Thursday, February 27, 2014

Canadian Conflicts News

In honor of a recent Olympic hockey win, we feature a Canadian conflicts story. Last year, we noted developments in Canadian National Railway Co. v. McKercher LLP, which noted expert Simon Chester called "the fourth significant decision on conflicts of interest, the scope of duties of loyalty, and the appropriate division of responsibility between courts and law societies as regulators of professional conduct. It rejected arguments for liberalizing the so-called bright-line rule, but clarified its operation."

Now from comes more on Canadian conflicts: "The More Things Change…. A Post-McKercher Conflicts Case", which comments on MTM Commercial Trust v Statesman Riverside Quays Ltd. 2014 ABQB 16.
  • "In his decision in MTM Commercial Trust v Statesman Riverside Quays Ltd. Justice Macleod determined whether Bennett Jones LLP could act for Matco Group, a client of many years, in a dispute with the Statesman Group, for whom Bennett Jones acted on a very limited retainer, and who had been advised that Bennett Jones would act for Matco in the event of a future dispute between the two clients."
  • "Somewhat surprisingly, Justice Macleod held that Bennett Jones could not represent Matco.  In this comment I will suggest that this judgment supports the position I set out in an ABlawg post in 2011, that 'in actual cases judges are less concerned with carefully articulating the applicable rules, and more concerned with reaching the right outcome on the facts, all things considered'"
  • "One of the striking things about Justice Macleod’s judgment is that it spends a significant amount of time summarizing the law governing conflicts of interest, but only two paragraphs discussing the application of that law to the facts of Bennett Jones’ two retainers.  That division means that it is not entirely clear how the legal doctrine cited informs the result."
  • "Ultimately it appears that two things caused problems for Bennett Jones: that it did not tell Statesman that it had taken a retainer from Matco significantly adverse to Statesman’s interests, and the severity of the impact on Statesman of Matco’s allegations in the litigation."
  • "Perhaps the key point is this: Bennett Jones could have advised Statesman, or have withdrawn in an orderly fashion from that retainer.  Likely that would not have been the preferred course of action for Matco, but Bennett Jones could also have asked for and obtained consent from Matco for taking those steps.  There was nothing in law to prevent it from taking steps to advise Statesman of what it was doing."
  • "If the law firm has acted in an up front and candid way, then it is likely to avoid problems, even if its conduct might be considered a conflict of interest on a strict application of the law.  Conversely, if there is any sense that the firm has not been up front and candid, it will run into problems, even if it has a reasonable argument that it is not in a conflict."

Wednesday, February 26, 2014

In the News: Conflicts Allegations & Confidentiality

From New Jersey Public Television: Conflict of Interest Concerns Surface with Port Authority
  • "At today’s special meeting of the NJ Transit board, there was no mention of the controversial deal with the Port Authority that gave NJ Transit a $1 a year lease on a Port Authority-owned Park & Ride in North Bergen. The 2012 vote would have gone unnoticed except that Port Authority Board Chairman David Samson voted for the deal, while NJ Transit was a client of his law firm Wolff & Samson. It’s the latest example of what some are calling an unchecked abuse of power."
  • "You can take your pick of potential Samson conflicts: There’s the $1.5 million his firm collected from NJ Transit for helping broker the parking lot deal. Or the $250 million makeover of the Harrison PATH station that potentially benefits a real estate developer represented by Samson’s firm. Or several other instances. Samson, though, is about to get a long hard look from the legislatures Select Committee on Investigation."
  • "A review by the Star-Ledger found that Wolff & Samson made more than $8 million from contracts with the state and other authorities, not to mention another million a year in lobbying business. It’s a lot of money that the former attorney general will now have to weigh against the cost all this scrutiny is having to his reputation."

  • "Sometimes, mistakes happen. That was the gist of an opinion handed down this week by a federal magistrate judge who showed leniency toward Quinn Emanuel Urquhart & Sullivan LLP for an evidence leak that allowed its client, Samsung Electronics Co., to get hold of a copy of a confidential license agreement between two rivals, Apple Inc. and Nokia Corp."
  • "Though sparing the law firm of harsher sanctions, U.S. Magistrate Judge Paul Grewal gave them a scolding. He ordered Quinn Emanuel to reimburse Apple and Nokia  for legal costs associated with the leak. And he instructed Samsung to put in place safeguards to make sure it doesn’t happen again."
  • "The quick back story: In March of 2012, several months before the start of a high-profile patent jury trial between Apple and Samsung, Quinn Emanuel distributed a report to Samsung that included a confidential license agreement between Apple and Nokia. Quinn Emanuel acquired the document, written by a Samsung licensing expert, through the normal discovery process."
  • "Judge Grewal didn’t let Samsung off the hook completely. He chastised Samsung and its outside counsel for setting up what he saw as a sloppy system to manage the flow of highly confidential information in a such complex case. The lack of oversight, he said, warranted at least some redress."

Tuesday, February 25, 2014

Risk Talk: Lawyer Professional Responsibility & PHI

Intapp's Kathryn Hume writes in with news of an upcoming risk session she'll be presenting at, hosted by the Arizona Association of Defense Counsel: "HIPAA Concerns for Arizona Practitioners".

The session will explore the relationship between federal and state requirements around PHI and how that impacts lawyer’s professional responsibility requirements. It will include practice guidance for addressing compliance requirements.

Lewis & Roca partner Gregory Harris will be co-presenting.

Wednesday, February 19, 2014

NSA Controversy Touches Law Firm

As reported by the New York Times: "Spying by N.S.A. Ally Entangled U.S. Law Firm" --
  • "A top-secret document, obtained by the former N.S.A. contractor Edward J. Snowden, shows that an American law firm was monitored while representing a foreign government in trade disputes with the United States. The disclosure offers a rare glimpse of a specific instance in which Americans were ensnared by the eavesdroppers, and is of particular interest because lawyers in the United States with clients overseas have expressed growing concern that their confidential communications could be compromised by such surveillance."
  • "The government of Indonesia had retained the law firm for help in trade talks, according to the February 2013 document. It reports that the N.S.A.’s Australian counterpart, the Australian Signals Directorate, notified the agency that it was conducting surveillance of the talks, including communications between Indonesian officials and the American law firm, and offered to share the information."
  • "The Australians told officials at an N.S.A. liaison office in Canberra, Australia, that 'information covered by attorney-client privilege may be included' in the intelligence gathering, according to the document, a monthly bulletin from the Canberra office. The law firm was not identified, but Mayer Brown, a Chicago-based firm with a global practice, was then advising the Indonesian government on trade issues."
  • "Duane Layton, a Mayer Brown lawyer involved in the trade talks, said he did not have any evidence that he or his firm had been under scrutiny by Australian or American intelligence agencies. 'I always wonder if someone is listening, because you would have to be an idiot not to wonder in this day and age,' he said in an interview. 'But I’ve never really thought I was being spied on.'"
  • "Most attorney-client conversations do not get special protections under American law from N.S.A. eavesdropping. Amid growing concerns about surveillance and hacking, the American Bar Association in 2012 revised its ethics rules to explicitly require lawyers to 'make reasonable efforts' to protect confidential information from unauthorized disclosure to outsiders."
On Monday, the Chicago Tribune published an update that included additional commentary from Mayer Brown: "Chicago-based law firm responds to report of NSA spying" --
  • "Mayer Brown, the Chicago-based law firm cited in a weekend report about National Security Administration spying, has issued a statement that stops short of an outright denial that its communications were under surveillance but says there is 'no indication' that any spying occurred 'at the firm.'"
  • "Responding to the report, Mayer Brown said in a statement late Sunday night: 'There is no indication, either in the media reports or from our internal systems and controls, that the alleged surveillance occurred at the firm.'"
  • "Asked by the Tribune whether the firm was saying that there was no evidence of spying at the firm, or that there was no evidence of spying of the firm, a Mayer Brown spokesman responded: 'At the firm.'"
  • "The Mayer Brown statement also said, 'Nor has there been any suggestion that Mayer Brown was in any way the subject of the alleged scrutiny. Mayer Brown takes data protection and privacy very seriously, and we invest significant resources to keep client information secure.'"

Wednesday, February 12, 2014

Risk Roundtable Executive Briefing (Chicago)

We're pleased to announce our first 2014 Risk Roundtable, which will be hosted at the Chicago office of Foley & Lardner on February 18.
This session will feature Intapp risk experts moderating a group discussion about how law firms can improve risk management and compliance policies and processes to support business goals and strategy.
Key topics will include:
  • Analytical client intake to promote overall strategy
  • Firmwide compliance with client guidelines
  • Managing matters to reduce write-offs and improve realization.
Paul Boken, Executive Director at Hinshaw & Culbertson, will also describe how Intapp technology has helped his firm address emerging compliance and business challenges.

These events always provide a forum for risk, IT and firm management professionals to connect in a collaborative environment.

Attendance is by invitation only and is limited to qualified law firms and personnel. Please contact for more details.

Tuesday, February 11, 2014

Lane Powell Leverages Multiple Intapp Products to Respond to Client Information Security Requirements and Address HIPAA Compliance


Lane Powell, a multi-specialty law firm with offices across the Pacific Northwest and in the United Kingdom, is using Intapp Wall Builder to centralize and automate confidentiality controls across multiple firm software applications and Intapp Activity Tracker to alert firm management of suspicious activity on sensitive information.

The firm has enhanced security measures to address HIPAA compliance requirements and satisfy information security audits from clients, especially those in the financial services industry.

Said the Firm's Manager of Information Technology, David Fairchild:
  • "The recent surge in client audits, along with the 2013 HIPAA data privacy and security mandates, is forcing all law firms to take information security more seriously."
  • "Our firm is working closely with clients to ensure that internal policies and practices meet their specific requirements. We decided to adopt Wall Builder as a core component of our information security strategy because the product is an industry standard that allows us to demonstrate a best-practices approach to clients."
Intapp Wall Builder is a web-based information security and confidentiality management software application that enables organizations to centrally control and report on user access permissions across multiple applications, including document management, accounting, portal, CRM, time entry and records management systems. It also automates notifications to individuals subject to specific policies and tracks acknowledgments for compliance purposes.

Wall Builder is the most-adopted information security management software by law firms with 150 or more lawyers. According to an independent survey by the International Legal Technology Association (ILTA), 72% of large law firms using commercial software to enforce information access controls use Intapp Wall Builder.

Intapp Activity Tracker supplements these security capabilities by monitoring how lawyers and staff use sensitive information. It notifies management of suspect activities so that firms can resolve potential problems before they become crises or compliance violations.

Noted the Firm's Enterprise Applications Manager, Tim Lozensky:
  • "After evaluating several options, we selected Wall Builder because it delivers extensive security management capabilities with an easy-to-use, consumer-grade interface that addresses the needs of both technical IT and non-technical risk staff."
  • "Wall Builder is the tool we needed to centralize our access control policies for securing client protected health information (PHI) and Activity Tracker enables us to monitor information usage to detect any suspicious activity that may signify a security breach. Both capabilities are central to the technical and administrative requirements of the HIPAA Security Rule."

Visit for more information on how Intapp enhances law firm information security, to learn more about HIPAA compliance for law firms, or to request more information and a demonstration.

Monday, February 10, 2014

Another Paralegal Conflict/Screening Case

From ALM (free registration) comes news of Hodge v. Urfa-Sexton, No. S13G1626: "Court Ponders Ethical Screen for Paralegal Conflict at Firm: High court hears case in which a paralegal moved between opposing firms" --
  • "The Georgia Supreme Court this week pondered an issue of first impression: whether a paralegal who works on a case then switches to the other side's firm automatically disqualifies her new employer from the litigation."
  • "At issue is whether firms can use a so-called ethical screen to wall off a nonlawyer from the firm's work on a case in order to prevent the nonlawyer's conflict of interest from disqualifying others at the firm. The Supreme Court last year issued an opinion in another case that appeared to leave open questions about firms using ethical screens to avoid imputation of lawyer conflicts. The state's lawyer ethics rules don't specifically address how to handle conflicts of law firm employees who are not attorneys."
  • "James Myers, an Insley & Race partner who argued the case at the Supreme Court on Tuesday, has said that the firm generally looks for conflicts in hiring staff but didn't pick up on Bussey's involvement in the Williams matter right away because Hanks Brookes usually represents defendants, not plaintiffs."
  • "After Bussey brought the problem to the attention of Insley & Race partners in October 2011, about a month before the lawsuit was filed, the firm implemented various screening measures. The firm has said it restricted Bussey's access to the law firm's electronic and physical files on the Williams matter and told her not to talk to anyone at the firm about the case. The firm also told Hanks Brookes about the issue."
  • "During Tuesday's arguments, without making clear their position on screens generally, justices questioned whether the rules for lawyers and nonlawyers should be the same."

Thursday, February 6, 2014

Navigating Potential Conflicts in Complex Matters

Interesting story in today's Wall Street Journal. Interesting both for its substance, and as an example of another conflicts discussion in the general media. This matter relates to the recent chemical spill in West Virginia that left 300,000 people with unsafe drinking water:

"Law Firm Has History With West Virginia Chemical Company: McGuireWoods to Represent Freedom Industries in Post-Spill Bankruptcy" --
  • "When Freedom Industries Inc. faced mounting litigation over a chemical spill that tainted the water supply of a large swath of West Virginia last month, it turned to lawyers at McGuireWoods LLP as it sought Chapter 11 protection."
  • "Weeks earlier, McGuireWoods represented Chemstream Holdings Inc. when it acquired Freedom for $20 million. In that takeover, McGuireWoods also represented the subsidiary that owned the site where the trouble started. In matters unrelated to Freedom, McGuireWoods has represented J. Clifford Forrest, the Pennsylvania mine operator who owns Chemstream, as well as Mr. Forrest's Rosebud Mining Co."
  • "McGuireWoods disclosed most of these connections to the bankruptcy court on the first day of Freedom's Chapter 11 case and won the court's approval to represent Freedom. But bankruptcy experts say disclosures raise new questions that may require answers as creditors begin to form ranks. Can McGuireWoods represent Freedom in battles that may pit the company's interests against those of the law firm's former clients? Such battles are likely to be waged in the coming weeks... In a court filing late Tuesday, McGuireWoods said it wouldn't represent Freedom in the event of clashes with Freedom's owners."
  • "McGuireWoods spokesman Bob Lewis said the law firm 'takes very seriously its ethical and disclosure obligations and devotes significant resources to those matters to ensure compliance.'"
  • "'Ethics rules say that you can't pull your punches on behalf of one client against another client,' said Nancy Rapoport, a bankruptcy law professor and ethics expert at the University of Nevada at Las Vegas. 'Professionals have to search through what they've done before and let the court know: Have they represented people on the other side of a transaction with the debtor? Have they represented people related to the debtor? Have they represented principals of the debtor?'"

Tuesday, February 4, 2014

When Conflicts Have Consequences

As reported this past weekend in the Financial Times and detailed in The Lawyer: "White & Case debarred over conflicts in $2bn oligarch battle" --
  • "White & Case has been disqualified from acting on one of its flagship cases, the $2bn oligarch litigation between Ukranian industrialist Victor Pinchuk and his rivals Gennady Bogoliubov and Igor Kolomoisky, after a conflict of interest."
  • "Today’s disqualification centred on White & Case’s internal conflicts checking procedures, which were highlighted after it emerged that the firm had been advising Bogoliubov and Kolomoisky in the US on a corporate restructuring and potential IOPO and Pinchuk in London on the dispute involing the former pair."
  • "The court heard that White & Case decided internally there was no conflict of interest between its acting for the claimants and also acting for Pinchuk and did not establish any information barriers separating the teams for two years."
  • "In his ruling today Mr Justice Field found that White & Case was in possession of confidential information that was or might be relevant to the litigation, and that Pinchuk’s interests were or might be adverse to the interests of the claimants."
  • "He further held that White & Case could not show that there was no real risk of the disclosure of the claimants’ confidential information to Pinchuk."
  • "In a statement White & Case said: 'White & Case has an exemplary record in detecting and avoiding conflicts of interest and in safeguarding our clients' confidential information. We have robust policies and procedures that are underpinned by strong systems and regular training and support for our partners, lawyers and staff... The issues raised in the judgment are very specific to the facts of this particular case and to the relationship between the parties involved, but we are considering whether any improvements to our policies and procedures can or should be made.'"