While judicial opinions frequently assert that the attorney-client privilege protects communications rather than information, the application of that distinction has proven much more difficult than its recitation. For example, the District of Columbia Court recently held that internal legal memoranda from the Office of Chief Counsel for the Internal Revenue Service (itself part of the Chief Counsel's Office of the Treasury Department), that had been requested by IRS field agents were not protected by the attorney-client privilege. Tax Analyst v. IRS, 117 F.3d 607 (D.C. Cir. 1997). The court appeared to base its decision on two lines of reasoning.
 

First, the court found that the communications from the attorneys in what is called the Field Service Advice Memoranda (hereafter FSAs), were not based on "confidential information obtained from the client," but rather on communications from outsiders , i.e., individual taxpayers, that did not contain "'any confidential information concerning the Agency.'" Second, the court held that since the opinions of counsel were being used as a basis for agency policy, those opinions were, in substance, law created by the IRS that should be applied with consistency to all taxpayers, and therefore, subject to discovery by taxpayers.
 

Confidential "Information" from the Client
 

The first line of reasoning, requiring confidential information from the client, reflects a fundamental, albeit widely held, misunderstanding of privilege. The nature of the "information" contained in the communications from the client to the attorney is irrelevant to the communications' privileged status. Regardless of where the client acquired the information, or of the confidential or public nature of that information, the content of what the client communicated to the attorney is privileged. That is, if the client acquires the information in his communication from the public record, the daily newspaper, interacting with others, or direct communications from third parties (such as taxpayers), the content of what the client said or otherwise communicated (for example, through the transmission of copies of pre-existing documents) is privileged, and therefore, should not be discoverable from either the attorney or the client. This rule is no different for government entity clients.
 

In Tax Analysts the IRS field agents acquired the information upon which they sought advice from taxpayers. They communicated this information to the Office of Chief Counsel seeking legal advice on how best to handle particular issues, and they did so with the expectation of confidentiality. If the responsive communications from the Office of Chief Counsel explored the legal position that should be taken by the field agents, focusing on the unique facts of each inquiry, the responsive communication should be afforded the protection of the privilege. The Court acknowledged that the FSAs gave guidance to field agents "with reference to the situation of a specific taxpayer" and include "a statement of issues, a conclusions section, a statement of facts, and a legal analysis section." These memoranda "'state limitations or conditions to which a conclusions may be subject, " and are exploratory and descriptive in nature "'so that the strengths and weaknesses of a case are presented and developed candidly, directing attention to the authorities against the conclusions arrived at as well as those which support them.'" The situation of a taxpayer vis-a-vis the opinions of the Chief Counsel's Office of the IRS is, in substance, the same as that which that taxpayer might have as a licensee or franchisee vis-a-vis the opinions of the legal counsel for the private licensor or franchisers relative to an interpretation of a license or franchise agreement and the royalties that may be owed under them.
 

The Court's discussion of the privilege's application to responsive attorney communications raised another issue about which courts have been in disagreement. It relates to whether the responsive advice of the attorney is afforded a direct protection under the attorney-client privilege or receives only a derivative protection--that is, whether it is protected only to the extent that it reveals directly or indirectly what the client had previously confided. Since the privilege was designed to encourage open communication from the client to the attorney, courts initially protected only the communication of the client. To fully achieve its goal of client candor, however, it was ultimately necessary to extend the privilege's protection to the responsive communications of the attorney, but only to the extent that it disclosed the communications principally protected. Over time, because most responsive communication of counsel reveal, at least indirectly, the prior confidential communications of the client, courts began to generally refer to the attorney-client privilege still more generally as protecting communications "between" the attorney and client. This has prompted many courts to extend a direct protection to the attorney's advice regardless of what is exposed within it. In Tax Analyst the D.C. Circuit appears to have followed the classical derivative definition of the privilege for legal advice, but inappropriately required that it reveal or "'rest on confidential information obtained from the client,'" rather than confidential communications of the client.

Legal Opinions "Making Law"
 

The Court's second line of reasoning is equally troublesome. Because the IRS is interpreting the law in applying it to individual taxpayers, the court characterized Chief Counsel's opinions as "making law" that should be accessible to taxpayers.
 

No private attorney has the power to formulate the law to be applied to others. Matters are different in the governmental context, when the counsel rendering the legal opinion in effect is making law. Here the Office of Chief counsel is one of the principal tax lawgivers within the Executive Branch. Nearly all the interpretations of the tax laws the IRS applies in assessing and collecting taxes emanate from the Office of Chief Counsel. . . . As we have discussed previously, FSAs issued by the Chief Counsel create a body of private law, applied routinely as the government's legal position in its dealings with taxpayers. It is this quality . . . that [makes them] significant.
 

While the Court had previously acknowledged that the FSAs are not binding on IRS field personnel, it still characterized them as "making law" simply because they are held in "high regard" and "generally followed." This, of course, is also true in the private context. Legal opinions of counsel, particularly outside counsel, are highly respected and generally followed by clients. This, however, should not change the privileged character of those opinions. It is the actions that are taken by the client, whether IRS or private entity, that converts the advice into a "body of law" controlling future actions. Although the client can be compelled to explain the rationale for its actions, which may be identical to the legal advice previously obtained, the content of that advice should remain privileged until the client chooses to waive it by stating that the client is specifically relying on it. If the logic of the opinion in Tax Analysts were generally followed it would, at the very minimum, place the privileged status of the legal advice obtained by all governmental agencies in doubt. This seems to be the trend of Circuit court decisions during the past year.
 

Whittling Away the Privilege versus Its Abolition
 

Within the past year, two Circuits have whittled away at the attorney-client privilege for governmental agencies. The Eighth Circuit, in In re: Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 1997 U.S. App. LEXIS 9840 (8^th Cir. April 9, 1997) has also declared that governmental agencies may not assert the attorney-client privilege to block access to relevant information in an investigation by a federal grand jury. Because of the overriding public interest in the prosecution of criminal conduct, the court held that papers of White House counsel, in which conversations with the First Lady were recorded, had to be produced to the Office of Independent Counsel in response to a grand jury subpoena.
 

We believe the strong public interest in honest government and in exposing wrongdoing by public officials would be ill-served by recognition of a government attorney-client privilege applicable in criminal proceedings inquiring into the actions of public officials. We also believe that to allow any part of the federal government to use its in-house attorneys as a shield against the production of information relevant to a federal criminal investigation would represent a gross misuse of public assets.
 

112 F.3d 910, 1997 U.S. App. LEXIS 9840, *27-27 (8^th Cir. April 9, 1997).
 

The public policy driving the White House papers decision cannot logically be limited to grand jury subpoenas. As important as it is to successfully prosecute individual criminal activity, the successful regulation of entire industries by government regulatory agencies, or enactment of regulatory and criminal statutes by Congress is of equal, if not greater, importance. Therefore, it would be inconsistent for the court to deny a request for the same privileged documents from those regulatory bodies and Congress. While many states have limited the applicability of the government's attorney-client privilege to instances where the discussions with the attorney are in anticipation of litigation, See Paul R. Rice, Attorney-Client Privilege: State Law, § 8:26 (Rice Publishing 1997), no state or federal court has ever imposed such a limitation independent of legislative enactment.
 

If courts want to question the legitimacy of the application of the attorney-client privilege to governmental agencies, they should do so openly after a reasoned debate--and it probably should be done through Congress and the enactment of privilege rules in the Federal Rules of Evidence. The application of the privilege to governmental bodies has never been fully explored or justified in judicial opinions. Courts have always applied the body of law developed in the corporate context--treating each agency as an independent corporate entity.
 

Surprisingly, however, no judicial opinion has explored the logic and dynamics of the attorney-client privilege in the corporate context or examined how it encourages communications that otherwise would not occur. The first time the Supreme Court extended the attorney-client privilege to corporations, the question of its applicability was not raised. United States v. Louisville & Nashville R. Co., 236 U.S. 318, 336 (1915). When the Court reaffirmed the application of the privilege in Upjohn v. United States, 449 U.S. 383 (1981) its application was assumed, based on the Louisville & Nashville precedent. More recently, in Commodity Futures Trading Commission v. Weintraub, 471 U.S. 343 (1985), the Court again set out to address the attorney-client privilege in the corporate context, only to cite the above decisions and conclud that "[i]t is now well established . . . that the attorney-client privilege attaches to corporations as well as to individuals."⁽²⁾ Thus, over a period of seventy years, the unexamined assumption in Louisville became precedent for Upjohn and quietly matured into an established rule of law in Weintraub.
 

An honest debate about the applicability of the attorney-client privilege in the governmental context is unlikely; yet as questionable as its application may be there, the logic of its application in the corporate context--the wellspring from which the governmental privilege is guided-- is even more questionable.
 

With both the corporate and governmental privileges, the entities are the clients, not the employees who speak for them. While the attorney-client privilege may protect what employees say to the corporate or government attorneys, the privilege's protection exists only for the benefit of the entities, not the employees. Therefore, those individual employees have no standing to object to the disclosure and use of their communications with the entities' attorneys. If the entity does not object, the employees' communications will be disclosed. Consequently, the privilege, which is designed to encourage open communications, is denied in the entity context to those who communicate with the attorneys, and granted instead only to the legal fictions that can't speak. To some this might suggest that the privilege should not be applied in either context. However, this issue deserves careful analysis--more than is being given by those courts that either have written blank checks to corporations or issued stop payments on particular applications to the government.

1. Professor Rice teaches evidence at the American University Washington College of Law and is the author of the leading treatises on the attorney-client privilege in both state and federal courts. P.R. Rice, Attorney-Client Privilege in the United States (Lawyers Cooperative 1993); P.R. Rice, Attorney-Client Privilege: State Law (Rice Publishing 1998). For more information, call 202-237-0421 or visit http://www.wcl.american.edu/pub/faculty/rice/acprivilege/.

2. 471 U.S. at 348.