When a company seeks legal advice by retaining outside counsel to conduct an internal investigation, the investigation is ordinarily privileged.  But what if the company plans to use, or ultimately uses, the legal advice for a business purpose?  Does the existence of a business purpose render the privilege inapplicable?

In a recent decision, the Sixth Circuit answered with a resounding “no,” holding that the attorney-client privilege remains intact even when internal investigations serve both legal and business purposes.

The case, In re: FirstEnergy Corp. (6th Cir. Aug. 7, 2025), involved a company retaining outside counsel to conduct internal investigations after learning of alleged wrongdoing.  Later, plaintiffs in a related securities action against the company sought the fruits of those investigations.  The district court sided with plaintiffs, holding that the attorney-client privilege did not apply because the company also used outside counsels’ advice for business purposes.

The Sixth Circuit emphatically disagreed, explaining that the dispositive question “is not what a company does with its legal advice, but simply whether a company seeks legal advice.”  That clear and easily administrable line recognizes the reality that legal advice is often, if not always, “business-related.” And the court made clearer still that legal advice through an internal investigation in response to criminal and related civil allegations is especially “critical and essential,” so divesting such advice of protection simply because the advice also has a business purpose would be perverse.

Consistent with In re: FirstEnergy Corp., companies retaining outside counsel to conduct an internal investigation should make clear that they are doing so to obtain legal advice.  Companies and law firms should document this legal purpose in their engagement letter.  In addition, written communications and reports should include reference to their legal nature and purpose.  In In re: FirstEnergy Corp., for example, the Sixth Circuit attached weight to the fact that outside counsel provided “legal updates” on their investigative findings.

Over the Atlantic, in England & Wales, preserving legal professional privilege (formed of legal advice privilege and litigation privilege) during an internal investigation so as to protect sensitive legal advice and maintain confidentiality is equally essential. 

This can be achieved by involving lawyers at the earliest stage, clearly marking all legal communications as "privileged and confidential", segregating privileged from non-privileged documents, avoiding the creation or forwarding of new summaries of legal advice, and restricting the circulation of privileged material strictly to those who need to know.

If you are conducting—or planning—an internal investigation, skilled counsel may assist in maximizing privilege protection under In re: FirstEnergy Corp. and related precedent, and avoiding the scourge of inadvertent waiver.

Additional authors: A. Scott Bolden, Charles Hewetson