Wednesday, February 11, 2015

Risk Grab Bag (Clients, Conflicts, Currency and the Cloud in Canada Cancelled?)


Several interesting updates to share. First, on the economic risk front: "Managing the Risks of Investing in Clients" --
  • "Clients are looking for ways to pay attorneys with something other than cash. Attorneys are looking to move away from the standard billable hour toward fee arrangements that allow them to participate in the success of projects they help make happen."
  • "The most significant limitation for attorneys investing in clients is whether the transaction is fair and reasonable—from the perspective of the client. Bar associations and courts are especially sensitive to whether an attorney is unfairly trading off of the attorney's knowledge of client confidences or secrets, or otherwise leveraging the relationship to gain an unfair advantage."
  • "One failsafe protecting clients from unreasonable terms is the opportunity to consult with independent counsel. Independent counsel operating with no interest in the transaction allows the client to benefit from professional judgment free from conflict."
  • "Some investments can change the nature of the relationship of the attorney and the client to law practice. Depending on the investment, attorneys may become a client of the firm, in addition to their other role with the practice. Such changes implicate a myriad of issues including the evaluation of potential conflicts of interest for both existing and prospective clients. As a result, in order to detect and resolve these potential issues, it is important to change the law practice's client intake procedures to include any information now relevant because of the transaction."
Next, on how close a relationship must be to trigger conflicts: "Louisiana Supreme Court concludes that 'of counsel' lawyers are associated with that law firm for conflicts of interest analysis" --
  • "...the recent Louisiana Supreme Court which concluded that “of counsel” lawyers are associated with that law firm for purposes of potential conflicts of interest analysis. The case is In re Randy J. Fuerst, No. 2014-B-0647 (La. SC 12/9/14). The Court’s opinion is here: https://www.ladb.org/DR/?"
  • "Bottom line: According to this Louisiana disciplinary opinion, a lawyer who is “of counsel” to a law firm is considered to be a member of that law firm for purposes of conflict of interest analysis; therefore, a lawyer who has a conflict of interest and must withdraw from representing a client cannot refer that client to a law firm in which he has an “of counsel” relationship since this conflict is imputed to the law firm and all of its lawyers."
Finally, turning to the Great White North: "Did the LSBC Just Kill Cloud Computing for Lawyers in BC?" --
  • "...the Law Society of British Columbia (LSBC) President, Jan Lindsay, boldly pronounced that, in no uncertain terms, BC lawyers are prohibited from using US-based cloud computing providers."
  • "...from the back of the room, an attendee stood up and stated (roughly, to paraphrase): 'I am Jan Lindsay, President of the Law Society of BC. This is black and white: BC lawyers are prohibited from using non-BC-based cloud computing providers, including Google and Dropbox... It is a new ruling as of October 31st."
However, take heart, if you parse the spirited comments in that discussion, and proceed to track down the LSBC president's blog, you'll find the retraction: " I don’t believe I said that non-BC cloud computing services were not permitted, but if I did I was wrong."

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