Wednesday, August 31, 2011

Law Firm Lateral Hiring (and Associated Risk) on the Rise

The Recorder reports a spike and likely increasing industry lateral hiring activity. Drawing on data culled from published news releases and other public sources, the analysis focuses on activity in Northern California: "Lateral Partner Movement Achieves Liftoff in Northern California. Recruiters say the summer pipeline indicates that the rest of the year could bring more of the same."
  • "Fueling the demand is firms' desire to build out both core and support practice areas, plus renewed desire for growth from some out-of-town firms building their presence... Along with the increased demand at firms, partners have been more willing to make the leap with the economy stabilizing."
  • The head of recruiting at Hogan Lovells explained that : "...the firm targets established partners who are happy where they are but may have doubts about their firm's strategic direction, or younger lawyers who don't feel supported at their firm."
  • "DLA has tweaked its lateral hiring in the past year. San Francisco partner Clowes, who's in charge of corporate partner recruiting locally, said the firm's top brass has thrown its weight behind the Bay Area push. San Diego-based partner Cameron Jay Rains, a member of the firm's executive committee, has been making regular trips to San Francisco and Silicon Valley to meet with potential candidates, a strategy that Clowes said has worked well for DLA in Los Angeles and Sacramento."
Of course, increasing lateral volume and urgency creates new opportunities for risk as intake teams that must manage conflicts and execute personnel on-boarding processes swiftly and responsively. (Our next risk webinar will address these very issues. Stay tuned for more event details shortly.)

Tuesday, August 30, 2011

Law Firm Conflicts, Disqualification & Ethics News

Today's alphabet of risk news and updates is brought to you by the letter B and the number 4:
  • Apple of My "i" -- Last month, Samsung moved to disqualify patent counsel for Apple based on allegations of previous work representing Samsung: "Together they spent more than 9,000 hours representing Samsung in patent litigation matters while at Kirkland & Ellis, obtaining 'unfettered access and insights into Samsung's approach to patent litigation'" Samsung attorneys at Morrison & Foerster wrote in their 20-page motion." Apple denied any conflict of interest. However the firm in question has decided to withdraw. (A hearing we held last week, but the judge had yet to rule on the matter.)
  • 3 Years for Insider Trading -- Another lawyer gets jail time, tied to the Galleon insider trading scandal.
  • And Then There Were 5 -- Some conflicts can't be managed. Based on conflicts tied to the proposed AT&T / T-Mobile merger, several lawyers amicably exited Paul Hastings to set up their own shop.
And for those fascinated by how the internet creates new ethical questions for law firms:
  • Another "OK" for Groupon -- North Carolina joins South Carolina in proposing ethics rules that make "daily deal" style advertising for lawyers okay -- Proposed 2011 Ethics Opinion 10.
  • "+1" for Lawyer Social Network Incentives? -- The New York State Bar issued an ethics opinion (873) saying that prizes and incentives to join a lawyer's social network do not violate rules of processional conduct. (That's one way to fill your Myspace...)

Wednesday, August 17, 2011

Upcoming Risk Roundtable Session: ISO 27001 for Law Firms

The Risk Roundtable Initiative is pleased to announce a special seminar on information risk and security management for law firms. The session is scheduled for September 16 and hosted by Cravath, Swaine & Moore in New York:

Over the past 18 months, corporations have increasingly mandated more stringent information security requirements for outside counsel. For IT, this often means more time spent responding to client requests and RFPs. Today several firms are leveraging the ISO 27001 standard as a strategic response.

This session will explore the “how” and “why” behind ISO 27001 for law firms and is designed both for firms interested in certification as well as those interested in information security processes and strategies employed by their peers.

Agenda:
  • Opening Remarks — Pat Archbold, IntApp
  • ISO 27001—What is it, why should I care and an outline of the key stages of deployment? (Andrew Rose, Forrester)
  • Law Firm Accreditation Overviews — How two global firms addressed certification and the benefits they realized (Andrew Rose, Forrester)
  • Where do you start — Real examples of strategies Cravath has deployed to respond to changing requirements (Jeff Franchetti, Cravath)
Speakers:
Andrew Rose, now with Forrester, previously took two Magic Circle firms through the ISO certification process. He is traveling from London to share his experience and expertise. He’ll be joined by Jeff Franchetti, CIO of Cravath, Swaine & Moore, who will describe tactical initiatives he has implemented at Cravath. Together, they will present tangible strategies and ideas attendees can use to enhance their firm’s ability to address client security requirements. Pat Archbold, IntApp Risk Practice Group leader will open the session and serve as moderator.

Attendance is by invitation only and is limited to qualified law firms and personnel. Space is limited. Please contact info@riskroundtable.com for more details.

Tuesday, August 16, 2011

Information Risk Management at August ILTA Conference

Pat Arcbhold, head of IntApp’s risk practice and frequent contributor to Risk Roundtable events writes in with an invitation to connect at the upcoming ILTA conference in Nashville later this month:
  • “My team and I will be attending the ILTA conference the week August 22. We’re eager to connect in person with law firms interested in discussing their information risk and confidentiality management challenges. The readership of the risk management blog already understands the growing importance of these issues, particularly as clients continue to set out increasingly stringent requirements. If you or someone from your IT organization is attending, please feel free to reach out: Pat.Archbold@intapp.com.”
At the conference, Pat will be presenting a talk entitled: “Data Loss Prevention: What We've Learned from WikiLeaks.” (Thursday, August 25, 2pm)

Another Delayed Motion to Disqualify, Another Implied Conflicts Waiver

We’ve previously touched on the question: “When Does ‘Delay’ Equal Implied Consent?” (See this case, which notes that two years as too long to wait, and this one, which holds that four months is fine if the law moving firm was actively trying to resolve the matter directly with unresponsive opposing counsel.)

Now Bill Frievogel notes a recent decision by the Court of Appeals of Texas (14th District), which just ruled that a thirteen month delay is too long: IN RE: LOUISIANA TEXAS HEALTHCARE MANAGEMENT, L.L.C. and Merensy Reef Hospital Corporation, Relators. (No. 14–11–00503–CV):
  • “A party who does not file a motion to disqualify opposing counsel in a timely manner waives the complaint. Vaughan v. Walther, 875 S.W.2d 690 (Tex.1994) (orig. proceeding). In determining whether a party has waived the complaint, the court will consider the length of time between when the conflict became apparent to the aggrieved party and when the aggrieved party filed the motion to disqualify.”
  • It is undisputed that relators first learned Ferguson was consulting with Plaintiffs' counsel in discovery responses on or about February 10, 2010. The motion to disqualify was not filed until March 11, 2011, thirteen months later.”
A good amount of the original motion and appeal centered on debating "who knew what and when." But in the end, the court essentially ruled: "You know you knew it back then."
  • “From the above testimony, the trial court could have rejected relators' claim that they were unaware Ferguson's consult with the opposing party involved a substantially related matter. Accordingly, the record supports a finding that relators became aware of the conflict in February 2010 when they were told Ferguson was an expert for the opposing party.”

Monday, August 15, 2011

Ethics Opinion Affirms Suitability of Screening for Non-Lawyer Staff in Los Angeles

[h/t to Bill Frievogel]. The Los Angeles County Bar Association Professional Responsibility and Ethics Committee recently issued an opinion (524) that affirms the ability of an ethical screen to work in situations where non-lawyers move between firms, even when they possess confidential information relating to an active matter between the two firms.

Client consent is not required, but in such instances opposing counsel should be notified.

The committee calls out the elements of an effective screen, which include:
  • “witten notification to all legal staff to isolate the screened employee from communication regarding the matter”
  • "prevention of the screened employee’s access to the relevant files"
  • "admonishment of the employee not to discuss the prior matter with the new firm"
  • and "a search of the firm’s records to ensure that all cases on which the new employee’s former firm is opposing counsel are identified"
The opinion highlights the important of a screening response that address electronic information:
  • “The Committee believes that electronic security is also an important element of an effective screen. Electronic files should be password-protected and the password withheld from screened employees.”
And recommends regular notifications and acknowledgment tracking regarding the screen:
  • “Effective practices may also include documenting the continued existence and impermeability of the screen, for example by periodic electronic or written reminders to all staff or by requiring periodic certification by screened staff that they have not breached the screen.”

Thursday, August 11, 2011

Do Some UK Firms Have Their “Heads in the Sand” Regarding Compliance?

In the UK, movement continues toward implementing the new “outcomes focused” regulatory framework (OFR). As part of the new structure, firms must appoint a dedicated compliance officer, who must be a lawyer, and maintain detailed records of any known lapses in compliance.

Yet Legal Futures reports that many firm may be challenged to meet impending deadlines:
  • “Richard Turnor, a partner at London firm Maurice Turnor Gardner, said that while many firms have been thinking about OFR and the role of the COLP, others seem to ‘have their heads in the sand…Firms will have to submit their first annual reports to the SRA in October 2012, covering the period from October 2011 no doubt, and disclosing any lapses about which questions are asked. Therefore firms really need to get their houses in order by October 2011.’”
Turnor does not provide definite data regarding the number of firms he believes are sand-immersed, but the concern is worth noting.

Wednesday, August 10, 2011

Pending Rule Changes in California

John Steele at the Legal Ethics Forum provides an excellent background and update on California’s move to adopt 70 new ethics rules (which are based on the ABA Model Rules):
  • “Although that large number of rules has been approved through the highest level of the State Bar (i.e., the Board of Governors), at this time only six rules have been submitted to the Supreme Court of California for immediate consideration… “
  • “As for advance waivers, the proposed rule 1.7 has a comment 22 that is, in my view, a reasonable statement of when advance waivers should be enforceable. As I've argued previously, courts should tacitly insist that corporate clients contract around the uncertainties surrounding the corporate affiliate conflicts problem and should enforce advance waivers when the client is a corporation that employs its own lawyer.”
The complete proposal is available at the California Bar web site.

Monday, August 8, 2011

Standards and Ethics for Lawyer Use of Hosted Cloud Software Services

Law Technology News recently published an article on law firm information risk management considerations for using third-party hosted applications and data storage services: “Security and Privacy Standards for Cloud Services.
  • “For service providers to achieve and maintain information security sufficient to safeguard firm and client information, providers should adhere to appropriate standards and policies, even applicable legislation, and implement technical security controls that comply with the requirements that correspond to their customers' needs.”
The article offers links to several detailed resources for firms looking to conduct technical due diligence and shape their IT strategy. On the practitioner front, several jurisdictions are considering (or reconsidering) the ethical implications of cloud software:
  • In Alabama, one lawyer reached out to the state bar ethics committee to ask specifically about the very popular Dropbox file hosting service, which has been the subject of some recent controversy: “My question? After the events of late is it still ethical to use Dropbox for our offsite storage of client files?” You can read more on his blog.
  • The North Carolina Bar issued draft rules on cloud software services in April, 2010. But based on industry feedback, they retracted the draft a year later and have since published a revised proposed opinion: “This time, the comments were less favorable, with many in the legal computing arguing that the requirements were so onerous as to effectively block the use of many cloud applications.” [Here’s a sample.] In response, the Bar has directed the committee working on the opinion to review and revise.