White Collar & Government Investigations Blog

Olshan Litigation and White Collar & Government Investigations partner Derrelle Janey published an article in Private Equity Law Report entitled “PE and the Crime‑Fraud Exception: How the KKR Investigation Reshapes the Attorney‑Client Privilege.” (You can also read Derrelle’s Bloomberg Law article “KKR-Kirkland Email Ruling Shows Legal Privilege Is No Guarantee” here.) In the article, Derrelle discusses how the DOJ’s KKR investigation may reshape attorney-client privilege, work-product protections and documentation practices for private equity firms. The DOJ’s ability to obtain a court order to review confidential attorney-client communications sparks a critical moment of pause for general counsel, chief compliance officers and outside counsel to reassess how legal advice is documented, communicated and preserved in high-stakes regulatory and litigation matters. “The KKR case signals a critical inflection point for private equity firms and their counsel: the crime-fraud exception is no longer a theoretical risk but an operational reality that demands immediate reassessment of how legal advice is documented, communicated, and preserved,” Derrelle explains. “PE firms that do not align their in-house and external counsel documentation protocols around the principles outlined here, particularly distinguishing between informed legal advice and ‘fighting positions’ designed to achieve business outcomes, will face material exposure in both government investigations and post-closing civil litigation, with consequences extending to fund performance and regulatory standing.” Derrelle explains that the crime-fraud exception can apply beyond DOJ criminal investigations, including in civil litigation where a party alleges intentional withholding of materials or litigation misconduct. He also notes that the potential exposure can extend beyond emails and other client communications to attorney work product, internal memoranda, notes and materials prepared in anticipation of litigation. “Documentation practices should meaningfully take into account and reflect the potential consequences of information exposure under the crime-fraud exception,” he writes. “It is essential for both in-house counsel and external counsel to be mindful and thoughtful about the specific legal advice rendered to the client.”