Monday, July 21, 2014

On Managing Client Terms of Business, OCGs and Rules of Engagement

Our colleagues at Paragon have written in to note that Gilda Russell (who served as partner and Ethics & Conflicts Counsel to Holland & Knight LLP for fifteen years), has joined their Panel of Preferred Service Providers and authored an excellent white paper: "Dealing with Client Outside Counsel Guidelines and Other Non-Standard Client Engagement Terms" --
  • "Such OCG and client terms are now utilized by a wide range of clients, including business and financial institutions, federal, state and local governments and agencies, health care organizations, defense contractors, and even non-profit groups. OCG and client terms cover a large number of subjects and demonstrate attempts by organizational clients and their in-house law departments to maintain control over and loyalty from outside counsel through various restrictions and obligations."
  • "Yet, OCG and client terms can cause enormous problems for law firms -- however large or small the firms -- given the obligations they create, many of which may be adverse to law firm policies, more restrictive than professional ethics rules, designed for other types of businesses than law firms, in conflict with professional liability policies, and/or unduly burdensome."
  • "Accepting OCG and client terms without a clear understanding and assessment of the many obligations they impose can result in subsequent breach of contract and malpractice claims, disqualification motions based on conflicts of interest, exposure to potential civil and criminal penalties at least in the government representation context, and loss of client business."
  • "Consequently, firms should develop effective processes for dealing with OCG and client terms. These processes should focus on monitoring the avenues by which OCG and client terms come into firms as well as requiring review and approval of OCG and client terms by designated persons well versed in the subject matter of the provisions and related compliance issues."
Note: Longtime readers will recognize Gilda as a participant in several Roundtable programs, including a webinar on this very topic. (And, similarly, readers are also likely aware that OCGs can be more effectively reviewed, evaluated and implemented at the point of client engagement through the use of modern approaches to new business intake and acceptance…)

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