Friday, October 31, 2014

Risk News (the Halloween / New Jersey Edition)


A conflicts-related editorial coming out of the Garden State : "The Record: Lawyers' conflicts" --
  • "Imagine the fox is running the henhouse. Imagine the fox has ties to a poultry processing corporation. Now imagine you are the hen."
  • "That pretty much sums up where taxpayers stand in New Jersey as long as there is no conflict-of-interest law prohibiting law firms from working for state government while they are also employed as lobbyists trying to influence state government."
  • "While Republican Governor Christie's former top appointee at the Port Authority of New York and New Jersey, David Samson, is currently under the spotlight for possible conflicts of interest, Democrats and Republicans have taken advantage of this ethical loophole for decades."
  • "Samson, as former Port Authority chairman, voted for projects that also benefited clients being represented by his law firm, Wolff & Samson. And as reported by The Record, governmental affairs agents affiliated with the law firm lobbied the Economic Development Authority for clients while Wolff & Samson was the EDA's bond council."
  • "The scandal involving the George Washington Bridge has spawned numerous investigations – some related to the lane closures and others to the internal operations of the Port Authority. The bi-state agency would not be affected by a Jersey-only law, but Weinberg's bill would do much to put an end to a practice that too often is not in the spotlight."
  • 'Whether anything illegal occurred at the Port Authority during Samson's tenure as chairman has not been determined. But the ethical question can be answered now: Conflicts of interest should be eliminated and avoided."
  • "Weinberg said, 'The fact is that we have to put an end to this culture of influence-wielding, because we are paying a price for political favor-trading and governmental waste and abuse by individuals who seek to enrich themselves on the backs of taxpayers.'"

Thursday, October 30, 2014

Mergers, Conflicts & Waivers (Oh My!)


An excellent article published by the ABA/BNA Lawyers' Manual on Professional Conduct
"Clearly Enforceable Future Conflicts Waivers" --
  • "We therefore set out to write what we believe to be a future conflicts waiver letter that should withstand virtually any imaginable ethical or legal attack. This article is the result."
  • "Before turning to the letter itself, we will review three authorities from 2013 that uphold future conflicts waivers. After discussing these authorities, the article will first identify the general preconditions or helpful conditions for effective future conflicts waivers and then turn to the specific draft language."
And news of conflicts causing complexities: "Mintz Levin Looks to Poach Edwards Wildman IP Group"--
  • "Ahead of a looming merger vote with Locke Lord, a roughly 20-lawyer IP group from Edwards Wildman Palmer in Boston is poised to depart for Mintz, Levin, Cohn, Ferris, Glovsky and Popeo as a result of a conflict between their practice representing a large pharmaceutical company and Locke Lord’s work for a generic drug manufacturer, according to five sources familiar with the matter."
  • "The Am Law Daily has learned that David Conlin, cochair of Edwards Wildman’s IP litigation practice in Boston, is head of a team that's conflicted out of a merger with Locke Lord. One of Conlin’s biggest clients is Japanese drug giant Takeda Pharmaceutical Company, whose North American unit fended off a generic challenge to its oral antidiabetic agent Actos in 2006 with the help of Conlin. In subsequent years, Conlin has continued to handle IP litigation work for Takeda."
  • "Edwards Wildman declined to identify the lawyers affected by the conflicts issue or the case that it involved. The firm did, however, acknowledge the existence of an irreconcilable conflict. 'As is the case with any law firm merger, prospective client conflicts can be an issue,' said a statement provided to The Am Law Daily by Edwards Wildman. 'In this instance, we have identified a specific client conflict that would arise from the anticipated merger. As a result, some of our colleagues will be leaving the firm. We thank them for their contributions and friendship, and we wish them well in their new endeavors.'"

Wednesday, October 29, 2014

Law Firm Conflicts Cleared


"Judge Tosses Shareholder Suit, Finding No Counsel Conflict" --
  • "A federal judge in Newark has dismissed a shareholder suit claiming hotel operator Wyndham Worldwide failed to fend off breaches of its computer networks and then declined to litigate against the employees responsible for allowing the breaches based on advice from conflicted counsel."
  • "The judge rejected the plaintiff’s claim that the law firm representing Wyndham in the shareholder suit, Kirkland & Ellis, had a conflict of interest because it also represented the company in a separate suit related to the hacking incidents that was filed by the Federal Trade Commission."
  • "In an attempt to demonstrate Wyndham’s directors acted in bad faith, Palkon claimed that the company wrongly refused his litigation demand based on advice from conflicted counsel. He relied on Stepak v. Addison, an Eleventh Circuit case from 1994. In that case, a company’s outside counsel was found incapable of evaluating a shareholder demand because the same firm had represented the company in related criminal proceedings. The panel in Stepak found the law firm had divided loyalties to the client because its continuing duty to preserve the confidences of its clients in the criminal case hampered its investigation of the subsequent shareholder allegations."
  • "But Chesler said Kirkland & Ellis did not face the same conflict as the firm in the Stepak case because its obligations were to act in Wyndham’s best interest in both the FTC case and the shareholder case, Chesler said."
"Gibson Dunn Ducks Slap for 'Troubling Conduct'" --
  • "A federal judge considering conflict-of-interest claims against Gibson, Dunn & Crutcher sided Thursday with the powerful law firm. Though she said Gibson Dunn 'engaged in troubling conduct' in HLP Properties LLC v. Consolidated Edison Company of New York, U.S. District Judge Lorna Schofield found no need to disqualify its lawyers from the case."
  • "The finding comes in a lawsuit by Manhattan developer HLP Properties to make Con Edison's subsidiary pay $24 million for the cleanup of a site once known as the West 18th Street Gas Works."
  • "Though Schofield found that Gibson Dunn lawyers had met with Con Edison representatives about the environmental dispute "on at least four occasions" between those years, Con Edison's subsidiary did not cry foul about the alleged conflict until 2014."
  • "Schofield found "no indication of an actual or apparent conflict in loyalties," but said Gibson Dunn should have sought waivers from both parties to guard against the potential for one. The judge also suggested that Con Edison's lawyers may have drummed up controversy for "tactical" reasons. To avoid leaving HLP without its longtime legal team, Schofield refused to disqualify Gibson Dunn. 'Were it not for this consideration, the outcome of this motion might well have been different,' her opinion states."

Tuesday, October 28, 2014

Conflicts Management Software – Eversheds Goes Live with Powerful New System


  
Leading international law firm, with more than 4,500 legal and business advisers worldwide, Eversheds, has implemented Intapp Open software for conflicts management. Eversheds selected Intapp Open last year as part of a firm-wide programme to streamline business acceptance, and was recently shortlisted for the prestigious British Legal Awards 2014 "Best Use of Technology" award.
 
Now live and in production, the software has streamlined conflicts searches and accelerated the evaluation of new clients and matters for the firm. Using Intapp Open, the Conflicts and Compliance team at Eversheds now process an average of 160 conflicts searches a day, or approximately 42,000 annually.

 
  •  With 52 offices across 30 countries, Eversheds has a proven track record in conflicts management; however, its previous approach required lawyers to spend a great deal of time evaluating and responding to long, complex conflicts reports.
  • Since implementing Intapp Open, the administrative burden on lawyers and staff has been reduced significantly. By automatically filtering and cleaning the data generated by conflicts searches, Intapp Open has enabled the Conflicts and Compliance team to create simplified, shorter reports which rank potential conflicts in the order of priority, and eliminate clearly irrelevant results. The system also provides the firm's management with visibility of similar conflicts searches being initiated across different parts of the business, enabling partners to align across various practice areas and regions as needed.

Said the Firm's Head of Operations, Kerry Kendal:
  • "Once we switched the new system on, the benefits of using Intapp Open were immediately apparent to key stakeholders across the business – saving time and resources, reducing risk for the firm, and ultimately improving our responsiveness to clients,. The efficiency gains have allowed the Conflicts team to deliver an enhanced service, enabling lawyers to open matters faster, and enabling the Conflicts team to support the effective execution of the overall business strategy of the firm."
The success of the conflicts analysis programme has received widespread recognition at Eversheds from lawyers and firm management, including an award for "Best Project." Based on this success, the Conflicts and Compliance team has been allocated additional resources to expand its scope and charter.

In July of this year, Eversheds launched an expanded new business acceptance programme, to help assess new client matters in terms of their financial viability, potential for growth, and fit with the long-term business goals of the firm. In addition, the Conflicts team has been tasked with extending the conflicts analysis programme beyond the UK and across Eversheds International.

Said the Intapp Risk Practice VP,  Pat Archbold:
  • "The Conflicts team at Eversheds has done an outstanding job of demonstrating how highly efficient conflicts analysis links to better business strategy and execution for the firm. We're very excited that Intapp Open has been central to enabling Eversheds's expanded business acceptance programme." 
Visit Intapp.com for more information on Intapp Open new business intake and conflicts management software, or to request a demonstration.

Monday, October 27, 2014

Big Banks Continuing Focus on Law Firm Information Security

 
A reader sent word of a story in today's Wall Street Journal: "Banks Demand That Law Firms Harden Cyberattack Defenses" --
  • "Big banks are demanding that their law firms do more to protect sensitive information to ensure that they don’t become back doors for hackers. Once given special status as trusted third parties, lawyers, particularly those who get access to sensitive bank information, now are more likely to get full background checks. The number of compliance checklists for law-firm technology systems and security procedures has ballooned. And law firms big and small increasingly are getting on-site audits to check who has access to documents and office servers."
  • "J.P. Morgan Chase & Co., Morgan Stanley , Bank of America Corp. and UBS AG subjected outside lawyers to greater scrutiny even before financial institutions were victims of cyberattacks this summer, people familiar with the matter said."
  • "The demands come as financial regulators are paying more attention to third-party vendors. Benjamin Lawsky , the superintendent of New York state’s Department of Financial Services, last week sent a letter to dozens of banks requesting information on security risks relating to law firms, accounting firms and other third parties."
  • "Big law firms with financial-institution clients were already subject to some security requirements, such as limiting access to certain documents or having policies in place to guard against cyberattacks... Clients often entrust them with everything from valuable trade secrets to market-moving details on mergers and acquisitions."
  • "'It’s a lot more than just checking a box,' said Lorey Hoffman, chief information officer at law firm Goodwin Procter LLP. 'I walk through our data centers into the [server] cage with examiners' sent by clients. The firm also enlists outside auditors to test its defenses and runs internal checks of system strengths and weaknesses."
  • "Such programs don’t come cheap. Banks generally foot the bill for their on-site audits of law firms. But the firms must invest in technology and software upgrades. Another cost: hiring staff to maintain systems and train lawyers and employees on minimizing risk."
  • "Hedge funds, private-equity funds, technology startups and manufacturers also are asking more questions about security, said Jim Darsigny, chief information officer at law firm Brown Rudnick LLP."

Thursday, October 16, 2014

Is the California Sky Grey? (Raining on Professional Rules Update)


Interesting news and updates coming out of the Golden State: "California Justices Tell State Bar to Redo Proposals for Updating Lawyer Conduct Rules" --
  • "The California Supreme Court has told the state bar to go a different direction in coming up with proposals to update California's lawyer conduct rules. It took the state bar more than a decade to develop suggestions that were sent to the high court four years ago, and which went nowhere."
  • "In August the bar abruptly changed course and quietly stopped trying to gain the justices' approval of the comprehensive rule revisions. Now, the bar is going back to the drawing board to develop a new set of proposals under specific marching orders from the supreme court."
  • "These recent events essentially bag a set of 67 proposed rules the state bar's board of governors approved in 2010. See 26 Law. Man. Prof. Conduct 473, 619."
  • "The 2010 revisions followed the Model Rules' format, although the bar made significant departures in the substance of many of the California versions. The rules were developed by the bar's Commission for the Revision of the Rules of Professional Conduct, which began its work on updating the rules in 2001."
  • "Without the supreme court's approval, the updated rules never took effect. California is the only state that has not remodeled its lawyer conduct rules along the lines of the ABA templates, which were first issued in 1983."
The Legal Ethics Forum, often the water cooler of spirited and intelligent commentary, weighed in with a variety of reader opinion.

See also commentary by the creatively named Kafkaesq blog: "Supreme Court Goes Old School On Revised Rules of Professional Conduct."

(And for those who make their way through all the ins and outs of the above, and have grown accustomed to your editor's occasional insertions of amusement and distraction, comes this video, which mentioned of complex rules always brings to mind... in this case, a fictional account involving an agreement that took 372 legal experts to create.)

Wednesday, October 15, 2014

IP Conflict Allegation Causes Firm Withdrawal



In September we published an article on IP conflicts (and associated webinar recording): "IP Matters: Navigating a Complex Conflicts Landscape," Now comes an interesting cast of IP conflicts allegation in the news: "Mega Firm Withdraws From Patent Infringement Suit After Former Client Alleges Conflict of Interest" --
  • "On September 29, 2014, K&L Gates voluntarily withdrew as defendant’s counsel in a patent infringement action after the plaintiff asked a California federal district court to disqualify the Am Law 100 firm for a conflict of interest because the firm had previously represented the plaintiff regarding the same patents at issue in the litigation. See Cyber Switching Patents, LLC v. Eaton Corp., No. 4:14-cv-02862 (N.D. Cal.)"
  • "The complaint accused Eaton of infringing three patents relating to power distribution technologies for data centers. On August 18, 2014, Eaton’s counsel, K&L Gates, filed an answer denying infringement and asserting counterclaims of non-infringement and invalidity. Cyber alleged that it engaged K&L Gates in November 2013 about representing Cyber in enforcing the very same patents that were the subject of the lawsuit."
  • "Notwithstanding its denial of wrongdoing, K&L Gates agreed to withdraw as counsel for Eaton. The firm stated the reason for its decision was that, “it would be fundamentally unfair to subject Eaton to a protracted distraction” in litigating the disqualification motion. Substitute counsel will be replacing K&L Gates to represent Eaton."
  • "Consequently, many large firms have adopted the practice of including advance conflict waivers in their engagement agreements. Whether such advance waivers are enforceable is far from certain. The difficulty with most advanced waivers lies in the fact that an effective waiver requires “informed” consent. Informed consent requires sufficient disclosure by the lawyer, who “must explain the risks and advantages, if any, of representation burdened with a conflict of interest, as well as reasonably available alternatives. . . .” Model Rule 1.7, comment [20]. But in many advanced waiver cases, the potentially conflicting representation has not yet arisen, thus “informed” consent may not be possible under such circumstances."
More detail and commentary on the IPethics & INsights blog and Law360. And for those interested in managing these risks with technology, see more about Intapp IP conflicts management software.


Tuesday, October 14, 2014

Advance Conflict Waivers Causing Conflicts?


Interesting article in the Legal Intelligencer: "Some Conflict Waivers Are Rubbing GCs the Wrong Way" --
  • "General counsel who spoke to The Legal said they are increasingly seeing advance-waiver clauses in engagement letters from large law firms and rarely is it something they find acceptable. Advance waivers typically say in their most basic form that a law firm represents many clients in many industries and some of those clients may be adverse to the new client, but that the new client agrees to waive any future conflict with the understanding that the law firm will appropriately wall off any adverse matters from the new client's matters."
  • "QVC General Counsel Larry Hayes of West Chester, Pa., said almost every large firm in the United States has advance-waiver clauses. Whether he signs them depends on how he intends to use the firm's services. If it is a one-off matter, Hayes said he may agree to the engagement as drafted. But for a firm that QVC uses on a more regular basis, Hayes said he would be reluctant to sign such an agreement. Hayes said the use of such clauses doesn't do much to show a firm is interested in forming a long-term relationship."
  • "He chalked up the trend to growing law firms whose increased merger activity has created more cross-over clients and has made operating under the traditional conflict regiment more difficult. 'It's a different mentality I think with the more global law practice,' Hayes said.
  • "Since law departments have given less work to outside firms through either bringing it in-house or leveraging their outside spend across fewer firms, law firms have been forced to make up that revenue in other areas, increasing the chances for conflicts, Lincoln Financial Group General Counsel Adam G. Ciongoli said. He said his department has been asked for advance conflict waivers, often from larger firms, and simply won't agree to them. He said he questions the ethics of some of them."
  • "For Reading, Pa.-based Penske Truck Leasing General Counsel Michael Duff, granting traditional conflict-waiver requests as they arise is something he is quite willing to do. 'I feel pretty strongly that firms are entitled to earn a living and take on clients they want as long as they are not somebody specifically adverse to us,' Duff said. But advance waivers are a different story. 'That I won't do,' Duff said."
  • "Duff said he understands large firms don't want to be 'tied down' to seeking conflict waivers from him when he is only using the firm for one matter, but said he still wants the opportunity to evaluate the specific situation rather than give a blanket waiver."
  • "And Duff noted that GCs of technology or pharmaceutical companies may have a tougher view on conflicts because of the intellectual property issues at stake in their businesses."
  • "One issue Hayes said he sees more commonly on the international stage is large, global firms seeking waivers to represent more than one bidder in a transaction. The London office would represent one company in a bid while the Vienna office would represent another bidder, Hayes said as an example. That is an issue he said he is not comfortable with."

Thursday, October 9, 2014

Rulings on Recent Conflicts Allegations of Note


Disqualification stories in the news. First: "Judge in Russia hacking case boots law firm," which updates a story we covered earlier:
  • "U.S. District Judge Richard Jones said he understands this type of ruling is rare, but he said Fox has a conflict of interest because the firm also represented Zpizza, one of the alleged victims in the hacking scam that Roman Seleznev is charged with orchestrating. Jones said his decision was influenced by a letter he received from the president of Zpizza. In the letter, Sid Fanarof told the judge that he gave a Fox lawyer confidential information that could benefit Seleznev and said he believed the firm has a conflict."
  • "Ray said Fox first became involved in the case because one of its lawyers, Ely Goldin, knows Seleznev's father, Valery Seleznev, who is a member of the Russian Parliament. Ray said the firm got involved in July when Seleznev was arrested in the Maldives and taken to Guam and then to Seattle. His lawyers have called his arrest an 'illegal rendition.'"
  • "'We were not aware of Z's involvement in the case at the time,' Ray said. Zpizza was not listed in the indictment, he said. It only became an issue when one of the prosecutors learned that a Fox lawyer represented Zpizza on another matter and let the law firm know that Zpizza was an alleged victim, could be a witness and if Seleznev is convicted, could be a subject of restitution, Ray said."
  • "'When we learned that, we put a Chinese Wall around the case' and screened off the lawyer involved, Ray said. But Jones did not believe that was enough protection. In his ruling from the bench, he said he had to balance judicial integrity with the interest of justice. 'The court understands this is rare and only used in severe circumstances, but the court finds that severe circumstances are present,' he said. 'The court concludes that Fox should not be allowed to represent the defendant.'"
And: "Pa. ethics panel clears Street on son's legal work" --
  • "In a split decision, the Pennsylvania Ethics Commission has cleared former Philadelphia Mayor John Street of conflict of interest charges related to legal work awarded to his son's law firm."
  • "The Wolf Block law firm billed the Philadelphia Housing Authority for hundreds of thousands of dollars worth of work done by the former mayor's son, Sharif Street. When the PHA board hired Wolf Block, John Street was its chairman, and he participated in several votes to authorize legal work for the authority."
  • "The state ethics code prohibits public officials from using their authority to benefit a family member. Ethics commission executive director Robert Caruso said Street's votes presented a problem."
  • "The commission's investigative staff saw Street's votes for the legal work as violating the conflict of interest provision of the state ethics law, but a majority of the commission disagreed, because Street's action wasn't specifically targeted to benefit only Wolf Block... A majority of the commission members said while they don't condone Street's conduct, they don't find a violation of law."

Wednesday, October 8, 2014

Conflicts in the Public Eye



Another story of conflicts allegation making mainstream news: "WTFV apologizes for conflict of interest; forgets they reported on it Sept. 2" --
  • "Consider it yet one more cautionary tale for the modern media age. Or just another dumb move by people who should know better. WTFV/Channel 9 in Orlando seemed to score a coup with the addition of Belvin Perry Jr., former Chief Judge in Florida’s Ninth Judicial Circuit, as a legal commentator.'
  • "Perry even took the chance to weigh in on-air about one of Florida’s hottest issues, Amendment 2, the constitutional referendum on the ballot in November to legalize medical marijuana. On Monday, he took apart a No on 2 commercial, providing sharp criticism by claiming opponents created a “smoke screen” that only plays on viewer’s fears."
  • "WTFV — Orlando’s ABC affiliate — left out one small detail: Perry, upon his retirement, immediately took a position at behemoth law firm Morgan & Morgan. For those cave dwellers out there who might not be aware, Morgan & Morgan is the eponymous firm led by Orlando attorney John Morgan, known as the face (and checkbook) of the organization spearheading Amendment 2."
  • "One word about preparation — WFTV said nothing about Perry’s association with Morgan – something that anyone with a computer could easily find out. Of course, the station backtracked on Tuesday, acknowledging its error and apologizing for not mentioning the relationship... WFTV’s own website reported on Perry’s retirement and subsequent hiring by Morgan – on Sept. 2. Ooops."
And from BNA comes analysis of a recent Texas (the not-to-be-messed-with home of the "Don't call me officer, chief" title rules) : "Firm Must Leave Case if New Associate Worked on Other Side While in Law School" --
  • "A law firm must stop representing a litigation client if it hires a lawyer who formerly worked on the case as a law clerk at the firm representing the opposing party, the Texas bar's ethics committee advised in August."
  • "Screening the tainted lawyer to prevent the sharing of any confidential information he learned in his prior employment won't enable the firm to continue representing the client, according to the opinion."

Tuesday, October 7, 2014

More on Law Firm Insider Trading


Updated and new stories to share on this topic. First: "Napkin-Eating Middleman in Law Firm Insider Trading Case Pleads Guilty" --
  • "A Brooklyn mortgage broker who prosecutors said was the napkin-eating middleman in an insider-trading ring has pleaded guilty to his role in the alleged scheme, which involved stock tips supplied by an employee at Simpson Thacher & Bartlett LLP, a prominent New York law firm."
  • "Prosecutors said that Mr. Tamayo was the conduit for insider-trading tips that former Simpson Thacher managing clerk Steven Metro, a friend of his from law school, gleaned from the firm’s computer system."
  • "The case highlighted the internal risks that law firms face when safeguarding their clients’ confidential information. A lawyer for Mr. Tamayo said in an email, 'We cannot comment except to say that on Friday Mr. Tamayo took the first step in the process of accepting full responsibility for his actions.'"
Followed by: "Insider-trading case makes fine plot for a movie" --
  • "In an interesting case that reads like a movie script, the Securities and Exchange Commission last week charged a managing clerk at a major top-of-the-line New York law firm with violating insider-trading laws."
  • "The alleged scheme seemed to have started innocently enough. The law clerk was having drinks with friends in a bar in New York City in early February 2009."
  • "MM was concerned that a stock he owned would decline, and worse, he was afraid the company would go bust. The clerk knew that would not happen. At work, he had access to the law firm's computer system. He had seen documentation of an upcoming deal that would infuse $500 million into the ailing company, officials said."
  • "When MM realized this information would be positive for the stock, instead of selling the stock, he called his broker to buy more, it is alleged."
  • "'Law firms are sanctuaries for the confidential treatment of client information, and this scheme victimized not only a law firm but also its corporate clients and ultimately the investors in those companies,' said Daniel M. Hawke, chief of the SEC Enforcement Division's Market Abuse Unit. 'We are continuing to combat serial insider-trading schemes, particularly by law-firm employees and other professionals who are entrusted with extremely sensitive market-moving information.'"
And finally, news from Canada: "Insider Trading Case Considers Materiality Of Confidentiality Agreement And Expired Unsolicited Offer" --
  • "The British Columbia Securities Commission (BCSC) recently considered whether a consultant for a law firm had committed insider trading and breached the public interest when she traded a client's shares with knowledge of undisclosed facts."
  • "In Weiqing Jane Jin, 2014 BCSECCOM 194, there was no question that the consultant was in a special relationship with the issuer client and had traded while in possession of facts that had not been disclosed.  The materiality of these facts was contested."

Monday, October 6, 2014

Risk News: Strengthening Ethical Screens, Information Security


Two interesting stories to note today. First: "Additional safeguards against leaks ordered in San Bernardino County’s Colonies corruption case"--
  • "A Superior Court judge presiding over San Bernardino County’s Colonies corruption case issued a written ruling Thursday barring a former federal prosecutor - now working for the law firm representing one of the defendants - from having any access to all information in the case.
  • "Former Assistant U.S. Attorney Jerry Behnke was hired by the Los Angeles law firm Arent Fox, which is representing defendant Jeff Burum, in May. Behnke is the former supervisor of the U.S. Attorney’s Riverside office that oversaw the federal investigation of the Colonies case, which was shuttered in 2012 without a reason given."
  • "In his ruling, Judge Michael A. Smith determined that Arent Fox had in fact created an effective ethical wall when it hired Behnke, but included additional measures including prohibiting Behnke, his secretary and paralegal from having access to any electronic files pertaining to Burum and from sending or receiving any electronic communications related to the case, among other things."
  • "Smith also ordered that all files related to Burum’s case be kept in a locked room, and the files have written on them, 'SUBJECT TO ETHICAL WALL - DO NOT DISCLOSE TO JERRY BEHNKE OR HIS SECRETARY, PARALEGAL, ETC.' He also ordered that a memo be circulated, with Smith’s written ruling attached, to all Arent Fox staff advising them to report any suspected breaches of the 'ethical wall.'"
  • "A member of Arent Fox’s Professional Conduct Committee, Gerald Mitchell, will be tasked with monitoring the firm’s compliance with Smith’s order on a monthly basis, with any suspected violations being immediately reported to the court."
And another firm promotes their achievements in information security: "Shook Hardy gains certification for data security" --
  • "The firm recognized that security was being publicized frequently and that with some of the data breaches that have been in the news, it would be important to show that our firm has a strong commitment to security," said John Anderson, chief information officer for Shook. "Achieving this certification would help us show that commitment."
  • "All of our clients have sensitive confidential information and they expect us to have the appropriate security systems in place," Anderson said. "They're coming on site and doing security assessments, so having this shows them at the very beginning that we have good policies and procedures in place."

Wednesday, October 1, 2014

Session Recordings: The A-to-Z of IG



Here are two more recordings from the annual ILTA conference worth a listen. These updates focus on information governance and feature several speakers we've featured at past Risk Roundtable events and webinars:

Build Enterprise Information Governance from the Ground Up
  • Enterprise information governance programs are often as complex as the problems they intend to solve, incorporating governance needs, requirements from various internal and external stakeholders, and tight budgets.
  • Here we’ll walk through best practices any organization can use to kick-start an IG program and make quick progress. We’ll discuss topics like assessing the current situation and capabilities, prioritizing risks and opportunities, gaining support from all stakeholders for an IG framework, and simple ways to start.

  • Learn to develop an information governance strategy that incorporates the four dimensions of information risk management (records management, privacy, cybersecurity and e-discovery.) Our panel will share examples of how they integrated setting controls, reduced costs and improved compliance at their firms.

 

Tuesday, September 30, 2014

Session Recordings: Open vs. Closed DMS, Data Security Regulations



Here are more recordings from the annual ILTA conference worth a listen:

  • Do you require all documents be stored in the firm's DMS, or do you let the user decide? How do you manage security? We'll hear from firms in both camps as they discuss the challenges and successes that influenced their decisions.
Privacy Laws and Enterprise Content: Can Your ECM Systems Facilitate Compliance?
  • Your ECM is bursting with private content awaiting prying eyes, both inside and outside your firm, and privacy concerns should be at the forefront of planning how your ECM evolves.
  • We'll discuss the challenges you face and provide practical tips to let you face them head on. Learn about the software, processes and policies your ECM offers to support your firm's and clients' privacy requirements.

Monday, September 29, 2014

HIPAA is Here – Is Your Law Firm in Compliance?


With the government starting to make noise about upcoming audits, and the September 22 deadline for all organizations to update grandfathered business associate agreements that have not yet been brought into compliance with the new Omnibus Rule having passed, the McLane Law Firm (a New England based firm with 90 lawyers) writes: "HIPAA One Year Later: Is Your Law Firm Complying?"
  • "Since nearly a year has passed since the compliance date for most provisions of the Final Rule6, this article focuses on assisting lawyers and law firms looking to evaluate the sufficiency of their compliance efforts to date. This article also underscores the potential impact of the Final Rule on lawyers and law firms in light of recent enforcement activity by the Office of Civil Rights ("OCR") of the HHS, the federal agency charged with enforcement and administration of HIPAA."
  • "The Final Rule also requires updated provisions in BAAs and now requires business associates to have BAAs with its subcontractors. BAAs must provide that the business associate (or subcontractor, as applicable)."
  • "The Final Rule should have been a wake-up call for lawyers and law firms which have access to PHI to ask whether they are considered business associates of covered entities and, if so, to take the steps necessary to comply with their duties and obligations as business associates by September 23, 2013."
  • "Therefore, if a firm represents a covered entity or a business associate of one and accesses PHI to do its job, it must comply with the HIPAA Rules... It is significant that business associate status attaches under the HIPAA Rules regardless of whether the firm has signed a business associate agreement."
  • "Since the release of the Final Rule, OCR investigation and enforcement activities have served to highlight the unfortunate consequences that can arise from failure to comply with the Final Rule. Moreover, the extension of certain covered entity responsibilities to business associates now makes civil and criminal liability possible for lawyers and law firms."
  • "Attorneys who represent healthcare clients are keenly aware of HIPAA compliance issues and routinely work with these clients to ensure compliance. These lawyers, however, are not always mindful of the fact that the Final Rule makes the same standards allegedly violated by APDerm applicable to the lawyers and law firms which receive PHI from covered entities."
Previously, we hosted a webinar on HIPAA compliance for law firms. Interested readers can watch a recording of that and learn more about how Intapp is working with many law firms to address HIPAA compliance.

Thursday, September 25, 2014

IP Matters: Navigating a Complex Conflicts Landscape



Law firms with IP practices normally develop separate matter and risk management processes to prosecute and litigate patents, trademarks and copyrights for their clients. Speed to matter opening is critical, particularly in competitive situations.

But with IP matters frequently cross multiple jurisdictions, firms often struggle to develop efficient practices to open matter families across international jurisdictions and track progress throughout the matter lifecycle.

And IP practices face other unique challenges, including the need to manage subject matter conflicts. These arise when a firm simultaneously prosecutes patents for two different clients whose inventions or technology could merit the same or similar patent.

Identifying a subject matter conflict requires more nuanced and detailed analysis than standard ethical conflict. Firms are often forced to painstakingly examine information scattered across information repositories to identify a conflict, or leave the decision in the hands of lawyers familiar with the practice.

Both approaches invite risks and errors that could potentially generate costly litigation.

Intapp Open specifically addresses the complex and evolving intake landscape. It provides a modern workflow interface and data integration capabilities that make it easy for IP lawyers and staff to open patent matter families across jurisdictions.

The software enables firms to include patent and subject matter information in standard conflicts searches (including data integrated from systems including CPI and PATSY), grouping patent families together for faster resolution and alerting the firm of the hits with the highest risk. And it centralizes financial, ethical and subject matter into a single application to encourage risk management decisions that support firm strategy.

Read more at Intapp.com and access an abridged recording of the recent webinar on IP Conflicts management, featuring a law firm case study (Lathrop & Gage) and insights from legal ethics maven Bill Frievogel, and expert IP management consultant, Chris Kave (Aurora North).

Wednesday, September 24, 2014

Session Recordings: KM vs. Security Shootout (and More)


The folks at ILTA always do an amazing job at their annual conference, producing panels and seminars on a variety of topics, including IT, finance, risk and more. In keeping with their mission to foster collaboration and knowledge exchange, they kindly share recordings of many of those presentations.

We'll be bringing you several risk-related recordings of note, starting with:

KM and Security and Compliance: Fist Fight or Compromise?
  • Clients demand compliance with strict information security guidelines vis-à-vis protection of legal work product. But the "need to know" security model could hinder information access and collaborative KM processes, including, but not limited to, accessibility of enterprise search. Clients are under regulatory pressures and are cracking down on what they consider lackadaisical law firm security. Is there a right balance or compromise that can address the concerns of all involved — clients, KM and security officers? Come watch the fight unfold!
  • Prioritizing and implementing information security initiatives within the law firm environment can be next to impossible without full buy-in and support from senior firm management. In addition, while many IT security personnel have expert knowledge on how to design, build and deploy the best security-based technology available, many lack the business insight required to identify what is most important from an overall information security risk perspective.
  • Three law firms (Foley & Lardner, Ropes & Gray, and Blank Rome) will share how they've been successful in shifting some or all of the strategic focus, decision-making and prioritization of information security initiatives from the IT department and into the hands of firm business leaders.
  • Our speakers will share some of the tools, techniques and approaches they’ve used to help make this important transition within their firms. 

Tuesday, September 23, 2014

New Business Intake – Unlocking New Potential

 
Very interesting essay at 3 Geeks and a Law Blog on new opportunities for enhancing new business intake by incorporating new data, new process and new insight: "We Cannot Keep New Business Intake In a Vacuum" --
  • "Very little in the NBI reform/reinvention process is about better data. It focuses more on faster input of information to speed up the time to open a new matter, thus creating a faster turnaround on when attorneys can start (legally) billing time to a matter."
  • "Many of us depend upon the information gathered in the NBI process. Toby's group [pricing and project management] attempts to analyze matter budgeting, matter management, and costs to take on a matter using details gathered in the NBI process. Marketing uses the data gather during the NBI process to determine big matters for Public Relations news releases, and submissions to third parties like Chambers. Business Development uses this information to determine what types of work the firms is strong and weak. Conflicts uses the information to determine what work we may not be able to take on in the future. Incomplete, or bad information gathered during NBI can have a long-range negative impact on the firm."
  • "I'm reminded of a post we did a couple years ago on firms needing to do After-Action Reviews for matters. If we don't ask ourselves what happened, and how can we get better, we tend to continue to act in a similar fashion (good or bad) in the future. If we misidentify information, and never incentivize partners to correct that information, we'll continue to misidentify."
  • "Most firms have absolutely no incentives for partners to identify when information gathered during NBI process needs to be clarified or corrected. We also give almost no incentives to close matters. Yet, both of those processes are key pieces in our quest to better know our clients (KYC), gather BI/CI information, assist in identifying cross-selling opportunities, and gathering historical information to better plan how we price and staff similar matters in the future. I would think that the return on investment in beefing up a mid-matter review (MMR), and the closing matter process (CMP) would be substantial."
  • "Perhaps we stop thinking of the New Business Intake in a vacuum. Instead we combine the NBI, MMR, and CMP into an overall process of cradle-to-grave matter management. The NBI is step-one, and should be improved to help speed up the process of getting matters opened, conflicts checked, people assigned, and have the firm start working on behalf of a client. But it is step one only. If we ever want to leverage our prior work in order to improve or gain new work, then the NBI cannot be the first and only step."
Of course, Intapp is enthusiastically on this path, integrating intake, conflicts and other information flows directly into the act of new business inception – under an ambitious vision of "new business acceptance." That vision includes providing lawyers with an interface and experience (including mobile access) that encourages them to provide critical data at the point of entry.

Monday, September 22, 2014

Monday Morning Conflicts Quarterbacking?


A reader sent word of a conflicts allegation making big news. Whether the discussion involves team names or player health, the NFL has faced its share of controversies this year.

These latest allegations relate to the recent appointment of an independent investigator to review the way the Ray Rice domestic abuse matter has been managed. NFL commissioner Roger Goodell appointed former FBI director and current partner at an AmLaw 20 firm, Robert Mueller. That move brought immediate controversy, which the league defended last Friday, and the media continues to analyze.

Here's what commentator Mike Florio thought, writing on the NBC Sports web site: "How independent will Robert Mueller be?" --
  • "When I saw that two old-guard owners would oversee what would otherwise be an independent investigation, I became a little concerned that the investigation wouldn’t truly be independent."
  • "When I realized that the man hired to do the investigation works for WilmerHale, the law firm that helped the NFL recently negotiate a multi-billion-dollar contract with DirecTV, any hope of true and genuine independence evaporated.  As explained by ESPN.com, the firm previously has represented Washington owner Daniel Snyder, and several members of the firm have taken jobs with NFL teams."
Florio's later update includes details of to Goodell's more recent explanation : "Goodell defends Mueller’s investigation" --
  • "'The law firm that he works for is a law firm with extremely close ties to the NFL,' CNN’s Rachel Nichols said to Goodell. "You guys paid that law firm to help you negotiate some television deals. The president of the Ravens, who will be key in this whole investigation, worked at that law firm for more than 30 years. Why hire someone with even the appearance of impropriety and how do you expect us to accept everything?'"
  • "'I respectfully disagree,' Goodell said. "You are questioning the integrity of the director of the FBI. Yes, that firm has represented us in the past. They have also been on the other side in litigation against the NFL. So this is a highly respected individual, the longest serving director in the FBI.'"
  • "'Part of the idea of this is to restore public trust,' she said. 'So even if he does a flawless investigation isn’t there an element here of your leaving the door open for doubt?'"
  • "'Well, Rachel, unfortunately we live in a world where there is a lot of litigation,' Goodell said.  'A lot of law firms and maybe people have had some interaction with us in the past. Robert Mueller has not. The law firm may have. We are hiring Robert Mueller, his credentials to do an independent investigation reporting to the owners and I’m confident that will be the case.'"
And then Florio adds his own commentary:
  • "But there are thousands of law firms and thousands of lawyers capable of doing a fair and impartial investigation. Mueller’s appointment gives the investigation credibility on the surface, because he ran the FBI. The failure to pick a lawyer from a firm with no past connection and, most importantly, no aspiration for any future connection to the NFL prevents the investigation from having the appearance of independence."
  • "Ultimately, the decision to pick Mueller was just another mistake in the chain of blunders that has turned the NFL on its head. At a time when it’s become very popular for people connected to the NFL to talk about getting it right, how about we stop saying it and start doing it?"
Which is echoed by other commentators, such as Steve Rosenbloom at the Chicago Tribune: "Yes, Roger, I am questioning Mueller's standing" --
  • "Yes, Roger Goodell, as a matter of fact, I am questioning Robert Mueller’s integrity. Yours is gone, Roger. Long gone. Way gone. But sad to say, so is Mueller’s."
  • "Everybody watching the NFL should question Mueller’s integrity, which disappeared when he accepted the invitation to investigate Goodell’s horrible handling of the Ray Rice case. Mueller, a former FBI director, works for a law firm that has represented the NFL, specifically negotiating a broadcast deal. Mueller’s firm also has worked for two NFL teams, the Cowboys and Redskins, in cases against the NFL."
  • "This is a clear conflict of interest. Even the appearance of conflict of interest is a conflict of interest. Even a pinhead lawyer like Goodell could make that argument in court."
Ethically permissible or not, the relationships and history underlying this situation present yet another example of the sound bite appearances, coupled with external attention create challenges.

Friday, September 19, 2014

More Notes from BNA on Conflicts


Two updates of notes from ABA/BNA:

"If Job Hunt Extends to Client’s Adversary, Risk of Personal Conflict Must Be Assessed" --
  • "A nuanced analysis rather than any bright-line test must be used to determine whether a conflict of interest exists when a lawyer wants to be hired by a client's opponent or the law firm representing the adversary, the District of Columbia bar's ethics committee advised in July."
  • "The comprehensive opinion explains how lawyers should judge whether and when a job hunt may create a conflict. It also outlines what options a lawyer has if a conflict does exist, and discusses the responsibilities of supervisory lawyers when an associate's employment search gives rise to a conflict."
  • "When a lawyer in a private firm is seriously angling for a job with a law firm or litigant she is opposing in a client's matter, the lawyer's representation of the client may be materially limited by the lawyer's personal interests. Model Rule 1.7 cmt. [10]. The lawyer facing such a conflict must let the client know so that the client can make an informed decision about whether to continue the relationship."
  • "'There is no ‘bright line' test for determining the point during the employment process when a personal interest conflict arises, and that point may vary,' the committee stated."
  • "The opinion identifies two criteria to consider in determining whether a personal interest conflict exists. One is whether the lawyer has a material and active role in representing the client, either by having contact with the client regarding the matter, having contact with the adversary or adversary's lawyer in the course of working on the client's matter or doing work on the substance of the matter."
  • "The second criterion is the extent to which the lawyer's interest in the adversary or the adversary's lawyer is 'targeted, communicated and/or reciprocated.'"
Read the full article for additional cases, ethics opinions, and suggested options for addressing these scenarios.

"Trying to Shift Sanction to Client Alone Creates Unwaivable, Disqualifying Conflict" --
  • "An attorney who argues that a sanction imposed jointly on his client and himself should be paid solely by the client creates an unwaivable conflict requiring the lawyer's disqualification even if no party has complained, the Washington Court of Appeals, Third Division, held Aug. 12.'"
  • "The panel disqualified the lawyer in question on its own initiative, saying that courts have inherent authority to order an attorney's removal even when no other participant has sought it."
  • "Moreover, the court said the lawyer cannot continue to represent his own interests in this matter. He must obtain independent counsel to argue that the client alone should pay the sanction, and he may not reveal confidential information to that attorney except in response to any accusations the former client asserts against the lawyer, Judge George B. Fearing said."
  • "The appeals court said that Caruso violated “the supreme commandment of attorney ethics”—undivided loyalty to the client and the shunning of any self-interest at odds with the client's interest—by contending on appeal that the sanction should borne entirely by Wixom if it is upheld."
  • "The court found that Caruso was representing both himself and Wixom in challenging the sanction, and that the lawyer's personal interest in shifting the sanction entirely to Wixom was directly adverse to Wixom's interests."
  • "Although no Washington cases have addressed this issue, Fearing said that, based on general principles of attorney ethics and several federal decisions, 'we possess authority to disqualify an attorney, whose representation of a client poses an actual conflict with himself or another client.'"

Lateral Lawyer Movement, Lawyer vs. Client Contlicts


Two updates of notes from ABA/BNA:

"If Job Hunt Extends to Client’s Adversary, Risk of Personal Conflict Must Be Assessed" --
  • "A nuanced analysis rather than any bright-line test must be used to determine whether a conflict of interest exists when a lawyer wants to be hired by a client's opponent or the law firm representing the adversary, the District of Columbia bar's ethics committee advised in July."
  • "The comprehensive opinion explains how lawyers should judge whether and when a job hunt may create a conflict. It also outlines what options a lawyer has if a conflict does exist, and discusses the responsibilities of supervisory lawyers when an associate's employment search gives rise to a conflict."
  • "When a lawyer in a private firm is seriously angling for a job with a law firm or litigant she is opposing in a client's matter, the lawyer's representation of the client may be materially limited by the lawyer's personal interests. Model Rule 1.7 cmt. [10]. The lawyer facing such a conflict must let the client know so that the client can make an informed decision about whether to continue the relationship."
  • "'There is no ‘bright line' test for determining the point during the employment process when a personal interest conflict arises, and that point may vary,' the committee stated."
  • "The opinion identifies two criteria to consider in determining whether a personal interest conflict exists. One is whether the lawyer has a material and active role in representing the client, either by having contact with the client regarding the matter, having contact with the adversary or adversary's lawyer in the course of working on the client's matter or doing work on the substance of the matter."
  • "The second criterion is the extent to which the lawyer's interest in the adversary or the adversary's lawyer is 'targeted, communicated and/or reciprocated.'"
Read the full article for additional cases, ethics opinions, and suggested options for addressing these scenarios.

"Trying to Shift Sanction to Client Alone Creates Unwaivable, Disqualifying Conflict" --
  • "An attorney who argues that a sanction imposed jointly on his client and himself should be paid solely by the client creates an unwaivable conflict requiring the lawyer's disqualification even if no party has complained, the Washington Court of Appeals, Third Division, held Aug. 12."
  • "The panel disqualified the lawyer in question on its own initiative, saying that courts have inherent authority to order an attorney's removal even when no other participant has sought it."
  • "Moreover, the court said the lawyer cannot continue to represent his own interests in this matter. He must obtain independent counsel to argue that the client alone should pay the sanction, and he may not reveal confidential information to that attorney except in response to any accusations the former client asserts against the lawyer, Judge George B. Fearing said."
  • "The appeals court said that Caruso violated “the supreme commandment of attorney ethics”—undivided loyalty to the client and the shunning of any self-interest at odds with the client's interest—by contending on appeal that the sanction should borne entirely by Wixom if it is upheld."
  • "The court found that Caruso was representing both himself and Wixom in challenging the sanction, and that the lawyer's personal interest in shifting the sanction entirely to Wixom was directly adverse to Wixom's interests."
  • "Although no Washington cases have addressed this issue, Fearing said that, based on general principles of attorney ethics and several federal decisions, 'we possess authority to disqualify an attorney, whose representation of a client poses an actual conflict with himself or another client.'"

Thursday, September 18, 2014

Insider Trading Charges Leveled at Another Wilson Sonsini Employee

 
With coverage breaking across major media, including the New York Times, CNBC, Wall Street Journal and Bloomberg, eyes turn once again to Wilson Sonsini on the topic of insider trading.

Readers may remember that in 2011 a Wilson Sonsini lawyer was charged with and later plead guilty to insider trading. In that case, the individual was accused of gathering information by numerous methods, including searching the firm's document management system.

Now news of allegations that an IT staffer used access to electronic repositories including time entry, billing and conflicts software systems to collect and act on inside information:

"Wilson Sonsini Employee Is Charged With Insider Trading" --
  • "A computer systems engineer at the Silicon Valley law firm Wilson Sonsini Goodrich & Rosati was charged with trading on inside information about potential mergers and acquisitions he learned on the job."
  • "Dimitry Braverman, 41, is the second employee in three years at the Palo Alto, California-based firm to be charged with insider trading."
  • "Braverman used computerized records at the law firm to identify companies involved in possible acquisitions, including Gymboree Corp., Drugstore.com Inc., Epicor Software Corp. and Seagate Technology Plc, according to charges made public today in Manhattan federal court. He was arrested this morning at his home in San Mateo, California. Braverman temporarily suspended his illicit activity when a Wilson Sonsini lawyer was arrested for an unrelated insider-trading scheme in 2011, according to prosecutors."
  • "Braverman made almost $300,000 from the illegal trading, the U.S. said. He had access to billing records and attorney time sheets created when the firm opened new accounts or checked for conflicts of interest, according to the government."
  • "According to court documents, Wilson Sonsini's general counsel emailed employees after Kluger's arrest to remind them of the firm's policies on insider trading."

Wednesday, September 17, 2014

New Business Intake & Conflicts – Wiggin Goes to the Cloud


 
Media and technology law firm Wiggin has implemented Intapp Open for new business intake (NBI) and conflicts management. Pinnacle, a provider of specialist consulting services, executed the Intapp Open implementation as part of a broader Wiggin initiative to virtualise and host its entire IT infrastructure in a private cloud environment.

Wiggin, a highly regarded boutique firm with an innovative approach to legal services delivery, is well known for its strategic approach to outsourcing key aspects of its operations. Pinnacle completed the project, which included integration of Intapp Open with Creditsafe for conflict reports, within 35 days.

 
 
Said the Firm's Chief Executive Officer, John Banister:
  • "Intapp Open has transformed how we evaluate new business and manage potential client conflicts – a sensitive issue in the fast-paced media and technology industries. The product’s integration with Creditsafe has streamlined our process for new business review, and the ability to apply business rules to conflicts reports enables us to quickly identify and prioritise issues that need to be addressed."
  • "Migrating our IT infrastructure to a private cloud has been a major priority for our business, and we’re thrilled with the work that Pinnacle did in accelerating the implementation and integration of Intapp Open with our virtual environment."
Intapp Open was chosen to replace Wiggin’s legacy workflow system for NBI, which was difficult to maintain and could not be virtualised. Faced with the prospect of a costly and complicated upgrade of its existing system, which would have required re-implementation of business processes from scratch, the firm seized the opportunity to adopt a fresh approach to new business intake with Intapp Open.

Pinnacle worked with Wiggin to configure the Intapp Open forms and flows to fit the firm’s unique business model; managed integration with other applications that were part of Wiggin’s new virtual environment including Elite Enterprise; and coordinated with its cloud services provider throughout the project.


Said the Intapp Risk Practice VP,  Pat Archbold:
  • "Increasingly, new business intake is about improving client selection and financial performance for firms as much as it is about risk management. The work that Pinnacle and Wiggin have done to integrate Creditsafe for client review is a great example of how the Intapp Open platform is changing the way law firms take on new business."
 
Visit Intapp.com for more information on Intapp Open new business intake and conflicts management software, or to request a demonstration.

Tuesday, September 16, 2014

Conflicts Allegations & Disqualification Attempts


"Drugmakers Seek to Disqualify Counsel in Opioid Lawsuit" --
  • "Purdue Pharma L.P. and two affiliated companies are seeking to disqualify a former District of Columbia attorney general from representing the city of Chicago in its lawsuit against several drugmakers for allegedly seeking to misinform the public about the risks and benefits of opium-like pain medications."
  • "According to Purdue, attorney Linda Singer and her law firm law firm Cohen Milstein Sellers & Toll should be disqualified because Singer served as attorney general between Jan. 2, 2007, and Jan. 5, 2008. The District and 26 other jurisdictions reached a $19.5 million settlement with Purdue over the marketing of OxyContin on May 8, 2007, the drugmakers said."
  • "Singer personally and substantially participated in the older lawsuit by approving the consent judgment, the defendants argued. She was briefed on the settlement more than a month before any court filings were made; edited the proposed press release about the consent judgment; and lobbied to increase the statutory caps on D.C.’s consumer protection fund to accommodate the $950,000 the District recovered in the lawsuit, the pharmaceutical companies said."
  • "Singer also has entered a contingent-fee agreement with Santa Clara and Orange counties in California to pursue a similar lawsuit.
 Patrick Fitzgerald and R. Ryan Stoll of Skadden, Arps, Slate Meagher & Flom in Chicago filed Purdue’s motion."
[Updated: See this story, which include the firm's response to the disqualification motion.]


"Blackstone's law firm worked with Michael O'Flynn: Arthur Cox has advised Nama and the State" --
  • "Michael O'Flynn's legal showdown with US buyout fund Blackstone over its attempt to gain control of the O'Flynn Construction Group brought him face to face with a former adviser - law firm Arthur Cox. The Magic Circle solicitor firm, which represented Blackstone subsidiary Carbon Finance in the High Court case, had worked for Mr O'Flynn in the past. They had acted for one of his companies in a judicial review as recently as June of this year."
  • "When contacted for comment, Mr O'Flynn said: 'It's disappointing when a professional firm acts against you so recently after acting on your behalf, particularly given the nature of this case.'"
  • "The law firm's decision to represent Blackstone in its vicious legal dispute with Mr O'Flynn, designed to oust him as a director and wrest control of his construction group, has severed those ties. A further personal relationship between Arthur Cox and Mr O'Flynn existed beyond a lawyer-client relationship."
  • "Arthur Cox has previously denied suggestions that it faced potential conflicts of interests, having acted for the banks, developers and other state bodies in major cases. It has provided advice to the Government and state bodies, including Nama and the Department of Finance..."

Monday, September 15, 2014

Client Conflicts Allegations in the News

A few stories of conflicts allegations making news, each with complex fact patterns worth a click-through for those looking for a more complete picture:

"Ex-Client Sues, Alleges Conflict of Interest Against Thompson & Knight" --
  • "A former client of Thompson & Knight seeks at least $1 million in damages in a Sept. 8 lawsuit that alleges that the firm had a conflict of interest when it represented him and a third-party investor in the acquisition of a Houston company."
  • "Richard Slaughter of Houston alleges in a petition he filed in state district court in Harris County that he was 'shocked' to discover that Thompson & Knight had filed paperwork in the deal that identified the third-party investor as the 'sole manager' of Sivco Holdings..."
  • "Slaughter alleges in Slaughter v. Thompson & Knight that no one at Thompson & Knight, including former partner Bryan K. Brown, who allegedly worked on the deal, ever disclosed to him that the corporate formation documents excluded him as a manager of the company."
  • "Slaughter alleges that only after Houston attorney Rusty Hardin, of Rusty Hardin & Associates, 'expressed his concern' on Slaughter's behalf did the firm withdraw from representing the third-party investor and affiliated entities in connection with a postpurchase dispute with Slaughter."
  • "As alleged in the petition, Slaughter 'sought legal advice' from Brown, who was then a partner in Thompson & Knight in Houston, and Brown represented him in connection with the acquisition from late 2011 through the acquisition in December 2012."\
  • "When asked for a response to the allegations in the petition, the firm provided a written statement from Thompson & Knight partner L. James Berglund II of Dallas. Berglund wrote that the firm will vigorously defend itself... 'The claims in the lawsuit are simply incorrect. Thompson & Knight has a long history of honoring our legal and ethical obligations at every turn, which is exactly what occurred in this case. We regret that the plaintiff has elected to file litigation, and we are confident that a full examination of the facts will confirm that Thompson & Knight handled the matter appropriately,' Berglund wrote."

"Sparks fly as Cassels Brock rejects GM conflict claim" --
  • "Cassels Brock & Blackwell LLP was 'hopelessly conflicted' when it represented the Canadian government in its bailout talks with General Motors of Canada Ltd. in 2009 while simultaneously acting for the Canadian Automobile Dealers Association, counsel for dealers who launched a class action over the matter told a Superior Court judge last week."
  • "Before some 180 dealers signed GM’s wind-down agreement in 2009, Cassels Brock “did nothing” to help them get a better deal from the company, said Bryan Finlay, one of the counsel for the dealers, as the trial got underway on Tuesday. The class action seeking $750 million in damages names GM and Cassels Brock as defendants. None of the allegations have been proven in court."
  • "The interests of the dealers were adverse to those of Canada, said Finlay, adding that instead of advising the dealers of their rights, Cassels Brock told some of them the wind-down agreements weren’t negotiable."
  • "For its part, Cassels Brock argues the association, and not the individual dealers, had retained the firm. When the wind-down notice went to a group of GM dealers, the association advised them to seek legal advice from their individual lawyers."
  • "Cassels Brock didn’t present its opening statement on the first day of the class action trial on Tuesday. Earlier in the day, another lawyer for the plaintiffs, David Sterns of Sotos LLP, argued GM had made the dealers sign the wind-down agreements during the financial crisis through 'ambush, deception, and divide-and-conquer tactics.'"
  • "The trial continues with hearings set for six weeks in Toronto."