Monday, February 1, 2016

2016 Law Firm Risk Surveys Now Underway


 
We're pleased to kick off the 2016 Law Firm Risk Survey program.

Once again, we're running four separate exercises, inviting risk and IT stakeholders at participating mid-sized and large firms in each of four geographies – US, UK, Canada and Australia.
The survey should only take about 30 minutes to complete and participants will receive a copy of the final results. The report will provide valuable insight into industry trends, top firm concerns, and how organizations are evolving risk response strategies in response to a number of factors.

Survey Topic Areas Include:
  • Risk Policies & Priorities
  • New Business Evaluation, Intake & Terms
  • Conflicts Management
  • Information Security
  • International Issues
  • Emerging Issues
As with past surveys, all who participate will receive a copy of the final published report.

Invitations are going out this week. Please watch your inbox.

The survey will be open for the next two weeks. (And the final report will be reviewed live at Intapp Inception 2016, which will feature a dedicated, day-long Risk Roundtable track.)

If you haven't yet received a direct invitation and would like to participate, please email: info@riskroundtable.com.

Tuesday, January 26, 2016

Fox First to Guard its Own HIPAA Henhouse (Law Firm Risk, Privacy & Compliance)



With (slight) apologies for the punny title, we note the important development highlighted by the Legal Intelligencer: "Fox Rothschild Creates HIPAA Privacy Officer Role" --
  • "The firm announced health care ­regulatory partner Elizabeth G. Litten as its first privacy officer focused on ensuring the firm is protecting sensitive health information it receives from clients and employees. The news follows Fox Rothschild's naming last year of partner Mark McCreary as chief privacy officer."
  • "But for Fox Rothschild, it was important to keep separate the role of protecting health information. Litten said requirements under the Health Insurance Portability and Accountability Act are much more complex than some people might realize. She said lawyers and staff of the firm should know who they can call when they receive potentially protected health information."
  • ""We always thought that with an active health care practice, we are bound to have a certain amount of [protected health information] and we want to do everything we can to avoid a breach,' Litten said. The firm has never had a breach as far as Litten is aware, and it wants to make sure it has the policies, procedures and training in place to ensure that doesn't happen. "Shame on us if we don't take our own advice," Litten said of doing internally what the firm's health care lawyers counsel clients about."
  • "In her new role, which will be in addition to her daily practice, Litten will make sure Fox Rothschild has policies and procedures to handle protected health information, and trains attorneys on what is protected health information. Litten said it is important to know what is and what is not protected information under HIPAA because lawyers shouldn't give clients the wrong impression about the level of privacy and security surrounding their information. 'We treat all information as confidential of course, but there is an added layer of protection when it comes to HIPAA,' Litten said."
We've covered the impact of evolving HIPAA regulations on law firms for several years (including the significant 2013 Omnibus Rule changes). That history includes commissioning a survey on the topic, and noting several articles and updates. [See here and here.]

(We have also noted steps firms have taken to adopt security and confidentiality management software specifically as part of effort focused on HIPAA compliance. And now also note that the very firm that's the focus of this update for its expanded risk staffing approach, publicly highlighted a previous  investment in enhancing confidentiality management nearly six years ago.)

Monday, January 25, 2016

Conflicts Survey Shows Speed is Staggeringly Crucial



A recent conflicts survey conducted by HBR Consulting surfaces interesting details on the current state of the conflicts world: "Survey Reveals Need for Speed in Conflicts Clearing of Laterals, New Business" --
  • "A recent HBR Consulting Conflicts Clearing Survey of 12 members from a cross section of nine AMLAW 100 law firms and three Magic Circle law firms, confirmed the increasing urgency. Competition for high profile lateral attorneys and new business are primary drivers of the heightening pressure for fast and efficient conflicts clearing."
  • "Time to clear conflicts can win or lose business... According to the HBR conflicts survey, 58 percent of firms have lost business in the past 12 months due to a conflict clearing delay. In contrast, 75 percent of firms said client reporting suggests they have won work due to prompt conflicts clearance. Aside from the survey, there is anecdotal evidence from several firms indicating that delays in the conflict clearing process at least partially contributed to laterals going elsewhere. At a time when all aspects of a firm are under scrutiny, ability to check and clear conflicts at a fast pace is another indicator of a firm’s general operational effectiveness."
  • "Sluggish conflicts clearance can contribute to unhappy clients. When a firm wins new business, but has a misstep early in the process, a client may quickly develop and continue to hold a negative impression of the firm’s services. So, it should be a concern when 25 percent of survey participants said their clients have reported dissatisfaction at a conflict clearing delay. And some firms – 17 percent according to the survey – experienced both client loss and dissatisfaction due to conflict clearing delays."
  • "Firms are using a wide variety of staffing approaches. The survey showed a wide divergence in both the number and types of personnel (attorneys v. analysts v. clerks) in the conflicts groups. In fact, the standard deviation for the survey’s attorney-to-conflicts staff ratio was a surprising 23-to-1. There are too many variables to determine conclusively whether more personnel speeds up the clearing process, but in most operational improvement initiatives it takes more than adding resources to improve the end result."

Sunday, January 24, 2016

Industry Conflicts Trends & News (Secondee and Screening Edition)



BNA Bloomberg highlights a fascinating conflicts scenario and decision coming out of the U.S. District Court for the District of New Jersey: "‘Seconded' Lawyer Remained ‘Associated' With Firm Under Rule 1.10" --
  • "A law firm that includes a former in-house counsel of a medical technology company is disqualified from suing the company even though the lawyer was “seconded” to another client of the firm and in that capacity is doing no work on the firm's behalf..."
  • "That lawyer, Ritu Hasan, was 'seconded'—temporarily transferred—to another client of the firm, and in that capacity she 'shall not continue to work on behalf of the firm' during the secondment... The firm argued that Hasan's conflict cannot be imputed to Blank Rome under New Jersey Rule of Professional Conduct 1.10 because during the secondment she is not “associated” with the law firm."
  • "The court saw things differently. Arleo noted that in several ways Blank Rome continues to hold out Hasan as a Blank Rome lawyer, including references to her as such on its website. Therefore, the judge said, Hasan's personal conflict under Rule 1.9 must be imputed to the law firm under Rule 1.10. The firm did not fulfill Rule 1.10's requirements to escape imputation through effective screening, Arleo said."
  • "Blank Rome said the measures it took after Boston Scientific alerted the firm to Hasan's conflict satisfied the requirement in Rule 1.10(c)(2) to ensure that a 'personally disqualified lawyer is timely screened' from a matter. Arleo disagreed. 'To be timely, screening should have been performed at the time of Ms. Hasan's hiring,' she said. The court said it also could not credit Blank Rome's assertion 'that there was a de facto screen because Ms. Hasan was almost never at the firm and did not communicate with firm attorneys about confidential information.'"

Thursday, January 21, 2016

Risk News and Notes (or When Dentists Cause Pain for Lawyers)



Joseph A. Corsmeier flags fascinating news: "Washington State Bar suspends some ethics opinions because of antitrust concerns arising from 2015 U.S. Supreme Court opinion" --
  • "...the Washington State Bar Association has advised its ethics committee to stop issuing ethics opinions which could be interpreted as having the effect of restraining trade in the legal services market. The bar stated that it suspended the opinions so it could 'proceed very deliberately' in the wake of the U.S. Supreme Court’s February 2015 opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission."
  • "That U.S. Supreme Court decision permitted an antitrust action against the North Carolina state dentistry board for its decision prohibiting non-dentists from whitening teeth to proceed. The opinion stated that when a state board is controlled by active market participants in the market it regulates, state-action antitrust immunity cannot be applied unless the restraint of trade is affirmatively expressed by state policy and the policy is actively supervised by the state."
Karen Rubin at Thompson Hine reminds:"Dabbling in other practice areas can bring disciplinary, malpractice woes to lawyers"--
  • "Many lawyers begin to dabble when business slows down or dries up in an area they have become familiar with.  That was common during the last economic downturn.  It’s hard to measure the impact of dabbling on the incidence of malpractice complaints, but it seems to be responsible in a measurable way for disciplinary complaints against lawyers who do not prepare themselves adequately to face the challenge of doing a new kind of work."\
  • "Richard A. Dove, director of the Ohio Supreme Court’s Board of Professional Conduct (the adjudicatory arm of the state’s lawyer discipline system), said 'We see several disciplinary cases each year in which lawyers, often due to economic pressures, extend their practice beyond their areas of competence. This includes not only legal competence but competence in the use of technology prevalent in the practice of law.'"
Bloomberg BNA discussions how market trends and frim structure affects the conflicts landscape: "So Many Conflicts, So Many Contexts" --
  • "Large law firms offer many benefits, but avoiding conflict issues is not one of them. First, there is the internal politics emanating from conflicts involving existing and prospective clients. Each partner wants to have their client win the conflict battle — and the firm can generally represent just one. The winner is usually the partner with seniority (read larger book of business) or the client with larger fee potential. It’s a Darwinian struggle — and that’s just the internal side of it."
  • "Then there’s the problem of multiple offices and the structure of the firm. If the firm is “unified” in more than just the brand sense, then conflict rules can be an impediment to client development. This issue affects who comes to the firm, who stays, and who goes."
  • "Until recently, many thought the Swiss verein — a structure favored by some of the world’s largest law firms (as well as the Big Four) — provided shelter from the harshness of conflict rules. After all, each “member” firm in the verein had its own P&L and juridical independence. But that was shattered in a recent conflict case involving Dentons. Ruling on a disqualification motion brought against Dentons by Gap (a client of one firm verein member and adverse party to another)..."

Wednesday, January 20, 2016

Looking at Lateral Movement (New Developments, New Approaches, New Risks)


 
  • "California’s Fourth District Court of Appeal found that a partner’s status as 50% shareholder of a law firm did not give rise to a conflict of interest which would preclude the firm’s counsel from defending the firm and another partner against the departing partner’s lawsuit.  (See Coldren v. Hart, King & Coldren (2015) 239 Cal.App.4th 237.)" [Decision]
  • "The Court also found that under the facts specific to that case, the departing partner did not have standing to bring a motion to disqualify the firm’s counsel based on an alleged conflict of interest. The Court’s analysis in this matter is helpful in guiding not only attorneys who are considering whether there is a conflict with such dual representations, but for law firm’s handling the transition of departing partners and who want to avoid potential conflicts in representing the firm’s interests in such disputes."
And a reader sent a pointer to an excellent (and wonderfully detailed) article on applying new technology to streamlining lateral lawyer movement: "Solutions to Bring Order to Lateral Attorney Vetting" --
  • "While law firms often welcome lateral moves due to the influx of experienced talent and new clients, these moves create challenges and considerations for law firm administrators. Any serious dialogue between a potential lateral attorney candidate and firm involves the candidate sharing sensitive, detailed information regarding their salary, client list, work history and professional relationships."
  • "Any recently hired lateral attorney brings to their new firm a significant volume of digital and physical client material to support past and ongoing work. The potential receiving firm needs to vet the candidate for financial, business strategy, and most importantly potential client conflicts."
  • "A firm courting lateral candidates should aim to demonstrate good practices for protecting sensitive data during this lateral candidate vetting process. As discussions between a candidate and a firm progress, imagine a lateral candidate receiving an e-mail from the firm with a link that brings the attorney into a secure and well-structured online data collection tool or web portal. This interaction can guide a candidate through providing client and matter history as well as documenting influential professional relationships and key financial information."
  • "Steering a candidate towards an electronic information collection portal that sits on top of a workflow product can feed information to the appropriate downstream people and systems during and after a lateral candidate evaluation process."
  • "Financial performance data regarding past and projected billings for a lateral candidate or their clients can be passed along the lateral attorney evaluation workflow to internal financial analysts to evaluate the financial impact this lateral could have on the firm."
  • "A centralized interface that can collect and harbor the pertinent information supplied by a lateral candidate during the vetting and onboarding stage can serve as an efficient way to maintain sensitive information and then feed it out to the necessary groups in the firm for conflict searching, financial analysis, HR onboarding, IT provisioning, tracking waivers or client authorizations, and inventorying the receipt of approved supporting client files."

Tuesday, January 19, 2016

Laterals, Leaking Confidential Information (and a SLAPP)

Two interesting stories on lateral information risk. First via Law360 [subscription]: "Anti-SLAPP Law Doesn't Cover Attys' Emails, Calif. Court Says" --
  • "A California appeals court on Wednesday denied an effort by two former attorneys from law firm WHGC PLC to escape a suit accusing them of sharing confidential information with their new employer, Fish & Tsang LLP, saying emails to clients announcing the move are not protected by any anti-SLAPP statutes."
  • "A three-judge panel for California's Fourth Appellate Division found that emails sent in August 2014 by John van Loben Sels and Jennifer Shih to several current and former WHGC clients do not qualify as protected speech..."
  • Said the court: "Appellants’ emails, announcing their move from one law firm to another, have no connection with any issue under review by a judicial body...  Van Loben Sels and Shih failed to carry their burden to show that the conduct alleged in the complaint was an act in furtherance of their right of petition or of free speech in connection with a public issue."
Two Dentons partners write[via The Recorder]: "Keep Control of Your Firm's Digital Data" --
  • "Many law firms issue or subsidize laptops for their attorneys. So what happens when attorneys move between firms? Can they take their laptops with them? This very issue has arisen in lawsuits between law firms. The law firm from which the attorneys departed may have concerns that laptops contain sensitive, proprietary or client confidential data; the law firm that hired the departing attorneys may want to ensure that its new employees can transition their practice seamlessly."
  • "Today, departing attorneys can take information—a law firm’s most valuable commodity—without taking a single box of files or photocopying a single sheet of paper. Forms, client contact information, and client files can be taken with the single stroke of a computer key. Controls aimed at protecting or securing hard copies are largely meaningless in today’s electronic world."
  • "Control is essential to a law firm’s ability to fulfill its obligations to protect not only client confidences and secrets but also its business interests. In a business where time is money, control is inversely related to efficiency. In other words, the more difficult that firms make access to information, the less efficient attorneys can be. Less efficiency inevitably translates to less money."
  • "Today’s law firms must maintain a delicate balance by implementing controls sufficient to fulfill ethical and professional obligations (and to protect their most valuable asset), but not so formidable as to hinder the law firm’s ability to make money. To strike this balance, firms must shift their focus from physical possession of client information to 'virtual' control."
See the complete article for more detail (including relevant professional standards and case law) and recommendations, as well as previous blog coverage on this topic.

Some organizations are using technology tools to monitor abnormal lawyer document activity and provide early warnings by watching for unusual activity. This approach can give management early visibility so they can investigate and address any concerns before they become serious crises. (Interested readers can learn more about Intapp Activity Tracker  and read a few testimonials from firms making use of the technology as a risk mitigation strategy.)

Monday, January 18, 2016

Concerns about Commercial Conflicts Come to a Climax (IP Matters, Malpractice Allegations & More)



The one (which we last covered in September) has made several headlines over the past few weeks. The net results have been welcomed by many, while highlighting new conflicts management considerations, standards, and complexities for all.

 "Massachusetts Court Clears Patent Prosecutors of Malpractice Claims Arising From Representation of Clients in Same Technology Area" --
  • "The Massachusetts Supreme Judicial Court Wednesday affirmed a lower court’s dismissal of a legal malpractice suit finding that, 'simultaneous representation by a law firm in the prosecution of patents for two clients competing in the same technology area for similar inventions is not a per se violation,' of certain Massachusetts attorney professional conduct rules."
  • "The case was brought by Chris Maling, who hired patent prosecuting attorneys at Finnegan Henderson to prosecute a set of patent applications relating to screwless eyeglass hinges. According to Maling’s complaint, Finnegan was representing his competitor in the screwless eyeglass market, filing patent applications for that competitor. Maling claimed that he would not have hired Finnegan if he had known that the firm was representing the competitor in the same 'patent space.'"
  • "Maling further alleged that he was harmed when he asked the law firm to provide him with a legal opinion addressing similarities between Maling’s patents and the competitor’s patents, and the firm declined to do so."
Full opinion here

Additional background and the facts and history of this matter: "Law Firms Tell Mass. Supreme Court No Subject Matter Conflict In Patent Prosecution Unless Claims 'Identical' Or 'Mere Obvious Variants.'"

And additional analysis worth attention: "Finnegan's Malpractice Win Comes With Warning For IP Attys" --
  • "...welcome news for intellectual property attorneys who feared the court could bar firms from representing multiple clients in similar fields, but the ruling sends a message that all firms must be vigilant to avoid conflicts, experts say."
  • "'This is the first decision by any court in this area of the law' regarding conflicts in patent cases, Stewart said [Paul Stewart, Knobbe Martens Olson & Bear]. 'It was completely untested. Firms had been doing this consistently for years, but it was based on no law at all, just what seemed to make sense.'"
  • "While the court found that there was no conflict of interest in Finnegan's representation of the two eyeglass makers in this case, it stressed that representing competing companies with similar inventions could give rise to ethical violations in other factual scenarios. The opinion admonished firms to carefully police their cases to avoid conflicts, 'no matter how complex such a protocol might be.'"

Wednesday, January 13, 2016

Client Service, Business Advice & Engagement Letters



The latest edition of the always excellent Hinshaw Lawyers' Lawyer Newsletter contains several updates, including: Limiting the Scope of Engagements — Duty to Provide Advice on
Transactional (Business) Risks
[Peterson v. Katten Muchin Rosenman LLP, 792 F.3d 789 (7th Cir. 2015)]. --
  • "The Funds' bankruptcy trustee sued the firm, alleging that it breached its duties to the Funds by failing to advise Bell that having no direct contact with Costco, and receiving no money directly from Costco, suggested that Petters' business was fraudulent."
  • "In reversing the district court's ruling, the appellate court rejected a 'bright line'  between business advice and legal advice, recognizing that a transactional lawyer  must counsel the client on the level of risk inherent in different legal structures, and draft and negotiate contracts that protect the client's interests. In general, it is the role of the transactional attorney to provide legal advice on the best security for a transaction, to inform the client's business decision based on that legal advice. Where the lawyer fails to recognize the need for the advice, the representation is inadequate; however, where the advice is provided, but the client rejects the advice, in general, the attorney has met the standard of care and need not badger the client."
  • "Notably, the appellate court recognized that 'the scope of engagement' in the engagement letter establishes the  lawyer's role and duties. Where retained to provide advice on how to structure transactions, the attorney has a duty to advise the client on the relevant legal forms available, and the risk associated with the various forms. However, the transactional lawyer has no duty to question either the client's business objective or the client's business relationships."
  • "Risk Management Solution: This opinion emphasizes the need to include a carefully drafted and detailed scope of engagement in every written engagement letter. Where retained to provide legal advice related to business transactions, the lawyer must ensure that the client acknowledges, and is in agreement with, the scope of the engagement. Transactional attorneys are not retained to provide business advice. However, lacking an appropriately described scope of retention, a transactional lawyer will be held to the standard generally applied, including the need to recognize and counsel on the risk associated with various legal structures."
See this post for previous discussion on industry engagement letter trends, perspectives and management strategies.

Tuesday, January 12, 2016

Conflicts, Costs, Cash and Contentions (In-house to Firm, Screening, Class Actions & More)



Two interesting stories in the news, touching these themes:

"Boston Scientific Can't Get Fees From Blank Rome DQ" --
  • "Boston Scientific will not get attorney fees out of their successful bid to disqualify Blank Rome counsel from the False Claims Act suit against the company, after a New Jersey federal judge ruled Tuesday the firm did not extend the proceedings by failing to drop out."
  • "U.S. District Judge Madeline Cox Arleo wrote that although she had disqualified Blank Rome because of a conflict with one of the firm’s attorneys, Ritu Hasan, her disqualification did not extend to fees because of its unique nature. Hasan was previously employed as in-house corporate and compliance counsel for Boston Scientific and worked on internal investigations directly related to some of the issues in the case, according to court documents."
  • "Blank Rome did not screen her from communicating with the attorneys working in the instant case, the firm did not bar her from collecting any fees associated with the case and it did not give a heads-up to Boston Scientific about the issue, Judge Arleo concluded in the November decision."
  • "'The motion raised a novel conflict of issue not previously addressed by any court,' the judge’s order said. 'Accordingly, Blank Rome’s failure to withdraw did not ‘unreasonably and vexatiously’ prolong the proceedings.'"

"Class Actions, Cash and Conflicts?" -- 
  • "Potential conflicts in lawyers’ fees. A class action suit over Sony’s PlayStation 4 reveals the importance of knowing how your lawyer is being paid. Class action settlements usually attract headlines for their large numbers. But a recent class action settlement involving Sony Corporation and its PlayStation 4 deserves headlines for its small numbers."
  • "The class action litigation was settled with each purchaser to receive $20 as reimbursement for shipping charges, meaning the value of the settlement was a measly $8,000. The settlement also required Sony to pay $4,500 to the two plaintiffs who started the litigation, along with legal fees to be paid to the MLG in an amount to be determined by an Ontario court."
  • "Determining the appropriate level of fees fell to Ontario Superior Court Justice Edward Belobaba. The MLG argued it ought to receive a fee of between $120,000 and $225,000."
  • "Let’s pause here. Under what legal system could any lawyer expect to receive a fee of even $120,000 for achieving a settlement paying out $8,000 to consumers?"
  • "But Belobaba didn’t just reduce the fee sought to $30,000. He also took aim at the unwritten fee arrangement which provided that the MLG would only be paid legal fees by the defendant. No fees were to come out of the settlement or be payable by the class representatives. Belobaba viewed this fee arrangement as creating a potential conflict of interest between the members of the class action and their lawyers. He viewed the fee arrangement as one that might 'encourage premature, sub-optimal settlements negotiated by class counsel, trying to extract an almost risk-fee payment for themselves."

Monday, January 11, 2016

2016 Legal Risk Events of Note

Several upcoming risk events of note:


Is it time to replace your outdated Records Management System?”
New York, on Wednesday, February 3rd
  • InOutsource and FileTrail are hosting a Lunch and Learn. FileTrail is a modern records platform that is easy to deploy with features to enable law firms to comply with their information governance policy. FileTrail’s retention review module stands alone in the marketplace. FileTrail is browser-based, offers both a hosted and on premise solution and integrates with a variety of systems used in law firms including iManage Work and NetDocuments.
This session will likely be of particular interest to those firms looking at options to migrate from legacy LegalKEY systems, based on issues several organizations have noted and we’ve previously covered. For more information on this session, and to register, visit their event overview page.



In Chicago, running March 2-4, is the annual Legal Malpractice and Risk Management Conference. Now in its fifteenth year, this event always earns high marks. And 2016 looks to be no exception – here are a few agenda highlights:
  • Legal malpractice claims and insurance trends
  • Discussion of lawyer obligations to provide business advice (ed: an increasingly common expectation from clients are part of their growing service expectations)
  • “Phantom Clients and How to Exorcise Them”
  • • A panel on engagement letters and outside counsel guidelines
  • • A roundtable on "what's worrying law firm GCs?"
For more information and the full agenda, visit the conference web site.


Set for San Francisco April 24-27, the Intapp global user conference (Inception 2016) includes multiple risk-related content tracks, educational sessions, product information and opportunities for peer networking.
  • In addition to practical discussions focused on conflicts management, business intake, confidentiality/security, client terms of business management, engagement letters, and client evaluation, risk blog readers should take note of the all day Risk Roundtable track set for that Tuesday.
  • With topics including review of the 2016 Risk Survey (launching shortly), the Business Acceptance Maturity Model, risk staffing approaches, and more, this event offers a unique forum that’s already attracting a diverse audience of law firm general counsel/risk leaders, conflicts and intake professionals, IT leaders and IT staff.
For more information, visit the conference web site and see the complete agenda summary.


Sunday, January 10, 2016

Changing Argument Changes Conflicts Considerations (or ‘There and Back Again, a Risk Tale”)



Happy new year to our roster of regular readers. With a brief break in coverage through the end of 2015, we find several interesting developments making news, which brings to mind the paraphrased wisdom of Ferris Bueller -- Risk moves pretty fast, if you don't stop and look around for a while, you could miss it. Let's start with this story:

Three weeks ago: "BakerHostetler Tossed From $230M Russian Tax Fraud Suit" --
  • "A New York federal judge on Friday disqualified BakerHostetler and a partner from representing defendants in a civil suit over an alleged $230 million Russian tax fraud scheme after Hermitage Capital successfully argued the firm has now strategically chosen to blame the company for the fraud."
  • "U.S. District Judge Thomas Griesa had denied a previous bid by Hermitage Capital Management Ltd. to boot BakerHostetler and its partner John Moscow from the case over Moscow’s previous representation of Hermitage's co-founder William Browder, but the judge said it became “clear” during oral arguments on Friday that the firm has decided to pin 'substantial responsibility' on Hermitage for the alleged fraud."
  • Said the judge: “BakerHostetler's change in defense strategy now makes the subjects of its former and current representation ‘substantially related.' There is now a very real possibility that BakerHostetler will be in a position where it would be trying to show that its current clients (the Prevezon defendants) are not liable and showing this by attacking its former client (Hermitage) on the very subject of BakerHostetler's representation of that former client.”
However, just a week ago that bell was unrung: "Judge Rethinks Removing Baker Hostetler From Case" --
  • "Southern District Judge Thomas Griesa on Monday withdrew his opinion disqualifying Baker & Hostetler and partner John Moscow from defending real estate companies accused of laundering the proceeds of a Russian fraud scheme."
  • "But at Dec. 28 hearing, Griesa said he had reconsidered. He said he initially believed he had enough information to make the disqualification decision, but now thought it fair to have the parties brief the issue further."

Wednesday, November 18, 2015

In Conversation: On Changing Client-Law Firm Dynamics



Dan Bressler, head of Intapp marketing and the Risk Roundtable initiative, discusses the changing dynamics of client-law firm relationships with Casey Flaherty. Flaherty, who made headlines as in-house counsel at Kia motors with his provocative assertions about law firm and lawyer efficiency, shares his perspective on how clients and firms can work better together to achieve greater mutual success.

(Note: We're actively looking for interesting stories and perspectives to share. If you or your firm would like to participate in this series, please get it touch.)

Direct Download Link: In Conversation: Changing Client-Law Firm Dynamics

Sample:

Dan:
An important part of this dynamic is the fundamental question about trust — on both sides. Do clients trust their law firms? And do firms trust their clients? It’s such a critical element of these organizational relationships.

Casey:
Absolutely. Do you trust your outside lawyers? Yes. What do you trust them on? Again, it comes back to their expertise, their industry knowledge. You also trust them on that. You do trust that they have your best interest at heart. But do you trust them as project managers? Do you trust them as technologists? Do you trust the staff they are delegating work to? That’s where the trust starts to fray.

Legal work has become much more labor intensive — and  there’s the labor that can be done by human beings or machines — and the more emphasis there is on the labor side of the equation, the less trust you have. I do think that there has been a fraying of the trust between client and counsel.

Again, it has nothing to do with them being bad lawyers, or not being smart, hardworking, or honest. It’s almost too much to expect a lawyer to be a great lawyer, and a great project manager, and a great technologist, and a great everything. That’s where clients need to be more proactive in their monitoring. And I think it’s an area where clients could be doing a much better job.

Tuesday, November 17, 2015

Risk Roundtable Reports: Australian Edition



Positive reports to share from the recent Risk Roundtable events held in Sydney and Melbourne last week. Thanks again to our colleagues at K&L Gates and Norton Rose Fulbright for hosting sessions.

These sessions were focused on the theme: "How Much Risk Management is Enough and How Do You Staff the Team?"
 
  
And we're delighted to receive extensive event reports from Dion Cusack and Nell McKay from K&L Gates. Their comments are so extensive and thorough (and fascinating) that we've opted to deliver them in the form of a PDF, rather than run off the edges of your screens.

So read the Australian Risk Roundtable Report to hear more about discussions covering topics including:
  • GRC at law firms
  • Billing practices and risk pressures
  • Client engagement terms and trends
  • Information security
  • Raising the profile of risk within the firm

Wednesday, November 11, 2015

Risk Potpourri (Conflicts, Laterals, Screening & More)



Conflicts (in perspective):
An interesting and accessible summary from Mark Herrmann, Chief Compliance Officer at AON on law firm conflicts: "The Unspoken Differences Between Biglaw And Small" --
  • "Things don’t work quite that way at large firms. When Michael gets the call from his client who wants to be adverse to BigCo, Michael says, 'Thanks for calling me about this. I’d be delighted to represent you, but I can’t commit to handling the case until I check conflicts. Please don’t tell me anything more about the case. I’ll run a conflict check and get back to you as soon as possible.'"
  • "Michael then asks a conflict-checker to do the necessary search of the conflicts database. The computer searches for “BigCo” and “Big” and “Co”; and all corporate entities that have those words (or fragments) in their names; and parents, subsidiaries, and affiliates of all those corporate entities. Two hours later, Michael receives a 53-page spreadsheet with the names of all current clients, former clients, and potential future clients whose names the computer generated. The list is broken down not just by client name, but also by individual matter, and many matters were handled by different 'responsible partners' at various of the firm’s 30 offices around the globe."
  • "Michael dutifully sends out emails to the partners responsible for every matter that might create a conflict. A couple of those partners are in trial, and a few are on vacation, and one no longer works for the firm (but no one ever bothered to tell Michael). The guy in the Taipei office (who Michael has never met) naturally refuses to answer emails, despite many nudges."
  • "Three weeks later, Michael can at last return the call to his client, happily reporting that he can take the case. To which the client responds: 'Thanks very much. We got a TRO on the afternoon that I called you, and the preliminary injunction hearing is set for this coming Monday. As you might imagine, this implies that we retained other counsel. But we’ll be sure to think of you the next time something comes up.'"

Laterals (of the departing variety):
We previously noted Virginia’s rule about how departing lawyers and firms can and cannot communicate with clients during the metaphorical divorce process. One California firm takes issue with the possibility of such rules proliferating: "Are Recent Ethical Rules that Establish Attorney Notification Protocols For Departing Attorneys Really in the Best Interest of the Clients?"
  • "However, will this new Virginia rule, and similar notification rules that may be contemplated by other states, significantly change how law firm departures are handled? More importantly, will these rules promote a policy that is in the best interest of clients?"
  • "This well-intentioned attempt to force lawyers and law firms to cooperate surrounding an impending attorney departure seems to ignore the practical reality that most partnership or shareholder agreements, especially within larger firms, already have contractual provisions that govern what departing attorneys can or cannot do with respect to communicating with clients regarding their departure. These agreements, which many consider some form of adhesion contracts, are not subject to negotiation by the incoming partners or shareholders, and often become take-it-or-leave-it propositions."
  • "In California, as in most states, attorneys have fiduciary and ethical duties to keep their clients “reasonably informed about significant developments relating to the employment or representation.” (Cal. Rules of Professional Conduct, Rule 3-500.) This rule has been interpreted as imposing an obligation on the partner to inform clients (those firm clients with whom the attorney has significant contact) of his/her departure from a firm as soon as practical to allow clients to make a choice in counsel and provide for a smooth transition in order to avoid prejudice to clients."
  • "To codify the joint notice requirement, but to leave open the possibility that partnership or shareholder agreements can simply contract around it, renders it mostly meaningless. It increases the likelihood that law firms will seek to notify clients of a withdrawing partner’s departure first, not jointly. It also creates a heightened tension for departing attorneys who are trying to comply with applicable ethical guidelines during this process, but have various, and sometimes competing, provisions in their partnership agreements to balance."

Screening (shields up)

"D.C. Adopts Screening To Avoid Imputed Disqualification" --
  • "Major news from the Nation's Capital. The District of Columbia Court of Appeals has amended its Rules of Professional Conduct to permit screening to avoid imputed disqualification under Rule 1.10."

Security (another firm touting certification)

"Goodwin Procter Achieves Prestigious ISO 27001 Certification for Information Security Management System" --
  • "'At Goodwin, protecting the security and confidentiality of client and personal information is a top priority,' said David Fleming, the firm’s Chief Information Officer. 'We are pleased to be recognized among the small group of law firms that are certified against the stringent ISO 27001 standards.'"

Tuesday, November 10, 2015

Legal Conflicts, Legal Risks, LegalKEY



Conflicts continue to cause considerable concerns. Yesterday, we noted a story of one firm embroiled in a bit of controversy, with conflicts checking software playing a role.

A year ago, we noted another public story of a firm disqualified from representing a client worth over $12m in billings. At the time, that firm said it: "... made mistakes in the conflict check process for the merger, during which they used computers to run checks on more than 15,000 clients to screen for conflicts."

Conflicts complexities and surprises can affect any firm. So metaphorical stone throwing can be a risky proposition. However, there is a common thread in both instances: LegalKEY. (That these two firms use LegalKEY software is also public information, easily surfaced with the help of a search engine.)

LegalKEY Looks Locked
For nearly two decades, LegalKEY software has helped firms manage conflicts. But today, years after the last enhancements have been made to this product, and with future development concluded, the product is starting to show its age... and creating new potential risks.

For example, the pending end-of-life of Windows Server 2003 and 2008 will create significant  maintenance and support issues for firms. What’s more, growing evidence suggests that in common use data quality issues often surface in the product. In this environment, firms are increasingly and urgently pursuing new paths for conflicts management.

Third Party Perspective
The experts at InOutsource, who’ve worked with firms for over a decade on business intake, conflicts management, and other risk initiatives, have weighed in with their perspective on the technology risks. See Eric Mosca, CRM's piece: "Is LegalKEY Putting Your Firm at Risk" --
  • "LegalKEY has not kept pace with evolving industry standards and best practices. Firms using LegalKEY often cite their frustration with its reporting capabilities, noting the lack of tools to analyze hits, and filters that do not work as expected. Because conflicts reports are paper or PDF-based, they are difficult to review in sufficient detail, with no mechanism to centrally compile feedback from multiple stakeholders."
  • "Another challenge firms often cite is the “black box” nature of LegalKEY’s native data integrations."
  • "Similarly, integrations with external databases such as Dun & Bradstreet or OFAC are typically a bit of a mystery, leaving firms unclear as to what information is updated and with what frequency. This lack of visibility makes it difficult to know whether firms are using the most accurate, up-to-date data for their conflicts searches."
  • "As external factors affecting maintenance and support come to a head, and intrinsic software issues continue to present operational challenges, firms would be well advised to begin looking at other options now."
Note: InOutsource offers an assessment program for firms looking to understand their current risk exposure with LegalKEY.

Monday, November 9, 2015

Client Conflicts, Complex Conflicts Checks, Clashes Commence



The Recorder has posted several detailed stories on an unfolding matter involving a complex fact pattern, worth reading in complete detail (and documented nicely on their web site, with an interactive timeline). First: "Clash of Former Clients Puts Orrick in Hot Spot" --
  • "In March, Orrick, Herrington & Sutcliffe's chief legal officer typed out a few terse paragraphs cutting off the firm's three-year relationship with a Bay Area tech startup. The situation was clearly delicate. 'Because we are now aware that our clients are in litigation with each other, we believe it is appropriate to terminate' the representation, wrote Larry Low of Orrick in an email. 'This will confirm our withdrawal from our representation of Loop AI.' The email was the easy part. Extricating the firm from the ongoing litigation between its former clients has been trickier."
  • "John Bautista, a Valley Orrick partner, has represented Loop AI since its launch in early 2012 and drafted its employment contract with Gatti. A separate Orrick partner in New York helped Almawave hire Gatti as its CEO in 2014 under circumstances that are now at the core of the companies' dispute. The firm's conflict check system failed to flag any problem. All of which has left Orrick in the awkward position of fending off subpoenas and allegations of double-dealing as its two former clients bash each other in court."
  • "The dispute illustrates shortcomings in the ability of conflict check systems at large law firms to detect risky representations, particularly those outside the litigation sphere. And since the Orrick partner representing Almawave has taken that relationship to a new firm, the case also tests how far obligations of client loyalty reach in the age of frequent partner moves."
  • "Orrick's tangled role in the dispute is detailed in a motion to disqualify, not Orrick, but Almawave's litigation counsel at Venable, where the partner who represented Almawave now practices. The motion is set to be argued Thursday before U.S. District Judge Haywood Gilliam Jr. in San Francisco."
See also: "Venable Fights DQ in CEO-Sharing Conflict Brawl," which highlights several conflicts complexities, including arguments about non-litigation conflicts, evolving parameters and relationships, and allegations about what detail and flags software should have surfaced (or should be able to) --
  • "In a complicated sequence of events, Orrick, Herrington & Sutcliffe handled both companies' employment contracts with Gatti, without identifying any conflict. Earlier this year Almawave's lawyer lateraled from Orrick to Venable."
  • "Loop AI's counsel, Healy LLC's Valeria Healy, told Gilliam that Orrick's conflict system should have flagged Sternberg's representation of Almawave as a conflict, particularly because the company's U.S. subsidiary was incorporated at Gatti's home address in San Francisco."
  • "'To me, there is nothing more adverse than that,' Healy said. 'The focus is whether a conflict arose that should have been picked up that wasn't' and whether agreements were drafted by the firm that were 'prejudicial to an existing client.'"
  • "Gilliam responded that Healy's argument would put an untenable "obligation on the law firm to deduce that this second contract will somehow result in the breach of the first contract.' The example presented in the case, the judge said, is "quite far away from the paradigmatic transactional adversity" where a firm represents parties on the opposite sides of a deal."

Monday, November 2, 2015

Risk Ghosts, Ghouls and Ghastlies



Kudos to the risk experts at Hinshaw for taking a risk in their October newsletter and embracing the Halloween spirit with gusto. Such efforts at creative engagement should be rewarded, so we're dedicating this update to their legal leviathans (be they paranormal, paralegal or partner) and their fine fearsome work.

(For future harrowing Hinshaw updates, subscribe directly to their newsletter.)

Waiver of Conflict of Interest — Attorney Disqualification
Grovick Props., LLC v. 83-10 Astoria Boulevard, LLC , 2014 NY Slip Op 05627 (App. Div., 2d Dep't. Aug. 6, 2014) Risk Management Issue: What amount of detail must be included in a waiver of a future conflict of interest for it to be binding on the client and enforceable by the attorney?
  • "Because the conflict of interest waiver at issue in this case was clear and concise and it identified for Astoria, with specificity, the possible future conflict of interest, it was ultimately upheld. When drafting such waivers, it is imperative to thought fully articulate the language in the waiver and  identify in as much detail as possible any possible future conflicts of interest that will be waived."
Withdrawal of Attorneys — Engagement Letters
Robbins v. Legacy Health Sys., Inc., 177 Wash. App. 299 (2d Div. 2013)
Risk Management Issue: May a lawyer withdraw from a matter when the client is unwilling to pay the costs associated with the engagement?
  • "Robbins reaffirms an attorney's right to withdraw from a matter when the client fails to reimburse him or her for costs, if that withdrawal will not prejudice the client's case, based upon substantial hardship of the lawyer if forced to continue representation, as provided in most states' versions of the Model Rules of Professional Conduct 1.16. This case also underscores the need for clearly worded engagement letters that delineate the roles and
    responsibilities of both the attorney and the client..."
Conflict of Interest — Disqualification — The Importance of Timely Ethical Screening Before Undertaking the Representation
Signature MD, Inc. v. MDVIP, Inc., Case No. CV 14-5453 (C.D. Cal. Jan. 20, 2015)Risk Management Issue: A new matter comes in requiring immediate attention, but a conflict check reveals a prior representation of the adverse party. To the extent that screening may avoid or reduce the risk of disqualification, how quickly must a law firm implement the ethical screen?
  • "This ruling emphasizes the importance of implementing an ethical screen before undertaking the potentially problematic representation. In this case, the court required strict compliance with the rule even though the current and prior matter seemed only loosely related and the potentially tainted attorneys worked out of a different office."
See their complete write up for complete details. And may you face such risks, nevermore.

Thursday, October 29, 2015

On Sometimes Onerous Client Terms and Very Real Law Firm Concerns



Fascinating summary and analysis from Richard Moorhead, Director of the Centre for Ethics and Law and Professor of Law and Professional Ethics at the Faculty of Laws, University College London, on the SRA's recent publication: Independence, Representation and Risk: An Empirical Exploration of the Management of Client Relationships by Large Law Firms: "Out of the Shadows: Are Institutional Clients Influencing Lawyers to the Detriment of Others?"--
  • "The study concentrated on ‘high impact’ [i.e. high risk in SRA terms] commercial firms working.  The essential concern addressed by the research was whether institutional clients were exercising too much influence over the firms they instructed, to the detriment of the public interest and/or the interests of other clients."
  • "The central finding was that all respondents, 'discussed a shift in the balance of power from law firms to clients… [with] major corporates and financial institutions seek[ing] to impose their own terms of engagement on law firms.'  Most interviewees it seemed felt forced to accept terms of engagement dictated inflexibly by the client although some reported routinely and successfully pushing back on unacceptable terms."
  • "Whilst generally the resurgent client is seen as a positive, this report suggests some negatives.  Similarly, one might be tempted, unwisely if taken too far, to discount general grumbles that client procurement practices discourage lawyers from viewing themselves as professionals.  Allied with the concern that lawyers are increasingly thinking of themselves as mere ‘service providers’, the report raises more specific concerns which it seems to me do require careful thought and a considered response."
  • "The first of these is the familiar concern that institutional clients deliberately seek to conflict certain large firms out of litigating against them, whether that conflicting out is merited or not.  Partly this seems to be institutional clients, not entirely unreasonably, taking a broader view of conflicts of interest than law firms would like to take.  There may also be a degree of seeking to transport tougher US rules to UK firms."
  • "A more worrying problem is that (some) clients appear to be seeking terms which (some) firms accept that may affect duties it owes to other or future clients."
  • "The report considers a second set of potential problems including the attempts of clients and firms to ‘add value’ to their mutual relationships through secondments and the like.  As the report puts it there are: '...potential for breaches of confidentiality to arise from client terms –  via inbound secondments, IT and data protection audits, most favoured nation clauses etc – struck us as being high, but our interviewees seemed confident that this risk was being managed appropriately.'"

Wednesday, October 21, 2015

EVENTS: Risk Roundtable sessions set for Sydney and Melbourne


We're pleased to announce our upcoming Risk Roundtables set for Sydney and Melbourne.
 
Our previous events in Australia have been a great way for risk professionals to get a finger on the pulse of what is going on in the risk space both in Australia and other parts of the world. These also provide a good opportunity to understand the latest thinking and solutions available.
 
These upcoming sessions will provide a forum for risk and IT professionals to connect in a collaborative environment. The theme for the event is: "How Much Risk Management is Enough and How Do You Staff the Team?"
 
Presentations will explore trends we are seeing globally in staffing, and how firms are managing client terms and best practices being adopted with Intapp solutions by firms around the world.
 
The Sydney event is set for Tuesday, November 10th at office of K&L Gates LLP. Dion Cusack, Corporate Services Manager at K&L Gates, and Nell McKay, Quality & Risk Manager at K&L Gates, will discuss how their firm is implementing a new Risk and Quality Champion program to improve their risk assessment processes.
 
The Melbourne session follows on Thursday, November 12th at the office of Norton Rose Fulbright LLP. Allison Chong, General Counsel Senior Associate at Norton Rose Fulbright will present.
 
These sessions will also include a short demonstration of an Australian specific version of Intapp Open tuned to the particular drivers and needs of this geography.
 
Attendance is by invitation only and is limited to qualified law firms and personnel. Please contact info@riskroundtable.com for more details.

Tuesday, October 13, 2015

Legal Professional Regulatory Landscape: Change & Innovation (in the US and Canada)



Via the Legal Ethics Forum:"ABA Commission on the Future of Legal Services Proposes Model Regulatory Objectives" --
  • "The ABA Commission on the Future of Legal Services has released this draft resolution and report, which proposes the creation of ABA Model Regulatory Objectives.  The Commission’s cover memo offers the following explanation:
    • As one part of its work, the Commission is seeking comments on a draft resolution and report, which recommends that each state’s highest court, and those of each territory and tribe, use clearly identified regulatory objectives to help (1) assess the court’s existing regulatory framework and (2) identify and implement regulatory innovations related to legal services beyond the traditional regulation of the legal profession. The ABA Model Regulatory Objectives are intended to advance these important goals.
    • The Commission’s final resolution and report will be submitted for consideration by the House of Delegates at the 2016 Midyear Meeting. The comment deadline is October 30.
  • The Commission is also studying other regulatory issues and may propose additional resolutions in 2016.
  • The Commission was established in 2014 by then-ABA President William Hubbard.  Its mandate is to examine how legal services are delivered today and recommend new approaches that “improve the delivery of, and the public’s access to, those services.”  (Disclosure: I am the Commission’s vice chair.)
And from Malcom Mercer comes: "Innovate or be innovated" --
  • "When the Chief Justice of Canada highlights global liberalization of legal services regulation, recognizes that our old monopolies are fading, says that the legal profession must embrace new ways of doing business and that the question is not whether our rules should be liberalized but how, even those most resistant to change must take heed."
  • "On August 14, 2015, Chief Justice McLachlin addressed the Canadian Bar Association annual plenary in Calgary . In her remarks entitled The Legal Profession in the 21st Century, the Chief Justice suggested that the legal profession must ask itself three questions:"
    • First, where does the profession stand as it enters the second quarter of the 21st century?
    • Second, what are the forces that have led to the challenges the profession is facing?
    • Third, against this background, how can the profession move towards the newer world it seeks?

Monday, October 12, 2015

Risk News & Commentary: Lateral Movement & Conflicts



Several interesting updates to share. First: "Negotiating for legal employment with the 'other side' raises ethics issues." Which explores issues tied to lateral movement, rooted in a "ripped from the headlines" incident. (We noted similar themes a few months ago in: "Business Moves, Business Conflicts.")
  • "When you start planning to leave your firm for greener pastures, lots of ethics issues can crop up (bad pun). One of the most acute issues is if you get an offer to join a firm that is on the opposite side of a matter you are already handling. That was the situation in a recent bankruptcy case, In re US Bentonite, Inc., and it led the court to order the firm representing a Chapter 11 debtor-in-possession to disgorge several months’ worth of fees. The firm avoided disqualification, however, in part because the lawyer’s new firm had screened him."
  • "The scenario that the court dealt with in In re US Bentonite, Inc. — negotiating for a job with counsel representing the opposing party — is not unique to the bankruptcy context... In 1996, the ABA ethics committee considered it in Formal Op. 96-400, concluding that 'a lawyer’s pursuit of employment with a firm or party that [the lawyer] is opposing in a matter may materially limit [the lawyer’s]is representation of [the] client, in violation of Model Rule 1.7(b). Therefore, the lawyer must consult with [the] client and obtain the client’s consent before that point in the discussions when such discussions are reasonably likely to materially interfere with the lawyer’s professional judgment.' The more involved the lawyer is in the client’s matter, the more likely it is that a material-limitation conflict will arise."
  • "Comment [10] to Rule 1.7 echoes the committee’s advice: 'When a lawyer has discussions concerning possible employment with an opponent of the lawyer’s client, or with a law firm representing the opponent, such discussions could materially limit the lawyer’s representation of the client.”  See also ABA Formal Op. 09-455 (Oct. 8, 2009), “Disclosure of Conflicts Information When Lawyers Move Between Law Firms.'"
  • "In Bentonite, the debtor’s firm avoided disqualification based at least partly on the fact that the migrating associate’s new firm apparently screened him when he arrived. (The court’s order says that the new firm 'shall continue to screen' the lawyer from the case.)"
Next, a few conflicts updates to share. "Where There's A Will, There's A Conflict" --
  • “The Nebraska Supreme Court has publicly reprimanded an attorney for a conflict of interest in representing both a testator and a potential beneficiary… The attorney admitted the misconduct.”
And from Bill Freivogel:
  • N.C. State Bar v. Merrell, 2015 WL 5795667 (N.C. App. Oct. 6, 2015). The state disciplinary agency ordered Lawyer suspended, in significant part because he represented both lenders and borrower in a real estate development deal. In this opinion the appellate court affirmed. The facts are complex. The court found “guidance” in a North Carolina ethics opinion, N.C. Op. 2013-14 (Jan. 2015) (“2015 FEO 14”). Opinion 14 found Baldasarre v. Butler, 625 A.2d 458 (N.J. 1993), instructive, and concluded that a lawyer may almost never represent multiple parties in a commercial real estate closing.

Wednesday, October 7, 2015

In Conversation: Fresh Approaches to Intake and Conflicts


In the latest edition of In Conversation, Pat Archbold, head of Intapp's risk practice group moderates a panel discussion with several industry experts, exploring current trends in new business intake and conflicts management.

Participants:
  • Curtis Russell, Aurora North Software
  • Terry Coan, HBR Consulting
  • Eric Mosca, InOutsource
  • Meg Block, Intapp

Sample:
  • Pat: We've got a great panel today. I've got the easiest job — I just have smart people say smart things and guide the dialogue. The panel is going to talk about some of the drivers, the trends, things they're seeing to give you a sense of a broad spectrum of what's happening in this space. For one, things are getting riskier out there. We're going to talk about some of the risks and how people are responding.
  • We are seeing an increase in malpractice suits, conflicts of interest malpractice suits.
    Out of Am Law 200, in 2007, 92 cents out of every dollar was collected. By 2014, it went down about 8.5%. That's pretty significant. I don't want my income going down 9% over that time frame. You're seeing expenses rise, realization going down. On the demand side, things are relatively flat. And over the past four years pre-negotiated discounts and AFAs continue to climb significantly. The price pressure in most markets is very real.
  • What we're really going to try to talk about today is not just the risk management issues, but the financial issues. How do we start to help the firm really improve financial performance as they look at the matter intake process in general?
  • What do we do about that?
Click to read the full article and discussion.

Wednesday, September 30, 2015

Information Security News – Law Firm Hacked, Data Ransomed



In August, LegaltechNews noted: "Heightened Risk of Cyberattacks Puts Pressure on Law Firms to Bolster Defenses" --
  • "On a scale of one to 10, the risks law firms are facing are an 11, according to Daniel Solove, professor at George Washington Law School and organizer of the Privacy + Security Forum. Underscoring this urgency is data from Mandiant, a division of FireEye, which finds that 80 of the 100 biggest law firms in the U.S. have been hacked since 2011."
  • "Law firms have become a bigger target for cybercrime... Those sentiments have been echoed by the New York State Department of Financial Services (NYFDS) and others, which view law firms as a secondary access point for criminal activity due to the volume and sensitivity of data they deal with..."
Now comes a startling story posted in the Legal IT Network LinkedIn Group by a consultant: "Security incident in a law firm" --
  • "A few days ago one of the largest Polish law firms experienced a serious IT security breach. They were blackmailed then by hackers demanding ransom in BTC to stop publishing data stolen from the law firm servers. The hackers published 500 MB of sensitive data and threatened to expose further 100 GB if their demand is not met."
  • "The attack went through servers of IT company that delivered its services to the law firm. Lawyers from some other big law firms commented that they were also attacked, however the hackers failed to steal data."
See the full post for extensive community from that community, including a pointer to a 2013 Canadian article: "Law firms targeted in top 10 worst cyber attacks"

Tuesday, September 29, 2015

Disqualification News: Lawyer Facing His Former Firm



The New York Law Journal notes: "Lawyer Disqualified From Suit Against His Former Firm" --
  • "A Long Island attorney cannot represent plaintiffs in a lawsuit against his former law firm because he was working there when the plaintiffs opted out of a class action settlement against the firm, Eastern District Judge Kiyo Matsumoto ruled." 
  • "In August 2014, eight months after his employment as managing attorney at the firm was terminated, Pashkin filed suit against Cohen & Slamowitz on behalf of two plaintiffs who rejected the class settlement and one who asserted a claim similar to those argued in the class action case."
  • "The firm moved to disqualify Pashkin in Liew v. Cohen & Slamowitz, 14-CV-4868, saying he had participated in critically important confidential discussions between the firm and its insurance counsel. Those discussions involved the firm's ability to pay a judgment in the class action, efforts to define the class as broadly as possible to forestall subsequent litigants with similar claims, and general strategy the firm employed in responding to such claims."
  • "But Matsumoto held Tuesday that "Mr. Pashkin's insistence that his tasks in the [class action] matter were rather circumscribed is misplaced, because the operative question is whether he likely had access to relevant confidential information... The judge said the undisputed facts were sufficient to grant the disqualification motion, because mere access to the confidential information was an adequate reason."
See: Liew v. Cohen & Slamowitz, 14-CV-4868.