Attorney-client privilege generally does not depend on who physically possesses the communication but rather on the nature and purpose of the communication itself. Privilege is attached to confidential communications between a client and an advocate/attorney made in the course of and for the purpose of seeking or providing legal advice. Accordingly, both the attorney's and the client's copies of such communications remain protected, provided privilege is not waived.

In the context of attorney-client privilege under Indian law, the status of in-house counsel, in contrast to external advocates/attorneys, has been subject to varying judicial interpretations. The core issue arises from the distinction between an advocate and a full-time salaried employee under the Advocates Act and the BCI Rules, particularly Rule 49. This rule provides that an advocate should not be a full-time salaried employee of any individual or entity while continuing to practice law. Once employed full time, the individual is expected to suspend their right to practice for the duration of such employment.

This has led to questions as to whether in-house counsel, often engaged in non-litigious or advisory roles, can be regarded as "practicing advocates" for the purpose of invoking attorney-client privilege under the BSA.

In Satish Kumar Sharma v. Bar Council of Himachal Pradesh [2001], the Supreme Court took the view that full-time legal officers employed by the government may not fall within the statutory definition of a practicing advocate, especially where there is no express exemption under the applicable state bar council rules. Similarly, in Sushma Suri v. Govt. of NCT of Delhi and Anr. [1998], the Supreme Court noted that whether an employed legal professional continues to be regarded as an advocate depends on whether their role involves appearing and pleading in court on behalf of their employer.

At the High Court level, there have been decisions indicating a more inclusive approach. For example, in Municipal Corporation of Greater Bombay v. Vijay Metal Works [1981], the Bombay High Court suggested that legal advice provided by in-house legal advisers should receive the same protection as that from external counsel, provided the communication relates to legal advice. Likewise, in Larsen & Toubro Ltd. v. Prime Displays (P) Ltd. [2002], the court observed that privilege may still apply where the in-house counsel, but for their employment, would otherwise be qualified to give legal advice.

However, it is important to note that these decisions are of persuasive value only, and there is currently no authoritative ruling from the Supreme Court explicitly giving the status of an advocate to an in-house counsel for the purposes of attorney-client privilege.

Given the judicial precedents to date, legal privilege is not likely to extend to internal communications between a company and its in-house legal counsel.

This position stems from the Supreme Court's ruling in Satish Kumar Sharma v. Bar Council of Himachal Pradesh [2001], which held that in-house lawyers, being full-time salaried employees, do not qualify as practicing advocates under the Advocates Act . As a result, they do not enjoy the protections afforded to advocates/attorneys under the BSA, which governs attorney-client privilege. Accordingly, communications with in-house counsel are not protected by legal privilege in the same way as communications with external counsel.

The treatment of foreign lawyers under Indian law, for the purposes of attorney-client privilege, remains a gray area. While Indian statutes such as the Advocates Act and the BSA appear to limit privilege protections to individuals enrolled as advocates/attorneys with a state bar council in India, there is limited judicial guidance on how privilege applies to communications with foreign-qualified lawyers. The Supreme Court in Bar Council of India v. A.K. Balaji [2018] clarified that foreign lawyers are not permitted to practice Indian law or appear before Indian courts, highlighting the distinction between Indian advocates/attorneys and foreign legal professionals. Based on this, it is generally understood that communications with foreign lawyers, particularly where advice concerns Indian legal issues or is rendered to Indian clients, may not attract legal privilege under Indian law.

The Bar Council of India introduced the Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in 2023, amended further in May 2025. These rules only permit foreign lawyers to advise foreign clients on foreign and international law, subject to strict registration and compliance requirements. The amended rules explicitly prohibit foreign lawyers from practicing Indian law, appearing in Indian courts or tribunals, or advising Indian clients. Accordingly, communications with foreign lawyers may only attract privilege where the advice concerns foreign or international law and is privileged under the applicable foreign jurisdiction.

Given that this area remains largely untested in Indian courts, there is some uncertainty as to how privilege claims involving foreign lawyers will be treated, particularly in cross-border or multijurisdictional matters. Companies should therefore structure such engagements carefully to mitigate the risk of waiver or loss of privilege under Indian law.

Legal privilege under Indian law does not extend to nonlegal professionals such as accountants, tax consultants or forensic experts even where they provide advice on matters that have legal implications.

While the BSA does not explicitly provide privilege to communications with such professionals in practice, if nonlegal professionals are engaged by advocates/attorneys specifically to assist in rendering legal advice or in connection with anticipated litigation, there may be an argument for extending privilege, though this is not definitively settled.

This view finds some support in the Bombay High Court's decision in Larsen & Toubro Ltd. v. Prime Displays (P) Ltd. [2002], where the Court upheld privilege over documents prepared in anticipation of litigation. While the ruling did not directly address nonlegal professionals, it emphasized the importance of the context and purpose for which the communication or document was created, suggesting that documents created at the direction of legal counsel for legal advice or litigation strategy may be protected, even if prepared by third-party experts. However, in the absence of clear statutory language or binding precedent, the applicability of privilege in such cases is likely to be assessed on a case-by-case basis.