• Courts normally construe attorney client privilege narrowly, but they are even more suspicious in the context of in-house counsel. Federal courts have consistently upheld and arguably expanded an inhouse counsel's right to the attorneyclient privilege.The attorney-client privilege is the law that protects communications between attorneys and their clients and keeps all conversations confidential. In the litigation context, this privilege becomes especially important because privileged communications are not disclosed to the opposing party. Where inhouse counsel acts as a business person or a lobbyist, for example, privilege will not lie. Corporate-Attorney Client Privilege. The basis for the attorney-client privilege is the principle that clients and attorneys should be able to communicate in a free and frank manner. Attorneyclient privilege is important for inhouse counsel to manage litigation and effectively represent their corporate clients. Consultants to the lender's in-house counsel in the investigation following the. September 11 attack.115.