Sunday, June 21, 2015

Risk News: Screening, Security (ISO 27001) and Cloud Concerns (or Not)

For those in the US, Happy post-Fourth of July. Here's a set of interesting updates to kick of the month on a variety of topics. First up: "DC Bar Revisiting Ethical Screening: Comments Sought on Move to Amend Rules 1.10, 1.15, and 7.1" --
  • "The proposed amendments were submitted to the court by the D.C. Bar Board of Governors on recommendation of the Bar’s Rules of Professional Conduct Review Committee. The proposed amendments [include]:"
  • "A. Rule 1.10 (Imputed Disqualification: General Rule)
    Amend Rule 1.10 and its comments to allow ethical screening (without client consent) of lawyers moving laterally between private employers with certain initial notice requirements to former clients. The committee further recommends the addition of a new subparagraph (f) to address situations in which a law firm cannot provide required notifications without violating confidentiality obligations to an existing client."
Jeff Brandt at Pinhawk noted a resource of interest to the security-focused: "The brain of an ISO auditor – What to expect at a certification audit" by Advisera, a consultancy --
  • "If your company is going for the ISO certification (e.g., ISO 9001, ISO 14001, OHSAS 18001, ISO 20000, ISO 22000, ISO 22301, or ISO 27001), you’re probably not very happy about it – certification auditors are usually perceived as persons who are not very open minded and who will insist on a whole bunch of unnecessary details. But the truth is, it doesn’t have to be this way – if you understand how the auditor thinks, your audit can turn out to be much more pleasant and useful. Here’s what you need to know."
We also recently noted several updates concerning law firm risk and information governance practices tied to cloud services. (Watching the industry discussion unfold on this topic conjures memories of the industry's adoption and debate about electronic mail...) Here's another bit of commentary from outside of the legal space, which raises some important points: "Enterprise financials in the cloud? Why the fog of skepticism may be lifting" --
  • "Spreadsheets and email documents are a bigger threat than the cloud, says Forrester Research’s Liz Herbert"
  • "One of the HubbleUp speakers was Liz Herbert, a vice president and analyst at Forrester Research. During her talk, she emphasized that when it comes to keeping private data inside the enterprise, the horse has already left the barn. She talked about one customer engagement, which the C-level officers brought Forrester in to begin – to begin! – a feasibility study of placing some corporate information into the cloud. However, once onsite, she learned that the company was already using to manage its customer interactions. The lesson: The company was already storing sensitive information in the cloud, but didn’t even realize it."
  • "Herbert urged business to 'get real' and accept that security breaches, such as HIPAA violations, occurred from the use and misuse and abuse of locally stored data, not data in the cloud. The common scenario, she said: documents and spreadsheets being emailed around the company. It’s very, very easy to accidentally send critical information to the wrong address, or intentionally leak the information via email, or even copy it off a hard drive onto a USB key. 'Spreadsheets and email documents are a bigger threat than the cloud,' she said."

Thursday, June 18, 2015

Risk News: Conflicts (Quirky, Canadian or Common) Collide Consent & Cost

It's not every day we quote the Hollywood Reporter (and our television habits trend towards more towards episodic drama -- IP claims about who really-but-fictionally invented the infamous Coke commercial is the debate du jour in your editor's household -- rather than situation comedies). Regardless, this story does merit a viewing: "Judge Throws Out 'New Girl' Idea Theft Claims" --
  • "On Friday, a California federal judge rejected a key portion of an ongoing lawsuit brought by Stephanie Counts and Shari Gold that alleges that the Fox series New Girl was derived from their own proposals for a show about a woman who moves in with three single men."
  • "In support, the two said they had hired an attorney to pursue claims in 2011 and had gotten a $10,000 offer from Fox to settle the matter in 2012. Counts and Gold rejected the offer, but there was something a little off about the situation; their law firm at the time also represented New Girl executive producer and director Jacob Kasdan. Their lawyers advised them about the conflict and suggested that if they wished to pursue claims against Kasdan, they'd need to discuss further involvement in the dispute."
  • "According to the complaint, they 'were unaware of just how tightly aligned Defendants and their then-counsel were in the entertainment industry: The firm representing Plaintiffs also absurdly represented the director and executive producer of New Girl, the very show Plaintiffs claimed took their ideas and artistic expression. The extent to which this relationship had truly affected then-counsel’s representation of Plaintiffs only became truly evident to Plaintiffs in February 2012.'"
  • "In today's opinion, U.S. District Judge Stephen Wilson is hardly impressed with the argument. He writes that the plaintiffs admitted being informed about the potential conflict and 'apparently consented.' He adds that they might have found the $10,000 settlement offer insulting, but he doesn't believe the prior lawyer's 'failure to elicit a larger sum indicates that they were 'incapacitated' by their conflict of interest.'"
In another matter, involving substantially larger sums comes a conflict cleared: "Judge: No conflict of interest for Troy Kelley's lawyer" --
  • "Federal prosecutors said Friday they are satisfied that an attorney for indicted Washington State Auditor Troy Kelley does not have a conflict of interest that might warrant his removal from the case."
  • "The government last month said Kelley had paid more than $900,000 in stolen money as a retainer to Davis Wright Tremaine, the Seattle firm where his attorney, Mark Bartlett, works. Prosecutors said they were concerned that it could create a conflict of interest if Bartlett had provided Kelley with advice about spending that money, and they asked U.S. District Judge Ronald Leighton to consider whether a conflict might exist."
  • "They said they were concerned Bartlett might need to be called as a witness in the case or that he might have to cross-examine partners in his own law firm about how the retainer was handled. They said it could also raise issues that Bartlett previously represented Kelley's wife. Bartlett said no conflicts existed. He said he did not give Kelley advice on paying the retainer, and he noted his firm is holding Kelley's money in trust rather than spending it."

Wednesday, June 17, 2015

Cost of Changing Lawyers and Lawyers Changing (Malpractice, Billing, Conflicts and Other Allegations)

Some interesting allegations and updates making news. First: "Telstra has tripped over a legal conflict of interest issue as it fights a patent infringement claim" --
  • "Telstra has been sideswiped by conflict of interest issues after suddenly changing lawyers while defending claims that its mobile eCommerce platform has been infringing an inventor’s patents for many years."
  • "King & Wood Mallesons had been representing Telstra in the Federal Court, but last month the telco filed notice that it had changed to another top-of-town firm, Herbert Smith Freehills, with Sue Gilchrist as the representing lawyer."
  • "The Telstra account, a plump piece of business for any law firm, is potentially worth millions each year. However, Telstra’s new firm, Freehills, is known to have acted for Upaid as recently as last month when it filed a patent application in Australia. Upaid has now made an application to the Federal Court seeking to restrain Freehills from acting against the interests of Upaid. A hearing is set down for later this month."
And, as reported by Law360 (subscription or free trial) come allegations tied to a lateral departure of a lawyer (and more): "Mayer Brown 'Abandoned' Client In Trade Secrets Row: Suit" --
  • "In a legal malpractice complaint filed in Illinois court, Think Tank Software Development Corp. alleges that Mayer Brown unexpectedly withdrew as its counsel in March 2013 after the firm’s lead lawyer on the case, Thomas Durkin, accepted a federal judgeship."
  • "Adding insult to injury, according to the suit, Mayer Brown hit Think Tank with more than $1.1 million in legal fees after leaving the case. Many of the charges for the firm’s four-plus years of work “were excessive, duplicative and/or otherwise unnecessary and unreasonable,” Think Tank said."
  • "The firm’s alleged unreasonable billing practices also included 'vague and unintelligible time entries,' unauthorized rate increases and block-billed time entries, Think Tank said. The firm’s 'billing abuses,' various legal missteps and early departure from the case amount to negligence and also to breaches of the retainer agreement Think Tank had signed with the firm, according to the suit."

Tuesday, June 16, 2015

Upcoming Webinar: The State of LegalKEY – Responding to New Risks

Intapp is hosting a webinar for firms using LegalKEY for conflicts management, focused on understanding the current state of and emerging risks associated with that software product.
featuring three law firm case studies: The State of LegalKEY: Responding to New Risks
  • Date: Thursday, June 25th
  • Time: 9 am PST / 12 pm EST
  • Registration: Limited to select firms. Please email Jason Yu for more information.

Session Details

Effective conflicts clearance is critical to law firm risk management. The cost of missing a conflict can be significant – from loss of business, to serious reputational damage. It’s why enhancing conflicts management consistently rates as a top concern in industry surveys.

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, now is the time to start thinking about the future of conflicts management at your firm.
This webinar will provide more detail on the state of LegalKEY, including product risk, Intapp and third-party support, and a review of response options.
Moderated by Dan Bressler, head of Intapp marketing and the Risk Roundtable Initiative, the session will feature a deep-dive presentation from conflicts and LegalKEY expert Eric Mosca, Director of Operations at InOutsource.

Eric has worked with a number of firms to improve their conflicts policies and practices, including technology optimization and migration projects. He’ll provide an overview of the LegalKEY “Health Check” his organization has developed.

They’ll be joined by Mohit Thawani who will provide guidance for making the internal business case for investing in new software to enhance, conflicts, intake and overall business acceptance practices.

Attendance is limited to select firms and partners. Please email Jason Yu for more information.

Monday, June 15, 2015

Little Fluffy Clouds: New Ethics Opinion, New Policies, New Trends

With musical accompaniment optional (but recommended), we take note of the new ethics opinion from the State Bar of Wisconsin: "Cloud Computing is the New Norm: Ethics Opinion Outlines Lawyer Obligations" --
  • "Wisconsin Formal Ethics Opinion EF-15-01 (Ethical Obligations of Attorneys Using Cloud Computing), issued by the State Bar of Wisconsin’s Professional Ethics Committee, notes that increased lawyer accessibility to cloud-based platforms and services comes with a direct loss of control over client information... Lawyers can use cloud computing services if the lawyer uses reasonable efforts to adequately address the potential risks associated with it, the opinion concludes."
  • "'To be reasonable,' the opinion states, 'the lawyer’s efforts must be commensurate with the risks presented.' The opinion acknowledges that lawyers cannot guard against every conceivable danger when using cloud-based services, but lists numerous factors to consider when assessing the risk of using cloud-based services in their practices."
Next, we turn to news of an interesting intersection of these issues driven by client and management concerns meeting lawyer expectations and the line between personal and professional activity at work: "Which Biglaw Firm Has Blocked Personal Email?" --
  • "We’ve received tips that not one, not two, but three different Biglaw behemoths have recently made moves to block all personal, web-based email, such as Gmail, AOL (is that still a thing? I think it’s a thing.), Yahoo!, Hotmail, etc. from computers on the firms’ networks."
  • As reported in the linked new story, one 1400+ lawyer firm's memo reads: "One of the repeated demands by our clients is that we prevent our users from accessing Webmail programs (Gmail, AOL, Yahoo, Comcast…) through our network. In general, there are two reasons for that insistence. First, accessing Webmail programs through our network enables client and firm data to leave the Firm without tracking. Second, Webmail programs can be the vehicle for the introduction of malware into the Firm’s network. This is not a hypothetical risk: our IT team reports that that has occurred in the Mayer Brown network."
  • The article also notes an update from a source at a 2000+ lawyer firm with similar policies, which have evolved: "[Webmail] has been disabled for all our 'normal' browsers, but we have been given a new, limited functionality “External Webmail Browser” by which we can access gmail/personal email accounts and external instant messaging services. Our reasons were also driven by client security demands."
Industry tech luminary Jeff Brandt published an open letter in response, which stops short of explicitly shoeing millennials, with their various chats and grams apps, off his law, but might be best (cheekily) summed up as "Welcome to the new age. Lol. Kthxbye."

Still, with some clients actively embracing the cloud and looking for closer collaboration with law firms in that realm, and recalling security and privilege debates about email in its infancy, it feels like there's a balance to be struck on all fronts...

Thus, we close with an excellent overview from the Legal IT Insider (aka "The Orange Rag") highlighting firms' navigating cloud adoption: "Passing Clouds: The Cloud Club – Client Consent Not Required?" --
  • "IT departments backed by their partnerships, by bringing in or looking at bringing in what they still often dare not call cloud, are – unusually for the legal sector – ahead of many of their clients, particularly those in regulated industries such as the finance and insurance sectors."
  • "Other clients say they would be prepared to give informed consent subject to certain assurances – Vodafone’s group general counsel Rosemary Martin told the Legal IT Insider: 'No-one has asked me yet but it would depend – anything very sensitive such as major litigation or major M&A we would be a bit twitchy about. More run of the mill stuff we would probably be fairly relaxed about. I’d want assurance the cloud and access to it were truly secure.'"
  • "A similar position is taken by Suzanne Wise, group GC and company secretary at Network Rail, who said: 'I would want to be informed and would ideally like confirmation that the information was as secure as it had been.'"
  • "At Keystone Law, which operates a heavily IT-reliant dispersed model and signed with NetDocuments earlier this year, IT Director Maurice Tunney said: 'Most of our clients are start-ups or small-to-medium enterprises who want to be assured that their data is secure and for our larger banks and insurance companies, we have not had any concerns raised about the fact that their data is stored in the cloud. If it was raised then we would re-assure them that it is highly secure and meets all the necessary security accreditations and requirements.' Tunney was previously at FieldFisher, which became one of the first firms to place its DMS in the cloud with Virtustream on a PaaS model."
  • "At Farrer & Co, which went through a stringent DMS tender process involving numerous partners as part of an 11-strong project committee, Davison said: 'Clients trust us to make sure their documents are secure. We are now answering the question ‘are you ISO27001 certified?’ with a ‘yes’. ‘Is your data encrypted?’ ‘Yes’. We couldn’t have done that before and most law firms can’t.'"
  • "Firms are, of course, not obliged to seek client consent by the Solicitors Regulation Authority (SRA), which acknowledges in its November 2013 Silver Linings: cloud computing, law firms and risk paper that from a client care perspective, solicitors have implied consent to confidential information being passed to external IT providers. They are also largely updating their terms and conditions to reflect the fact they have a hosted DMS."

Sunday, June 14, 2015

Implications of Unfolding Conflicts Allegations: On Engagement Letters and Waivers

As reported in the American Lawyer (and previously noted here), while the firm strongly disagrees that its representation represents any form of conflict: "Kirkland's Conflict Woes Worsen in Teva Takeover Case" --
  • "It's too early to declare the litigation for Mylan, since Tuesday's report by U.S. Magistrate Judge Lisa Pupo Lenihan could be rejected by the district judge. Lenihan blasted Kirkland for ignoring conflicts related to its past work for Mylan, finding that the firm breached its ethical duties. Kirkland immediately vowed to contest Lenihan's findings, saying in a statement that it rejected Mylan's conflict of interest claims."
  • "Still, Lenihan's unsparing, 61-page report, which heavily cites the opinions of Harvard Law School professor and former Wachtell, Lipton Rosen & Katz partner John Coates, makes Kirkland out to be the clear villain in the dispute. Her holding that Kirkland should be preliminarily enjoined from representing Teva in the takeover battle is likely to carry a great deal of weight with Chief Judge Joy Flowers Conti, who must decide whether to adopt the report. And the damage may already be done: Teva told Reuters late Tuesday that Sullivan & Cromwell will be taking over Kirkland's role on the deal front."
Bloomberg BNA offers up its own commentary on these matters: "To Dodge Conflicts, Make Waivers Specific" --
  • "Should law firms rethink their client engagement letters, and more specifically, the advance waiver clauses they include? That’s the question emerging after a federal magistrate’s lengthy report recommending that Kirkland & Ellis LLP be disqualified from representing Teva Pharmaceutical Industries Ltd. in its attempt to acquire Mylan NV because of the work Kirkland had done for Mylan."
  • "The issue is particularly fraught because of partners moving laterally and because of law firm consolidation as well as consolidation within industries."
  • "Kirkland was already representing Teva when Mylan became a client. According to the magistrate’s report, Mylan was aware of Kirkland’s work for Teva, 'including regulatory matters and products liability litigation with respect to certain drugs, some of which were matters in which Teva’s interests were directly adverse to Mylan.' In addition, Mylan had agreed to a waiver agreement that allowed Kirkland to represent others, “including in litigation, arbitration or other dispute resolution” procedures that might be adverse. Nonetheless, that agreement, known as an advance waiver, shouldn’t be read to permit Kirkland to represent Teva, the magistrate said."
The judge has yet to issue a final ruling, so the debate remains live. With that context, here is additional commentary via Reuters: "Lessons from Kirkland’s ‘unfortunate and unethical’ Mylan mess" --
  • "What the Kirkland case shows, however, is that conflict waivers may not give lawyers broad rights to represent hostile bidders for current and former clients, even if the clients have said it’s okay for the law firm to pursue adverse litigation and even if the firm has set up ethical walls."
  • "Kirkland had originally wanted Mylan to waive conflicts on cases that were not “substantially related,” according to the magistrate’s report, but “substantially” fell out in negotiations over the wording of the waiver."
  • "Mylan sued Kirkland for breaching its duty in May. Its lawyers at Wilson Sonsini Goodrich & Rosati, Peacock Keller & Ecker and Pietragallo Gordon Alfano Bosick & Raspanti argued that Mylan’s conflict waiver in no way contemplated that the firm would represent a hostile bidder trying to take over the company. Kirkland, they contended, was violating the terms of its engagement agreement with Mylan by representing a Mylan adversary in a takeover bid necessarily related to the products at issue in Kirkland’s work for Mylan."
  • "Ultimately, Judge Lenihan read the agreement only to permit Kirkland to represent Mylan in the sorts of cases in which the firm was already working for Mylan competitors."
And the Wall Street Journal weighs in with: "Dealpolitik: Mylan-Kirkland Decision Should Give Big Law Firms Shivers" --
  • "Finally, the magistrate turned the way Kirkland tried to protect Mylan’s confidential information it obtained on the drug products representation against Kirkland. Kirkland had put in place what the magistrate called an “ethical screen” to be sure Mylan’s information was accessible only to lawyers representing Mylan (which in my experience is not an unusual action). The magistrate seemed to agree with Mylan that such a screen would not be necessary if the takeover were not 'related' to the Mylan representation. I find that conclusion dubious, but I think law firms now need to write into their engagement letters that a client agrees that specified procedures for the protection of client confidential information are appropriate and not evidence of a prohibited representation."
  • "In short, large law firms view themselves as a business. If a client wants its services, the client should expect prescribed terms of engagement giving a law firm maximum freedom to act on other assignments.  Because this thinking is so different from how the default ethical rules are structured, every once in a while a case has to remind the firms how explicit they need to be to get that permission and to make it stick."

Tuesday, June 2, 2015

Risk News: Conflicts, Disqualifications, Screens and Bright Lines in Canada

Interesting update from Thomson Hine: "'Comprehensive' ethical screen fails to avoid disqualification from side-switching paralegal" --
  • "Small may be beautiful, but when it comes to law firms, small can signal disqualification troubles that a bigger firm might sometimes be able to avoid, according to the reasoning of a recent opinion."
  • "In the recent case, Ullman v. Denco, a  New Mexico federal court magistrate judge granted disqualification, booting defendants’ counsel from eleven consolidated employment cases after the firm hired a paralegal from the firm representing the plaintiffs."
  • "The paralegal had worked extensively on the cases; she had interviewed most of the clients, and had  detailed information about plaintiffs’ legal strategies and bottom line settlement numbers."
  • "Under those circumstances, the side-switching paralegal clearly could not herself participate in the consolidated case.  The question was whether her personal disqualification would be imputed to the entire six-lawyer defense firm — especially considering the fact that the defense firm had quickly put up an elaborate ethical screen."
  • "The magistrate judge held that the paralegal’s disqualifying conflict would not be imputed to the rest of the firm. Comment [4] to New Mexico’s version of the conflict imputation rule, Model Rule 1.10, says that the disqualification rules do not 'prohibit representation by others in the law firm where the person prohibited from involvement in a matter is a non-lawyer, such as a paralegal or legal secretary. However, the defense firm’s continued representation of its employer clients was doomed anyway, because the magistrate judge held that even the comprehensive screen the firm proposed 'would not be effective'  — in part because the firm was just too small."
We've seen several stories about IP-related matters. Here's another: "Motion To Disqualify Law Firm Is Granted" --
  • "Plaintiff accuses defendant’s NAND flash products of infringing eight patents. Two of the attorneys in that firm were previously employed by Weil Gotshal & Manges where the represented defendant in seven patent cases and a trade secret case focused on NAND flash technology.  The court finds that the current representation is substantially related to the prior NAND flash and trade secret cases. The law firm is disqualified."
Finally, from Canada comes an interesting conflicts update and extensive analysis: "The “bright line” rule is dimmed by the Alberta Court of Appeal in Statesman" --
  • "Joint retainers are common in modern legal practice. But what happens when a dispute is brewing between two parties represented by the same law firm? How is a lawyer to know when the “bright line” of conflict of interest has been crossed? And when the duty of loyalty to a client is breached, when is disqualification of the law firm an appropriate remedy? The Alberta Court of Appeal addressed these issues in Statesman Master Builders Inc v Bennett Jones LLP, 2015 ABCA 142 (“Statesman”)."
  • "The Court of Appeal discussed the duty to avoid conflicts of interest in the context of the “bright line” rule set out by the Supreme Court of Canada in R v Neil, 2002 SCC 70 (“Neil”). The bright line rule prohibits a law firm from representing one client whose interests are directly adverse to the immediate interests of another current client, even if the two mandates are unrelated, unless both clients consent after receiving full disclosure."
  • "The Court of Appeal said that the bright line rule appeared “at first glance” to apply because Statesman was still a client of the Law Firm when Matco commenced planning its legal strategy in the oppression action. The Court of Appeal, however, emphasized the limitations of the bright line rule..."
  • "In the absence of the bright line rule, there was no evidence that the Law Firm’s representation of Statesman on the builders’ lien matter was materially and adversely affected during the “short overlap” between Matco first discussing the oppression action with the Law Firm, and the termination of Statesman’s limited retainer."

Friday, May 29, 2015

Risk Update: The Insurance Insights Edition (Malpractice & Cyber)

Two updates on the subject of insurance. First, likely a moot point already addressed by our compliant readership, but still interesting, from Thompson Hine: "Do you know your rule on malpractice insurance disclosure?" --
  • "Only one jurisdiction in the nation — Oregon — requires lawyers to carry legal malpractice insurance.  But all the other states have varying requirements about malpractice insurance and disclosing whether or not you carry it.  Knowing the rule in your jurisdiction is vital to staying out of ethics trouble."
  • The ABA’s comprehensive state-by-state chart.
  • "Ohio, for instance, is one of only seven jurisdictions that require lawyers (with certain exceptions) to inform a client directly if they do not carry a certain level of malpractice insurance.  And Ohio lawyers who fail to communicate that fact to their clients have been reprimanded, and even suspended (at least when the failure to disclose is coupled with other misconduct).  The other states with disclose-to-clients requirements are Alaska, California, New Hampshire, New Mexico, Pennsylvania and South Dakota."
See the full article for discussion on whether disclosure requirements are a good thing or not. And see BNA's update on: "Think You Don’t Need Cyber Insurance? Think Again!" --
  • "Big Law is a big target for cyber thieves, experts warn. For starters, law firms are viewed by criminals as low-hanging fruit — because firms are perceived as having “relatively lax security as compared with their sophisticated corporate clients,” said Roberta Anderson, a partner at K&L Gates,  and co-founder of the firm’s Cyber Law and Cybersecurity practice group."
  • "Negligent acts, as well as internal and external hacktivists, are also typically covered — 'for example, an attorney mistakenly emailing a non-encrypted file full of Health Insurance Portability and Accountability Act [HIPAA] information to a third party, and for an external event through a phishing attack and/or a rogue employee event,' said New York-based Joe DePaul, senior vice president, Finex North America Cyber and E&O team, Willis Americas Administration Inc."
  • "'Thinking that cyber insurance policies are all the same and will automatically respond to any cyber event, regardless of the cause,' said Selby. 'The devil is in the details, and law firms should carefully consider their unique cyber risk profile and ensure that their cyber coverage provides adequate protection against those risks,' she said. Working with an experienced cyber broker, and possibly coverage counsel, is highly recommended.'"
See the full article for discussion on recommendations for what cyber insurance should cover. And see our previous post from Paragon on reputation coverage specifically.

Thursday, May 28, 2015

Shepherd and Wedderburn Invests in Matter Intake, Compliance & Lawyer Visibility

Shepherd and Wedderburn, a leading UK law firm with offices in Edinburgh, Glasgow, Aberdeen and the City of London, has selected Intapp Open and Intapp Flow to increase visibility across firm-wide software systems and business processes.
Shepherd and Wedderburn will be using Intapp Open to modernise its matter intake system, enabling the risk team to monitor compliance more effectively and reducing administrative burdens on lawyers and support staff. In addition, Shepherd and Wedderburn is implementing Intapp Flow to automate business processes such as matter closing, to enhance business efficiency.
Said the Firm's IT Director, Paddy Toner:
  • "Given the increased focus on risk and compliance across the legal industry, we wanted a single application that could give us visibility into the entire matter intake process, and standardise how we manage other workflows. Intapp Open and Intapp Flow provide us with a modern, industry-standard approach to monitor, report and analyse business processes throughout the firm."
    "Intapp Open also offers our lawyers better visibility into the status of new matter requests."

Aurora North Software, a certified full-service Intapp partner, is leading the implementation with Shepherd and Wedderburn and conducting a series of training sessions.

Shepherd and Wedderburn's decision follows its successful implementation of Intapp Wall Builder, which the firm uses to manage security of sensitive client data. The firm implemented Wall Builder last year to replace ad hoc, manually intensive approaches with a single interface that enables organisations to centrally control, monitor and report on the entire confidentiality lifecycle.

Said the Firm's Application Manager,  Steve Dalgleish:
  • "We've been impressed with how effective Intapp Wall Builder has been in simplifying how we manage and protect client data – increasing information security without involving IT at every step. We look forward to applying the Intapp approach to our matter intake process and other workflows, which will improve visibility, standardise processes, and increase business efficiency."

Visit for more information on Intapp Open new business intake and conflicts management software, or to request a demonstration.

Wednesday, May 27, 2015

New York Event: CNA Large Law Risk Management Forum

Our colleagues at CNA write in with an invitation to attend their upcoming large law risk management forum, designed for firm management and senior risk professionals:
  • "We are pleased to invite you to a complimentary seminar focusing on law firm risk management. The seminar will feature multiple panels addressing today’s emerging law firm risks from various perspectives:
    • Trends in lawyers professional liability claims
    • Business continuity/business interruption planning
    • Information risk trends
    • Cyber event response
  • "CNA is the leading professional liability insurer of law firms in the United States, with more than 50 years of experience in providing insurance solutions and risk management services to law firms and attorneys."
The session is set for Wednesday, June 17, 2015 (1pm - 5pm) and features law firm speakers from Hunton & Williams, Fried Frank, Harris Beach, Baker Hostetler. For additional information and to RSVP, please see CNA's official invitation.

Monday, May 25, 2015

"Preposterous" Conflicts (Potentially Important Precedents)

Significant ink spilled in recent days on a conflict accusation facing Kirkland and Ellis. First, Kirkland responds to Mylan's disqualification attempt: "Kirkland Blasts 'Preposterous' Mylan Conflicts Claims Ahead of Hearing" --
  • "Kirkland & Ellis came out swinging this week against a lawsuit alleging that it ignored a conflict of interest by advising Teva Pharmaceutical Industries Ltd. in Teva's ongoing $42 billion bid for rival drugmaker Mylan N.V."
  • "Mylan's May 7 preliminary injunction motion, the firm says, is 'an unwarranted attack on the integrity and reputation of real people at Kirkland.'"
  • "In a statement earlier this month, Kirkland insisted that Mylan signed a conflicts waiver that covers the firm's representation of Teva. Monday's brief fills in the details, describing several cases in which Kirkland represented Teva and other companies that were adverse to Mylan without triggering any suggestion of a conflict."
But what's most interesting is the commentary on the pages of the Wall Street Journal: "Dealpolitik: Why Lawyers Need to Care About the Mylan-Kirkland Battle" --
  • "But sometimes it gets complicated, particularly in the corporate world where lawyers have many clients which in turn have many interests.  Big firms try to manage the issue by asking sophisticated clients to give their consent to some conflicts."
  • "Kirkland represents subsidiaries of Mylan, apparently in connection with some intellectual property litigation.  (Much of the court filings are filed under seal or redacted so the details of some of the dispute remain confidential.)  How can it then represent Teva in an attempted takeover of Mylan?  This where a law firm’s conflict management comes in.  Adverse representations can be permitted if the client has given informed consent."
  • "Mylan acknowledged in a court filing it gave consent to Kirkland in its engagement letter for certain adverse representations.  The consent is limited to matters which “are not related to the legal services that” Kirkland provides to Mylan.  In my own experience, this kind of generic waiver is commonplace at large firms, particularly those that have a significant takeover practice."
  • "Mylan’s position has far-reaching implications for takeover law firms.  Almost any representation of a corporate client involves its commercial and other strategies.  If the federal court throws Kirkland out of the deal, the decision could create doubt as to whether any law firm could work on a takeover fight where a client, or even a former client, is on the other side.  That outcome could be jarring to a number of large firms that have hundreds of clients but also have a thriving M&A practice."

Wednesday, May 20, 2015

Book Review: Conflicts of Interest in the Practice of Law: Causes and Cures

Intapp principal consultant and legal industry veteran Alexa Kokinos writes in with her review of Richard E. Flamm's latest: "Conflicts of Interest in the Practice of Law: Causes and Cures" [direct link to complete review] [publisher's web site] --
  • "In Conflicts, Flamm surveys the development of conflicts of interest in the United States as a history where simple principles confront the complexity of facts, circumstances and interpretation."
  • "Conflicts offers a comprehensive, extensively researched examination of ten different aspects of conflicts rules and law, ranging from 'Concurrent Conflicts of Interest' to 'Conflicts Involving Former Clients,' 'Attorney-Client Relationships,' and 'Consent.'"
  • "Model Rule 1.9 on conflicts involving former clients, for example, states that a lawyer shall not 'knowingly represent a person in the same or substantially related matter.'"
  • "Flamm devotes two chapters overviewing how federal and state courts interpret 'substantially' and 'related' differently. When considering whether a conflict arises with prospective clients, a party alleging a conflict claim is expected to show that counsel went beyond 'initial and peripheral contacts' by acquiring confidential information that could be 'significantly harmful' to the prospective client."

Tuesday, May 19, 2015

Time On Your Side? (Sometimes, Sometimes Not) – Conflicts, Disqualifications & Billing Records

Several interesting updates to share. First up: "Tensegrity DQ'ed in Suit Against Former Weil Client" --
  • "It's been nearly 10 years since Matthew Powers and Steven Cherensky handled patent and trade secret cases for Micron Technology Inc. while working at Weil, Gotshal & Manges. But on Friday they were disqualified from a case against Micron and their former law firm over the same NAND flash technology. Despite the passage of time and updates to NAND, U.S. District Judge Richard Andrews ruled there was still too much risk that Micron's confidences could be used against the company."
  • "'In addition, the fact that Messrs. Powers and Cherensky might be required to depose and cross examine the very same witnesses they previously represented creates the appearance of switching sides,' Andrews wrote in Innovative Memory Solutions v. Micron Technology."
  • "It's the second time Powers has been disqualified from a case against a former client since leaving Weil Gotshal in 2011 to launch Tensegrity Law Group, a plaintiff-side intellectual property firm. Powers represented numerous big technology companies during his 18 years at Weil, so steering clear of conflicts at Tensegrity has posed some challenges."
  • "Powers and Chernesky billed 4,000 hours on patent and trade secret cases for Micron and Lexar, a company Micron acquired in 2006, according to Andrews' opinion. Micron intends to argue that the Innovative Memory patents can be traced to confidential trade secrets that leaked from Lexar, so that previous representation is directly at issue, Micron argues."
Next: "Sydney law firm ruled to be in conflict" --
  • "A Nova Scotia Supreme Court justice has ruled a Sydney law firm made a mistake in accepting a retainer from a client involved in a land dispute with another client represented by the firm. In a decision released Wednesday, Justice Frank Edwards granted the application by Jacqueline Lappin that the firm of Sampson McDougall was in a conflict and should not represent another client with whom Lappin was embroiled in a land dispute."
  • "In September, construction began and Lappin contacted senior and founding partner of the firm, Robert Sampson, who advised she had a good case for establishing an easement and that he would speak to the previous owner of the property. Further, Sampson said he would write to Bauer demanding he halt the construction of the fence."
  • "In a conversation with a firm representative later in the month, Lappin was advised the firm was in a conflict and would not be able to represent her."
  • "There is no evidence that, prior to accepting the respondent's (Bauer) retainer, Sampson McDougall conducted a conflict check and satisfied itself that it was not in possession of confidential information from the applicant (Lappin)," Edwards wrote, adding that from the outset he would disqualify Sampson McDougall on the basis of having represented Lappin in 2010...He said the evidence of Lappin was clear in that she considered herself to be an ongoing client of the firm, and that contact with firm members was in accordance with that belief."
Finally: "Billing Records Are Confidential Even if They Contain No Legal Advice" --
  • "Billing statements are 'confidential communications' within the meaning of California's attorney-client privilege statute and thus categorically exempt from disclosure under the state's public records law, the California Court of Appeal, Second District, held April 13."
  • "The ruling—which answers a question of first impression that has divided courts around the country—denied a petition that the ACLU of Southern California filed after Los Angeles County officials rejected an open records request for the billing invoices of law firms to which the county paid nearly $40 million in a single year to defend it against a spate of police brutality lawsuits."
  • "Writing for the court, Justice Richard D. Aldrich said the county validly invoked a statutory exemption that applies to records containing confidential communications protected by the attorney-client privilege."
  • "The court said there was no controlling case law on “whether billing statements qualify as privileged communications” under Cal. Evid. Code §952, which codifies the attorney-client privilege."

Monday, May 11, 2015

In Conversation: The Business Case for Investing in Business Acceptance (or How to Succeed in Business Intake with a Bit of Trying)

Here's another interview piece: "Intapp In Conversation – Business Acceptance: The Case for Investment" -- James Perkin, COO at Procopio sits down with Pat Archbold, head of Intapp's risk practice group. Jim discusses the drivers behind his firm's decision to invest in enhancing intake and conflicts management.

Topics include:
  • Efficiency drivers
  • The lawyer experience
  • Supporting AFAs and pricing initiatives
  • Product evaluation considerations
  • Benefits of a best-of-breed solution vs. bundled practice management tools


  • Pat:
    • "Good point about looking at the overall picture. I think in many case intake projects have been led by people in the risk. The historical question is 'Can we take this on?' and maybe not 'Should we take it on?'"
    • "Traditional workflow tools focus on routing a form from Point A to Point B, but they don't really leverage that underlying data both from an efficiency perspective, and to support the strategic use of information, like for pricing."
  • Jim:
    • "I think all firms are looking for the holy grail of a system that pulls everything together and works together seamlessly. Our philosophy is to get the best in breed in each area. That can be accounting, that could be conflicts, client intake, etcetera. That's been our approach."
    • "We looked at best in breed and the way Intapp integrates intake and conflicts. And we made the decision that we would have both modules under one roof, as opposed to two separate entities. So we’re now moving conflicts from Elite into Intapp over the next six to eight months."
    • "As far as in what we're using and from a financial point of view, I think we've got to have our intake smarter. We actually look at accounts receivable now."
    • "We selected Intapp Open because we want to do this more efficiently while also have a lot more direct control over the software versus a system like Metastorm."
    • "We want to get ahead of the game by knowing how we can price based on history through the database because we all understand a lot of the clients are ahead of us on this through their e-billing systems. They're coming to us and telling what we can charge for a matter. I think we're all trying to catch up quite fast on how to get ourselves ahead of the game here."
The complete article is definitely worth a read..

Wednesday, May 6, 2015

Interesting InfoSec Updates: Breaches, Disclosure Duties, Ethics Opinions & More

Several interesting updates on all things law firm information security to share. First: "Cybercrime at Firms Triggers Ethical Duties" --
  • "Law firms of all sizes are falling prey to hackers and Internet scams. Now the New York City Bar Association has released an ethics opinion clarifying that lawyers must report hacking or other breaches of their computer systems."
  • "The opinion makes clear that lawyers don’t violate their ethical obligations by reporting cyberfraud to enforcement authorities. The opinion also emphasizes that law firms must tell clients if their interests might be at risk."
The Association of Certified E-Discovery Specialists (ACEDS) has some interesting commentary on the same topic: "Tension between client confidentiality, public disclosure stifling law firm cyber-breach reporting" --
  • "As cyberattacks on law firms increasingly take on an air of inevitability, though their accounts are largely anecdotal, new questions center on how to respond to breaches of sensitive materials and how to responsibly disclose these incidents without jeopardizing client relationships, and running afoul of professional codes."
  • "Citigroup, for example, recently told its employees in an internal report that law firms are vulnerable hacking targets because they are clearinghouses of high-value information and possess relatively weak security measures, according to The New York Times. The Citi memo also said that law firm security generally falls below the standards of other industries — and pointed to a reluctance by law firms to publicly disclose breaches and the absence of formal reporting requirements in the legal field as reasons for silence."
  • "Attorney Gary Kibel, a partner at Davis & Gilbert, poses a hypothetical scenario. 'What if you had a breach of a client’s files, and that breach involved personal information of the client’s customers? Now what if there’s a requirement that you have to go tell the customers your firm was in possession of the client’s files in the first place? I have no doubt that some law firm is going to be faced with this at some point,' Kibel told ACEDS. 'We’re all going to have to research this information carefully or make an appeal to the state bar associations,' he said. 'I suspect that compliance of the law is going to trump attorney-client privilege — and that the client is going to be very perturbed.'"
  • "Right now I think there are a lot of law firms that just are not aware of how serious the threat can be. It’s still the mentality of, 'This can’t happen to us'," said Dana Post, special counsel for e-discovery and data management at Freshfields Bruckhaus Deringer, at a recent ACEDS New York chapter panel discussion on cybersecurity. Client pressure may prove to be among the most powerful forces in prompting law firms to bolster their security practices. Prospective clients are starting to ask about information security when shopping for legal representation, Post explained. 'he smart clients already ask the questions,' she said. 'But more are coming.'
  • "The inherent tension between maintaining client confidentiality and disclosing breaches where client confidences are directly at issue shows no signs of easing. As lawmakers eye legislation that would impose reporting requirements on breach victims, that conflict may be coming to a head."
It's these trends and shifting requirements that inform calls like this recent piece from Ryan Schlunz, Chief Innovation Officer, Stoel Rives: "It’s Time To Get Serious About Law Firm Cybersecurity" --
  • "Imagine if there were only two types of law firms in the United States today: those who have experienced a data breach and those who don’t yet know they have experienced a data breach. This scenario is actually not far from reality, and for most AmLaw 200 firms it is likely already accurate. However, many law firms don’t yet appear to appreciate the scale of the threat."
  • "Patent and insider deal information are not the only types of information at risk of cyber-attack. Stolen healthcare data sells for as much as $10 per medical record on the black market, and has fast become more valuable than credit card information. Even those firms who do not store healthcare and financial data, or data related to mergers & acquisitions or patents, are at risk of hackers coming after client information that could help them hack into client systems It’s time for law firms to wake up and make cybersecurity a top priority at all firms."
  • "How law firms ensure the security of data is already a critical issue for all clients. Having data security procedures in place – such as regular client audits that prove that data is secured properly – is quickly becoming an industry standard. Regulatory requirements are likely not far behind. It’s time for all law firms to get serious about cybersecurity." 

Tuesday, May 5, 2015

Law Firm Disqualifications (Pursued or Achieved) Making News

First up, the case of the "Cat Came Back" -- "North Carolina Business Court: What Part Of Disqualification Do You Not Understand?" --
  • "The disqualified law firm had asked Judge Bledsoe to clarify his Order disqualifying it from representing the Plaintiff Kingsdown.  That was due to the firm's past representation of Defendant Hinshaw (the corporation's CEO) on a personal basis in the transactions which were the heart of the lawsuit."
  • "The law firm was not giving up its representation of its corporate client easily.  The Court's disqualification Order said that the law firm was disqualified from "further representation of Kingsdown in this matter against the Hinshaws."  Op. ¶56.  How far did the prohibition of that Order really go? The law firm argued that it should be allowed to continue in its role as Kingsdown's regular corporate counsel and to advise Kingsdown on the litigation against Hinshaw without appearing as counsel of record, so long as it did not disclose any of the confidential information it had obtained in the course of its representation of Mr. Hinshaw.
  • "Judge Bledsoe shot that argument down quickly.  He said: 'To the contrary, the Court intended that the Firm would cease all representation of Kingsdown adverse to the Hinshaws in this matter, whether as litigation counsel or otherwise. The Firm’s failure to satisfy Rule 10(b) of the Rules of Professional Conduct and the appearance of impropriety created by the Firm’s representation of Kingsdown do not disappear simply because the Firm is no longer counsel of record – as corporate counsel, the Firm is still representing a current client (Kingsdown) adverse to a former client (the Hinshaws) in a substantially related matter, and the ethical concerns attendant to that representation, including the appearance of impropriety, remain.'"
  • "So it looks like this entire lawsuit is radioactive to the law firm, despite the law firm's protestations that its client is being deprived of the counsel of its choice.  The Court responded to that point by saying that: 'the right of one to retain counsel of his choosing is secondary in importance to the Court’s duty to maintain the highest ethical standards of professional conduct to insure and preserve trust in the integrity of the bar. Avoiding a conflict and the appearance of impropriety are the best solutions.'"
"Affiliate Representation, Advance Waivers, Appearance of Impropriety, and Purloined Documents" --
  • "In short, the court determined that 'the facts weigh in favor of the conclusion that [subsidiary] and [parent] are a unified client. Hogan Lovells has advised [parent] on strategic decisions in matters that impact the entire corporate family, [parent] and [subsidiary] share the same legal department, and the company considers Hogan Lovells to be both its and its subsidiaries’ top strategic firm.' The court’s conclusion that the law firm represented both parent and subsidiary meant that the firm was engaged in a concurrent conflict of interest in the litigation at hand."
  • "The court stuck to this conclusion even over the parent’s signed representation agreement with the firm in 2005 stipulating to 'Client Identification' as follows: ‘You agree that the person or entity identified as engaging us in the Transmittal Letter is our client for the specific matters on which we are engaged, and that we shall not be deemed to represent any of its parents, subsidiaries, or other affiliates unless we expressly agree in writing to do so.'"
  • "The court disregarded this agreement because “the behavior of Hogan Lovells, [parent], and [subsidiary] since 2005 implies that all three understood Hogan Lovells was more than just [parent]’s law firm. Hogan Lovells’s relationship with [parent] may have started with the parent company alone, but its later representation of [subsidiary] and at least one other subsidiary . . . shows the expansion of their attorney-client relationship."
"Caesars Creditors Try to Disqualify Kirkland" --
  • "The committee has asked a judge to disqualify Kirkland, claiming the firm is conflicted because it has represented the casino company’s majority owners, Apollo Global Management LLC and TPG Capital, on unrelated matters. The committee is also claiming that the firm improperly received almost $10 million in fees on the eve of the company’s Jan. 15 bankruptcy."
  • "Bankruptcy is costly, and the spat over Kirkland is running up the bill. The firm said in court papers that it spent almost $10 million in the first six weeks since Caesars filed for bankruptcy. The disqualification fight will add to the cost without moving the case closer to a resolution."

Monday, May 4, 2015

Conflicts News: Laterals, Waivers (or Not)

Several Monday updates to share. First, Pinhawk’s Jeff Brandt highlighted this ABA article on the increasingly complex lateral risk landscape, noting that data about lateral-driven malpractice claims highlights "the importance of a *great* conflicts system" – "Malpractice concerns spark heightened scrutiny of lawyers switching firms" --
  • "As law firms have become more wary about ethics considerations in making lateral hires, experts say the process of switching legal employers has become more complex."
  • "A major cause for the increased focus on ethics when it comes to hiring laterals is that a significant percentage of malpractice claims against firms are related to newer hires. 'Our malpractice carrier tells us that a disproportionate number of claims that member law firms report come from lateral attorneys—attorneys with less than five years with the firm,' says Timothy W. Callahan II, general counsel at Saul Ewing in Philadelphia."
  • "'Every time a law firm hires a lateral, that lateral brings with him or her some potential conflicts that may either affect the firm's ability to continue to rep-resent current clients or prevent the firm from representing some potential clients,' says Peter A. Joy, who teaches professional responsibility at Washing-ton University School of Law in St. Louis and has consulted with several law firms about conflicts issues arising from laterals. 'Potential conflicts are the major reason why law firms are more ethics-wary in hiring laterals. No law firm wants to see itself disqualified from continuing to work on a case in which it has invested time and its client has invested a lot of fees. In some instances, the law firm may have to return some of the fees earned—or if it is a contingency fee case, the firm may lose out on a fee.'"
And several sources are covering the case of allegedly waived alleged waiver: "Drug Maker Mylan Sues Law Firm Kirkland & Ellis" --
  • "Mylan NV sued Kirkland & Ellis LLP over the law firm’s role advising Teva Pharmaceutical Industries Ltd. , which is in a bitter takeover battle with the drug maker. Mylan said in a complaint, filed in Pennsylvania state court late Friday, that because Kirkland has represented the company in the past, it should be barred from working for Teva, which last month launched a $40 billion public bid that Mylan has rejected."
  • "'We are confident in the propriety of our representation of Teva Pharmaceutical in this matter,' Kirkland said in a statement. 'We have a written conflicts-waiver letter, signed by Mylan, regarding the work we have done for Mylan. These filings are without merit, and are simply tactical measures designed to impede the proposed transaction.'"
  • "According to the lawsuit, Mylan has had a relationship with Kirkland since January 2013, and the law firm has had " wide-ranging access to Mylan's business," including confidential information about its drug pipeline, pricing strategy and prospects for regulatory approval. The information allegedly includes details about Mylan's EpiPen allergic-reaction treatment, which Teva is now targeting with a competing product. Such information is typically considered valuable for a company pressing a takeover bid, helping it determine, for example, how much to offer and whether regulators will sign off."
  • "Suing a former adviser in a takeover battle is a rare move. Airgas Inc. in 2010 sued Cravath, Swaine & Moore LLP for representing Air Products & Chemicals Inc., arguing that Cravath's previous relationship with Airgas should have prevented it from working on the potential deal. That case was eventually settled on confidential terms after Air Products abandoned its bid. Cravath is now advising Mylan."

Tuesday, April 28, 2015

Engagement Letters: Firsthand Industry Perspectives

We've had a very engaging week on engagement letters so far. It's a topic that's resonating with the community, so it's fitting to continue the discussion. The Willis industry risk report we noted previously also includes commentary on engagement letters from several industry experts:

Glenda West, Willis Head of UK PI Claims: "Partners should at the very least check the engagement letter on every matter. The task should not be delegated solely to an associate or a member of the risk team given its importance. When there is a professional indemnity claim, the first thing insurers will look at is the scope of the retainer – what the firm was instructed to do and sometimes more importantly what the firm was not instructed to do."

David Halliwell, Director of Knowledge, Risk and Legal Services at Pinsent Masons: "Client engagement risks are very high up the agenda for us, so a lot of our work involves making sure that client identification and conflict checks are always undertaken and that appropriate engagement terms are in place. If you get that right at the outset then you save yourself potential time, effort and trouble down the line, because you’ve absolutely clarified what you will be doing, what you won’t be doing, who you will be doing it for, when you need to get it done by, what you are going to get paid and how. This is so important that we recently centralised the responsibility for conducting money laundering checks to the risk team and removed it from the operational team."

Chris Perrin, Executive Partner & General Counsel at Clifford Chance: "A risk that has really risen up the agenda is the terms of engagement certain large buyers of legal services seek to impose on law firms. We are increasingly seeing provisions in these that are unacceptable to us, such as being responsible for third parties we instruct on behalf of the client or providing an indemnity in respect of any error (as opposed to being liable for the usual measure of damage). Here at Clifford Chance the rule is that these sorts of terms of engagement must be reviewed by me or my team so that we can get consistency in what the firm will sign up to."

(For those that may have missed it, the recorded demo of automating engagement letter management is online here.)

Monday, April 27, 2015

Improving Engagement Letter Management (Webinar Recording Online)

Yesterday, we highlighted the Willis risk management survey report, which noted: "...a clear lack of consistency in establishing clear terms of engagements and undertaking client due diligence when retaining clients." This jibes with other conventional wisdom – see for example past coverage, such as the colorful commentary on this exact topic from US General Counsel at Dentons and former GC at Jackson Kelly.

Now from Intapp comes a recorded engagement letter webinar highlighting how Intapp Open enhances this important piece of business acceptance. It runs about 10 minutes and includes a software demonstration showing automating engagement letter creation.

Intapp Open makes it easy to broaden the use of engagement letters by tightly integrating and automating drafting and tracking activity as part of new matter inception. This allows organizations to increase the overall use of engagement letters, to reduce risk and protect revenue, while increasing internal efficiency and lawyer satisfaction by reducing overhead associated with traditional business intake processes. It:
  • Automatically generates draft engagement letters for new matters, using data gathered during the normal intake process (or additional detail gathered through questions integrated into normal form/workflow activity)
  • Supports multiple templates, using the relevant option based on firm-defined business rules (e.g. matter type, geography, jurisdiction)
  • Integrates document assembly, leveraging a firm’s existing investment in HotDocs or ContractExpress; or allowing organizations to secure a document assembly tool licensed for engagement letters
  • Manages review and approval of draft letters as part of the overall new matter review and intake process
  • Attaches generated letters to intake requests, creating a clear record and audit trail
Click here to access the recording.

Sunday, April 26, 2015

Risk Management Survey Report: Priorities, Attitudes & Approaches

Global insurance broker Willis has published: “Risk Barometer: A Study on how Attitudes And Approaches to Risk Management differ between U.K. Law Firms.” While the report focuses on the UK, the topics covered and findings are sure to be of interest regardless of your geography.
  • “This report aims to identify which risks concern U.K. law firms most and what strategies are being adopted to mitigate them. The report includes the following:
    • What keeps risk managers awake at night?
    • What are law firms doing to mitigate risk?
    • The role of insurance in risk management
    • How much resource should be allocated to risk management?”
On Risk Investment Levels
  • "Our survey data reveals that, on average, law firms with over 100 Partners dedicate 1.2% of total revenues to risk management."
  • "Three quarters of surveyed firms with more than 100 Partners plan to increase investment in risk management during the next 12 months." 
On Client Risk, Engagement and Terms of Business
  • "31% of surveyed law firms with over 100 Partners identified claims risk as their number one risk, more than the proportion citing any other area of risk. This is likely a direct result of the surge in claims against law firms in 2014. High Court data reveals 418 professional negligence claims were issued against UK solicitors in 2014, almost three times the number in 2013."
  • "Despite the importance of claims risk to UK law firms, our survey data reveals a clear lack of consistency in establishing clear terms of engagement and undertaking client due diligence when retaining clients."
  • "For example, only 76% of surveyed law firms with more than 100 Partners always ensure their work does not stray beyond the scope of their PII cover. Even less (62%) always ensure lawyers are adequately supervised and only 48% always define the scope of the retainer."
  • "Our survey data reveals that a large number of law firms are not undertaking relatively simple risk management measures as a matter of routine whenever clients are retained. This is surprising given claims risk was frequently identified as the top risk facing U.K. law firms."
  • "While nearly every surveyed law firm checks for conflicts of interest as part of CDD, a smaller proportion undertake other vital CDD checks or relatively simple client engagement procedures. For example, only 76% of law firms with over 100 Partners always ensure work does not stray beyond the scope of PII cover, only 62% always ensure lawyers are adequately supervised and only 48% always define the scope of the retainer."
On Information Security and Confidentiality Management
  • "Some 19% of surveyed law firms with more than 100 Partners identified cyber attack as their greatest risk, making it the joint-second most frequently cited risk behind claims risk... Encouragingly, 87% of surveyed firms with more than 100 Partners are currently strengthening internal data protection and client confidentially systems related to human processes."
  • "Almost 90% of surveyed law firms with over 100 Partners are strengthening internal data protection and client confidentiality systems related to human processes. This is the most common risk management initiative currently being undertaken by U.K. law firms with more than 100 Partners."
  • "The growing cyber threat has also forced a number of law firms interviewed for this report to seek ISO 27001 accreditation. This enables them to demonstrate to their clients that they are adopting best practice cyber security procedures."
On Anti-Money Laundering Compliance
  • "It comes as no surprise that over 90% of surveyed law firms of all sizes review the systems and controls in place to avoid the misuse of client assets and improper use of clients’ money at least once a year. However, our survey data reveals a wide discrepancy in the regularity of anti-money laundering training provided to fee earners – 52% of surveyed law firms with over 100 Partners provide anti money laundering training to fee earners less frequently than annually."
The full report, freely available from Willis, runs 48 pages and provides a wealth of additional detail, including data covering smaller firms and information on insurance trends.

Wednesday, April 22, 2015

Breaking Risk News: The "Appearances and Matters" Edition


Several updates on the theme appearance. First: "'Appearance of impropriety' is now dead in Kentucky" --
  • "In any event, the former Model Code included Canon 9, which stated 'A Lawyer Should Avoid Even the Appearance of Impropriety.' While not actually a Disciplinary Rule, the 'appearance of impropriety' was 'a favorite of some courts, which quoted it with great frequency over the years,' as Ronald Rotunda and John Dzienkowski note in their useful treatise, Legal Ethics — The Lawyer’s Deskbook on Professional Responsibility.  It was especially used as a basis for disqualifying lawyers for a broad range of conduct, ranging from conflicts to other kinds of misconduct."
  • "Earlier this month, in Marcum v. Scorsone, the Kentucky Supreme Court overturned 18 years of precedent, holding that 'disqualification based on an appearance of impropriety is inappropriate under the existing Rules of Professional Conduct,' and that if that were the standard, 'all the former client has to do is claim discomfort with the subsequent representation to create the appearance that something untoward is going on …'  Moreover, the court said, the standard 'creates the impression that courts are ruling based on appearances rather than facts.'"
  • "So the appearance of impropriety is dead — at least in Kentucky.  If faced with a disqualification motion — or if making one — you should research carefully to see how courts in your jurisdiction treat the old standard.  It will make a difference in how easy or hard it might be to prevail, whichever side of the motion you are on."
Next, from the fictional side, we were admittedly a little late to the Breaking Bad universe, but are tickled at the various coverage of "The Ethics of Saul Goodman," as flagged and further linked in the Legal Ethics blog. Turns out, one can find detailed discussions on this topic (with the enthusiasm only rapid hybrid TV-legal scholar fans can muster), addressing questions like "Did Kim Violate Conflict of Interest Rules?" and "Digging Through the Dumpster." For those so inclined, enjoy. (I am the one who blogs.)

And finally, bridging from fiction back to reality (or hypothetical reality), from the New York Legal Ethics Reporter comes a lengthy analysis: "'Illegal' Conduct Under Rule 1.2: When Does Advice to a Client Violate an Attorney's Ethical Obligations?" --
  • "Many attorneys have experienced situations in which a client has sought advice about proposed actions which 'push the legal limit' or are even clearly illegal. How far—if at all—may attorneys go in assisting a client to engage in questionable activity?"
  • "At first glance, the New York Rules of Professional Conduct (NYRPC) appear to provide some clear guidance. Rule 1.2(d) prohibits an attorney from counseling a client to engage in conduct that the attorney knows is 'illegal.' [NYRPC Rule 1.2(d).] In practice, however, application of Rule 1.2(d) is not always straightforward... A close look at the application of Rule 1.2(d) demonstrates the difficulty of defining 'illegal' conduct under the Rule and why some guidance would be beneficial."
  • "An important source for interpreting the meaning of NYRPC 1.2(d) is the history of the Rule, which would also involve an examination of the ABA Model Rule. The ABA Model Rule 1.2(d) is nearly identical to New York’s Rule 1.2(d) with a very important distinction: the ABA uses 'criminal' in place of 'illegal.'"
  • "Some types of civil “wrongs” would certainly appear to fall outside of the rubric of “illegal” conduct under the Rule. A good example is breach of contract."
  • "Ultimately, the authors do not take a position on how extensive Rule 1.2(d)’s prohibition should be. But if the Rule is going to continue to use the term 'illegal' instead of 'criminal,' instruction on the meaning of 'illegal' would be beneficial."

Tuesday, April 21, 2015

Take the Disqualification, Leave the Cannoli

North Carolina Lawyers Weekly (subscription required) reports: "Blurred lines between corporate client and its CEO gets law firm disqualified" --
  • "In The Godfather, Michael Corleone assures his brother that 'It’s not personal, Sonny. It’s strictly business.' Law firms should take similar care to draw bright lines between work done for a business client and work done for the company’s officers in their personal capacities. A Greensboro law firm appears to have done a bit of both, and as a result was recently disqualified by the North Carolina Business Court from representing a longtime corporate client that’s currently suing its former CEO."
  • "Since 1987, Tuggle Duggins has served as corporate counsel for Kingsdown Incorporated, a mattress manufacturer based in Mebane that is suing its former CEO, Eric Hinshaw… In the decades that Hinshaw was CEO, Tuggle Duggins also advised him on several personal matters, including some now at issue in Kingsdown’s lawsuit. When Kingsdown brought its suit, Hinshaw moved to disqualify Tuggle Duggins as its counsel, arguing that he had a prior attorney-client relationship with the firm."
  • "But I must say no to you [ed: please give the NCLW headline writer a raise]… Bledsoe found this evidence lacking, however, since the firm conceded that Tuggle provided advice to Hinshaw but the firm never asked him for payment. 'Given the Firm’s provision of legal services to both Kingsdown and the Hinshaws without maintaining separate records to distinguish between the two, it comes as no particular surprise that the Firm's billing records do not reflect the Firm’s representation of the Hinshaws in connection with the transactions in dispute,' Bledsoe."
Complete decision here, for those with additional questions, just this once. (Such is the life we have chosen…)

Monday, April 20, 2015

Business Conflicts: One More Thing... Are You Feeling Lucky?

Following last week's discussion of advanced waivers comes discussion of the impact of business conflicts, the other side of the coin, in our backyard here in Silicon Valley: "In Google-Apple Rivalry, a Conflict Not Easily Waived" --
  • "Client conflicts can scuttle a lateral move, as any recruiter can tell you. But some conflicts run so deep, and are spread so wide, they split the entire Silicon Valley legal marketplace in two."
  • "For law firms, that reality requires calculations about the value of the business in hand versus other business that might be precluded. And for would-be laterals who do work for either company, it means recognizing that it may be hard, if not impossible, to move to a firm in the other camp."
  • "Only a few firms have done work for both companies since 2009: Morgan, Lewis & Bockius; Greenberg Traurig; O'Melveny & Myers; and Kasowitz, Benson, Torres & Friedman have handled intellectual property matters for each. Fish & Richardson has handled multiple litigation matters for Google, and has also done patent prosecution for Apple."
  • "The line between "Apple firms" and "Google firms" can put roadblocks in the way of partner movement, and narrow the field of options for would-be laterals. Recruiters tell stories of partners whose adversity to a big player boxed them out of just about every firm they were inclined to approach. In such cases, lawyers have little choice but to wait out the matter."
  • "Hiring a particular law firm can be tactical for large clients. By spreading work among elite law firms—and turning down conflict waivers—they limit the universe of firms their opponents can hire. Apple and Google have spread work to some 70 law firms since 2009, so lawyers need to step carefully."

Sunday, April 19, 2015

Events: Risk Roundtables (New York, Boston, Philadelphia & Dublin)

We're pleased to announce our upcoming Risk Roundtables set for New York, Boston, Philadelphia and Dublin.
Measure Twice, Cut Once: Improving the ROI in your COI (conflicts of interest) / business acceptance process
Evaluating new business becomes more and more challenging as firms grow. Client demands are changing and regulatory pressures continue to increase. Effective acceptance processes that deliver quick results and improve management visibility and control is critical to firm operations (and financial performance).
This session will discuss how firms are impacted by and responding to these new changes – and how they’re leveraging people, process and technology to deliver new value to their lawyers and clients. 
Industry expert, Meg Block, with Intapp, will provide an overview of trends and considerations facing firms looking to modernize their own practices, and share examples of different approaches organizations can take to execute these projects.
As always, we’ll have plenty of time for open discussion, peer exchange and networking.
Dates & Locations:
  • Friday, May 15th at the Boston office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
  • Thursday, May 14th at the New York City office of Cravath, Swaine & Moore LLP.
  • Wednesday, May 13th at the Philadelphia office of Post & Schell, P.C.
  • Thursday May 21st at the Dublin office of A&L Goodbody
Attendance is by invitation only and is limited to qualified law firms and personnel. Please contact for more details.

Thursday, April 16, 2015

The Cost of Risk – Malpractice Claims, Disqualifications & Sanctions

Two stories highlighting the costs. First, from The Recorder: "Legal Malpractice Claims Are Costing Firms Big Bucks" --
  • "Recent headlines from around the country reveal multimillion-dollar legal malpractice payouts, with firms facing big exposures arising out of predictable and avoidable problems. In difficult economic times, clients and former clients often look to attorneys—perceived as having deep pockets—to compensate them for failed businesses, lost homes or risky investments. This year, the number of large verdicts against attorneys confirms the risks of failing to follow effective risk management procedures for avoiding legal malpractice claims."
  • "Big firms face big risks. Unfortunately, neither the size of the firm nor the reputation of the attorney provides much insulation from legal malpractice exposure. Some of the bigger verdicts this year were against attorneys with excellent reputations who were part of well-regarded law firms."
  • "Oddly, it is often the most experienced attorneys with the best reputations that skirt firm protocols and ignore risk management procedures. Yet, according to the data, the attorneys who need to strictly adhere to risk management practices and procedures are experienced attorneys with significant clients and exposures. Big reputations backed by big firms do little to persuade a jury to find in an attorney's favor when the rules have not been followed or a mistake has been made."
  • "Conflicts of interest continue to drive up exposures. Juries do not like conflicts of interest, regardless of how they happen. In fact, even the appearance of a conflict of interest can, and often does, result in some of the largest legal malpractice verdicts."
  • "As these cases make clear, actions alleging a breach of the duty of loyalty result in stiff penalties for attorneys and law firms. There is no good substitute for clear conflict of interest identification procedures and effective protocols for documenting the resolution of identified conflicts."
  • "But not all the news is bad. Increasingly, legal malpractice data confirm that effective risk management procedures can substantially reduce these risks. These steps begin with effective client intake procedures and include conflict identification and resolution procedures."
Next, from DQED "Disqualification Retaliation: Sanctions for Seeking or Defending Disqualification" --
  • "The issue of disqualification can irritate many lawyers and judges.  For example, some fear that disqualification motions are invariably 'tactical' or 'strategic' moves that should be viewed with 'skepticism' and 'extreme caution.'  Others, however, tend to view the lawyers or firms at issue as ignoring their ethical responsibilities and rationalizing away clear conflicts of interest or other misconduct."
  • "Two very recent examples illustrate the infliction of sanctions. First, the Eastern District of Louisiana just concluded that a plaintiff had brought suit solely as a tactic to have his wife’s lawyers disqualified in a separate divorce proceeding and awarded attorneys’ fees as a consequence."
  • "Second, in an unpublished decision last week, the Second Circuit upheld a high-dollar attorneys’ fees award against Boies, Schiller & Flexner (BSF) for failing to withdraw (and instead making the opposing side file a motion to disqualify): ‘Host moved for sanctions on the grounds that BSF’s representation of Madison 92nd Street Associates, LLC (“Madison”) presented a clear conflict of interest in light of BSF’s earlier, substantially related representation of Host, and that BSF unreasonably refused to withdraw from its representation of Host until faced with a motion to disqualify. The district court agreed, concluding that '[a] clearer conflict of interest cannot be imagined” and that Host was entitled to fees and costs incurred in preparing the motion to disqualify BSF.’"
  • "As an interesting aside, although the district judge in her above ruling was clearly no friend to the large firm of BSF, she happened to be notably nice to another large law firm (namely, Sidley Austin, LLP) last week.  In short, the judge held that because Sidley screened a partner who had represented the other side in the same dispute, Sidley was not disqualified."