It is well-established that attorneys and their clients are entitled to private and protected communications. But what level of protections are available when an accountant is used in an engagement to provide an area of expertise not possessed by the attorney?
This is a significant question because accountants are frequently relied upon as indispensable members of legal teams because they have the ability to properly interpret complex technical accounting concepts and explain them to lawyers, judges and juries. When utilizing accountants in legal matters, the level of protections afforded will often depend on the agreement entered into between the parties.
As an initial matter, parties involved in legal disputes should understand that the accountant-client privilege generally does not provide the same level of protections as the attorney-client privilege. Relying solely on the accountant-client privilege presents substantial risks for the client. Rather, the parties should recognize and consider the benefits of entering into a Kovel Agreement to protect their communications.