1. Banfield & whoever are being very irresponsible about this privilege business. I don't know what they actually said, but "people" (as in commenters on the internet) seem to be assuming or reading their words to mean that there is essentially no privilege in joint representation if all clients are present during conversations with the attorney. This is simply not correct. Full stop.
Joint representation of clients whose interests may come to diverge is tricky. I've been making this point since we first heard SB's name, considering the issues, stakes, and potential interests at play here.
However, where joint representation is otherwise appropriate and executed properly, privilege is not inherently lost due to group discussions. That would make it nigh impossible to do, and it would also result in potential variances in key information (particularly where the conveyer of information may struggle to provide precisely the same information in multiple conveyances).
2. I think we need to stop talking about SB being "formally" or "officially" "retained." He has never used that phrasing. What he said was that he was first involved in this matter on 9/11. The Laundries are his long-time clients for a variety of matters. Their conversations about legal matters are going to be considered privileged. Attorneys have ethical requirements (around, for example, conflicts of interest, privilege, zealous representation, joint representation, etc.), but we are not required to fill out specific forms or document administrative matters in any particular way. Typical ways of handling things have grown up over time because they help ensure ethical matters are considered and handled properly, and because in the event of a question or concern, it's always good to be able to show your work (so to speak). It's good practice. But if SB didn't formally open a new matter or fill out certain forms each time the Ls had a legal question or even a new transaction/legal matter, that doesn't mean he was not still their attorney/acting as their attorney in between discrete matters. (This is all assuming that he was otherwise behaving appropriately, not involved in any crime with the client/s in question, etc.; imo, it's not usually useful to focus on wild, imagined, fantastic Hollywood-ized scenarios.)