Wednesday, September 29, 2010

Lateral Movement Trends and Law Firm Information Risk Management

The American Lawyer reports that several indicators point to record lateral movement among law firms. They point to their own "finger in the air" test -- noting that the volume of firm-issued press releases announcing laterals has recently doubled and feedback from recruiters. (They also call out a trend long in the making, linking to quantitative analysis with data showing record significant movement in 2009 as well.)

Several factors are commonly cited for lateral movement: lawyers may act to maximize personal compensation (particularly as the end of the year nears), to find a more compatible work environment, or in response to pressures from firm management to "find a new home," in the case of poorer performers.

When lawyers leave or plan to leave firms, risk follows. One key risk is client information management and confidentiality. The Legal Ethics Forum just pointed out an interesting paper on the challenges of and common disputes tied to managing electronic client files: "Client Files and Digital Law Practices: Rethinking Old Concepts in an Era of Lawyer Mobility." Key excerpts
  • "The digitization of client files and law firm intellectual property, however, severely tests the existing framework for defining the relative rights and interests of law firms, lawyers, and clients. Digital files reduce or eliminate some recurring problems with hard copy files. For example, the digital file may be duplicated easily and inexpensively, thereby eliminating disputes over hard copy materials that arise when material is voluminous and can only be duplicated at substantial expense. The ease of digital duplication, however, renders client files and firm intellectual property highly portable, and facilitates the movement of lawyers from firm to firm. The portability of digital files poses significant challenges to firms attempting to mitigate the effects of lawyer mobility."
  • "To complicate matters, firm intellectual property may exist both within and outside client files, thereby creating three competing interests in the same collection of data (i.e., the client, the client’s lawyer, and the owner of any intellectual property). That a law firm may have intellectual property rights is without question, but in the absence of clear agreements between the affected parties, the nature of these rights is murky, and success in denying departing lawyers access to and use of information in which the firm may have proprietary rights is spotty at best."
For additional discussion on information risk management tied to lateral attorney movement, see a previous post and article linked within on law firm data leakage risks. See also a series of webinars on how firms are using technology to identify abnormal access and treatment of internal information that may flag impending lateral movement.

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