A Kovel letter extends attorney-client privilege to a non-attorney expert — such as a financial advisor or restructuring consultant — working alongside counsel, protecting sensitive communications from compelled disclosure.
At CRAGSI, we define a Kovel letter as a formal agreement through which an attorney retains a non-attorney expert — such as an accountant, financial advisor, or restructuring consultant — as an agent of the attorney for purposes of a specific engagement, thereby extending attorney-client privilege to communications between the expert and the client. The name derives from United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), in which Judge Henry Friendly held that an accountant working for an attorney in connection with the rendition of legal services could be protected by attorney-client privilege.
The practical significance is substantial: it allows clients to share sensitive financial information with a non-attorney advisor without waiving the attorney-client privilege that would otherwise protect communications with their lawyer. In a distressed situation — where clients are weighing options with both legal and financial dimensions — the ability to conduct frank, confidential analysis without fear of compelled disclosure in litigation is enormously valuable.
CRAGSI's co-founding law firm relationship with Groshoff and Urien, LLP enables us to structure certain client engagements using Kovel letters, ensuring that privileged communications can cover the full scope of CRAGSI's advisory work where appropriate. Kovel protection is not automatic and requires proper structuring; clients should consult qualified legal counsel.
Related CRAGSI service: Turnarounds & Restructurings