In understanding the In re Grand Jury Subpoena case, it is important to begin with the scope of the attorney-client privilege in cases of joint representation of two individual clients. Normally the presence of a non-privileged party at the time of a communication would make it non-privileged. But that would mean that no communication when representing two clients jointly would ever be privileged, because each would destroy the other's privilege. This will not do. This is how the Restatement of the Law Governing Lawyer puts the way this problem has been resolved:

§ 75. The Privilege Of Co–Clients

(1) If two or more persons are jointly represented by the same lawyer in a matter, a communication of either co-client that otherwise qualifies as privileged under §§ 68-72 [which are the normal requirements for the privilege for an individual] and relates to matters of common interest is privileged as against third persons, and any co-client may invoke the privilege, unless it has been waived by the client who made the communication.

(2) Unless the co-clients have agreed otherwise, a communication described in Subsection (1) is not privileged as between the co-clients in a subsequent adverse proceeding between them.

Notice that this rule applies even concerning matters one co-client says to the lawyer in private, provided that it concerns the matter of joint representation.

Here is an example from the Restatement:

Client X and Client Y jointly consult Lawyer about establishing a business, without coming to any agreement about the confidentiality of their communications to Lawyer. X sends a confidential memorandum to Lawyer in which X outlines the proposed business arrangement as X understands it. The joint representation then terminates, and Y knows that X sent the memorandum but not its contents. Subsequently, Y files suit against X to recover damages arising out of the business venture. Although X's memorandum would be privileged against a third person, in the litigation between X and Y the memorandum is not privileged. That result follows although Y never knew the contents of the letter during the joint representation.

Concerning actions by third parties against X or Y, either can assert the privilege. It is generally accepted that the waiver of the privilege as to third parties requires all joint clients' consent, not just the consent of the client who made the communication, despite the language in § 75(1) that the client who makes the communication can waive it unilaterally. An the court put it in In re Teleglobe Communications Corp., 493 F.3d 345 (3d Cir. 2007): "A wrinkle here is that a client may unilaterally waive the privilege as to its own communications with a joint attorney, so long as those communications concern only the waiving client; it may not, however, unilaterally waive the privilege as to any of the other joint clients' communications or as to any of its communications that relate to other joint clients."  See also Wright & Miller Federal Practice and Procedure § 5505.

There is a similar rule for cases not involving joint representation, called the common interest privilege:

§ 76. The Privilege In Common–Interest Arrangements

(1) If two or more clients with a common interest in a litigated or nonlitigated matter are represented by separate lawyers and they agree to exchange information concerning the matter, a communication of any such client that otherwise qualifies as privileged under §§ 68-72 that relates to the matter is privileged as against third persons. Any such client may invoke the privilege, unless it has been waived by the client who made the communication.

(2) Unless the clients have agreed otherwise, a communication described in Subsection (1) is not privileged as between clients described in Subsection (1) in a subsequent adverse proceeding between them.

Now let us move on to joint representation of an entity and a constituent. We know that, under the Model Rules, such joint representation is possible. But if that is so, then how can we explain the result in In re Grand Jury Subpoena? Doesn't that put greater requirements for the assertion of an attorney-client privilege for an individual in an joint representation context with an organization/employer than in the usual context?

How is this puzzle solved by the notion, as Hazard puts it, by the imputed-knowledge doctrine? And if it is solved, then didn't the lawyer in the In re Grand Jury Subpoena case commit malpractice by not warning his individual client's of this fact?