Thursday, March 29, 2012

Law Firm Mergers, Conflicts & ICSID Arbitration Rules

[via] Do Global Law Firm Mergers Expand an Arbitrator’s Continuing Obligation to Disclose Conflicts of Interest Under the ICSID Arbitration Rules?
  • "Venezuela filed a formal proposal to disqualify Mr. Fortier on October 5, 2011, one day after Mr. Fortier made a disclosure to the ICSID Secretary-General regarding the upcoming merger of Norton Rose OR LLP (”Norton Rose”), the firm in which he was a partner, and Macleod Dixon LLP (”Macleod Dixon”). Macleod Dixon was a Canadian-based law firm with international offices in, among other regions, South America. Venezuela’s proposal to disqualify Mr. Fortier arose out of concerns related to Macleod Dixon’s Caracas office. Specifically, Venezuela had concerns about “the extent and depth” of that office’s representation of ConocoPhillips (the Claimant in this arbitration) and other clients in matters adverse to Venezuela, its state-owned petroleum company and/or affiliates."
  • "While it is clear that global law firm mergers inevitably result in potential conflict of interest situations for counsel with active arbitration practices, it is not certain if the ultimate remedy has to be resignation from the partnership. In this case, Mr. Fortier decided to answer that question, as have others in similar circumstances, by resigning from his long-time law firm. It remains to be seen if an arbitrator could sustain a disqualification challenge on the grounds that the arbitrator would maintain appropriate ethical screens, including restricted access to file and information systems, with lawyers in the same firm albeit located in different countries thousands of miles apart. Until this question is answered, it seems likely that a lawyer practicing principally as an arbitrator may find it safest to resign from his or her partnership prior to a pending merger. This will be a more difficult decision for those who try to maintain a practice both as an arbitrator and as counsel within the context of a global law firm."

Thursday, March 22, 2012

Los Angeles & San Francisco Risk Roundtables Scheduled (April) + Canadian Roundtable Update

We're pleased to continue this year's Risk Roundtable series with events in San Francisco and Los Angeles.

The LA event is being hosted by O'Melveny & Myers LLP and is set for Wednesday, April 25th. SF will be hosted on Thursday, April 26th by Cooley LLP.

Joining us as a guest speaker at both events is John Steele, ethics lawyer and founder of the often-cited Legal Ethics Forum blog. He'll be discussing the increasing compliance and ethics requirements clients are placing on outside counsel. (See relevant article.)

As a reminder, the Risk Roundtable provides a forum for risk, IT and related professionals to connect in a collaborative environment.

These sessions will include:
  • A 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
  • Guest presentation from John Steele
  • 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.

For those attending our upcoming Toronto Roundtable, we're pleased to welcome Malcolm Mercer, general counsel at McCarthy Tétrault LLP, as a guest speaker. He'll be discussing upcoming changes to the Federation Model Code relating to conflicts management.

Tuesday, March 20, 2012

Benesch Upgrades Firm Information Security and Confidentiality Management

Benesch, Friedlander, Coplan & Aronoff LLP, a business law firm with 170 lawyers, has upgraded to Wall Builder 5.0 as part of its efforts to streamline ethical screen enforcement and enhance firm risk management protections:
  • "We made the choice to work with IntApp in late 2011, after evaluating available confidentiality management products and confirming that what we had heard about Wall Builder was true - it's the most-adopted, most capable and easiest to use information security software for law firms like ours," said George Ansfield, Strategic Analyst, Benesch. "Based on the extremely positive experience we had working with IntApp to implement Wall Builder on time and on budget, we were eager to upgrade to version 5.0 to take advantage of the latest product enhancements."
  • "The new user interface in Wall Builder 5.0 is stunning and the product's functional enhancements are significant," said Andy Close, Network Engineer, Benesch. "But for our IT team, the best part of the move from version 4 to version 5 was the upgrade process - it took literally just a few minutes. That's an example we'd love to see other vendors take a lesson from."
  • "We're excited to see firms like Benesch benefit from the continuing evolution of Wall Builder," said Pat Archbold, head of IntApp's Risk Practice Group. "Their success highlights the advantages available to law firms who choose to partner with IntApp to respond to the complex confidentiality management and compliance challenges facing the industry today."
For more information, see the official news release.

Monday, March 19, 2012

Industry Event: LPL/Legal Malpractice Claims and Litigation Conference

We've been invited to participate as a media sponsor of the upcoming LPL/Legal Malpractice Claims and Litigation conference produced by ACI. It's set for May 31-June 1 in New York. (As an added bonus, we have the ability to offer a modest discount to qualified blog readers and partners. Email: for details.)
  • Join an unparalleded faculty of leading insurance professionals, counsel specializing in LPL, law fi rm risk managers and renowned jurists to ensure that you are fully protected against emerging risks and prepared to defend against the latest legal malpractice claims.
  • Continuing fallout from the implosion of the real estate market, the wave of bankruptcies and Ponzi schemes and the broader state of the economy has led to increasing lawsuits against attorneys by frustrated clients. Additionally, the use of electronic communication, cloud computing and social media brings new retention, network security and privacy risks. Attorneys and law firms must stay ahead of the curve to avoid unnecessary exposure to risk and successfully defend against the newest deluge of legal malpractice claims.
  • ACI's Advanced Forum on LPL/Legal Malpractice Claims and Litigation is designed to offer insurers, brokers, attorneys and other risk management professionals valuable insight into how to prevent, manage and defend against the most current legal malpractice claims. Get the inside scoop from judges on the latest malpractice claims brought against attorneys as well as from leaders in the insurance industry, including in-house professionals from: CNA Insurance, Swiss Re America Holding Corp., Willis Group, ECC Insurance Brokers, OneBeacon Professional Insurance, Marsh USA, Endurance Service Ltd., Ahern Insurance, Aspen Specialty Insurance Co., Allied World National Assurance Co. and many more.
By attending the conference, you will:
  • Gain valuable strategies from major corporations as they provide insight into the changing relationship between companies and their outside counsel
  • Hear directly from 7 federal and state judges, and get their views on the most common legal malpractice claims they are seeing and how to improve your litigation strategy
  • Ensure protection against emerging areas of risk and understand the latest trends in claims, coverage and underwriting from a panel of expert insurance professionals

Friday, March 16, 2012

Client Interview Risk: Lawyer Disqualified because of Previous Interview with Defendant

First noted by Bill Freivogel, and recently analyzed by Mike Mintz at, Zalewski v. Shelroc Homes, LLC, 2012 U.S. Dist. LEXIS 19370 (March 6, 2012) addresses a recent disqualification:
  • "...the U.S. District Court for the Northern District of New York grappled with the issue whether to disqualify plaintiffs’ attorney, Lee Palmateer, because he had once been interviewed by defendants with a view to representing them in the identical or substantially similar action. The court concluded that Mr. Palmateer in fact had to be disqualified from representing plaintiffs in the action."
  • "Defendants claimed that they shared confidential, privileged information, including detailed analysis of the overall case and that they analyzed the evidence of the alleged copyright infringement. According to defendants, Palmateer was actively involved in the discussion and freely offered his advice and asked questions. According to defendants they discussed what defendants might be willing to offer to settle the case."
  • "The major bone of contention is the nature of the information defendants divulged to Palmateer at their meeting and whether that information is significantly harmful to defendants if Palmateer continues to represent their adversary, i.e. the plaintiffs."
Freivogel summarizes the net result: "In connection with N.Y. Rule 1.18, the parties disputed mightily the nature of information the defendants gave Lawyer during the interview. What convinced the magistrate judge to grant the motion was that counterclaims raised in this case deal with the plaintiffs' alleged abuses arising from Lawyer's use of information from the interview. Thus, in addition to everything else, Lawyer may well have to be a witness. Thus, the court disqualified Lawyer from this case only."

Thursday, March 15, 2012

Elements of an Effective Ethics Screen

Michael Downey, litigator and legal ethics lawyer with Armstrong Teasdale provides a thorough and nuanced review of differences in state rules of professional conducts ethical screening standards for law firms: "Elements of an Effective Ethics Screen." (Published by ABA/BNA: [Text Version] [PDF Version]

Downey notes that state rules of professional conduct are “inconsistent on what elements are required for a screen to be effective.” He goes on to provide an excellent summary of different requirements for a variety of screening scenarios:
  • Lawyer who works on a matter at a prior firm
  • Nonlawyer prior work
  • Lawyer who works on a matter while a government employee
  • Lawyer previously involved in the matter as a judge
  • Where communication with prospective clients reveal confidential information
Common screen standards apply to all situations including timeliness, notification and enforcement requirements. He notes that best practices include:
  •  “Implement data access controls to prevent screened lawyers from accessing all digital files and documents relating to the screened matter…”
  • Monitor and audit the screen on a regular basis to ensure continued compliance.”
  • Send reminders of screens on a periodic basis and when circumstances make such notices appropriate. Examples would include an additional screened person joining the firm or a screened lawyer changing offices.”
  • “Audit specific screens and the firm’s screening procedures on a periodic basis to ensure that the firm is taking proper steps to implement and maintain its screens. Particular attention should be paid to changes in information or document management, or personnel responsibilities, that may require changes for screens to be effective.”
  • “Preserve records establishing that the client and appropriate firm personnel received notice and demonstrating that a particular screen was effective throughout its duration.”
Interestingly, Downey notes that decommissioning screens is another important area to consider (and one firms often overlook): “…screens should be discontinued when they are no longer necessary. This reduces the number of screens in effect in the event that a firm later needs to defend its screening policy.”

These elements highlight the value of modern screening software that automates creation, notification, enforcement and auditing processes. Such an approach can also be extended to interface with firm matter closing processes or update screens and matter teams based on lawyer billing practices (for example, notifying an administrating regarding screened matters that have not seen active work in a predetermined time and may warrant review by risk stakeholders to see if they are still active.)

Monday, March 12, 2012

Canadian Risk Roundtable Scheduled (April 10th, Toronto)

We're pleased to kick off this year's Risk Roundtable series in Toronto, with a session scheduled for Tuesday, April 10th, hosted by McCarthy Tétrault LLP:

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.

This session will include:
  • A 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.

Friday, March 9, 2012

SRA Updates: Handbook Revisions, Conduct Breaches, Compliance Deadlines

Hat tip to Legal Futures for several interesting Solicitors Regulation Authority updates:
  • SRA approves third version of Handbook in six months – with another one set for June -- "The SRA said it recognised the disruption that so many updates in such a short time would cause the regulated community but argued that they have been unavoidable. The plan is to have two updates a year once implementation of the new regime has settled down."
  • Most firms in multiple breach of the Solicitors Code of Conduct, says SRA research -- "The vast majority of law firms are non-compliant with the Solicitors Code of Conduct, research by the Solicitors Regulation Authority (SRA) has found. Most of the 200 firms assessed for a baseline study on solicitors’ approach to regulatory compliance had four or five incidences of non-compliance, although in the main they could be remedied relatively easily through changes to client-care procedures and letters, the authority said."
  • SRA set to delay COLP and COFA deadline -- "The 31 March deadline for law firms to nominate their new compliance officers is to be pushed back as a result of the continuing practising certificate (PC) renewal problems at the Solicitors Regulation Authority (SRA)."
  • SRA rejects calls to curb publication of regulatory decisions against solicitors -- "The Solicitors Regulation Authority (SRA) has rejected calls from the Law Society and practitioners to curb the amount of information it publishes about solicitors subject to regulatory sanctions."

Thursday, March 8, 2012

Law Firm Mergers, Client Confidentiality Management, Legal Ethics + More

Two interesting stories to share today:

King & Wood and Mallesons iron out confidentiality issues ahead of merger
  • "King & Wood and Mallesons have addressed perceived client confidentiality issues ahead of their 1 March merger by pledging to keep the Chinese partnership out of the firm’s network system... a number of Mallesons partners were uneasy about sharing systems across the merged firm because under Chinese law lawyers in domestic firms are obligated to hand over any client information the ruling Communist Party may ask for."
  • "The new approach includes establishing a comprehensive intranet site to help lawyers manage the change to King & Wood Mallesons and ensure effective internal communication, and setting up a stricter procedure of sharing client documents and confidential information between the partnerships."
  • In an internal memo, Mallesons chief executive Stuart Fuller instructs: "You should only share client documents and client confidential information between the partnerships if you have the client’s consent. This applies to sharing documents via the document management system or by email."
Privatizing Professionalism: Client Control of Lawyers’ Ethics
  • [via Hildebrandt Institute]: "Whelan and Ziv examined the formal guidelines given to outside counsel by their clients, as well as informal industry ethical norms, to determine what impact corporations can have on the ethical standards and behavior of their lawyers."
  • "The authors found that clients can, in fact, exert considerable influence over the ethical behavior of their outside counsel. More significantly, Whelan and Zin make the argument that such influence is an important form of “private regulation” that may fill in the gaps between government regulation of legal ethics and self-regulation by the industry"

Wednesday, March 7, 2012

Law Firm Lateral Hires and Depatures -- Do's and Don'ts

The Legal Intelligencer Blog published an interesting series: “Do’s and Don’ts for Departing a Law Firm” [Part 1] [Part 2] [Part 3].

It presents analysis stemming from Joint Formal Opinion 2007-300, “Ethical Obligations When A Lawyer Changes Firms,” case law and personal experience of the author, who has represented both firms and lateral movers in disputes.

He notes that firms responding to departing lawyers should take care to not:
  1. "Prevent the departing lawyer from honoring his ethical obligations to clients or attempt to thwart any ongoing relationship between that lawyer and departing clients."
  2. "Forbid a departing lawyer from announcing his departure, notifying clients or opposing counsel in a litigated matter."
  3. "Instruct firm personnel not to disclose the whereabouts of former lawyers to clients or other callers."
  4. "Withhold files of departing clients as leverage in disputes with departing lawyer over fees or other strictly lawyer-to-lawyer issues."

Tuesday, March 6, 2012

ABA Ethics 20/20 Commission Posts Final Draft of Proposed Model Rule Changes

We’ve posted several updates on the ABA Ethics 20/20 Commission’s work. This group is reviewing ABA Model Rules of Professional Conduct and other regulatory rules affecting law firms in order to develop policy recommendations in response to changes in technology and global legal practices.

The group has now published revised drafts of proposals scheduled to go to the ABA House of Delegates in August 2012. It’s inviting external comments by April 2, 2012. Further details and specific proposal language is available at the ABA web site. The Legal Ethics Blog has published an excellent series of proposal summaries. Of particular interest:
The Proposed Rule 1.0(k) change seeks to explicitly modernize screening requirements. The Commission notes:
  • “Advances in technology have made client information more accessible to the whole firm, so the process of limiting access to this information should require more than placing relevant physical documents in an inaccessible location; it should require appropriate treatment of electronic information as well.”

Monday, March 5, 2012

Upcoming Webinar: Paragon Insurance Presents IntApp Risk Briefing

Paragon International Insurance Brokers is presenting a webinar on trends in law firm confidentiality and how firms can respond to maintain a competitive advantage over their peers.

Date: Tuesday, March 13
Time: 9 am Pacific / 12 pm Eastern / 5 pm BST

Description: Law firms are investing in confidentiality enhancements in response to drivers including professional rules (ethical screening) [read more], tougher client requirements [read more], greater concern about data leakage [read more], and the desire for certifications such as ISO 27001 [read more].

Pat Archbold, head of IntApp's Risk Practice, will discuss:
  • Recent disqualification decisions
  • Insider trading threats
  • Data leakage
  • Confidentiality management software solutions
Attendance: This is a third-party event, produced by Paragon. Attendance is by invitation only and limited to Paragon clients and partners. For more information, please email: Natasha Watson, Director of Paragon Risk Management Services.