NEW YORK, Nov 11 (Reuters Legal) - The government's case against a former in-house lawyer at GlaxoSmithKline Plc could turn on the advice she received from an outside law firm -- and raises tricky attorney-client privilege questions.

The lawyer, Lauren Stevens, was indicted this week on four counts of making false statements, one count of obstruction of justice and one count of falsifying and concealing documents related to Glaxo's promotion of an anti-depressant drug for unapproved uses, such as weight loss.

According to the indictment, filed in federal court in Greenbelt, Maryland, Stevens knew that Glaxo had sponsored programs to promote the drug for unapproved use. The government alleged that Stevens, a now-retired Glaxo vice president and associate general counsel, concealed information from the Food and Drug Administration about physicians' promotions of Glaxo's drug and sent letters to the FDA falsely saying Glaxo didn't encourage off-label promotion.

Stevens claims to have been guided by the advice of outside lawyers, according to a statement issued by her lawyers on Tuesday. "Everything she did in this case," the statement said, "was consistent with ethical lawyering and the advice provided her by a nationally prominent law firm retained by her employer specifically because of its experience in working with the FDA." Reuters Legal could not immediately identify the unnamed law firm.

The statement was released by Stevens' lawyers Brien O'Connor and Colleen Conry of Ropes & Gray. Stevens is also represented by Reid Weingarten and William Hassler of Steptoe & Johnson in Washington. O'Connor declined to comment.

An advice-of-counsel defense can raise a number of sensitive attorney-client privilege issues. To vigorously assert the theory that she relied on the advice of outside lawyers regarding her correspondence with the FDA, Stevens will have to present evidence of that legal advice. Because the client of the outside law firm was the company, it's up to Glaxo, not Stevens, to decide if it wants to waive privilege.

And therein lie the questions Stevens' defense team are likely to confront: Will Glaxo waive privilege? Is it in the company's interest to waive? And has it already done so?

Prof. Samuel Buell of Duke University School of Law and a former federal prosecutor, said that when considering whether to waive privilege, the interests of a company and defendant usually align.

"It's in Glaxo's interest to want her absolved," said Buell. "Because if the individual is liable, the company can be liable, too."

But a decision by Glaxo to waive privilege could mean uncovering internal memos, disclosing internal decision-making, and showing how the company interacted with its outside lawyers -- all things that could potentially expose the company to further government scrutiny.

"A company put into this position is going to be focused on avoiding entanglement with the government and is not going to rush to the defense of former officers who have gotten in the crosshairs of prosecutors," said Jeff Ifrah, an attorney with Ifrah Law in Washington, D.C., who specializes in health care and white-collar defense.

In regulatory filings, Glaxo has said it's cooperating with the government's probe, which could mean it has already waived the attorney client privilege in an effort to resolve the government investigation. A Glaxo spokeswoman declined to comment on whether the company waived the attorney/client privilege during its talks with the government.

Even if the Stevens defense team is able to present the outside law firms' legal advice, it can't just argue that Stevens talked to a lawyer and therefore did nothing wrong. Instead, said Buell, the Duke professor, she must show that she got a legal opinion that was reasonable on its face and she relied on it in good faith.

The fact that Stevens is a lawyer further complicates the advice-of-counsel defense. On the one hand, jurors could hold her to a higher standard because she holds a legal degree. On the other, said Prof. Daniel Richman of Columbia University, jurors could be sensitive to the idea that lawyers are more likely to grapple over nuances and gray areas.

"We tolerate a higher degree of close reading of questions, and of close parsing of answers from lawyers than what we do for other actors," said Richman.

The case is U.S. v. Stevens, U.S. District Court, District of Maryland (Greenbelt), No. 10-CR-694.

(Reporting by Carlyn Kolker and Terry Baynes of Reuters Legal; Additional reporting by Jeremy Pelofsky of Reuters)