party asserting work product protection to demonstrate that litigation was not merely foreseeable but actually anticipated at the time each document was created. This places an enormous burden on corporations that conduct internal investigations as a matter of routine governance, even when no specific threat of litigation exists. The ruling does not completely eliminate work product protection for internal investigations, but it demands a level of procedural rigor that most corporate legal departments have not historically maintained.

To satisfy this new standard, I advise my clients to implement a strict separation protocol that creates a clear firewall between legal investigation activities and business compliance functions. This protocol should begin with a formal engagement letter that explicitly defines the scope of legal representation, identifies the specific legal issues under investigation, and documents the anticipation of litigation as the primary purpose for the investigation. Every communication generated during the investigation should be labeled with a header that identifies the legal nature of the document, the specific legal issue being addressed, and the litigation or legal proceeding for which the document is being prepared. In my practice, I have my clients use a dual-tracking system where factual findings are documented in a separate factual record that is not commingled with legal analysis or legal strategy. The factual record can be produced to regulators or opposing counsel without waiving privilege over the legal analysis, provided the separation is maintained consistently from the outset of the investigation. This approach aligns with the Court's emphasis on the "primary purpose" test by ensuring that any communication that mixes legal and factual content can be justified as serving a predominantly legal purpose. The Department of Justice's Yates Memorandum and subsequent guidance on corporate cooperation already required companies to disclose relevant facts while preserving privilege over legal advice, and this ruling makes that separation not just best practice but a legal necessity.

Revising Your Privilege Logs and Disclosure Protocols to Survive Judicial Scrutiny

The Supreme Court's ruling places unprecedented emphasis on the adequacy of privilege logs, which have long been a battleground in federal discovery disputes. Under the new standard, a privilege log that merely identifies the date, author, recipients, and a generic subject description will almost certainly be deemed insufficient to sustain a privilege claim. The Court held that the privilege log must now include a detailed explanation of how the communication satisfies the primary purpose test, including a description of the specific legal advice sought or provided, the legal context in which the communication occurred, and the absence of any substantial business purpose that would defeat the privilege. In my 25 years of practice, I have seen privilege logs evolve from simple spreadsheets to multi-page documents, but this ruling demands a level of granularity that will require significant investment in document review and privilege analysis. For corporations facing parallel proceedings—such as an SEC investigation running concurrently with a DOJ criminal inquiry—the privilege log must separately address the privilege analysis for each proceeding, because the primary purpose may differ depending on the regulatory context. The ruling also clarifies that the privilege log must be served contemporaneously with any privilege claim and updated promptly as new documents are discovered or as the legal landscape changes during the course of litigation.

Beyond privilege logs, the ruling has profound implications for disclosure protocols under Federal Rule of Evidence 502, which governs the scope of waiver when privileged material is inadvertently disclosed. The Court held that the "clawback" provisions commonly used in complex litigation do not automatically cure a disclosure that occurs during an internal investigation if the disclosure was not accompanied by reasonable precautions to prevent it. This means that corporations cannot rely solely on post-hoc clawback agreements to protect privileged materials that were shared with regulators, auditors, or business partners during the investigation process. In practice, I recommend that my clients implement a mandatory pre-disclosure review protocol where every document proposed for disclosure to any third party is reviewed by independent counsel who was not involved in the underlying investigation. This independent reviewer can assess whether the document contains privileged legal advice or work product and can recommend redactions or withholding before any disclosure occurs. The ruling also suggests that selective waiver—where a corporation discloses privileged materials to a government agency while asserting privilege against private litigants—is disfavored and may result in a broader waiver than intended. For companies operating under Department of Justice cooperation policies that require disclosure of internal investigation findings, this creates a tension that must be managed through careful structuring of the investigation and disclosure process from the very beginning. I have already revised my standard investigation protocols to include a privilege preservation plan that is approved by the board of directors before any investigation commences, ensuring that the company's privilege claims can withstand the rigorous scrutiny that the Supreme Court now requires.

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