Advisers that think that their communications with attorneys at compliance consulting firms are protected by the attorney-client privilege had better think twice. The U.S. District Court for the Southern District of New York recently ruled that communications between an investment adviser and staff attorneys at its compliance consulting firm were not privileged when made within the scope of a “membership agreement” that specifically disclaimed that the consultant’s attorneys were rendering legal advice. The adviser also waived privilege by sending an otherwise privileged tax opinion to its accountants without implementing appropriate safeguards. This article details the background of the litigation, the adviser’s privilege claims and the court’s opinion and order; provides insight on the implication of the decision for private fund managers from a securities litigation attorney; and outlines several best practices that fund managers should consider in order to avoid waiving privilege. See our three-part series on protecting attorney-client privilege and attorney work product while cooperating with the government: “Establishing Privilege and Work Product in an Investigation” (Mar. 23, 2017); “Minimizing Cooperation Risks” (Mar. 30, 2017); and “Implications for Collateral Litigation” (Apr. 6, 2017).