Include An Accountant in Attorney-Client Privilege

In a nice piece on Forbes today, attorney Robert W. Wood of Wood LLP explains how to structure an attorney-accountant relationship in order to keep the accountant’s knowledge of a potentially-sketchy financial situation part of the attorney-client privilege.

In sensitive tax matters, the answer to this quandary is the Kovel letter, named after United States v. Kovel. Your tax lawyer hires an accountant. In effect, the accountant is doing your tax accounting and return preparation, but reporting as a subcontractor to your lawyer.

Could this work for other subcontracted service providers? Presumably, although Mr. Wood does not address that potential or whether there needs to be specific case law supporting it as there is for accountants.

Read Neat Trick? Attorney-Client Privilege From an Accountant on

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  1. I am not nearly as confident as Mr. Wood that the a-c privilege could successfully be extended to a non-lawyer merely by having the client’s attorney hire the accountant. The Kovel case does not say that but it suggests, as do other cases, that when an accountant is hired to play a role similar to a language interpreter -i.e. to assist the lawyer in giving advice to the client- the privilege may apply to the conversations with the accountant.

  2. Avatar Michael says:

    My firm always hires engineers, accountants and architects as subcontractors. The communication between the firm and the sub is privileged; and so is the firm’s analysis of the subs findings relayed to the client. If the client performed the direct hire the communication between the client and the sub would not be privileged.

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