Monday, November 30, 2009

ABA Commission on Ethics 20/20 – Comments Due Dec 31, 2009

The ABA’s Commission on Ethics was created to review and recommend updates to Model Rules and regulations affecting lawyers in response to changes in the nature of the practice of law, new technology, etc. Its charter is to “…study these issues and, with 20/20 vision, propose policy recommendations that will allow lawyers to better serve their clients, the courts and the public now and well into the future.”

In November, the Commission issued an outline of preliminary issues [PDF] under consideration and invited public feedback and comment. These risk, ethics and regulatory issues include:
  • Regulations Governing Admission to Practice (both domestically and internationally)
  • Outsourcing
  • Conflicts (including evaluating the feasibility of defining different conflicts rules and standards for “more sophisticated” clients vs. “less sophisticated” ones; law firm lateral hiring)
  • Confidentiality (addressing contradictions between domestic law firm confidentiality management obligations and international laws affecting firms with global practices; reviewing duties to employ data security / ethical walls software and other protective measures)
  • Alternative business / ownership structures
  • Approaches to law firm / lawyer regulation
Comments are due by December 31, 2009 and will be reviewed by the Commission at its February 2010 meeting in Florida.

Tuesday, November 24, 2009

Is your firm leaking sensitive information?

A recent survey of 600 office workers in Canary Wharf London and Wall Street NY revealed that 41% of workers who have switched jobs took sensitive data with them. And a third would “pass on company information if it proved useful in getting friends or family a job.”

The report, “The Global Recession and its Effect on Work Ethics,” notes that surveyed organizations may be getting lax about security:
  • “… it would seem employers have only themselves to blame as they appear pretty lackadaisical when it comes to protecting their data from their employees with 57% of respondents stating that it’s become a lot easier to take sensitive information from under their bosses noses this year, up from 29% last year.”
Another study published this week suggests that workers are actually acting more ethically since the economy turned. As reported by The National Law Journal, a study by the nonprofit Ethics Resource Center suggests that workers are observing less misconduct and reporting it more when they see it.

Of course, there may be a difference between what people actually are seeing and reporting vs. real-world activity. Regardless, firms are taking steps to prevent data leakage and unauthorized movement of firm and client information.

These surveys don’t focus specifically on law firms. But even the legal industry is concerned about the issue. At this article from the Law Technology Journal notes: “Law Firms Up Employee Surveillance as Redundancy Figures Grow.” It quotes the IT Director of Allen & Overy who voices an opinion shared by many:
  • “Most law firm employees are bound by a professional conduct code but we would be careless if we weren’t being a bit more vigilant.”
The IT Director at another 600-lawyer firm notes:
  • “Clients want to do extra audits and are asking more questions about our capability and redoubling their questions.”
To learn more about steps law firms are taking to combat these risks, see the white paper: “Is Your Firm Leaking? Why Data Leakage Can Happen Now More Than Ever.”

It explores how technology has made it easier than ever for attorneys and staff to remove large quantities of firm and client information undetected, and steps organizations can take to address the problem.

Thursday, November 19, 2009

Building Risk Management and Compliance Resources for Law Firms

Whether you’re a law firm general counsel, loss prevention partner, director of conflicts, or records manager, you face a variety of risk and compliance issues every day. There are several excellent resources on the web that many turn to for research, news and other insight. We’d like to build a consolidated list of them. You can help.


We’ve set up a wiki page (a wiki is an web page with an “edit” button on it, so anyone can contribute) called Law Firm Risk Resources and added some of our favorite links. These include resources like our sister site, the Risk Roundtable Initiative, as well as links to articles on law firm risk management and professional responsibility issues, conflicts (rules, case law and changes), lateral hiring, risk and technology and other issues.

To manage new additions, we’ve set up a “suggestions” page where visitors can nominate new link ideas for the list. This is an experiment we hope proves successful. We have about a dozen links and growing. If you have a favorite online legal risk web site, article or other resource, please feel free to contribute.

Friday, November 13, 2009

California Bar May Allow Advanced Conflict Waivers

As reported in today's Recorder, this weekend, the California State Bar is voting on 45 proposed changes to its Professional Rules of Conduct, including the allowance of advanced conflicts waivers. That’s the most controversial of several revisions proposed by a Special Commission that has been working for several years and issued this latest series of recommendations.


Over 1000 pages of comments on this and other changes have been submitted by California lawyers. Highlights of the advanced waiver debate:

• "The rules are supposed to protect clients, not lawyers," Richard Zitrin, an ethics expert and adjunct professor at Hastings College of the Law, said Wednesday. "This protects lawyers, not clients."

• “Zitrin, of Zitrin & Frassetto, authored last year's letter signed by 12 other law professors opposed to the waiver proposal, and he followed up Tuesday by sending a letter of his own in which he called the idea “a monumentally inappropriate and grossly flawed standard.’”

As the Commission’s report notes, current California rules are silent on the issue of advanced waivers. Furthermore industry data, such as the Law Firm Risk Survey, [LINK] suggests that the practice is growing across the industry as a whole. It will be interesting to see how this issue resolves. Stay tuned…

Wednesday, November 11, 2009

What duty does your firm have to protect client confidential information that creates conflicts?

Hinshaw & Culbterson publishes an excellent risk newsletter called “The Lawyers’ Lawyer.” The November issue includes an article on confidentiality issues: "Duty to Protect Confidential Information – Duty to Keep Client Informed of Developments Relating to Representation – Resolution of Conflict Between Duties Owed to Different Clients Regarding the Same Information." Highlights from the full article:
  • “Risk Management Issue: What are the duties of a lawyer when he learns a fact in connection with the representation of a client that, although confidential in connection with that engagement, may be material to the lawyer’s representation of a second client in an entirely separate and distinct matter?”
  • “This situation is by no means unique. For example, it frequently arises when firms regularly represent clients who bid on publicly finance projects, where several clients may wish to bid against one another.”
  • “Risk Management Solution: The solution that some firms routinely adopt in order to deal with these situations is to insert a provision in every client’s engagement letter that states that the firm’s lawyers have no obligation to share information, even information material to the representation, if that information was learned while representing other clients and is confidential to those other clients.”

Tuesday, November 10, 2009

Upcoming Risk Roundtable Event (Philadelphia)

Date: Tuesday, November 17
Location: Philadelphia, PA

Topic: Confidentiality and Information Risk Management Issues Facing Law Firms
This session will explore how recent rules, regulations and industry standards are affecting law firms and the steps organizations are taking to reduce their risk exposure, increase the internal profile of risk management and better protect themselves.

Moderators: Kristopher Klein (Fox Rothschild LLP), John Sharkey (IntApp), Stacey Fiorillo (Baker Robbins & Company)

For more information, please visit: RiskRoundtable.com

Thursday, November 5, 2009

Firm Confidentiality Risk -- How hard should you clamp down on internal leaks?

If you’ve ever read a legal tabloid blog, you’re not alone. These sites pride themselves on providing “inside” information on the industry. Their content is often edgy and opinionated, without the filter of the more traditional press. This presents a challenge for law firms, as these sites encourage and post leaks of internal firm information – policy memoranda, strategic plans, compensation details, rumors and more.

When layoffs took place this the year, sites like Above The Law and Law Shucks published information swiftly (much to the chagrin of several firms, especially those attempting "more discrete" personnel adjustments).

In response, today some firms are trying to clamp down. Most recently, rumors circulated about one firm's internal memo (which eventually leaked) that was said to warn of strict penalties to anyone caught leaking. However, the definition of a leak and the complexities raised by such policies may create new risks...

First, "clamp downs" raise the likelihood of causing the Streisand Effect. This is what happens when "...an attempt to censor or remove a piece of information backfires, causing the information to be publicized widely and to a greater extent than would have occurred if no censorship had been attempted."

Furthermore, they’ve raised the hackles of journalists and others in favor of this type of sharing. As one blog commentator noted: blanket prohibition on associates discussing their working conditions may violate federal law, and similar restrictions on the discussion of compensation may be a violation of Title VII and/or the Equal Pay Act (and possible state and local equivalents).

It’s perfectly reasonable for firms to expect and take measures to preserve internal confidentiality. (It remains to be seen what other measures firms might employ to supplement warnings and new policies. Other industries have had mixed experiences clamping down.)

Regardless, with easy communication technologies available and a sometimes weakening sense of associate firm loyalty, this is an issue worth understanding and preparing for, before you read about your own firm on “Page 1” of an internet legal tabloid...

Wednesday, November 4, 2009

Annual Risk Roundtable Law Firm Risk Surveys Now Underway

The initial round of the 2010 Law Firm Risk Management Survey is now underway. Based on the success of the North American survey, this initiave has been expanded by the Risk Roundtable program -- a separate survey for UK-based law firms has been added. The UK survey offers a question set tailored specifically to risk issues affecting firms in that geography.
  • North American Law Firm Risk Survey -- Explores several risk areas including policies and education, new business intake practices, lateral hiring and departures, confidentiality management, policy management, and compliance tracking and verification.
  • UK Law Firm Risk Survey -- Collects feedback on a variety of issues including firm risk strategies and internal priorities. It also explores policy management approaches and organisational investment plans.
Participation is open to risk stakeholders at qualified organizations. All who participate will receive a copy of the final report. To learn more about this program or to participate, please see details on: RiskRoundtable.com.

Monday, November 2, 2009

Risk White Paper from Managing Partner Magazine Now Available

The Ark Group / Managing Partner Magazine just published an excellent collection of risk articles comprising a new white paper: "Risk Management in the Legal Profession, US Ed." The UK version of this white paper series is now in its 3rd or 4th edition, and it's great to see Ark/MP expand this program to focus on US issues as well.

This inaugural US edition includes articles written by several industry luminaries and risk experts, including: