Tuesday, January 31, 2012

UK Risk News and Updates

  • UK-based Legal Risk LLP has published its latest newsletter, which contains updates on Alternative Business Structures, Outcomes-focused regulation, Anti-money laundering compliance, and Professional indemnity insurance.
  • International firms offered global entity regulation – “The Solicitors Regulation Authority (SRA) is proposing to sweep away the old system of registering foreign offices of global firms and to replace it with a single international ‘passport to practice’… Under the proposals, international law firms will have greater flexibility to operate in any form that is allowed in other countries. They will also be able to bring into their partnerships lawyers from key emerging markets.” [via MP Magazine]

Friday, January 27, 2012

Law Firm Engagement Letters in the News...

A Clearly Drafted Engagement Letter Can Limit the Scope of Attorney's Duties” – according to the U.S. District Court for the Eastern District of Louisiana, as reported by Hinshaw & Culbertson: "the firm’s clearly drafted engagement letter successfully provided a defense to the client’s allegations that the firm did not provide adequate legal representation."

A bit more colorful analysis is provided by legal news rag Above the Law, which offers specific advice:
  • “Retainer Agreement, engagement letter, whatever you want to call them. Have one. Just don’t make it a bunch of much-too-long, written “understandings” of too many things that the client isn’t absorbing at the initial consultation. These documents are not tools to attempt to impress the client with your ability to expand on: “You are going to pay me this, and I am going to do this, and I’m not paying for this, and if anything else comes up, we’ll talk about a separate retainer/fee/cost, and I’m not guaranteeing anything or giving you money back, and we have no other agreements, so sign here.”

Wednesday, January 25, 2012

Law Firm Conflicts and Controversy

Megaupload, Megacontroversy, Megaconflict?
Hogan Lovells partner withdraws from representation of Megaupload in its recent legal troubles. The organization is currently defending itself against accusations that it built an elaborate system designed to encourage online copyright infringement: “Robert Bennett was required to withdraw from the case because of a conflict involving at least one other client of his law firm, Hogan Lovells, this person told Reuters. The other client or clients were not identified.” Interestingly, Bennett represented Megaupload in other matters, so this may be a base both of “business” as well as ethical conflicts. [See American Lawyer story for additional detail.]

Risk When Law Firms and Politicians Mix
An interesting article exploring the relationship between one firm and Wisconsin’s Republican leadership: “In December news broke that Wisconsin Supreme Court Justice Michael Gableman, a well-known conservative, had received about $100,000 worth of free legal services from a Michael Best & Friedrich attorney. The revelation created a controversy because the Supreme Court presides over cases argued by Michael Best & Friedrich. Accepting free services from the firm could be considered a conflict of interest.” [The judge in question denies a conflict of interest and will not recuse himself.]

Wednesday, January 18, 2012

Data Privacy News and Updates

Firms that store and manage sensitive client information should take heed of recent privacy developments and news:
  • New California Data Privacy Law Now In Effect -- "SB 24 strengthens and standardizes the notification requirements when someone’s personal information has been hacked into, stolen, or lost. The bill also requires state agencies, businesses and others to notify the Attorney General if more than 500 Californians are affected by a data breach."
  • Privacy Enforcement Actions Set to Increase in 2012? -- "There's going to be a lot more privacy enforcement actions. By a lot of different government authorities, not just DPAs. And the sanctions/damages are going to go through the roof. Indeed, it's not easy to keep track of which government officials are in charge of data protection enforcement actions. There are a lot of them."
  • A pertinent example: UCLA Hospitals Sued Over Patient Data Breach -- "The suit, filed as a proposed class action on Dec. 14, alleges that by not protecting its patients' confidential information, the hospital system violated California's Confidentiality of Medical Information Act. The law allows each patient to recover $1,000 in statutory damages per occurrence." In this case, a former physician had sensitive information on his home computer, which was stolen by burglars. (Could this happen to a lawyer?)

Monday, January 16, 2012

Lateral Movement, Client Poaching and Staff Screening

  • Laterals Be Careful? -- Lawyer May Be Liable to Former Firm in Tort For Improper Efforts to Recruit Firm's Clients -- "The U.S. District Court for the Eastern District of Pennsylvania Dec. 22 granted a law firm's motion for a preliminary injunction against a lawyer who tried to recruit many of the law firm's clients after she was fired (Feldman & Pinto PC v. Seithel, E.D. Pa., No. 11-5400, 12/22/11)."
  • Avoiding disqualification on matters due to non-lawyer firm changes -- Bill Freivogel published an excellent article on "what screens law firms should put in place to avoid problems with non-lawyers." The essay compares and contrasts US and Canadian standards, explores when unilateral lateral screening is permitted vs. when waivers are required, and provides a case study example. He also presents a list of the five minimum characteristics of an effective staff screen, including policy construction, notification, information access control and compliance documentation. [Update: h/t to Legal Ethics Forum for suggesting LA County Ethics Opinion 524 as a relevant related read.]

Friday, January 13, 2012

Alternative Business Structure Applications Live in the UK (ABA Says: "Not So Much")

  • First ABS wannabes begin SRA application process -- "More than 10 prospective alternative business structures (ABSs) completed the first stage of the Solicitors Regulation Authority’s (SRA) application process on the first day, the authority has revealed." As explored in greater detail in the article, Law Society President John Wotton argues that ABS licensing provides England and Wales with a competitive global advantage for legal services.
  • ABA Panel Says No to Outside Law Firm Ownership -- "An American Bar Association commission is considering recommending that nonlawyers be allowed to take an equity stake in law firms for which they work while urging that an existing ban be maintained on the kind of outside investment in U.S. firms that is now possible in the United Kingdom and Australia."

Wednesday, January 11, 2012

Law Firm Rules & Regulations (News & Fighting)

  • ABA and European Law Societies Fight New Efforts to Regulate Legal Industry -- Stemming from the debt crisis, new attempts at external law firm regulation threaten "...one of the core principles of the legal profession: regulation independent from the executive branch of the state," the industry argues, noting that a "guarantee of independence" is "fundamental to the profession."
  • Washington DC ethics opinion 361 allows referrals to non-lawyer service providers -- “…such as a financial services firm may accept compensation from the provider for the referral so long as the criteria of Rule 1.7(c) and, if applicable, Rules 1.8(a) and 5.7 are satisfied. Those criteria are exacting, however, and the arrangement may be beyond the lawyer’s malpractice coverage even if permitted by the Rules.”
  • Utah Bar Says Using Student's Lexis/Westlaw Access for Firm Work is Unethical -- "The Utah Legal Ethics Advisory Committee considered whether an attorney who encouraged a student to breach her agreement by doing firm-related research had committed an ethical violation. The Committee answered in the affirmative finding that an attorney's misuse of a student's educational Wexis access is theft of services, a potential felony."

Monday, January 9, 2012

2012: New Year, New (and Old) Risks

A few interesting updates as we kick off the new year:
  • The ABA Commission on Ethics 20/20, the body charged with reviewing and recommending changes to the Model Rules, recently issued a Summary of Actions, writing: "For two years, we listened to all elements of the profession as well  as clients, consumer groups and businesses that support, sell to, and report on the profession.  Our proposals respond to what we have heard and are intended to address the following developments…"
  • From the frequently linked and hat-tipped Legal Ethics Forum -- John Steele published his "Top Ten Legal Ethics Stories of 2011." It’s excellent reading.