Over at Faughnan on Ethics, Brian Faughnan has published a short but very accurate review of the basics regarding confidentiality and privilege. You should read it here.
The only thing I would add to what he says is that one way to remember the distinction between confidentiality and privilege is to understand that privilege is a right (of the holder of the privilege) while confidentiality is a duty (of the lawyer.) Privilege gives the right to prevent disclosure of information; confidentiality imposes an obligation to keep the information secret.
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