Thursday, March 31, 2011

ABA Seeking Input on Multijurisdictional Practice Rules

The ABA Commission on Ethics 20/20 just published and is seeking comments on an issue paper on multijurisdictional practice issues. The paper, drafted by the Working Group on Uniformity, Choice of Law and Conflicts of Interest, is available on the ABA web site.

This discussion focuses on rules for lawyers practicing across state and country lines and potential changes to Model Rule 5.5 (Unauthorized Practice Of Law; Multijurisdictional Practice Of Law) to update (and potentially liberalize) guidelines. The paper includes an interesting review of different models employed by Canada, the EU, Australia and Colorado. Interested parties are encouraged to submit feedback to the ABA.

Tuesday, March 29, 2011

2011 Law Firm Records Management Survey Report Released

Following our other recent survey activity, we're pleased to conclude the 2011 Law Firm Records Management Survey. This project was initiated in conjunction with a Roundtable member firm interested in taking a "quick pulse" of peer policies, practices and priorities. It was a great success, with representatives from 27 AmLaw 100 firms participating over the course of three weeks.

Questions explored current and planned law firm records retention policies, related technologies and other facets of information lifecycle management.

Thanks to all who participated. You will be receiving a copy of the summary report shortly.

Tuesday, March 22, 2011

Events: Spring Risk Roundtable Regional Meetings Scheduled

The Risk Roundtable Initiative recently held its London meeting and has planned regional sessions hosted by member law firms in cities including: Washington DC, New York, Houston, Los Angeles and San Francisco.

Industry developments continue to raise the profile of risk and compliance issues -- particularly with information risk management, where rising client expectations, evolving professional standards and new regulations create new challenges and dangers.

In this context, it's vitally important that risk professionals continue to take steps to understand this changing landscape and minimize firm exposure.

The Risk Roundtable provides a forum for risk, IT and related professionals to connect in a collaborative environment. Sessions will explore topics including:
  • Communicating the implications and potential exposure tied to the expanding information risk landscape
  • Review of news stories, issues, trends and developments affecting law firm risk management
  • An update on the Risk Roundtable Compliance Consortium, including an overview specific industry risk response guidelines under development
  • An open forum for peer discussion, exchange and networking
Attendance is by invitation only and is limited to qualified law firms and personnel. Please contact for more details or visit the Risk Roundtable web site for more information about this initiative.

Tuesday, March 15, 2011

Are Alternative Business Structures Coming to US Law Firms?

We've posted several updates covering the move overseas to allow non-lawyers to invest in and own law firms. Now a similar move is afoot in the United States. A bill recently proposed by a North Carolina state senator has introduced a bill which would allow non-lawyers to own up to 49% of a law firm.

Top of mind in these discussions (and debates) is the roles non-lawyers can play in the firm and the extent to which external investment might create the appearance of or temptation for improper activity. As with UK alternative business structure arrangements, this latest effort attempts to define policies that will assuage concerns. As reported in Forbes, the proposal:
  • "...includes language designed to prevent non-lawyers from interfering with the relationships between attorneys and their clients. Non-lawyer shareholders would be barred from interfering “with the exercise of professional judgment by licensed attorneys..."
  • "That language is designed to allay concerns that lawyers would answer to investors instead of their own clients, or the courts of which they are considered officers."
  • The article also notes that external investment and related influence concerns may already exist, depending on one's perspective: "Right now lawyers borrow money at high interest rates from outside investors who hide behind the fig leaf of providing debt financing instead of equity. But as anyone with a grasp of finance can understand, debt starts to look a lot like equity as the risk levels escalate."

Monday, March 14, 2011

2011 UK Law Firm Risk Management Survey Report Released

We're pleased to announce the availability of the 2011 UK Risk Management Survey Report. (This is the sister publication to the North American risk survey report published last year.)

Sponsored by IntApp, the survey was produced by the Risk Roundtable Risk professionals from the 100 largest UK-based law firms were invited to participate. The Law Firm Risk Survey focuses on firm risk management policies, practices and priorities. It examines specific issues including, information risk management, confidentiality enforcement, and compliance tracking and verification.

The published survey report provides quantitative summaries of overall group response data, as well as samplings of individual responses to questions seeking free-form comments. Selection of Key Findings of the Survey Report:
  • Top law firm risk concerns include confidentiality management, conflicts management and building a more risk-aware firm culture.
  • 50% of firms have a dedicated risk management budget. Other firms draw funds from other departments' budgets. 
  • 75% of firms have a written risk register; most of these firms manage it manually using Excel spreadsheets.
  • Nearly all firms have software in place to enforce information barriers.
  • Most clients view risk management as a key priority or a way to differentiate themselves from their peers. Lawyers and staff view it primarily as a necessary but inconvenient pursuit.
  • Clients are increasingly raising concerns about the steps firms take to ensure the confidentiality of sensitive business information.
  • Most firms are concerned about at-risk lawyers who may be planning lateral departure, but only 35% of firms have any means of identifying these lawyers.
  • 80% of firms perform internal audits to ensure policies are being followed.
  • 40% of organisations can now provide audit trails and logs documenting compliance with confidentiality and information barrier requirements beyond the record of an initial screening memorandum.
Those who took the survey and UK-based Risk Roundtable participants will receive a copy of the report shortly. For others interested in acquiring a copy of the survey report, contact:

Thursday, March 10, 2011

More Lawyer Insider Trading Alleged: Another Associate Accused

The Wall Street Journal notes: "The ongoing crackdown on insider-trading is again lapping up on the shores of the AmLaw 100." The latest accusation was brought by the SEC against a former associate with Dewey LeBoeuf charged with trading based on insider information. In this case, based on access to details of a draft merger agreement, the associate purchased shares.

The trades were made in 2007 and netted approximately $27,000. The associate in question was terminated in 2008.

The firm told the National Law Journal that it has policies against this sort of thing and that it has: "...cooperated fully with the SEC since the outset of its investigation."

Tuesday, March 8, 2011

Risk Roundup: Records Management

  • Records Mangement Survey Underway -- The Risk Roundtable initiative is conducting a survey of AmLaw 100 firms to assess current and planned law firm records retention policies, related technologies and other facets of information lifecycle management. A report containing aggregate results will be distributed to participants. If you or someone from your firm is interested, please email: for more information. (This particular exercise should take 10-15 minutes to complete.)
  • Lateral Movement: Addressing Client and Firm Records Information -- Interesting article in Law Technology News on controlling information flow when lawyers leave the firm: "Can Departing Lawyers Take the Data and Run?" The article presents a good summary of current thinking on handling of client and firm information (including firm form and precendent documents): "One result of this uncertainty is that firms that hire laterally moving lawyers are increasingly taking very great care before accepting data "dumps" by those lawyers when they arrive at the new firm."

Tuesday, March 1, 2011

"Screening is Alive and Well in the Second Circuit..."

Hat tip to Bill Frievogel, legal ethics maven, who writes that: "...screening is alive and well in the Second Circuit..." with the just issued decision in Arista Records LLC v. Lime Group LLC, 2011 U.S. Dist. LEXIS 17434 (S.D.N.Y. Feb. 22, 2011).

The organization in question, a 600-lawyer firm based in New York, used ethical screening software to secure and prevent access to electronic information repositories. It also distributed memoranda and took other steps to demonstrate compliance, including affidavits.

In this case, a lawyer who worked for the plaintiff's firm, later joined a firm which was subsequently engaged to represent a defendant. The lawyer in question was the "senior associate" on the case in his former life, and it was "undisputed" that he had access to confidential information in that role.

At the heart of the disqualification motion were assertions that the screen was insufficient. As part of its response, the firm took the interesting step of conducting a complete electronic audit of its document management system, in order to confirm that no sensitive information had been accessed by the screened lawyer.

Interestingly, the court agreed that there were weaknesses in the screening procedure such as policy creation and  notification delays, but ruled that there was no reason to believe that the screen was ineffective, that confidential information had been communicated and that there was no "real risk that the trail will be tainted."

In addition to the acceptance of screens, this case also highlights the extent to which firms moving for disqualification will assess and attack every element of a screening firm's response (including their affidavits).