Illinois common law does recognize the attorney-client privilege.  The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law.  The purpose of the privilege, which belongs to the client, is to encourage and promote full and frank communication between the client and his or her attorney, without fear that the confidential information will be disclosed to others.  “The privilege embodies the principle that sound legal advice and advocacy are dependent upon such full and frank communication.”  People v. Radojcic, 376 Ill.Dec. 279, 288 (2013) (citations omitted).  

The Illinois Supreme Court has recognized the following elements for the attorney-client privilege:

“(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection be waived.”

People v. Radojcic, 376 Ill.Dec. at 288, quoting People v. Adam, 51 Ill.2d 46, 48 (1972).  Although this formulation suggests only communications from the client are protected, the modern view is that the privilege applies to the client’s communications to the attorney and the attorney’s advice to the client.  Id.  

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The attorney-client privilege applies in both civil and criminal proceedings.  If privilege has been established, is not subject to an exception, and has not been waived, government authorities may not require disclosure of privileged attorney-client communications. 

Illinois is one of only eight states that applies the narrow “control group” test to applying the attorney-client privilege in the corporate setting. For the purposes of establishing the attorney-client privilege with a corporate client, only the “control group” qualifies as the client. The control group is comprised of top management who have the authority to make decisions based on legal advice received from counsel, and those less senior employees “whose advisory role to top management in a particular area is such that a decision would not normally be made without [their] advice or opinion, and whose opinion, in fact, forms the basis of any final decision by those with actual authority.”  Consolidation Coal Co. v. Bueyrus-Erie Co., 89 Ill.2d 103 (1982). The privilege may also apply to communications between a non-employee agent and counsel where the agent is an advisor to top management and is expressly authorized by the corporate principal to communicate with counsel for the purpose of receiving legal advice.  Caremark, Inc. v. Affiliated Computer Services, Inc., 192 F.R.D. 263 (N.D. Ill. 2000).

Theoretically, for the purpose of asserting the attorney-client privilege, the determination of who is the attorney is straightforward, and the privilege treats in-house counsel and outside counsel equally.  See, e.g., United States v. United Shoe Machinery Corp., 89 F. Supp. 357 (D. Mass. 1950).  However, some courts have made it clear that they do treat in-house counsel differently when assessing assertions of privilege. These courts explain that, because in-house counsel often plays both legal and business roles in the corporation, the courts will apply heightened scrutiny in determining whether the elements necessary for privilege have been established, requiring in-house counsel to make a “clear showing” that withheld communications were made for a legal purpose. See, e.g., In re Vioxx Prod. Liab. Litig., 501 F. Supp. 2d 789, 797 (E.D. La. 2007).  Simply copying in-house counsel on a company email will not protect a communication that is not legal in nature. Kleen Products LLC v. International Paper, 2014 WL 6475558, at *1 (N.D. Ill. 2014).  

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The common interest doctrine is recognized in Illinois. Selby v. O’Dea, 418 Ill.Dec. 655, 663-64 (1st Dist. 2017).

The common interest doctrine is not an independent basis for privilege, but an exception to the general rule that the attorney-client privilege is waived when privileged information is shared with a third party. One Illinois appellate court has stated: “[T]he common-interest exception to the waiver rule protects from disclosure to third parties those statements made to further the parties’ common interest, pursuant to a common-interest agreement, (1) by the attorney for one party to the other party’s attorney, (2) by one party to the other party’s attorney, (3) by one party to its own attorney, if in the presence of the other party’s lawyer, and (4) from one party to another, with counsel present.”  Selby, 418 Ill.Dec. at 677.

Although a written common interest agreement is not generally required, documenting the arrangement increases the parties’ ability to meet their burden to demonstrate that they were acting jointly at the time they communicated with each other.  

Illinois law does not prohibit litigation funding.  See Miller UK Ltd. V. Caterpillar, Inc.,17 F.Supp.3d 711, 725-26 (N.D. Ill. 2014) (“[Over] the centuries, maintenance and champerty have been narrowed to a filament. . . .Illinois has been in the vanguard of that trend, and the Illinois criminal maintenance statute should not be given a new life by judges in a setting like the one in this case to which the Illinois Legislature never intended it to be applied.”].
  
Illinois State Bar Association Advisory Opinion No. 19-02 (April 2019) addresses ethical concerns that lawyers should consider in matters in which litigation funding is being considered.  First, Opinion No. 19-02 advises that, notwithstanding Illinois Rule of Professional Conduct 1.8(e), which prohibits a lawyer’s direct extension of financial assistance to the client, the lawyer’s assistance to the client with respect to third party financing and continued representation of the client in litigation when the client has entered a third-party financing arrangement do not per se constitute an ethical violation on the lawyer’s part.  Second, IRPC 2.1 requires a lawyer to exercise independent professional judgment and to act solely in the client’s interest, and IRPC 1.1 requires a lawyer to provide competent representation.  The Opinion explains that, if a lawyer is unfamiliar with third party financing transactions, “he or she must either acquire the appropriate knowledge through reasonable study and preparation, associate with an experienced lawyer, or refer the client to another lawyer with established competence.”  (citing ABA Commission on Ethics 20/20 Information Report to the House of Delegates, December 2011, at p. 38.) Third, the Opinion explains that a lawyer must be aware of and advise the client regarding the risks of waiving the attorney-client privilege and work product protections through disclosures to the third party funder, and obtain informed consent from the client to make disclosures to the funder.  The Opinion notes that Illinois law is unsettled as to whether such communications are protected from discovery.  [Note: The court in Miller UK Ltd. held: (1) disclosures to a third party funder waived the attorney-client privilege, because the parties shared business, not legal interests, therefore the common interest doctrine did not apply; and (2) disclosures to the funder did not waive work product protections where the client reasonably expected confidentiality and, therefore, the disclosures did not substantially increase the opportunity for potential adversaries to obtain the information.  17 F.Supp.3d at 732-33, 735-36.]  
 

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The crime-fraud exception is recognized in Illinois.  People v. Radojcic, 376 Ill.Dec. 279, 289 (2013).

The crime-fraud exception to the attorney-client privilege applies when a client seeks or obtains services of an attorney in furtherance of criminal or fraudulent activity. The rationale for the exception is that in seeking legal counsel to further a crime or fraud, the client does not see advice from an attorney in their professional capacity.  In re Marriage of Decker, 153 Ill.2d 298, 313 (1992).  Not all discussions between attorneys and their clients about possible illegal activities come under the crime-fraud exception.  The exception applies where a client, when consulting with the attorney, knew or should have known that the intended conduct was unlawful.  Good faith consultations with attorneys by clients who are uncertain about the legal implications of a proposed course of action are entitled to the protection of the privilege.  153 Ill.2d at 314.  

Illinois Supreme Court Rule 201(b) establishes the scope of the work product protection in Illinois state courts:

“(2) Privilege and Work Product.  All matters that are privileged against disclosure on the trial, including privileged communications between a party or his agent and the attorney for the party, are privileged against disclosure through any discovery procedure.  Material prepared by or for a party in preparation for trial is subject to discovery only if it does not contain or disclose the theories, mental impressions, or litigation plans of the party’s attorney.  The court may apportion the cost involved in originally securing the discoverable material, including when appropriate a reasonable attorney’s fee, in such manner as is just.”
 

The work product protection established by Rule 201(b) is narrower than the protection provided in federal courts by Federal Rule of Civil Procedure 26(b)(3)(B).  Rule 201(b) protects only opinion work product, that is, material that reflects the theories, mental impressions, or litigation plans of a party’s attorney.  Rule 201(b) does not protect “ordinary” work product, which is protected under the federal rule.  The purpose of the work product doctrine is to protect the right of an attorney to prepare their case and to preclude a less diligent adversary from taking undue advantage of the former’s efforts.  Fischel & Kahn, Ltd. V. van Straaten Gallery, Inc. 189 Ill.2d 579 (2000). 

Comp. Stat. Ann. Ch. 225, § 450/27 (Confidentiality of licensee’s and registrant’s records) provides:

“A licensed or registered CPA shall not be required by any court to divulge information or evidence which has been obtained by him in his confidential capacity as a licensed or registered CPA.  This Section shall not apply to any investigation or hearing undertaken pursuant to this Act.”    

The accountant-client privilege may not apply to accountants who are not registered or working in Illinois.  See Armour Intern. Co. v. Worldwide Cosmetics, Inc., 689 F.2d 134, 136 (7th Cir. 1982) (holding privilege did not apply where audit was of a company’s Japanese subsidiary and none of the audits were conducted in Illinois, none of the accountants involved was registered in Illinois, and none of the requested material was in Illinois). 
 

The Illinois Uniform Mediation Act, 710 ILCS 35/1, et seq. establishes certain protections against discovery of mediation communications.  Section 4 of the UMA provides:
Sec. 4.  Privilege against disclosure; admissibility; discovery. 

1. Except as otherwise provided in Section 6, a mediation communication is privileged as provided in subsection (b) and is not subject to discovery or admissible in evidence in a proceeding unless waived or precluded as provided in Section 5.  
2. In a proceeding, the following privileges apply:\
   1. A mediation party may refuse to disclose, and may prevent any other person from disclosing, a mediation communication.
   2.  A mediator may refuse to disclose a mediation communication, and may prevent any other person from disclosing a mediation communication of the mediator.
   3. A nonparty participant may refuse to disclose, and may prevent any other person from disclosing, a mediation communication of the nonparty participant.
3. Evidence or information that is otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely by reason of its disclosure or use in a mediation.

Section 6 of the UMA provides a long list of exceptions to the privilege.  Section 6

1. contains seven exceptions.  In addition, Section 6(b) provides:
   Sec. 6   Exceptions to the privilege.
2. There is no privilege under Section 4 if a court, administrative agency, or arbitrator finds, after a hearing in camera, that the party seeking discovery or the proponent of the evidence has shown that the evidence is not otherwise available, that there is a need for the evidence that substantially outweighs the interest in protecting confidentiality, and that the mediation communication is sought or offered in:
   1. a court proceeding involving a felony; or
   2. except as otherwise provided in subsection (c), a proceeding to prove a claim to rescind or reform or a defense to avoid liability on a contract arising out of the mediation.
3. A mediator may not be compelled to provide evidence of a mediation communication referred to in subsection (a)(6) [claim or complaint of professional misconduct] or (b)(2).  
    

Illinois Rule of Evidence 408 provides that settlement negotiations are not admissible if offered for certain purposes. However, the rule provides several exceptions where settlement negotiations are offered for permissible purposes. Even where Rule 408 prohibits admissibility, it does not address discoverability of settlement negotiations.