Employees In All But Name: Where's The Privilege?

July 11, 2017

Times are changing. The virtual business model is increasingly replacing traditional corporate structures. This is particularly popular among biotech startup companies. Companies working under a virtual business model have fewer bona fide employees; most core functions are fulfilled by external parties. A company enjoys great flexibility and optimizes limited financial resources using this model. Such external parties can be consultants, contract employees, investors, business counselors, lawyers, and are sometimes employees of another company such as a contract research organization (CRO). Often, one or more of these persons enjoy a seat as a member of the board of directors. These parties are often heavily involved in both business and legal strategy sessions, the latter of which frequently involve communications traditionally protected under attorney-client privilege.

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