Tuesday, December 16, 2014

Today's Hottest Risk Update: "Swiss Cheese," The Duke, Vereins & More


Today's post has everything. It's another example of general media coverage of risk issues we frequent. (And, perhaps, a suitable subject for SNL's Stefon, were he to summarize legal battles, as this one has everything... Dukes, Vereins, Fee Splitting, Ethics Allegations, Cheese and a Platypus...) As Newsweek writes in: "Legal Swiss Cheese" --
  • "Trademark lawsuits can be a little dry, but a California case in the fall has drawn attention not only because it involved John Wayne and a whiskey named 'Duke,' but also because it highlights a growing tussle over legal ethics."
  • "In the Duke case, lawyers for John Wayne Enterprises argued in court documents last August that Norton Rose Fulbright, the verein law firm in which legacy firm Fulbright & Jaworski represented Duke University, was playing both sides of the fence—an ethical no-no."
  • "Specifically, the Wayne lawyers asserted, Norton Rose, which formed the verein with Fulbright in mid-2013, had previously represented the distillery producing the Duke-branded bourbon in unrelated matters. Fulbright lawyers denied any conflict of interest, saying in court papers that verein 'member firms do not share privileged information with other member firms unless they are retained by and working together for a client on the same matter.' The judge did not address either side’s assertion."
  • "The inner workings of vereins 'are going to be tested in courts, because someone’s going to be very unhappy,' says Edwin Reeser, a former managing partner at prominent law firm Sonnenschein Nath & Rosenthal LLP, who is now in private practice."
  • "Still, the relative financial and operational opacity of vereins is the subject of increasing debate in legal circles. Peter Kalis, the chairman and global managing partner of non-verein K&L Gates, a major law firm, tells Newsweek, 'The business model for vereins is not yet proven.' Kalis has variously compared the mega-firms to a platypus (i.e. a freak of nature), a kaleidoscope, a “grand illusion” and a Potemkin village."
  • "Law firms rushed into these network combinations because they sounded like a wonderful panacea” to the problem of expanding amid the post-2008 recession, Reeser says. 'But the U.S. law firms are going to be the losers in these structures because of conflicts of interests and ethics rules on fee splitting.'"

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