What Is a Common Interest Agreement and How It Works?

A common interest agreement is an arrangement that lets two or more separately represented parties share privileged information with each other without waiving attorney-client privilege or work product protection against the outside world. It is not a standalone privilege. It is an exception to the default rule that disclosing privileged material to a third party destroys the privilege, and it only works when the parties genuinely share a legal interest, not merely a business one.

What It Protects and What It Doesn’t

Attorney-client privilege covers confidential communications between you and your lawyer made to obtain legal advice. The work product doctrine covers materials your lawyer prepares in anticipation of litigation. Both protections normally collapse the moment the information reaches someone outside that relationship, because the disclosure suggests the communication was never meant to stay confidential.

The common interest doctrine opens a narrow exception. When parties with a shared legal interest each have their own attorneys, those attorneys can exchange privileged material among themselves without triggering a waiver. The underlying privilege has to exist first. A communication that was never privileged does not become privileged because the parties label their exchange a common interest arrangement.¹

Common Interest Agreement vs. Joint Defense Agreement

The two terms get used interchangeably, but they describe different situations. A joint defense agreement traditionally refers to co-defendants in active litigation coordinating their defense. A common interest agreement is broader and reaches scenarios outside pending litigation, such as regulatory investigations, compliance matters, and shared transactional risks.²

Federal circuits disagree about how far the doctrine actually reaches. Some courts limit it to pending or anticipated litigation. Others extend it to transactional and advisory contexts whenever parties share a common legal interest. If you intend to rely on a common interest agreement outside the litigation setting, there is a real chance a court in your jurisdiction will refuse to recognize it. That is the single biggest structural uncertainty in the doctrine, and it should drive how aggressively you rely on the protection.

When Parties Use One

The clearest use is co-defendants facing the same lawsuit or criminal prosecution. They share an interest in defeating the plaintiff’s claims and their lawyers need to exchange strategy, analysis, and documents. Without a common interest arrangement, every exchange hands the plaintiff a waiver argument.

Government investigations are the next common setting. When an agency investigates an industry and several companies receive subpoenas, those companies often share overlapping legal interests. Their counsel want to compare notes, align legal theories, and develop consistent responses. A common interest agreement lets them do that without giving the government a waiver argument. The risk is unusually high here because any one company may later decide to cooperate against the others.

Companies in joint ventures, mergers, or complex transactions sometimes use these agreements to share legal analysis of shared regulatory exposure or compliance questions. Whether a court will honor the privilege in a purely transactional setting depends entirely on the jurisdiction.

What the Agreement Should Include

A well-drafted common interest agreement handles the things courts examine when a privilege challenge arrives later.

Identification of every party and their respective counsel. Each party must have independent legal representation. Under the Restatement, a person who has no lawyer and is not themselves a lawyer cannot participate in a common interest arrangement.¹
A specific description of the common legal interest. Vague references to shared “business interests” will not satisfy a court. Name the lawsuit, the investigation, or the particular legal exposure.
An express statement that the parties intend to preserve attorney-client privilege and work product protection for everything shared under the agreement.³
Rules on how shared information can be used and a prohibition against disclosure to anyone outside the group.
A clause confirming that each attorney represents only their own client and that no new attorney-client relationship is created with the other parties.
Withdrawal and termination procedures, including obligations to return or destroy shared materials and continuing confidentiality duties after a party leaves.

Does It Have to Be in Writing?

Most courts do not require a written agreement. The protection can rest on an oral understanding or even conduct implying a shared arrangement. In practice, oral agreements are risky for a simple reason: if privilege is challenged, you have to prove the arrangement existed, what it covered, and who was in it. A written document gives you clear evidence of all three.

Execute the agreement before any privileged information changes hands. Retroactive coverage of earlier exchanges is possible in some circumstances, and some sample agreements have been structured that way,⁴ but relying on it adds uncertainty you do not need.

Proving the Privilege Applies

When the privilege is challenged, the party asserting common interest protection carries the burden. Courts generally require proof of four things: that the parties agreed to the arrangement, that they shared a common legal interest, that the specific communications were made in furtherance of that interest, and that confidentiality was maintained throughout. The legal interest has to be identical or substantially similar, not merely overlapping, and purely commercial interests do not qualify.⁵ One frequently cited federal decision put the standard bluntly: the “nature of the interest must be identical, not similar, and be legal, not solely commercial.”⁶

The agreement by itself is not enough. A court will look at the specific communication at issue and ask whether it actually related to the defined common legal interest. Discussions of business strategy, commercial negotiations, or anything beyond the scope spelled out in the agreement will not be protected, even if the parties assumed everything they said was covered.

Conflict-of-Interest Exposure

Joining a common interest arrangement creates conflict-of-interest risks that can escalate fast. ABA Model Rule 1.7 recognizes a concurrent conflict when there is a significant risk that representation of one client will be materially limited by the lawyer’s responsibilities to another person.⁷ An attorney who absorbs confidential information from another party through a common interest arrangement takes on a fiduciary duty to keep that information confidential, even though no attorney-client relationship exists with that other party.⁸

The danger arrives when interests later diverge. An attorney who has learned confidential information from a former co-party may be forced to withdraw from representing their own client, because continuing the representation is materially limited by what they now know. The conflict can reach the attorney’s entire firm unless screening procedures are set up in advance. Best practice is for both attorneys and clients to sign the agreement, with the document confirming that clients received a full explanation of these risks before anything was shared.⁸

When Interests Diverge

Common interest arrangements do not always end cleanly. Parties fall out, interests shift, and a former ally becomes an adversary. Two questions dominate when that happens: can a departing party use the privileged information it received, and can it waive the privilege on its own?

In most federal circuits, no single party can unilaterally waive the privilege over communications shared under a common interest agreement. All parties must consent. The protection survives the end of the arrangement, so a departing party cannot simply hand the shared information to the opposing side or to the government.

Courts also draw careful lines around what the agreement actually covers. In one federal case, two parties were found to share a common interest on some issues while remaining adversaries on others. Communications about their shared defense against a third-party claim were protected; communications about financial disputes between the two parties themselves were not. Having an agreement in place does not mean every conversation that happens under it is privileged.

The government investigation scenario is where this matters most. If one company in a common interest group starts cooperating with prosecutors or regulators, the others face the practical risk that the cooperator will reveal what it learned through the arrangement. Legally the cooperator cannot waive the other members’ privilege, but the practical fallout is harder to control. Agreements built for this context should address the cooperating-party scenario directly.

Why These Agreements Fail

Courts have described the common interest doctrine as unpredictable and frequently rejected. Litigants often discover this only after a privilege challenge succeeds and shared communications become fully discoverable. A few patterns show up again and again.

Scope defined too broadly, or not defined at all. A vague scope invites a court to find that the specific communication at issue fell outside the protected zone.
Commercial interests dressed up as legal ones. Shared commercial goals do not qualify. Courts distinguish between parties who both want a deal to close and parties who face the same legal exposure.⁶
Unrepresented parties in the room. Including a person who has no lawyer, and is not a lawyer themselves, can destroy the protection for everyone.¹
Disclosure beyond the group. If any party shares the information with an outsider, privilege may be waived for that communication. The known presence of a stranger during the exchange negates the privilege.¹
Crime-fraud exception. If the arrangement is used to further a crime or fraud, the protection collapses, just as it does for ordinary attorney-client privilege.

The best protection is doing the work up front: define the legal interest narrowly, put the agreement in writing before information is exchanged, make sure every party has independent counsel, and treat each shared communication as something you may eventually have to defend in court.

1
University of Houston Law Center. Restatement Third of the Law Governing Lawyers
2
The Federal Lawyer. What Is a Common Interest Agreement
3
Association of Corporate Counsel. Joint Defense and Common Interest Privilege Agreement
4
Vermont Attorney General. Common Interest Agreement Regarding the Sharing of Information
5
National Association of Attorneys General. Common-Interest Doctrine and Attorney-Client Privilege for Public Attorneys
6
Justia Law. Duplan Corporation v. Deering Milliken, Inc., 397 F. Supp. 1146
7
American Bar Association. Rule 1.7 – Conflict of Interest – Current Clients
8
American Bar Association. Protecting Yourself and Your Client in a Joint Defense Arrangement