- "The $100 million legal battle over the share-price collapse of listed law firm Slater and Gordon has taken a bitter twist over an allegation of a serious conflict of interest. Slater and Gordon faces a class action led by its No.1 rival, Maurice Blackburn, after the collapse of its share price last year."
- "The spur for the conflict-of-interest allegation was a move by Maurice Blackburn to apply to the Federal Court for details on Slater and Gordon's insurance policies and documents relating to the debt-strapped law firm's rescue deal with its bankers."
- "Its application came after Fairfax Media revealed a rescue package for the debt-strapped law firm will use a legal precedent to ring-fence the company's assets from secondary creditors including class action claimants."
- "Fairfax Media also revealed Slater and Gordon is expected to reach an in-principle agreement with its bankers for a debt-for-equity swap by March 17. Lawyer for Slater and Gordon, Leon Zwier of Arnold Bloch Leibler, said he had concerns about Maurice Blackburn representing shareholders and that should also be discussed in the mediation talks."
- "Lawyer for Slater and Gordon, Leon Zwier of Arnold Bloch Leibler, said he had concerns about Maurice Blackburn representing shareholders and that should also be discussed in the mediation talks. 'It's a serious issue,' Mr Zwier told the court. 'It's like asking Channel Seven to play a role in the reconstruction in Channel Nine.'"
Tuesday, March 21, 2017
Touching on a multiple issues and topics we've previously covered: "Slater and Gordon accuses class action firm of conflict" --
Posted by Dan Bressler at 6:47 AM
Monday, March 20, 2017
Following the news about Ropes & Gray, BNA conducted an interview with Greg Sueoka, former Fenwick & West managing partner: "Prominent IP Lawyer on 100 Lawyers and Staff Leaving Ropes & Gray" --
- "One of the big stories last week was Ropes & Gray’s announcement that it would spin off its patent prosecution practice, resulting in 100 lawyers and staff departing the large Boston-based law firm to form a new entity."
- "On Friday, Big Law Business caught up with Greg Sueoka, the former managing partner of Fenwick & West, who has maintained a patent prosecution practice of his own and now operates the boutique, Patent Law Works, which he formed after leaving Fenwick in 2010."
- "Sueoka: I loved the people at Fenwick, but one reason I left was because of conflicts of interest. As a patent prosecutor, I’ll deal with a decent number of start ups. Maybe their initial spend might be in the tens of thousands of dollars. But litigators and corporate folks say, ‘We don’t want that conflict.’ Patent litigation is a huge law firm revenue ticket item. When it comes to a conflict between my little tens of thousands, which might grow to half a million or more later, I was getting conflicted out of a lot of work."
- "Sueoka: If you bring in, say, ten startups a year, in two years, five of those companies will be gone because they’re startups. Four years later, you only have three clients left, but those three clients will be good companies, generating a lot of revenue for you. But that still creates conflicts when you have large numbers of companies coming in. Technology moves in waves. Everybody is trying to do the same thing at the same time, whether it’s Snapchat and messaging, Facebook — they all kind of come together at the same time and you don’t know who’s going to be the next Facebook or LinkedIn versus who are going to be the losers. The amount of conflicts we’re going to have here is relatively easy to manage compared to me competing with 1,000 other lawyers to bring a client into a big firm."
Sunday, March 19, 2017
"Dissolving Firms Must Still Put Clients First, DC Bar Says"
- "Despite numerous requirements facing attorneys during a law firm’s dissolution, the principal obligation for lawyers and the firm during the process must be to focus on the present and future needs of their clients, a new ethics opinion released Friday by the D.C. Bar said."
- "The D.C. Bar said attorneys must not only attempt to see current matters through to completion, if possible, but are required fulfill their ethical obligation to notify clients of the impending dissolution. The opinion said a significant amount of responsibility in terms of client notification and representation also falls on the firms themselves, as in most cases they are the signatories of engagement letters with clients, not their attorneys."
- "The ethics opinion addressed the responsibility of client notification in the event of a law firm dissolution. While it is difficult to pin down an exact time after a dissolution decision to inform clients, the bar said law firms must do so in a “timely” manner to comply with the D.C. Bar rules of professional conduct."
- "The bar went on to say that this notice should be given to allow a client enough time to plan its next move as to future representation, especially when a matter is pending. Additionally, the opinion stated that notification should be given to all clients that could be affected by the dissolution. The bar said this even includes clients with inactive matters and closed files, as long as the files have been closed for less than five years, or in the event that the property held contains some sort of intrinsic value like a will or stock certificates."
Posted by Dan Bressler at 4:24 PM
Sunday, March 12, 2017
Our expert risk consulting colleagues at InOutsource are co-hosting a webinar on replacing legacy records management systems.
We've covered some of the risks associated with legacy systems. For firms looking to plot a migration strategy, this session offers new insights and advice:
"Dare to Compare: Must-Have IT Requirements for RMS Replacement" --
- Join Tim Clauss, Implementation Manager at InOutsource, and Jamie Richgels, VP of Engineering at FileTrail, as they review key considerations when evaluating a replacement Physical Records Management Solution.
- This session will review total cost of ownership, project management, and implementation, as well as ongoing support considerations.
- It will also include discussion of FileTrail as a modern replacement for legacy systems
- They've noted: "FileTrail is a modern records platform that is easy to deploy with features to enable law firms to comply with their information governance policy. FileTrail’s retention review module stands alone in the marketplace. FileTrail is browser-based, offers both a hosted and on premise solution and integrates with a variety of systems used in law firms including iManage Work and NetDocuments."
Posted by Dan Bressler at 2:55 PM
Thursday, March 9, 2017
ABA begins offering cyber liability insurance to lawyers, law firms of all sizes" --
- "The American Bar Association has expanded its insurance offerings to include cyber insurance, adding a well-timed line of insurance to its coverage that already includes life, disability, dental, vision and travel insurance for law firms."
- "The innovative insurance is underwritten by Chubb Limited and includes cyber coverage for a firm’s own expenses, such as network extortion, income loss and forensics, associated with a cyber-incident as well as for liability protection and defense costs. The coverage can be tailored to meet a law firm’s unique needs and also includes Chubb’s loss mitigation services both before an incident and following an incident."
- "In recent years, the legal profession has become a popular target for hackers. Despite vigilance and increased awareness by law firms and individual lawyers, cyber-related risks have escalated based on the sensitivity and nefarious uses of that data. Last year, for example, the Manhattan U.S. attorney’s office unsealed indictments against three Chinese men who are accused of using stolen law firm employee credentials to access troves of internal emails at two law firms. The men, according to prosecutors, used details they obtained from partners’ emails about pending deals to make more than $4 million in illegal stock trades."
- "'Cyber insurance coverage is a valuable and practical member benefit for lawyers offered through the ABA Insurance portfolio,' ABA President Linda A. Klein said. 'As the number of cyber breaches increases everywhere and throughout all industries, it is critical that lawyers and law firms that rely on vast amounts of electronic data are protected. As the legal profession evolves, the ABA remains at the forefront in providing attorneys the tools they need to thrive.'
- "A whistle-blowing general counsel won an $8 million federal jury verdict earlier this month, in a case that might encourage other GC’s to call out corporate wrongdoing."
- "After deliberating only three hours, the jury in Wadler v. Bio-Rad found that the GC had a reasonable basis for reporting his suspicions about the company’s Chinese sales operations to the organization’s audit team."
- "But the jury found that the company had retaliated against the GC by firing him after the report, in violation of the Sarbanes-Oxley Act, and that absent the report, he would not have been terminated for legitimate reasons."
- "The award to the GC included $5 million in punitive damages... the GC’s lawyer attributed the punitive damages to the company CEO’s creation of a back-dated negative performance review; computer metadata proved that the review hadn’t been created until after the GC had been fired.Whether the Bio-Rad case will be upheld, and whether it is a trend or an outlier, remain to be seen. But in the short run, it may encourage other GC’s to blow the whistle."
- "Akin Gump Strauss Hauer & Feld LLP, Alston & Bird LLP and Norton Rose Fulbright LLP should all be barred from serving as counsel in a consolidated suit over patents covering online-ordering technology, said Ameranth Inc. on Friday in California federal court, renewing disqualification bids put on hold by a three-year case stay."
- "The Friday filings reiterate a 2013 disqualification bid centering around former Magistrate Judge Charles Everingham, who oversaw a separate Amaranth suit that targeted three of the four patents tackled by the consolidated litigation. Everingham later joined the private sector and became a partner at Akin Gump, where he worked with Stein before Stein left for Alston & Bird, according to the motion."
- "In another Friday motion, Ameranth also asked to disqualify Jim Warriner and his current firm Norton Rose Fulbright LLP, saying Warriner previously clerked for Everingham during his tenure as a magistrate, thus connecting him to the previous patent litigation. Warriner represents hospitality defendants including Expedia, Hotwire and Fandango."
- "According to the filings, Everingham presided over at least one precursory case, Ameranth v. Menusoft, from 2007 to 2011 and sat in on confidential settlement meetings with Ameranth’s principals before joining the law firm.'These facts call into question whether Akin Gump could have possibly adequately screened Mr. Everingham from the matters involving Ameranth,' the motion said."
Wednesday, March 8, 2017
Hinshaw highlights: "Risk Management Issue: Can client A's waiver, given with informed consent, permitting lawyer to represent client A jointly with client B in the same matter be effective to permit lawyer's continued representation of client B in the future should lawyer no longer represent client A, where such continued representation will or may be adverse to now former client A?" --
- "Because it was indisputable that the matters were "substantially related", the dispositive issue was whether Foltz had waived the apparent conflict of interest arising from Tom Cummings' current representation of Ryan. The engagement agreement's waiver provision stated that both Foltz and Ryan "hereby waive any actual or potential conflict of interest which currently exists or may arise out of Tom Cummings' representation of both of them." Foltz contended this provision was inapplicable to the instant case, however, because it only provided consent for Tom Cummings to represent him and Ryan at the same time, not for Tom Cummings to represent Ryan in the future should he no longer represent Foltz."
- "The Court disagreed. Relying upon Oklahoma's statutory rules of contract construction, the Court did not construe the retention agreement and its waiver provision as narrowly as Foltz suggested. Foltz conceded that at the time Plaintiffs decided to hire Tom Cummings, both men "had competing interests for the same funds" at issue. With this recognition in mind, both plaintiffs agreed to waive any actual or future conflict of interest stemming from Tom Cummings' dual representation. The Court was satisfied that, with respect to Tom Cummings' current representation of Ryan, Foltz has given a knowing waiver, i.e., an 'informed consent' to such representation under Rules 1.7 and 1.9."
- "A California federal magistrate judge has granted Leapfrog Enterprises Inc.’s request to disqualify Cooley LLC from representing competing educational game company Epik Learning LLC in a trademark infringement suit."
- "Magistrate Judge Elizabeth D. Laporte on Thursday decided that Cooley may not continue representing Epik in the case because the firm previously had a long-standing relationship with Leapfrog and had advised it in similar matters, but she refused to sanction the firm for not withdrawing sooner, saying the issue was not 'clear cut.'"
- "In the opinion, the judge said it was a 'close call' but that the balance tipped in favor of Leapfrog because Cooley had acquired a substantial knowledge base of how the company operates over the years. Leapfrog said it considered Cooley its 'go-to firm' for two decades and that it has paid Cooley about $10 million in fees for various matters, but Epik contended that Leapfrog was late in speaking up about the potential conflict."
Posted by Dan Bressler at 6:46 AM
Tuesday, March 7, 2017
"Metadata Fair Game in Texas?" --
- "In a recent opinion, the Texas bar panel adopted the minority view on metadata, which states that there is not an obligation to inform opposing counsel that he has sent a document containing metadata. Moreover, Texas rules do not prohibit searching for and in extracting metadata from documents. Of the nineteen jurisdictions that have issued opinions with specific requirements regarding attorneys’ obligation when transmitting or receiving documents containing metadata, Texas is the third state to opine that its rules do not require notification to the sender of the document."
- "Additionally, the Texas opinion indicates that the ethics rules “do not prohibit a lawyer from searching for, extracting, or using metadata” embedded in documents sent from opposing counsel. Currently, ten other state’s opinions forbid searching for or extracting metadata from the documents."
- "The Texas opinion acknowledge other state opinions and notes that . lawyers may be subject to metadata restrictions if they are subject to the rules of other jurisdictions."
- "Putting sensitive materials on an unprotected file-sharing site waived a plaintiff’s attorney-client privilege and work product protection for those materials, a federal magistrate judge in Virginia held Feb. 9 ( Harleysville Ins. Co. v. Holding Funeral Home, Inc. , 2017 BL 39590, W.D. Va., No. 1:15cv00057, 2/9/17 )."
- "However, the magistrate judge also ruled that defense counsel acted improperly by accessing the materials and using them without notifying the plaintiff’s counsel and asking for a court ruling. Disqualification isn’t warranted, but defense counsel must pay the parties’ costs in connection with the disqualification motion as a sanction, Magistrate Judge Pamela Meade Sargent decided."
- "The court’s waiver ruling should make lawyers think twice before putting confidential documents in a file-sharing site without password protection. The case is also a reminder that lawyers generally aren’t free to secretly exploit inadvertently disclosed materials even if they believe the disclosure waived any privilege claim."
- "The magistrate judge said the insurance company inadvertently disclosed the confidential material when an employee intentionally uploaded the case file to the Box site. The disclosure waived the attorney-client privilege under the multifactor waiver test set out in Virginia case law, the magistrate found. The employee should have known that the information uploaded to the site wasn’t protected in any way and that anyone who clicked on the hyperlink could access the case file, the magistrate said."
Posted by Dan Bressler at 7:34 AM
Monday, March 6, 2017
A brief note to remind readers that the early bird registration deadline for Inception 2017 (May 15-18) expires this Friday. With great turnout (and great feedback) from risk-focused attendees last year, it was inevitable that we’d increase our risk investment in 2017.
Indeed, we’re planning informative, instructive and inspiring sessions. These include a special Risk Roundtable track. (And a GC breakfast event, which I heard loudly and clearly that many non-partner, risk professionals wanted in on last year. Message received, see below.)
Some key sessions, panels and topics which should incite interest:
- Panel summary and discussion of key takeaways from the morning GC breakfast
- Risk staffing approaches for conflicts management
- Enhancing the business impact of risk management
- Making the case for investing in risk
- Expanding client evaluation (beyond conflicts, how to address client health, strategic alignment and other factors)
- Enhancing intake through better client requirements and terms of business management
- Integrating third party data into business acceptance
- Case studies about migrating from legacy conflicts applications
- Advanced topics and scenarios in new business intake
- Advanced topics in conflicts management and compliance (AML, KYC, etc)
- Addressing business intake/conflicts management as part of general Practice Management System (PMS) migrations and upgrades
- Information security trends and drivers
- Why Walls, information barriers and screens now matter more than ever
The latest agenda, event overview and a new “Dear Manager” letter template (for those who might need some assistance making the case for investment to their supervisors) are all online at: www.inception17.com.
I previously offered qualified and enterprising blog readers a path to an additional discount. And in the spirit of inclusion (today is a big post for “in” words), I’m extending the same offer this week, with a limited supply on hand.
If you’re interested... email: Tammy Kim: email@example.com (and tell her that I sent you). (And watch for future updates on Inception 2017.)
And, for a bit more flavor on the event, see this 90 second recap video highlighting the 2016 experience:
Posted by Dan Bressler at 6:42 AM
Sunday, March 5, 2017
several years: "Covington Pays to End 3M Conflicts Row. The deal puts an end to an unusually high-profile clash between a Fortune 100 client and its onetime law firm." --
- "Ending a long-running conflict of interest dispute, Covington & Burling has agreed to settle claims that it betrayed its obligations to onetime client 3M Co...The unusual clash between a Fortune 100 company and its well-known former law firm had drawn attention from specialty law publications and legal ethics blogs, as well as more mainstream outlets such as the Minnesota Star Tribune and The Washington Post."
- "Lead 3M lawyer William Brewer III of Brewer, Attorneys & Counselors said in a statement that Covington or the firm's insurer would provide some sort of payment to 3M as part of the settlement. Further details were not publicly available."
- "The dispute began taking shape in 2010, when Covington, representing Minnesota on a contingency basis, sued 3M for allegedly polluting state waterways by its handling of fluorochemicals once used in such products as 3M's Scotchgard stain repellant."
- "More than a year later, 3M's lawyers sought to have Covington disqualified from the case. The company maintained that in the years before the 2010 water pollution suit, Covington had advised 3M on regulatory issues related to fluorochemicals. Lawyers for 3M later filed a separate lawsuit, accusing Covington of 'side-switching' and breaching the firm's contractual and fiduciary duties to the company."
- "Following multiple rulings and appeals, a Minnesota state judge determined in February 2016 that Covington could continue representing the state in the environmental suit. But the judge also found that Covington had violated its ethical duty to 3M."
- "A New York federal judge scolded Holland & Knight LLP for a letter it submitted in a case pitting First NBC Bank against ethanol distributor Murex LLC, saying the unsolicited filing contesting a bid to disqualify the firm did not reflect well on it and that its attorneys had 'abused the court's courtesy.'"
- " Given that the current case is one of first impression, the letter goes on to say, 'there is ample risk that Murex's motion [to disqualify Holland & Knight] and the circumstances giving rise to it are tactically motivated.' Murex contends that Holland & Knight used confidential information obtained from consulting work performed by one of the firm's senior policy advisors to achieve an unfair advantage in a suit brought by FNBC."
- "The judge told the firm at a Feb. 13 hearing that he found it likely that Holland & Knight had represented both sides. However, he said he would give the firm and its client some time to decide their next move. He was "not inviting substantive briefing" on the matter, but asked them to inform him of their "bottom-line determination.""
- "On Tuesday, Judge Engelmayer said the firm abused the courtesy he had extended, and that he was "constrained to express dismay" at the tactic. 'While the court appreciates the strength of counsel’s views on the pending disqualification motion, HK’s resort to such a fait accompli, in support of its own self-interest, does not reflect well on the firm,' Judge Engelmayer said."
Posted by Dan Bressler at 7:33 AM
Wednesday, March 1, 2017
A few interesting stories about information governance. First, from Karen Rubin at Thomson Hine: "Digital dilemma: Who owns litigation database when partners leave a firm?" --
- "A high-profile duel over rights to legal databases is playing out in state court in Boston. The warring parties are six former partners and the asbestos defense firm they left, allegedly taking with them high-value file-management and other databases. The firm’s suit, filed in November, raises the question: When partners leave, does a database that includes client information belong to the clients they take with them? Or to the old firm, which says it has invested heavily in developing the proprietary database?"
- "According to the complaint, before abruptly ending the sale discussions and leaving, one of the former partners had copies of the databases downloaded to her own computer. The six partners allegedly took more than half of Governo’s business with them; the complaint asserts claims for misappropriation of trade secrets, interference with contractual relationships and civil conspiracy."
- "The former partners opened their new firm on December 1, and are asserting that the database information belongs to the clients who came with them, and who were billed for the work connected to the databases."
- "On January 11, the Suffolk County Superior Court in Boston denied the Governo firm’s motion for preliminary injunction, ruling that the record was too undeveloped to determine whether the databases belong to the Governo firm, or to the clients who moved their business to the new firm. A scheduling conference is set for Feb. 14."
- "The Boston Globe reported that the case is being carefully watched, for its potential to make law on 'leaving a law firm in the digital age.'"
- "In denying injunctive relief, the judge reportedly assessed evidence from both sides on the ownership of the database material, but found it insufficient to decide. That would appear to be a sound call, since determinations in this area can be very fact-specific. Key factors might be whether the firm used its own funds to develop the data base, or if those development costs were passed on to clients. In the latter case, an argument could be made that the clients charged for creation of the database should have a continuing right to have the lawyers use it at their new firm. Whether you are a firm manager or a lawyer thinking about leaving your firm for greener pastures, this is an area where it pays to check your jurisdiction’s rules and ethics opinions before acting."
Next, Matthew Hector at Woerthwein & Miller offers commentary on: "ISBA ethics opinion OKs storing client info in the cloud" --
- "Lawyers can store client information on cloud-based servers, an ISBA ethics opinion says, but only if they take the proper precautionary steps."
- "ISBA Professional Conduct Advisory Opinion No. 16-06, issued in October, says yes, as long as lawyers take specific steps to ensure the security of the data stored there. See https://www.isba.org/sites/default/files/ethicsopinions/16-06.pdf."
- "The cloud isn't going away. Much like email (and likely the fax machine), it will eventually become a standard and accepted method of storing and sharing data. Moving to cloud-based storage makes sense for many attorneys, particularly those who often practice in the field as opposed to at the office. Until the cloud is as normal as email, however, attorneys should take extra care when choosing and working with a cloud-services provider."
Tuesday, February 28, 2017
- "A New York federal judge on Monday told Holland & Knight LLP that he was "extremely likely" to find that the firm had concurrently represented ethanol distributor Murex LLC and First NBC Bank, which is suing the energy company over alleged sham transactions."
- "After quizzing attorneys from both sides for more than an hour, U.S. District Judge Paul A. Engelmayer went off the record, "speaking candidly" about his "current thinking." He said he was leaning strongly toward finding that Holland & Knight was representing both Murex and FNBC while it prepared a lawsuit for the latter against the former, but he did not say outright that he intended to disqualify Holland & Knight in the upcoming trial."
- "Murex began working with Holland & Knight after joining the Advanced Biofuels Association, of which Holland & Knight partner Michael J. McAdams is president. In 2016, McAdams passed on another Holland & Knight partner’s request that Murex waive any potential conflicts so the firm could represent First NBC Bank in “another unrelated lawsuit,” according to court papers."
- "Despite Murex’s rejection of that request, Holland & Knight continued to represent FNBC and eventually sued Murex while still working for it, using confidential information against the distributor, Murex said."
- "Judge Engelmayer said he was he was going to contemplate his decision for a week while Holland & Knight and FNBC decide whether to proceed together in this suit or make the decision moot by parting company.
- "Philadelphia Eagles right tackle Lane Johnson told an Ohio federal court in an amended complaint Tuesday that the WilmerHale attorney who arbitrated his appeal of a 10-game performance-enhancing drug suspension failed to disclose that his firm was representing the NFL in another player disciplinary matter."
- "In his original complaint, Johnson had alleged arbitrator James Carter, who denied his suspension appeal and denied his requests for information on the drug testing procedures used, was evidently partial because his law firm, WilmerHale, conducted an investigation for the NFL into the much-publicized domestic abuse scandal with former running back Ray Rice, which eventually "exonerated" the league."
- "But according to his amended complaint, Carter, who is a senior counsel at WilmerHale, never disclosed his potential conflict to Johnson and that the NFLPA knew of the potential conflict but nonetheless allowed him to continue to serve as an arbitrator under both the performance-enhancing and drug abuse policies. He alleged Carter was, therefore, “affiliated” with the league and union, which should have disqualified him from serving as an arbitrator under the policy."
- "The NFLPA has argued that none of its alleged conduct caused Carter to rule against Johnson, saying that he had admitted to taking banned substances during the proceedings. The union said, regardless, that Johnson 'has not come close' to alleging the facts necessary to show the union breached its duty of fair representation."
Posted by Dan Bressler at 7:06 AM
Monday, February 27, 2017
It's OK to Consult an Ethics Committee as Long as You Inform Your Client if There Is a Conflict" --
- "Our firm has an ethics committee. I wish to consult with the ethics committee about issues arising out of my representation of a client of a firm. Can I do so without creating a conflict with the client, or do I have to notify the client? Would your answer change if my consultation was not with the in-house ethics committee, but I sought the advice of outside ethics counsel?"
- "The question is an interesting one. Does receiving internal ethical advice and seeking the advice of outside ethics counsel create a conflict between the lawyer and the client or the law firm and the client. The fact that one goes to in-house counsel or one goes to outside counsel would not seem to make a difference in the ethical analysis."
- "The seeking of the advice itself would not seem to creating a conflict with the client... But, if after seeking advice and the advice does suggest there is a conflict or there is something wrong, then it would appear the lawyer has a duty to advise the client because, at that point, a conflict could arise between the lawyer and the client. There doesn't appear to be any reported decisions by the Pennsylvania Supreme Court on this issue. There also doesn't appear to be any written Pennsylvania ethics opinions on this issue. Some other states have attempted to deal with this question."
- "But, common sense would demonstrate that if a lawyer as part of the representation reaches a conclusion that there is a conflict between the lawyer and the client or conflict between what the client wants the lawyer to do, then the lawyer has to bring that to the client's attention under Rule 1.7 of the Rules of Professional Conduct. Under that rule there is a concurrent conflict of interest if the lawyer's interest may differ from the client's. If there is a conflict on an ethical issue which is determined to be wrong, then it's in the lawyer's interest to take certain steps. To do so, the client has to be fully and properly informed and given a chance to change his or her behavior."
- "Therefore, conclusions of conflicts or misconduct or wrongdoing or ethical problems have to be disclosed to the client once those conclusions are reached. But, the initial consultation either with outside counsel or an in-house committee, would appear not be one where a client would have to consent or even be informed of."
Posted by Dan Bressler at 6:54 AM
Sunday, February 26, 2017
"IP Firm Tees Up Dismissal Of Subject Matter Conflict, Negligent Patent Prosecution Malpractice Case" --
- "A recent patent malpractice action filed in federal court in New York against an IP firm raises once again the issue of subject matter conflicts between concurrent clients in prosecuting patent applications in a similar field of technology. The issue of subject matter conflicts in concurrent patent representation continues to be an area of significant interest–and concern–for IP practitioners who represent multiple clients in the same area of technology."
- "On October 18, 2016, Portus Singapore PTE Ltd. (“Portus”) filed an amended complaint for legal malpractice against the recently-shuttered IP boutique, Kenyon & Kenyon (Kenyon), and two of its former attorneys. In its amended complaint, Portus alleged that it was represented by Kenyon with regard to Portus’ patent portfolio for more than a decade. The amended complaint alleges that Kenyon was negligent in two respects (1) losing three and one-half years of patent term; and (2) failing to disclose a concurrent conflict of interest with another client in the same technical field as Portus."
- "According to the Amended Complaint, throughout its representation of Bosh, 'Defendants were simultaneously representing Portus in its prosecution of its patent portfolio.' Portus asserts that, 'Bosch was a potential infringement and licensee target in the patent prosecution, yet Defendants never notified Portus about its representation of Bosch.'"
- "In 2015, Portus provided Kenyon with an infringement analysis with 'claim charts for a utility deployment of IP video surveillance based on Bosch Video Management System and IP cameras.' Portus allegedly sought Kenyon’s advice as to whether such a deployment would infringe Portus’ patent claims. Evidently, no opinion was provided, although the Amended Complaint fails to allege what was Kenyon’s response to that request or whether it provided the requested opinion. However, Portus asserts that 'to this date, Defendants have never disclosed a potential conflict of interest to Portus.'"
- "The [Kenyon] motion to dismiss further argues that Portus’ conflict of interest malpractice claim fails to state a cognizable claim because it fails to plausibly allege that but for the alleged conflict regarding Kenyon’s concurrent representation of Portus and Bosch, it suffered any cognizable harm. The only alleged “harm” suffered was the loss of patent term, but the Amended Complaint fails to allege how or why that loss of patent term caused Portus to suffer harm vis-à-vis Bosch."
- "Securus Technologies Inc. urged a Texas federal court on Tuesday to disqualify Sterne Kessler Goldstein & Fox PLLC from representing rival Global Tel Link Corp. in patent litigation over prison phone systems, arguing that two attorneys who just joined the firm have been privy to Securus’ trade secrets."
- "The two attorneys had access to the information while they worked on cases with Kellogg Huber Hansen Todd Evans & Figel PLLC, but that presents a conflict now that they now work for Sterne Kessler, which represents GTL in matters before the Patent Trial and Appeal Board, according to Securus. GTL and Securus had signed off on protective orders that allowed attorneys to review the information, but forbid them from sharing it with lawyers working on PTAB matters, according to Securus' motion to disqualify."
- "Since attorneys John C. Rozendaal and Michael E. Joffre are now working with Sterne Kessler, the firm may be obligated to disclose some of the information gleaned in the cases to other firm attorneys working on related inter partes reviews and patent prosecution matters before the PTAB, even though the protective orders bar it from doing so, Securus argued."
Posted by Dan Bressler at 1:47 PM
Thursday, February 23, 2017
Here's a new video featuring Ivo Nikolov, CIO at Davies on his firm's adoption of business intake, conflicts management and confidentiality/information security solutions. Not a bad way to spend nine minutes:
Intapp Open — for Business Acceptance
- "We felt that having compared our options, Intapp Open was the best alternative to Aderant or any other of your competitors... We love Intapp and we're a customer because we believe that what you have is the idea of taking development work out of the hands of the client and making it your priority and your responsibility."
- "A lot of people have done away with coding in-house because of you. I mean, we've never felt that it makes sense to have inside development on a massive scale but this is proof that you're doing it right and this is the direction that the rest of the industry is going."
Intapp Walls — Serious Security
- "Security is a big deal for us and as you know we implemented Wall Builder [Intapp Walls] years ago firm-wide. Again, it's a set it and forget it kind of solution because we don't have to develop anything. It's all developed. It just makes sense."
- "Every client that we talk to wants to know how we secure their documents, the crown jewels, as it were... We've had tools before. We've had home-grown. Two or three before. Nothing compares."
- "We have the experience from everything that we've acquired before, whether it's Intapp Time or Intapp Walls. The first one was Intapp Integrate... We've been adding these products because they just make sense. You have a core infrastructure in the middle, all of these products draw on it."
- "Many tools on the market are overly complicated and inflexible, and leave a lot to be desired from the user experience point of view... Intapp is a first-class vendor that always delivers to a very high standard."
Posted by Dan Bressler at 6:31 AM
Wednesday, February 22, 2017
Several interesting conflicts stories to note today. First up: "Conflicted Kirkland Team Hangs On In Turkish Trader Case" --
- "A Kirkland & Ellis team representing a Turkish businessman accused of money laundering and breaking U.S. sanctions on Iran can stay in the case despite a maze of conflicts surrounding the firm’s work for banks named in the government's case, a New York federal judge ruled Wednesday."
- "Calling Kirkland & Ellis LLP’s conflicts related to eight banks federal prosecutors say were victimized by Reza Zarrab more theoretical than actual, U.S. District Judge Richard M. Berman denied the government’s disqualification bid."
- "After extensive briefings on the conflict issues and proposed solutions, and check-ins with legal ethics experts, Judge Berman said he was not aware of any actual conflict or potential conflict Zarrab couldn’t waive."
- "'The court finds that Mr. Zarrab -- with ‘eyes wide open’ — knowingly, intelligently and rationally accepts the...potential conflicts and limitations upon Kirkland and Ellis's representation of him,' the judge said. 'He does so (apparently) because he has confidence in the value of Kirkland and Ellis's (even limited) representation and also because he has qualified primary counsel who appear to be conflict free.'"
- "When a conflict of interest crops up during a case, Ethics 101 tells us that the “taint” of that conflict can spread, and potentially disqualify all the lawyers of the affected firm. Model Rule 1.10, “Imputation of Conflicts” explains the rule. But how far does that disqualification go? A New York appeals court examined this question in December, and reversed a DQ order in a personal injury suit."
- "In Kelly v. Paulsen, the firm (“HHK”) represented two plaintiffs who had been injured in a motorcycle accident allegedly caused by the defendant. HHK filed suit on plaintiffs’ behalf in 2009. Four years later, a sole practitioner joined the plaintiffs’ team as co-counsel. Very shortly before trial in 2015, the defendant learned — allegedly for the first time — that HHK was representing plaintiffs. On the first day of trial, the defendant moved to disqualify HHK because the firm had also represented the defendant in “personal and business matters” for the previous 30 years.""
- Based on the conflict, HHK withdrew, leaving the solo as plaintiffs’ only lawyer. Defendant then moved to disqualify the solo as well, and the trial court granted the motion. On appeal, the Third Department reversed... the court wrote, “not every lawyer who has any connection or relationship with a firm is considered to be ‘associated’ with that firm” for conflicts and imputation purposes. The question requires a factual analysis, and turns on whether the lawyer’s relationship with the firm is “sufficiently close, regular and personal."
- "There are a number of courts that, like Kelly, have held that taint doesn’t affect co-counsel, at least where there is no showing that co-counsel received confidential information about the party moving to disqualify. The always-excellent Freivogel on Conflicts collects the cases. But there are still decisions that go the other way, too. See, e.g., j2 Global Communications Inc. v. Captaris Inc., (C.D. Cal. 2012) (imputing “outside in-house counsel’s” disqualification to firm). Bottom line: while information-sharing remains key, this is a fact-specific area, and it pays to be aware of nuances that can vary the outcome."
Posted by Dan Bressler at 7:39 AM
Tuesday, February 21, 2017
Clients Turning to Encryption to Combat Law Firm Data Breaches" --
And as one consultant notes in Chief Security Officer magazine: "Law firms subject to same cyber risk as others, but is compliance required? Law firms are handling some of our most sensitive and private information but how are they doing?" --
- "Firing off an email to a client may become a bit more complicated as some in-house legal departments are looking to email encryption as a way to combat law firm data breaches... Corporate counsel are encrypting emails with outside counsel on sensitive matters, including high-stakes litigation and mergers and acquisitions."
- "'I never considered something like this before I came to Sophos,' said Eleanor Lacey, the network security company's senior vice president and general counsel, who joined from SurveyMonkey in November 2016. 'But I should've, because law firms have had data breaches.'"
- "Late last year, Preet Bharara, U.S. attorney for the Southern District of New York, announced that three Chinese nationals had been charged with hacking into two national law firms to steal information on upcoming M&A deals."
- "A legal operations professional at a Fortune 200 company, who was not authorized to have quotes attributed to her name or company, said her company has secured email 'tunnels' with outside counsel on high-stakes litigation. 'We contacted our firm, they put us in touch with the right IT contact, who then talked to our IT contact, and it was done,' the source said, explaining the ease of the process. 'Once it's set up, it's done. It's invisible to me.'"
- "The source also said some companies are skittish to publicly announce that they use email encryption because it could make them a 'target' for outside hackers."
And as one consultant notes in Chief Security Officer magazine: "Law firms subject to same cyber risk as others, but is compliance required? Law firms are handling some of our most sensitive and private information but how are they doing?" --
- "This is an article I have been meaning to write ever since we performed an IT audit for a large law firm a year or so ago. The firm was responding to the HIPAA law that requires all third-party vendors working with healthcare organizations to have a Risk Assessment. This further proves my point that most businesses won’t do much in the area of cyber security or compliance, not even an IT risk assessment unless required by law."
- "Somehow law firms have escaped being subject to the same legal compliance mandates that many other businesses must adhere to. The American Bar Association has certainly visited this issue and stated the following in 2013. Many firms are now asking, “What do we do to keep our systems and data safe? How can we keep this from happening to us?” There is a simple answer to this question: Hire a chief information security officer, give him or her a budget to hire the staff needed to build and maintain an enterprise security program (ESP), and exercise appropriate governance over the firm’s digital assets."
- "But do law firms have a security standard like FISMA, PCI DSS, HIPAA or SOX? Not really one specific compliance mandate for law firms. If they handle credit cards it's PCI DSS, if they handle HIPAA, then HIPAA third party kicks in. It’s a disconnected disjointed, patchwork of laws written by? Legal professionals. Add privacy laws to the mix. Forty-seven states, the District of Columbia, Puerto Rico, Guam and the Virgin Islands have all enacted statutes requiring companies to provide notification if a breach of personal information occurs."
- "'We live in a world where our national security is threatened by cyberterrorists, and where private enterprise is forced to respond to cyber theft of intellectual property on a daily basis. The ABA Cybersecurity Legal Task Force is examining risks posed by criminals, terrorists and nations that seek to steal personal and financial information, disrupt critical infrastructure and wage cyberwar. When our national security and economy are threatened, lawyers will not stand on the sidelines,' said Laurel Bellows, 2012-2013 President of the American Bar Association."
Finally, commentary on another jurisdiction's move to approve cloud services: "Illinois State Bar Association issues Opinion on using cloud services to store client information" --
- "Back in October, the Illinois State Bar Association (ISBA) issued a Professional Conduct Advisory Opinion stating that a lawyer may use cloud-based services to store client information as long as the lawyer takes reasonable measures to ensure that the client information remains confidential and is protected from breaches."
- "Carefully choosing an internet cloud space provider is, of course, the first step a lawyer must take in order to comply with the duty. But, it is important to note that the opinion clearly states that a lawyer does not comply with the obligation to protect the client information by merely selecting (however carefully) a reputable provider. Thus, the opinion concludes that lawyers must conduct periodic reviews and regularly monitor existing practices to determine if the client information is adequately secured and protected."
Posted by Dan Bressler at 8:44 AM
Monday, February 20, 2017
"Akin Gump Lawyer Accused of Trying to Sell Lawsuit Under Seal" --
- "A Washington lawyer at a prominent firm was arrested in a disguise while trying to sell a copy of a secret lawsuit involving a company that was under investigation by the U.S. Justice Department. Jeffrey Wertkin was picked up Jan. 31 in the lobby of a hotel in Cupertino, California, where he believed he was about to collect $310,000 for selling the lawsuit, according to the Federal Bureau of Investigation."
- "Wertkin, who worked in Washington for Akin Gump Strauss Hauer & Feld LLP, believed he would hand a copy of a complaint to an employee of the company, which was accused in the complaint by a whistle-blower of falsely billing the government. Wertkin, who was wearing a wig and went by the name of Dan, was met instead by an FBI agent, according to arrest documents unsealed on Feb. 6. “My life is over,” Wertkin told the agent."
- [The firm states]: "There is no indication that Mr. Wertkin misused any Akin Gump client information. It appears from the criminal complaint that the document he attempted to sell was filed under seal in January of 2016, when he was working at the Department of Justice and months before he joined the firm."
It's important to note the firm's position in this matter with regard to where and when access to the sensitive materials occurred.
But it's equally important to flag the broader risks raised when bad actors gain access to extremely sensitive information. (An individual acting improperly with data obtained months prior to joining a firm, might be equally or even more tempted to continue pursuing such activity.)
Consider that over the years we've covered multiple instances of insider trading and other unsavory (alleged) behavior by rogue actors, both lawyers and staff, working within several firms.
It's one reason why firms are increasingly taking a closer look at internal information governance and security practices, including "pessimistic" or "hybrid" models of access and confidentiality management.
Of course, no policy or approach can completely prevent a determined, trusted bad actor from doing (or attempting) bad things -- that's what makes this particular risk so concerning, and the need for continued vigilance so critical.
Posted by Dan Bressler at 8:25 AM
Wednesday, February 8, 2017
"Why This California Case Is Driving a Wedge Between Law Firms and Clients" --
- "Dozens of major law firms are lining up against their corporate clients in an awkward faceoff at the California Supreme Court that lays bare the increasing tension between companies' expectations of loyalty and Big Law's economic incentives to take on more and more business."
- "In papers filed last week [Dec 16], more than 50 law firms including Arnold & Porter, Latham & Watkins, Sidley Austin and Wilson Sonsini Goodrich & Rosati urged the state high court to adopt a ruling that would allow them to represent clients with opposing interests, though not in the same matter, through the use of broad conflict waivers—and ensure they still get paid."
- "That notion rankles in-house lawyers who say their interests are being stepped on to boost law firm profits. In briefs opposing the law firms, the Association of Corporate Counsel (ACC) and an unusual alliance of corporations including the paper giant Kimberly-Clark Corp. and networking hardware maker Netgear Inc. argue that conflicts must be disclosed and that companies must not be left to foot legal bills if the firms they hire are secretly playing dual roles."
- "Such public discord between law firms and their clients is atypical, to say the least. While spats over legal fees erupt from time to time, rarely do law firms and corporations stake out opposing positions at a venue as significant as the California Supreme Court."
- "The Association of Corporate Counsel has joined a host of companies in their support of J-M Manufacturing as it opposes Sheppard Mullin Richter & Hampton LLP’s appeal of a $3.8 million fee forfeiture order at the California Supreme Court, agreeing that the firm’s “open-ended” advance conflict waiver should remain invalid."
- "General counsel from 10 companies, including Kimberly-Clark Corp., Newegg Inc., Herbalife International and NetGear Inc., have also urged the court to reject Sheppard Mullin’s attempt to overturn the order, saying in a joint amicus brief the firm’s “boilerplate” advance conflict waiver was rightly rejected."
Posted by Dan Bressler at 7:17 AM
Tuesday, February 7, 2017
In November, we noted an ethics opinion: "No ‘Web Bugs’ on E-mail to Opposing Counsel, Bar Panel Says." Now comes a related story – tied to when providing metadata is NOT allowed. (And, similarly, considering the different scenarios – those when reviewing receiving counsel should review metadata vs. definitely should not.):
"Lawyers Beware: Sending Native File Documents to Third Parties May Violate Your Ethical Obligations" --
- "Frequently, a party must produce electronic documents, such as Word documents, in their native format, rather than producing paper copies, in response to discovery requests; this obligation includes producing the document’s metadata, the data automatically embedded in an electronic file that contain information about the document, such as its origin and history of revisions. But what are a lawyer’s responsibilities concerning the transmission or receipt of metadata outside of the discovery context? A recent ethics opinion from the State Bar of Texas offers some guidance—and a stern warning: attorneys risk violating state rules of professional conduct if they mishandle metadata."
- "The Professional Ethics Committee for the State Bar of Texas recently concluded that a lawyer must take “reasonable measures” to avoid transmitting metadata containing a client’s confidential information to persons to whom such confidential information shouldn’t be disclosed. See Professional Ethics Committee for the State Bar of Texas, Opinion No. 665, at 2 (Dec. 2016). This obligation, according to the committee, springs from two duties imposed under Texas rules of professional conduct: the duties of competence and confidentiality. Id."
- "These professional duties are not unique to Texas, so it is unsurprising that other states similarly require attorneys to handle metadata carefully... But not every state has formally addressed the issue, and those that have taken it up have adopted different rules regarding the obligations of an attorney who receives electronic documents containing metadata."
- "The answer to avoiding ethical violations by the recipient of metadata is less straightforward given the different state rules. Recipients who take a better-safe-than-sorry approach by ignoring metadata in all instances might not be choosing the right course, as failing to thoroughly review documents obtained from opposing counsel could itself be a violation of an attorney’s duties of competence and diligence. See, e.g., Vermont Bar Association Professional Responsibility Section, Opinion No. 2009-1 (2009). Attorneys, therefore, must carefully review the rules in their own state. Failure to do so could have significant consequences."
Posted by Dan Bressler at 4:20 PM
Monday, February 6, 2017
Here's a new video featuring Lisa Mayo, Director of Data Management and Ballard Spahr on her firm's journey to improve risk management.
This discussion includes discussion of the firm's migration from the legacy LegalKEY conflicts tool (the risks associated with we've covered) to a modern conflicts management solution, and the pursuit of industry best practices for information security by adopting sophisticated confidentiality lifecycle management software.
Intapp Open — Modern Conflicts
This discussion includes discussion of the firm's migration from the legacy LegalKEY conflicts tool (the risks associated with we've covered) to a modern conflicts management solution, and the pursuit of industry best practices for information security by adopting sophisticated confidentiality lifecycle management software.
Intapp Open — Modern Conflicts
- "We were on a very old version of LegalKEY. We were on version 3. LegalKEY had been purchased by OpenText. They weren't really putting out any new releases, and so based on the maintenance that it would take if we needed a new report — we would have to call, spec the report out, wait for a developer to build it — it just was an older product. We needed to move to a more modern tool with a modern infrastructure and something that would respond to our needs more quickly."
- "What we found with Intapp Open was that it would provide us with a framework to be able to maintenance the system ourselves, so instead of waiting for a developer to write a report that was part of the executable, now we had the power to create the reports ourselves. If we needed to make modifications to forms or even the workflow, we now had the power to do that ourselves. It was a logical choice for us."
- "In addition, with the conflicts system, there were a lot of features that we could take advantage of, such as the Dun & Bradstreet integration, Hoover's integration, and so that's what lead us to purchase the tool. We've been very happy with it."
Intapp Open — Future Value
- "We are also looking at Intapp Terms in purchasing and implementing that tool, what we find is that we often get very voluminous outside counsel guidelines. Those have to be scanned in, but what we've found is that the continual maintenance, where someone's actually looking at those terms and making sure they're being enforced, that's too separated from the intake."
- "By including Terms as a part of our intake, we hope to have those alerts to be easily notified when a term is being violated, a clause is being violated, and we also like the fact that with Terms, we're going to be able to have a central repository. It's not in someone's head who's working on the case and forgets to connect with accounting or connect with another administrative group. With the centralized repository, we'll be able to audit the terms against what's actually happening and be able to make sure that we're 100 percent compliant with what those outside counsel guidelines are."
- "We know that Intapp is customer-focused, so it's not just the sales organization. They're focused on having customer support staff that are actually following up with us on a regular basis and again, seeing what our ongoing needs are and maintaining that relationship."
- "I would say that really when you're working with Intapp, the company, you form a personal relationship with whoever your salesperson is. We see each other at different conferences, whether it's ILTA or Insight. You're greeted with a hug. You really build that relationship. They come to know what's important to your firm, what your needs are, and then they can respond in kind with solutions that will make your life easier."
Posted by Dan Bressler at 9:05 AM
Sunday, February 5, 2017
Batting clean-up on 2016: positional conflicts, settlements and your firm letterhead" --
- "The U.S. district court for the Middle District of Tennessee in October turned back a disqualification motion aimed at Butler Snow, ruling that the firm could continue representing a personal injury plaintiff who was potentially contesting the constitutionality of the state’s punitive damage caps, while at the same time asserting the caps defensively in at least one pending case for another client."
- "In its DQ motion, the trucking company defendant said those positions were inconsistent and raised a positional conflict in violation of Tennessee’s version of Model Rule 1.7 and its cmt. ."
- "Not so, said the district court. First, the trucking company waited until two months before trial to try to disqualify the law firm; it would cause severe prejudice to the plaintiff if she had to find new counsel."
- "Second, the firm retained separate counsel to represent the plaintiff on all post-trial issues challenging the damage caps, an arrangement that plaintiff agreed to at the beginning of her representation. Third, there was no evidence that the potential conflict had actually affected the injury case, or was likely to compromise the firm’s representation of clients who simply asserted the caps to limit their liability rather than expressly defending their constitutionality. On all these bases, the court held, the firm could stay in the case, part of which has now been settled."
- "When a defense is being provided to an insured under the terms of an errors and omissions policy, a number of conflicts can arise in the tripartite relationship among the insured, the insurer and the defense counsel. For defense attorneys, one of the most difficult to navigate is the conflict that arises when the plaintiff makes a settlement offer. Such a demand triggers separate rights and distinct duties to the policyholder/client, which pull against the sense of loyalty many defense attorneys feel to the insurer that hired them and, in many cases, supplies a great deal of their business."
- "While the focus of this article will be the conflicts that defense lawyers feel between the needs of their clients and the demands of the insurers who pay them, understanding those conflicts requires an understanding of the conflicts the insurers face when determining whether to settle a claim."
Posted by Dan Bressler at 7:04 AM
Friday, February 3, 2017
Much attention has been paid to current events. Several firms are finding themselves facing scrutiny from a variety of sources, highlight issues including potential ethical conflicts as well as risks associated with client selection. Here are several stories of note and interest:
"In The Polarized Era Of Trump, BigLaw Searches For Balance" --
- "Despite many BigLaw attorneys’ personal opposition to Trump, prestigious and traditionally bipartisan firms have largely remained quiet and cautious following an unusually divisive election."
- "Firms that have represented Trump, including Jones Day, Kasowitz Benson Torres & Friedman LLP, and Morgan Lewis & Bockius LLP, have benefited from his rise to power. To be perceived as taking a political side could be advantageous, risky or both, given the current political climate and the unpredictability of the new president."
- "The alignment of law firms with or against the new administration in the legal battles to come could open rifts among attorneys and perhaps with some clients."
- "California’s Legislature this month retained Covington & Burling to help it resist Trump's potential attacks on the state's immigration, environmental and health care policies. Legislators cited expected “extraordinary challenges” and “uncertain times” in a news release announcing the deal. Former Obama administration Attorney General Eric H. Holder Jr. will lead that effort for the firm."
- "Hester told Law360 that his firm views California as just another client with a host of potential legal conflicts with the federal government. He said that the firm itself has no political preference; it has represented both Democratic and Republican organizations...Hester said that he has received some calls from clients about its representation of California. They weren't complaints, but merely concerns that the firm's representation of the Golden State might create a conflict with their own cases involving California government entities. The firm’s representation of California hasn’t caused them to drop any other cases so far, he said."
- "Trump owes one of his most enthralling displays of legal-political theater to his longtime tax attorney, Sheri Dillon of Morgan Lewis. On Jan. 11, she stood next to Trump and a table piled high with paper and folders arguing that Trump’s widely criticized business conflict management plan was legal, appropriate and effective. She dropped her firm’s name three times, at the beginning and end of her remarks. It was a crown jewel in an unconventional press conference... Dillon and Morgan Lewis declined to comment for this article. To some watchers, Dillon’s performance was a stellar example of an attorney providing vigorous advocacy for her client — and a fine way of getting her firm’s name into the public. To others, the comments crossed a line and placed Dillon and Morgan Lewis in jeopardy."
"Giant Law Firm Overlooks Giant Trump Conflict… Sends ‘Oops’ Letter" --
- "Perhaps Dentons has finally grown too big. The global behemoth of a law firm sent a threatening letter to CNN last week, after CNN pointed out that Trump’s nominee for Secretary of Health and Human Services, Rep. Tom Price, had purchased shares in an implant company conveniently before introducing legislation that would financially benefit the company. Then someone performed the conflict check."
- "Well, it turns out that someone else at Dentons performed a simple conflict check and revealed that Dentons actually does a whole mess of work for CNN, prompting Mike McNamara, Dentons’s U.S. Chief Executive Officer, to write another letter apologizing to CNN."
- "So is that what happened here? He just forgot to run a check? It seems unlikely, and not just because you would expect him to practise what he preaches. Campaign finance records show that Price, who represents Georgia’s sixth congressional district, has been a longtime client of Evans."
- "As for CNN, is it plausible that Evans, a Trump surrogate who has appeared on the network and who works in the firm’s Atlanta office, would be oblivious that Dentons also represents the Atlanta-based network? This is doubtful. Dentons may be huge but the Atlanta office has just over 100 lawyers. And CNN is the kind of client that colleagues would mention. Even if Evans did not run a conflict check, you would think he would know."
- "So what did happen? Evans’ own writing may provide an answer. 'In some circumstances, ‘thrust upon’ conflicts arise. It often involves a situation where a firm represents two different clients who suddenly have an unexpected pote'tial conflict and there is insufficient time to address and/or resolve the conflict,' he wrote. “More often than not, both clients have been firm clients without incidence.'"
- "So far, that seems right. Price and CNN were both Dentons clients, but they were not adverse to each other until the CNN story."
- "Earlier this month, President-elect Donald Trump named former New York City Mayor Rudolph Giuliani, who heads a cybersecurity practice at the Miami-based law firm Greenberg-Traurig, as his chief adviser on cybersecurity issues. Giuliani's new title is more than just another notch on his resume. It's also likely to be good for business. "The way the world works, if you're perceived as having proximity to power, that brings certain advantages," says William Galston, senior fellow in governance studies at the Brookings Institution."
- "Giuliani told Politico his role as Trump adviser would present no conflict-of-interest, and he said he would never use his White House access to lobby the president."
- "But Politico said Giuliani 'acknowledged that he might have business ties with some of the people he connects to Trump, and that he might be discussing government and private issues with some people.'"
Posted by Dan Bressler at 2:30 PM
Thursday, February 2, 2017
We saw a large and operationally diverse community join us at Inception 2016, Intapp's inaugural global user conference. That event was a truly memorable experience, earning high marks from all who attended (including many longtime blog readers). And we’re building on that success in big ways.
Inception 2017 will be jam-packed with informative sessions, inspiring keynotes, hands-on-workshops, peer networking opportunities, exciting social events, and much more.
It's set for May 15th – 18th 2017 in San Francisco, California, at the Fairmont hotel. And we’re developing a rich program of educational and inspirational content, and adding several new enhancements.
As with last year's event, we'll have a "Risk Roundtable" program track.
You can read more about the event at the conference web site, where you can also download overview PDF with more detail. (The official agenda will be published shortly.)
For a bit more flavor on the event, see this 90 second recap video highlighting the 2016 experience:
Special Promotion for Risk Blog Readers
For the next week (Feb 2-9) we're making a limited number (we are in the business of risk, of course) of $100 off discount codes available to risk blog readers. These are reserved for qualified organizations and individuals, are first-come, first-served, and require registration to be completed by February 17.
Incidentally, these will apply in addition to the early bird registration rate. So, I hope some lucky, loyal blog readers will jump on the opportunity.
Please email: Tammy Kim (and tell her that I sent you) for details. (And watch for future updates on Inception 2017.)
Posted by Dan Bressler at 7:11 AM
Wednesday, February 1, 2017
Turkish Trader Wants To Retain Kirkland Despite Conflicts" --
- "Accused international bank fraudster Reza Zarrab said Thursday he wants to keep a Kirkland & Ellis LLP team to support his defense despite conflicts the megafirm has with eight banks — even astonishingly agreeing to allow HSBC, a Kirkland client in a similar case, to examine his defense filings before they are made public."
- "The eight banks with which Kirkland has ties are seen as victims of Zarrab's scheme, according to prosecutors."
- "'I am aware of the conflicts,' Zarrab said during a lengthy questioning designed to convince Judge Berman that his choice of counsel had not wavered despite the direct and potentially thorny conflicts with the banks, especially HSBC. 'I am very happy with their services.'"
- "In Lanard Toys Limited v. Toys “R” Us, Inc. et al, 3-15-cv-00849 (FLMD December 16, 2016, Order) (Barksdale, MJ), a patent infringement matter in Florida District Court, the court denied defendants’ motion to disqualify plaintiff’s new counsel for simultaneously representing defendant in an unrelated case."
- "Four months after lawyers with Gordon & Rees Scully Mansukhani LLP (“Gordon & Rees”) began representation of Lanard Toys Limited (“Lanard”) against Toys “R” Us-Delaware, Inc. (“TRU”), other lawyers with Gordon & Rees began representation of TRU in a California state case. Upon discovering the conflict of interest, Gordon Rees withdrew from representing TRU in the California matter. However, Gordon Rees refused to withdraw from the Florida case, so TRU filed a motion seeking disqualification."
- "Gordon Rees asserted the dual representation was a result of an “inadvertent input error,” wherein the names of some of the parties where inadvertently omitted from the conflict tracking software during the conflicts check, and not because Gordon & Rees deliberately disregarded the duty of loyalty to a client."
- "Gordon Rees was only acting as local counsel to TRU in the California matter. The only activity in which Gordon & Rees participated on behalf of TRU in the California Case was the finalization and filing of TRU’s answer to the complaint at the direction of the Palter Firm, who was TRU’s primary counsel in the California matter."
- "In analyzing the issue and ruling on TRU’s disqualification motion, the Court first noted that because a litigant is presumptively entitled to counsel of its choosing, only a compelling reason will justify disqualification. Disqualification is a “harsh sanction, often working substantial hardship on the client,” so it “should be resorted to sparingly.” And, because a disqualification motion may be used to harass or for tactical advantage, it should be viewed with caution. The Florida Court further noted disqualification is not mandatory, even if a court finds a lawyer is violating a conflict-of-interest rule."
Posted by Dan Bressler at 2:00 PM
Tuesday, January 31, 2017
Known Knowns and Unknown Knowns: "Conflict Lateral Hire Didn’t Recall Disqualifies Alston & Bird" --
- "Alston & Bird LLP can’t defend a doctor accused of breaching a non-compete agreement with a nanomedicine company, because a lateral partner may have previously advised the company on the non-compete but couldn’t completely recall his involvement, the U.S. District Court for the District of Maryland ruled Jan. 5 ( CytImmune Scis., Inc. v. Paciotti , 2017 BL 2356, D. Md., No. PWG-16-1010, 1/5/17 )."
- "The conflicted lawyer, Jonathan Rose, joined Alston & Bird after a four-year stint at Katten Munchin Rosenman LLP, which served as plaintiff CytImmune Sciences Inc.'s outside counsel for several years."
- "Judge Paul W. Grimm said Rose’s work on a CytImmune matter while working at Katten meant he had to be disqualified from this case—and that Rose’s conflict was imputable to all of his colleagues at Alston & Bird."
- "Grimm reached that conclusion even though Rose claimed to have no “recollection whatsoever of ever working with [CytImmune] while at Katten” and wasn’t even 'aware of the existence of a company called CytImmune.'"
- "'I am left with the impression that Rose’s inability to recall the precise details of his prior work for CytImmune placed him squarely between the Scylla of [Rule] 1.9 and the Charybdis of [Rule] 1.7,' Grimm said. 'And if Odysseus could not navigate such treacherous waters, then, respectfully, neither can Rose.'"
Playbook: "Cooley May Be DQ’d In Ex-Client Leapfrog’s Trademark Suit" --
- "The California federal magistrate judge overseeing Leapfrog Enterprises’ trademark infringement suit against competing educational game company Epik Learning said at a hearing Tuesday that she may disqualify Cooley LLP from representing Epik since the firm has worked on similar cases for Leapfrog for 20 years, but added she wouldn’t sanction the firm."
- "Magistrate Judge Elizabeth D. Laporte said the case posed a 'close question.' Cooley's years representing Leapfrog Enterprises Inc., often in similar matters, might help the firm understand the company’s negotiating strategy, the judge said. But representation and communication had tapered off for months before the firm notified Leapfrog it could no longer represent the company in April, Judge Laporte said, and California’s strict laws on the subject seemed to her 'outmoded' and not in keeping with the pace of modern law firm management, but instructed her to 'err on the side of disqualification.'"
- "Judge Laporte said Leapfrog’s strongest argument for disqualification was the possible negotiating strategy that Cooley was privy to, which meant the firm would know whether Leapfrog was “the type who starts at the top, then drops like a stone” during settlement talks."
- "But she said she found it 'troubling' that Leapfrog hadn’t accepted Cooley’s offer to withdraw as counsel and had instead opted to pursue its motion for disqualification as well as sanctions when the matter was moot. She added that if anyone was entitled to attorneys’ fees, it might be Epik Learning, which had to continue fighting the motion even after offering to find new lawyers."
- "A California federal judge refused on Tuesday to disqualify Cooley LLP from defending ATM processor Cardtronics Inc., its Mexican subsidiary and two of its executives in a suit alleging the companies cheated a franchiser out of commissions, saying Cooley properly disclosed potential conflicts to its clients and obtained their consent."
- "Magistrate Judge Elizabeth D. Laporte said during a hearing in San Francisco that Cooley had the four defendants sign consent forms acknowledging potential conflicts, and that’s 'the correct way to do it.' Judge Laporte also criticized plaintiff William D. Bush’s argument that Cooley should be disqualified because the attorneys aren't licensed to represent their clients in Mexico. Judge Laporte said those 'aren’t really grounds to disqualify,' and even if they were, it wouldn’t be up to Bush to decide if the defendant’s counsel was competent."
- "Lawyers for Microsoft Corp. and Impulse Technology Ltd. spotted a problem when they arrived at the Federal Circuit for argument Nov. 4: Judge Kimberly Moore was seated on their panel. Moore routinely recuses herself from cases in which her husband’s law firm, Latham & Watkins, represents one of the parties. But in this case Latham lawyers had appeared for Microsoft at the trial court level only, and the conflict slipped through the cracks."
- "After counsel notified the court, Moore stepped aside and Judges Pauline Newman and Alan Lourie heard the case on their own. 'Our appreciation and thanks to counsel for bringing this conflict to our attention now, rather than later,' Newman said."