Houston partners Robert Wolin and Scott McBride, New York partner John Carney, and New York associate Dennis Cohen, authored an article for the March 2007 edition of  "Hospitals & Health Systems Rx," a publication of the American Health Lawyers Association, titled, "Waivers of Attorney-Client Privilege—Changes in the Department of Justice's Position—The McNulty Memorandum."

According to the authors: "Healthcare providers facing governmental investigations now may have some additional flexibility in responding to federal prosecutors' demands to requests for waivers of attorney-client
privilege and work product protection, including the results of internal investigations. As a result of intense lobbying efforts by an unlikely group of allies, bipartisan congressional threats of action, and judicial rebukes, the Department of Justice (DOJ) has revised its culture of demanding waivers in order to avoid prosecution or draconian penalties."

The article focuses on the memorandum issued in December 2006 by Deputy Attorney General Paul McNulty, which "once again reevaluated the principles on corporate prosecution, limiting line prosecutors' authority in an apparent hope of staving off a significantly harsher proposed congressional fix." 

According to the authors, the memo put forth revisions to a previous memo, issued by then-Deputy Attorney General Paul Thompson in 2003, which "increased the government's emphasis on an organization's cooperation during the course of an investigation and unleashed what some have viewed as a full frontal assault on (1) the attorney-client privilege and (2) the ability for a corporation to pay employees' counsel fees."

The authors go on to detail changes outlined in the McNulty memo which "reflect a significant softening of the hard line the DOJ has drawn historically regarding corporate cooperation."

The article goes on to describe some of the "backlash" that occurred in the wake of the Thompson memo, including proposed legislation—the Attorney Client Privilege Protection Act of 2007.  Within days of the proposed legislation being announced, the DOJ issued the McNulty memo.

The authors conclude: "On balance, the McNulty Memorandum represents an important departure from the Thompson Memorandum and will clearly have an effect on the way prosecutors think about corporate cooperation. These new principles offer entities a wider range of strategies and tactics for responding to federal government investigations and significantly level the playing field. However, even under the revised rules, federal prosecutors still retain significant leverage over corporate targets and, accordingly, entities should exercise care in striking an appropriate balance in the process. Whether requested or voluntarily offered—the incentives for cooperation remain firmly in place."