Thursday, September 23, 2010

Risk News Roundup : Conflicts, Ethical Walls & More

  • Here's another story about a firm disqualified due to failing to erect a timely and effective ethical screen. Interesting, this case follows a recent Texas decision regarding the need to screen paralegals. In another Texas case, the State Supreme Court disqualified a plaintiff for not properly screening a paralegal who formerly worked for the defendant. The paralegal signed a confidentiality agreement and pledge not to work on matters related to her previous employer, yet ended up doing so regardless. The Court ruled that the firm "did not take reasonable steps to shield the assistant from working on the Leal case and that she actually worked on the case at her employer’s directive."
  • No law firm wants to find itself representing both sides in the same case. But one AmLaw 100 firm has just been disqualified for attempting to do just this: "Southern District of New York Judge William Pauley said that a 'clear conflict of interest' exists where one Sonnenschein attorney represents former BDO Seidman partner and now cooperator Adrian Dicker and another represents former BDO Seidman CEO Denis Field."
  • For a little more conflicts and disqualification intrigue, see this story: "A federal judge has refused to disqualify on conflict of interest grounds a defense attorney with deep ties to the Gambino organized crime family."
  • A federal appeals court affirmed a ruling that Blank Rome was appropriately disqualified from a matter for representing a company that was adverse to a subsidiary of another client: "In a ruling in which the 2nd Circuit addresses for the first time whether a law firm infringed on its duty of loyalty by taking on a representation adverse to a client's corporate affiliate, the circuit affirmed a decision by Southern District Judge Jed S. Rakoff, who found that Blank Rome's engagement letter had not given it broad authority to accept a case adverse to a Johnson & Johnson affiliate's interest."
  • Finally, ALI/ABA is hosting a timely audio webcast on this very topic: "Brave New World: Ethical Screens and Conflicts of Interest." The session will explore how ethical screens can be used to address conflicts scenarios and the requirements necessary for screens to be judged effective. (For past discussion of this topic, see also: Managing Information Risk with Lateral Hires and Lawyer Departures.

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