Most companies treat their lawyers like a cost center. They are missing a moat.

Attorney-client privilege is the rule that says certain communications between a company and its lawyers cannot be obtained by opposing counsel in litigation. Discovery — the legal process where each side hands over its documents — applies to almost everything else. Internal emails. Board minutes. Slack threads. Notes in margins. Strategy decks. All of it. Except the privileged.

The strategic implication is that the boundary of privilege is the boundary of what your competitors can read about you in a courtroom.

Most companies set that boundary too narrowly. They use lawyers for legal work — drafting contracts, defending lawsuits, complying with regulations. They don't loop them into commercial decisions. They don't have in-house counsel on the strategy emails. They don't structure third-party consultants under Kovel agreements that extend privilege outward.

The result is that everything sensitive ends up discoverable.

The companies that get this right do three things. They give in-house counsel a seat on the strategic communications. They flag those communications as privileged and confidential at the moment they're created. And they extend privilege to third parties — financial advisors, accountants, consultants — by structuring those relationships through outside counsel.

The net effect is that the company's most sensitive thinking lives in a privileged corridor that opposing counsel cannot enter. Not because of secrecy — the materials still exist — but because the law has carved out a zone where the strategic logic of a business cannot be used against it in court.

Privilege is not free. It costs in legal fees, in process discipline, in the slight friction of routing material through counsel. But the alternative is to have your strategy memos sitting in a discovery production three years from now, being read by people who would not have been allowed to read them last Tuesday.

The companies that understand this build a moat. The ones that don't build a paper trail.