Former Deputy Attorney General Larry Thompson who wrote the memo the memo that underpinned the policy used to prosecute scandal-plagued corporations has conceded the prosecutors have gone too far and that it will probably need revising, according to news reports.

The memo told federal prosecutors to consider nine factors in determining whether to charge a corporation for criminal wrongdoing, one of them being whether the it cooperated in the investigation, including whether it waived lawyer-client and work-product protections. At issue here is the question of whether businesses have been pressured to disclose privileged attorney-client information in exchange for more lenient prosecutions.

In an excellent post on the White Collar Crime Blog, on December 1, professor Ellen Podgor correctly pointed out that the fundamental problem to start with was a lack of consistency.

"Legislation is really the best way to proceed here. DOJ has been told time and again to stop asking or implying a benefit or detriment premised on the waiver of the attorney-client privilege. The only thing that has happened in response to the outcry, is a minor memo that merely looks for consistency internally in each office."

An issue like lawyer-client privilege is delicate. On one hand, it's a fundamental right of a system that will not work if people cannot get protected confidential advice. On the other hand, it's subject to abuse and used to sanitise files or stop investigators from getting to them.

Significantly, Australia seems to be moving in the other direction with attorney-general Phil Ruddock asking the Australian Law Reform Commission to review the rules that allow communications between clients and lawyers to be kept secret. That follows claims by the Cole report into AWB that there were long delays caused by AWB's claim of legal professional privilege over hundreds of documents.

As the experience of the Thompson memo, playing around with privilege can in itself be subject to abuse. On the other hand, legal professional privilege can tie up the legal system and chew up everyone's time.

The fallout from the Thompson memo showed us one thing: lawyers will always be lawyers. Any attempt to reduce privilege will mean that fewer things will be committed to paper, and companies will put in place more elaborate compliance regimes to protect themselves.