Wednesday, June 15, 2011

Webinar Recording: Lawyer Mobility & Law Firm Disqualification Trends

Content from our June webinar is now online for those who missed the live session:
  1. Building a Robust Risk Management Organization -- Many thanks to panelists at our latest Risk Roundtable webinar. We welcomed another large group (100+ attendees) who heard speakers from Reed Smith (Boyd Sleeth), Holland & Knight (Gilda Russell) and Haynes & Boone (Richard Clark) talk about recent trends in law firm disqualification decisions.
Those who registered but were not able to attend these events should have received a link to the video recordings via email. Others interested in these sessions can view them online: [Law Firm Risk Management Webinars].

Sunday, June 12, 2011

More Law Firm-Linked Insider Trading...

[h/t to the Legal Ethics Forum] Hot on the heels of our recent post on guarding against law firm insider trading, comes a report of another alleged incident of insider trading linked to a law firm: "SEC: California inside trader stole Abbott/AMO deal secrets from his daughter":
  • "The SEC charges California personal injury attorney Dean Goetz with insider trading, accusing him of stealing confidential information about Abbott's 2009 buyout of Advanced Medical Optics from his daughter, also an lawyer who worked for AMO."
  • "Unbeknownst to Goetz's daughter, working on the deal during the winter holidays at her parents' house, Goetz allegedly stole the information he used to buy 900 shares of AMO stock on Jan. 8, 2009, according to the SEC."
  • The American Lawyer points to evidence suggesting that the lawyer's daughter, who was not accused of wrongdoing, was likely working at Skadden, Arps, Slate, Meagher & Flom at the time.
The lawyer in question agreed to settle the charges against him with the SEC, without admitting or denying their allegations, subject to court approval.

Wednesday, June 8, 2011

Articles: Electronic Ethical Walls and Conflicts

Screening: "The Rules Bless 'Screening' But Firms Should Focus on Erecting 'Firewalls'" -- Brian Faughnan, a partner with Adams and Reese, argues for the need to implement effective electronic ethical screens. He makes the case that a "memoranda-based" approach to screening is insufficient in today's environment. Sending a notification to affected parties and relying on their due diligence to adhere to defined rules, while required, does not take into account the reality of the accessibility of electronic information, which should be affirmatively secured.

Conflicts: Bearing in mind that conflicts allegations are just that (allegations), several have been publicized in recent week. See:

Thursday, June 2, 2011

Risk News and Updates: Conflicts, Confidentiality, Disqualifications & UK Risk Event Report

  • Confidentiality of internal law firm discussions regarding potential client conflicts -- Hinshaw & Culbertson review:  TattleTale Alarm Systems, Inc. v. Calfee, Halter & Griswold, LLP, et al., 2011 WL 382627 (S.D. Ohio 2011). "How can law firms protect their internal communications from discovery when they communicate internally regarding the firm’s potential malpractice in an existing client’s matter?" In this case, the court ruled that the firms internal communicates were protected by privilege and not subject to discovery by its former client.
  • Report from Law Firm General Counsel and Risk Management conference in London -- Lisa Rohrer with the Hildebrandt Institute posted a summary of the GC forum they hosted last week. (Kaye Sycamore from IntApp attended as well and reports the event was very informative and well received.) In her report, Rohrer notes significant group discussion about confidentiality management: "...clients are increasingly asking law firms to assure them that data and files are safe and secure." She echoes others in drawing out the clash between the need for internal knowledge sharing and close access controls over sensitive matters and other information: "Balancing these two forces of collaboration and security will require professionals from multiple disciplines in the firm (lawyers, risk management, IT, knowledge management, etc.) to work together to design creative solutions. To find and successfully implement those solutions is another challenge to law firm managers in today’s increasingly complex legal environment."
  • Law Firm Suing to Allow Alternative Business Structures -- Arguing that it's about time the US allow non-lawyer ownership of law firms, Jacoby & Myers has filed lawsuits in several jurisdictions to change the rules: "The suit argues that, because of the fee-sharing ban 'critical sources of funding are unavailable to a majority of lawyers … which dramatically impedes access to legal services for those otherwise unable to afford them.'" [See also one State's move to change the rule, and the UK's more deliberative path to pursuing such models.]
  • Wisconsin Supreme Court rules non-client party can bring disqualification motion -- "...a nonclient party – one who is not a former or current client of opposing counsel – could have standing to move for disqualification of opposing counsel... Specifically, it allows nonformer clients to disqualify opposing counsel when opposing counsel (or opposing counsel’s firm) has represented a nonparty on matters closely tied to the case."

Event: Canada Risk Roundtable Regional Meeting Scheduled

This year we've held several lively and informative sessions in: London, San Francisco, Los Angeles, Houston, Washington DC and New York. We're pleased to round off the Spring series with an Canadian session scheduled for Tuesday, July 12th in Toronto:

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.

Wednesday, June 1, 2011

Confidentiality, Insider Trading, Information Risk Management & Technology

Law Technology News brings information risk management to the forefront with this month's cover story: "Catch Me if You Can: Guarding Firm Data From Insider Trading."

While spurred by recent insider trading scandals, the article does an excellent job of defining the fundamental tensions and challenges regarding confidentiality management:
  • First is striking the right balance between the need for security and the need to share knowledge among attorneys. Second is how crucial it is for firms to have not only detailed and clearly thought-out security policies, but also to put the right people in place ­-- with enough authority to implement and enforce them, monitor compliance, and continually review and update the protocols."
  • "But the dilemmas are obvious. The service that law firms sell is their expertise and experience. So, by their very nature, firms encourage attorneys to collaborate and share knowledge. At the same time, they have to protect clients' confidential information. In information systems, that tension often shows up in how document and knowledge management systems are configured."
  • "They can be set up either as open systems by default, whereby sensitive documents are secured only in specific cases, or as closed systems by default, where all documents are locked down and made available only to certain people in specific circumstances. While the latter approach is safer, the former approach is more conducive to the nature of law firms. After all, the reason most firms adopted these systems is to make it easier to find and share information so that attorneys can work more intelligently and efficiently. That's why nearly all firms leave their systems open. Patrick Archbold, vice president of the information risk management practice at IntApp, says he's aware of only two (one Magic Circle firm in London and one firm in New York) that have closed systems."
The article includes an excellent overview of how technology can often create risk (internal enterprise search) and help mitigate risk (automated confidentiality management and enforcement).