Thursday, March 31, 2016

HACKED: Prominent Law Firms Breached




via the Wall Street Journal: "Hackers Breach Law Firms, Including Cravath and Weil Gotshal" --
  • "Investigators explore whether cybercriminals wanted information for insider trading... Hackers broke into the computer networks at some of the country’s most prestigious law firms, and federal investigators are exploring whether they stole confidential information for the purpose of insider trading, according to people familiar with the matter. The firms include Cravath Swaine & Moore LLP and Weil Gotshal & Manges LLP, which represent Wall Street banks and Fortune 500 companies in everything from lawsuits to multibillion-dollar merger negotiations. Other law firms also were breached, the people said, and hackers, in postings on the Internet, are threatening to attack more."
  • "The attacks on law firms appear to show thieves scouring the digital landscape for more sophisticated types of information. Law firms are attractive targets because they hold trade secrets and other sensitive information about corporate clients, including details about undisclosed mergers and acquisitions that could be stolen for insider trading."
  • "The potential vulnerability of law firms is raising concerns among their clients, who are conducting their own assessments of the firms they hire, according to senior lawyers at a number of firms."
  • "One of the trickiest questions for law firms is when they are required to publicly disclose a data breach. Forty-seven U.S. states have their own breach-notification laws, forcing law firms and other companies to navigate a patchwork of different rules."
with added notes and detail via the American Lawyer: "Cravath Admits Breach as Law Firm Hacks Go Public" --
  • "Law firms will go to great lengths to keep attempted and successful hacks secret, because any sign that the data they store isn’t secure can result in a “huge loss of customer confidence,” said Austin Berglas, former head of the FBI’s cyber branch in New York."
  • "'I think that the majority of the law firms don’t even know that they’re compromised,' said Berglas, who now leads the cyber investigations and incident response team at K2 Intelligence. He added that law firms are traditionally understaffed in cybersecurity, compared with large corporations and banks."
  • "Berglas said he worked with a law firm recently that faced a ransomware attack, something he said he’s seeing more and more often. The firm did not know about the attack until the hacker sent a screenshot of the stolen data and a message that the information would be made public if the firm did not pay. This firm opted to comply and handed over a seven-figure sum, according to Berglas."
  • "Daniel Silver, a former federal prosecutor who recently joined Clifford Chance, said... Firms tend to be reluctant to publicly identify themselves as victims, said Silver. And they usually don’t have to. While corporations are often required to report data breaches and hacking, law firms—which frequently possess sensitive material from the same corporations—are in a different category."
  • "Generally, there is no specific regulation directed at law firms requiring them to report data breaches, Silver said. 'More often firms will turn to the private sector to try to fix a problem rather than call the FBI,' he said. 'It’s a patchwork approach these days … and law firms fall into a black hole when it comes to these data breach issues.'"


Wednesday, March 30, 2016

Conflicts (Waived or "Egregious")




via BNA comes two interesting conflicts updates. First: "Conflict Waiver Saves Day Pitney From Ouster in Later Dispute" --
  • "A conflict waiver bars a plaintiff from claiming that defense counsel must be disqualified due to its previous concurrent representation of the plaintiff and the defendants, a federal magistrate judge decided March 2 (Radici v. ICF Mercantile, LLC, D.N.J., Civ. No. 2:14-cv-07133 (SRC) (CLW), 3/2/16)."
  • "The decision supports the enforceability of advance waivers in which a new client gives up the right to seek a firm's disqualification in subsequent disputes with another specified client of the firm."
    "Magistrate Judge Cathy L. Waldo of the U.S. District Court for the District of New Jersey enforced the conflict waiver the plaintiff signed when he retained the Day Pitney LLP law firm. Waldo rejected his argument that he didn't know enough to give informed consent."
    "The waiver letter stated that the firm would concurrently represent Radici in the visa application process while also advising Ronner in his negotiations with Radici relating to ICF. It also said that in the event of a dispute among them, Day Pitney would stop representing Radici and would represent ICF and Ronner in the dispute."
    "The magistrate judge singled out this language in the waiver letter as important: '[Radici] will not use [Day Pitney’s] representation of him in the Visa Application Matter nor this consent and waiver as a basis on which to disqualify [Day Pitney] from representing ICF or Mr. Ronner on the Member matters, including any litigation that may arise between ICF and/or Mr. Ronner, on one hand, and Mr. Radici on the other.'"
And on the flip side: "Litigation Boutique May Be Disqualified for 'Egregious' Conflict" --
  • "Citing a conflict 'so egregious that it is unwaivable,' a federal judge in Santa Ana has issued a preliminary ruling disqualifying the recently formed litigation boutique Hueston Hennigan from a multi-million dollar healthcare fraud case that’s been in the headlines for years."
  • "In the civil case in front of Guilford, Hueston Hennigan name partner John Hueston has been representing the State Compensation Insurance Fund (SCIF), a worker’s compensation insurer instituted by the California state government, on claims it was defrauded of hundreds of millions of dollars as the the result of a complex kickback and fraudulent billing scheme that dates to the 1990s. Separately, the firm’s other name partner Brian Hennigan has been representing Paul Randall, who faces federal criminal charges that he participated in the scheme to defraud the fund."
  • "The Court now faces a relatively simple question,”  U.S. District Judge Guilford wrote. 'Can a single law firm represent both the victim and the victim’s alleged perpetrator at the same time and in the same litigation? The answer is clear: No... But for some reason, the lawyers at Hueston Hennigan did not see the clarity of that answer. In doing so, they may have lost sight of a bedrock of our adversary legal system: the duty of loyalty.'"

Tuesday, March 29, 2016

Engagement Letters and Malpractice Risk (and News)



via Karen Rubin comes: "Documenting who you do — and don’t — represent is key to avoiding malpractice trap"--
  • "In Lahn, the lawyer had represented the plaintiff, her brother and another individual as lenders in a series of private loans to a California-based real estate development corporation.  In a 2004 loan-rollover, the lawyer exchanged e-mails with the plaintiff and provided her with an inter-creditor agreement for the proposed transaction."
  • "The lawyer wrote that plaintiff was encouraged 'to seek independent counsel to review these and any documents in connection with this matter. Please remember, as it is expressly stated in the Inter Creditor Agreement, we are representing [your brother] in the transaction.' The inter-creditor agreement likewise reiterated that in this transaction, the lawyer was solely representing the brother as lender."
  • "Even though the lawyer had represented the plaintiff in other matters, the court wrote, 'the uncontested fact remains that he told plaintiff, directly and in writing,' that he solely represented her brother in the transaction, and that she was encouraged to seek independent counsel to review the inter-creditor agreement.  The inter-creditor agreement reiterated the same fact."
  • "Of course, the best way to document the identity of your client is in an engagement letter that leaves no doubt about who you do and do not represent. And here, where an engagement letter was not an option, the savvy lawyer avoided malpractice liability by effectively documenting who his client was not.  Take a lesson from Lahn, and be clear on this point."
And following an earlier update on this matter comes: "Paul Weiss Flirted With Malpractice Risk In Caesars" --
  • "A ballyhooed investigation finding Paul Weiss Rifkind Wharton & Garrison LLP attorneys missed a conflict of interest while representing Caesars Entertainment and its bankrupt operating unit also reveals the firm was at an increased risk of being sued for malpractice because it never obtained a retention letter, experts say."
  • "Sources who spoke with Law360 said Davis' determination that a conflict existed raises a question over how attorneys could have neglected to get in writing the parameters of the firm's representation of CEOC, a major client. CEOC filed for bankruptcy last January carrying $18.05 billion in debt."
  • "Still, experts said the lack of a retention letter is unusual, especially for a firm as large as Paul Weiss and for a client as large as CEOC. BigLaw firms routinely have risk management processes in place requiring engagement letters that outline the scope of the legal work."
  • " A New York rule that went into effect in 2002 requires attorneys who charge clients fees of at least $3,000 to provide a written letter of engagement. Firms are also usually required by malpractice insurance carriers to obtain retention letters, experts said."

Monday, March 28, 2016

Risk News & Updates (AML, Data Privacy & Paralegal Ethics)




Legal Risk LLP's latest newsletter notes:
  • "Pressure to bring forward the implementation of the Fourth Money Laundering Directive ((EU) 2015/849) (MLD4) to the end of this year, already fuelled by terrorist attacks in Paris and no doubt Brussels too now, should focus law firm management on the need to carry out a risk assessment and review policies and procedures."
  • "While the report on the thematic review of anti-money laundering compliance by the Solicitors Regulation Authority (SRA), expected imminently, may not contain major shocks, what passed muster when the review was carried out a year ago may not be sufficient for the future. We are advising leading law firms on their UK and overseas compliance, and those in other sectors such as property professionals and trust and company service providers, on the steps they need to take."
  • "The text of the new EU General Data Protection Regulation is expected in July and will take direct effect in two years. The Information Commissioner has published guidance,
    Preparing for the General Data Protection Regulation (GDPR): 12 steps to take now."
  • "The European Commission and the United States have reached an agreement on the Privacy Shield, which replaces the defunct Safe Harbor regime and sets out a new framework for transatlantic transfers of personal data.  However, Max Schrems, who successfully challenged Safe Harbor, has been reportedas saying that the Privacy Shield does not adequately solve the problem, describing it as ‘10 layers of lipstick on a pig’. "
And via Paragon: "Recent commentary [in the] Law Firm Risk Blog regarding Conflicts concerns in the hiring of paralegals coincidentally touched on one of the subjects of our next commentary for Paragon’s Policy-Wise, a Risk Management Blog.  Gilda Russell, one of our Preferred Providers, has written: Legal Ethics Concerns for Paralegals an article on some important ethics issues for paralegals" --
  • "...important legal ethics rules with which paralegals should be familiar as a guide to their professional conduct. These are Requirements of Competence, Diligence, and Professional Integrity, Requirements of Client Confidentiality, Rules Concerning Conflicts of Interest, Supervisory Lawyers’ Responsibilities Regarding Nonlawyer Assistants, and Prohibitions Concerning the Unauthorized Practice of Law."

Sunday, March 27, 2016

A Special (New) Offer for (Select) Risk Blog Readers



We want to do everything we can to encourage the risk community to attend Inception, which is now just a month away (April 24-27). (More details on the complete event and agenda at the conference web site.)


Special Promotion (for Risk Blog Readers)
This week we have a new opportunity, in the form of an allocation five complimentary day pass badges available for qualified, partner-level law firm readers interested in attending just the Tuesday risk day of the conference (April 25).
 
That day, detailed below, will commence with an exclusive GC breakfast, followed by a series of general risk panels and discussions (and culminate with a reception at the Exploratorium museum in San Francisco). If you're interested, please get in touch directly: dan@riskroundtable.com.

 
GC Breakfast
Moderated by Pat Archbold, head of Intapp’s risk practice. The event will include a provocative discussions of our speakers on several topics. We're pleased to feature risk experts:
  • Anthony Davis, partner at Hinshaw & Culbertson
  • Martin Checov, general counsel at O’Melveny & Myers
  • Ken Landis, vice president of loss prevention at ALAS

Conference Risk Content

We also have a dedicated Risk Roundtable program track on Tuesday open to all attendees, with a great set of talks and panels featuring speakers from firms including:
  • DLA Piper
  • Greenberg Traurig
  • Kirkland & Ellis
  • Foley & Lardner
  • Pillsbury Winthrop Shaw Pittman
  • Holland & Hart
  • Miles & Stockbridge
  • Schulte Roth & Zabel
Discussing critical risk topics:
  • Risk Survey review – Over the past decade, Risk Roundtable industry surveys have provided unique insight into industry trends, priorities, challenges and response strategies. This session will unveil the 2016 report, and feature review and discussion of key findings by an expert panel, along with ample time for audience Q&A and discussion.
  • Business Acceptance Maturity Model (BAMM) – The Business Acceptance Maturity Model (BAMM) allows firms to self-assess and rate their policies and procedures against overall industry practices and standards – which can vary based on jurisdiction and conflicts clearance models. This panel will review and share real-world examples of the four distinct acceptance approaches, and explore how you can use the BAMM framework to drive the change and improvement you want at your firm.
  • Risk Staffing Approaches: Conflicts & beyond – How is your firm’s risk team organized? Is risk organized under a single individual or umbrella group? Or is it distributed? Do conflicts managers and other risk staff wield broad authority to resolve issues? Or are they directed to follow layered escalation paths as issues arise? This panel discussion will explore different approaches for staffing the risk function, the various the pros and cons of each, and approaches for evolving your own organizational approach to best achieve your specific risk and business goals.
  • Making the case for investing in risk – Whether it’s for new technology, new staff positions, or new policies and practices – it’s no secret that making the case for investing in risk management can be challenging. But it’s critical to the long term health and success of every firm, and a cause worth advocating for. This panel will explore different strategies and approaches leaders have pursued to win mindshare, budget and support for risk initiatives. What are the “slam dunk” scenarios? What are the best arguments to make? Where’s the best place to start? Come hear real-world stories and advice from your peers – and bring your own to share as well.
Again, I'm delighted to make a limited set of passes available to qualified parties. Please get in touch if interested as these will go on a first-come, first-served basis. (dan@riskroundtable.com).
 

Friday, March 18, 2016

It’s (Risky) Business Time: Gaming Conflicts




"Paul Weiss Missed Caesars Conflict, Examiner Says" --
  • “Paul Weiss Rifkind Wharton & Garrison LLP’s dual representation of Caesars Entertainment’s operating unit and its private equity owner Apollo Global Management LLC created a conflict of interest while the firm worked on a series of controversial transactions involving the casino operator, a Chapter 11 examiner said.”
  • “Although Davis said Paul Weiss should have recognized that a conflict of interest existed, any potential claims creditors could bring against the firm would be weak because evidence collected indicates that lawyers did not knowingly do anything to harm CEOC creditors, the report said.”
  • “’In sum, while a conflict existed which Paul Weiss should have recognized, any claim against Paul Weiss for damages would be weak,’ the report said. ‘Although the conflict was real, and Paul Weiss lawyers should have recognized the need for independent directors and advisors at CEOC by no later than late 2012 – early 2013, and advised its clients accordingly, the evidence does not support a conclusion that Paul Weiss lawyers knowingly acted at any time to injure or prejudice CEOC or its creditors.’”
  • “Creditors of Caesars Entertainment's bankrupt operating unit have actionable legal claims against the parent company and its private equity owners worth between $3.6 billion and $5.1 billion over a series of transactions that stripped value from the business, according to a Chapter 11 examiner.”

Thursday, March 17, 2016

It’s (Risky) Business Time: Webinar Recording on Managing Terms of Business




For those that missed the live presentation, a recording is now available of the recent webinar on managing terms of business with Intapp Open.

With clients issuing increasingly stringent guidelines, it's critical that firms take their compliance responsibilities seriously. But keeping up with every rule and condition across multiple clients and matters can create significant overhead for lawyers and staff — which translates to real risk.

Intapp Open now provides a structured approach for storing, indexing and enforcing client mandates and other firm requirements, including outside counsel guidelines, engagement letters, and other internal requirements and standards. This session covered:

Key Challenges
•    Centralization and management of client obligations
•    Visibility and cross-functional access to client terms
•    Terms enforcement

Key Product Capabilities
•    Capture and categorize client terms
•    Provide transparency and accessibility
•    Enforce requirements during matter execution
•    Integrate with key firm systems
•    Report on and analyze client commitments

Click here to access the recording (which runs about 20 minutes).

Wednesday, March 16, 2016

It’s (Risky) Business Time: Lending or Paying (and Repercussions)




"Skadden Work For Aviation Exec 'Incestuous,' Lenders Say" --
  • "Creditors for bankrupt Evergreen International Aviation Inc. accused Skadden Arps Slate Meagher & Flom LLP on Monday of having an “incestuous relationship” in which it represented both some of Evergreen's entities and their late founder, and they asked a Delaware judge to make the bankruptcy trustee hand over documents from the firm."
  • "The creditors contend Skadden has a conflict of interest in representing both Evergreen debtors and Delford Smith. They claim the law firm facilitated ‘potentially fraudulent’ transfers ahead of the bankruptcy filing that benefited Smith and Skadden but allegedly lost creditors more than $30 million."
  • "The creditors told the judge in their March 7 motion that they have taken matters into their own hands and started investigating Skadden's work with Evergreen via publicly available sources and by interviewing former Evergreen executives."
  • "Counsel for the trustee and a representative for Skadden did not reply to requests for comment on Monday, and counsel for the creditors declined to comment."
"Sheppard Mullin's Bid To Buy Waiver Emerges In Fee Row" --
  • "A payout offer from Sheppard Mullin Richter & Hampton LLP to a California utility raising a conflict objection that ultimately led to the loss of millions of dollars in fees reveals an ethically murky area of behind-the-scenes deals in which BigLaw firms seek to quell disqualification bids, experts said."
  • " Even if wheeling and dealing over conflicts is deemed within professional conduct rules and benefits clients, experts said, lawyers also realize that the optics of offering money in exchange for conflict waivers aren’t necessarily positive."
  • "'There is a real underbelly to how conflict waivers are negotiated, and it can be like making sausage,' said bar discipline specialist James Ham of Pansky Markle Ham LLP in South Pasadena, California. 'I wouldn’t call what they did unprofessional, but I do think they made a very pragmatic business decision, probably based on the belief that it wasn’t going to harm the client.'"
  • "California legal ethics expert Diane Karpman of Karpman & Associates called the Sheppard Mullin offer unsurprising, as major firms turn to 'all existing paradigms' in an effort to head off potentially expensive conflict problems. 'Although [cash for waivers deals] are not often reported, I'm certain they occur,' Karpman said."

Tuesday, March 15, 2016

It’s (Risky) Business Time: Global Firms, Terms, Laterals & Business Matters



This week we're featuring several stories on the theme of risk and business. First up, an excellent overview via Hong Kong Lawyer: "Conflicts of Interest: A Challenge for Global Law Firms" --
  • “International conflicts challenges will usually first become an issue when law firms operating in different jurisdictions/countries decide to combine/merge in order to become one global firm and service the needs of international clients. The combined firm will need to decide on the application of different conflicts of interest rules by not only taking into account the different practice areas of the firm, but also local professional conduct rules.”
  • “One approach is to apply the more stringent ABA Model Rules of Professional Conduct (the “US Conflicts Rules”) to every client/matter in every jurisdiction where the global firm operates. However, standards under these rules can be in breach of local conflicts rules, which might not permit consents to a conflict of interest.”
  • “Another approach is to apply the local conflicts rules to local clients/matters. However, cross-border transactions might be problematic if it is unclear at the outset which conflict rules prevail. If a law firm adopts a combination/layering approach of the various conflicts rules, it should be done under careful consideration. While this approach may be more difficult at the outset, it may be the only viable way to avoid breaching local conflicts rules.”
  • “On top of considering the conflicts rules for each client/matter, firms also need to navigate commercial conflicts of interest either imposed by a contractual obligation or, generally, by the client relationship.”
  • Clients want to manage and control the efficiency and cost effectiveness in the delivery of legal services provided by law firms and the way they achieve this is by trying to impose outside counsel guidelines onto the law firms (ie, their terms of business). If law firms agree to outside counsel guidelines with clients then they need to contractually comply with the terms and conditions stipulated by the clients. Most of the time, the client’s terms of business do contradict the terms of business of law firms. The following issues are the ones where the interests between clients and law firms differs the most:
    • “Everyone is the client: representation of the whole corporate family. Clients want to define the client in the matter as everyone in the corporate family, including both subsidiaries and affiliates. However, this broadens the application of the fiduciary duties owed by a solicitor to a client. Including all affiliates is much too broad and might be difficult to comply with. Hence, law firms should try to define the client as narrow as possible.”
    • “No adversity: cannot be adverse to a client without consent. Clients want to impose the duty of loyalty under the US Conflicts Rules to jurisdictions where local conflicts rules do not require it. This could put a law firm at a competitive disadvantage as waivers would need to be sought which would not be required under the local conflicts rules, slowing down matter acceptance or even rejecting matters if a waiver cannot be obtained.”
    • “Best rates: most favoured nation clause. Clients want to obtain the same low rate that a law firm offers to its long-term clients, who deserve this rate due to its relationship and volume of work it gives to the law firm. This arrangement can be unfair to the law firm and other clients. Furthermore, it might even be impossible to measure due to the different types of services law firms provide to different client.”
  • “Hence, law firms need to be careful not to contractually incorporate the US Conflicts Rules into engagement terms which would need to be considered additionally when resolving conflicts of interest issues for local matters.”
Next, via the Partner Departure Blog (see the full story for California-specific analysis) comes: “Law Firm Can’t Require Departing Partner to Forfeit Equity If Partner Takes Clients” --
  • “In an important order that impacts the field of partner departures nationwide, a district court judge in the Eastern District of Virginia held that a provision in a law firm’s operating agreement that provides that a withdrawing partner who ‘takes clients’ forfeits up to fifty percent of his equity in the firm is void and unenforceable because it places an impermissible restriction on the partner’s right to practice law. (Moskowitz v. Jacobson Holman, PLLC, (E.D. Va. Jan. 28, 2016.)”
  • “In analyzing whether or not the forfeiture provision in the Jacobson partnership agreement was valid, the Court interpreted Rule 5.6 to prohibit, ‘not only outright restrictions on practice, but also indirect restraints, such as financial disincentives.’ (Order, Page 5.)”
  • “And while this provision on its face does not impose a direct restriction on the member’s right the practice law, the Court noted that it certainly ‘attaches a financial cost to a withdrawing member’s decision to continue to represent any of his or her clients.’”

Tuesday, March 8, 2016

Deconstructing Disqualification News




A heaping update harvesting a heaping helping of disqualification discussion in the news. First: "Federal Circuit Judge Bryson Denies Motion to Disqualify Plaintiff’s Counsel"
  • “Providing a rare glimpse into a Federal Circuit judge’s views on the rules of professional conduct governing conflicts of interest, on February 26, 2016, Federal Circuit Judge William Bryson, sitting as a trial judge, denied a motion to disqualify the law firm of Fish & Richardson, P.C.Erfindergemeinschaft Uropep GbR v. Eli Lilly & Co., No. 2:15-CV-1202 (E.D. Tex. Feb. 26, 2016).”
  • “Fish represented the co-defendant in the present case, Brookshire Brothers, Inc., in a previous patent infringement suit, GeoTag, Inc. v. The Western Union Co., No. 2:10-CV-574 (E.D. Tex. 2010). Brookshire moved to disqualify Fish because it now represents Uropep against Brookshire.”
  • “Judge Bryson decided first whether Brookshire was Fish’s former, not current, client at all relevant times. When Brookshire hired Fish for the GeoTag case, Brookshire and Fish entered into an engagement agreement providing that Brookshire was retaining Fish for only the GeoTag case and that any other matter would require another agreement. The engagement agreement contained also a broad waiver by Brookshire of future conflicts, extending to Fish’s representation of parties against Brookshire in subsequent matters that were not the same as the GeoTag case. The GeoTag case against Brookshire settled on November 20, 2013, and Fish provided no further services to Brookshire except responding to a question about the settlement agreement in June 2014.”
  • “Judge Bryson found that Brookshire was a former client of Fish at all relevant times... Judge Bryson found that the GeoTag case and the present case are not substantially related... Judge Bryson considered next whether Fish received confidential information from Brookshire in theGeoTag case that might be used against Brookshire in the present case, and rejected Brookshire’s arguments that it did... Judge Bryson next considered Brookshire’s assertion that Fish’s notice of termination of the attorney-client relationship in May 2015 was improper...”
  • “Finally, in response to Brookshire’s challenging the validity of the prospective conflict waiver in the engagement letter, Judge Bryson acknowledged that ‘[s]uch sweeping advance conflict waivers are of dubious validity, at least where the precise nature of the prospective conflict is not spelled out with scrupulous care.’ But Judge Bryson found that disqualification was not required regardless of the validity of the advance waiver provision in the engagement agreement.”
Next: "Prior Work for Other Side Not Cause to Disqualify Day Pitney" --
  • A federal judge in Newark has denied a motion to disqualify Day Pitney from representing the defendants in a dispute between business partners, finding no evidence that the firm used its prior representation of the plaintiff to gain an unfair advantage in the present case.”
  • “Day Pitney attorneys Michael Dunne and Elise Berman represented Radici in 2013 in connection with a visa application as he sought to move from Brazil to the United States to form a business partnership with Ronner, according to Waldor's opinion. Meanwhile, Dunne was also representing Ronner in his formation of the partnership with Radici.”
  • “When Radici sought Day Pitney's representation on the visa application, the firm obtained signatures from both Radici and Ronner on a letter seeking their waiver of potential conflicts of interest. The letter stated, in part, that Radici would not use Day Pitney's representation of him in the visa application as a basis to disqualify the firm from representing ICF or Ronner in any litigation that may arise between ICF or Ronner and Radici, according to Waldor.”
  • “Radici and Ronner's business relationship eventually soured and the present litigation arose. Day Pitney's prior representation of Radici became an issue in the present case when defendants served multiple interrogatories and document requests on him concerning his visa applications. He argued that his visa status was irrelevant to the present case and that Day Pitney was using its prior representation of him to his detriment, according to Waldor.”
  • “Waldor said to disqualify Day Pitney, Radici would have to demonstrate that the present case and the immigration matter are "substantially related," which requires a showing that the firm received confidential information from him during the earlier representation that is relevant to the present case. Radici failed to demonstrate that his immigration status was confidential and that the firm had that information because of its prior representation of him, Waldor said.”
And, finally, for those that have made it to the very end, comes the award for story title I’m glad I didn’t come up, which goes to: “Knife Maker Takes Another Stab At Locke Lord DQ In 2nd Circ” --
  • “The maker of copycat Victorinox Swiss Army knives doubled down Friday in its effort to have Locke Lord LLP cut from an appeal of a $1.7 million infringement judgment, telling the Second Circuit the law firm has not shown that it is free of conflict in the case.”
  • “B&F System Inc. is citing Locke Lord's January 2015 merger with Edwards Wildman Palmer LLP as the reason the law firm should be disqualified as Victorinox AG’s counsel. Locke Lord potentially has access to sensitive B&F information because the firm actually represented the warring parties simultaneously, B&F contends.”
  • The company claims it was dropped by the law firm it had known as Locke Liddell & Sapp PLLC 'without explanation' shortly thereafter. The reason turned out to be that Edwards Wildman had been representing Victorinox in the district court case, which B&F argues is tantamount to concurrent representation considering the law firms' eventual merger.”
  • Victorinox has argued the merger creating Locke Lord took place years after it first accused B&F of infringing on its signature knives and the request for disqualification is purely a tactical move to boot attorneys who are 'intimately knowledgeable' about the case.”

Monday, March 7, 2016

Event: Education, Connection and Inspiration @ Inception 2016




We're seeing significant interest in the Intapp user conference, Inception, scheduled for April 24-27. More details on the complete event and agenda at the conference web site.

I wanted to take a moment to highlight a slice of the great risk content that will be featured that week (and to offer an inspirational incentive to blog readers). We have a dedicated Risk Roundtable program track on Tuesday:
 

Key Risk Sessions & Expert Panels
  • Risk Survey review Over the past decade, Risk Roundtable industry surveys have provided unique insight into industry trends, priorities, challenges and response strategies. This session will unveil the 2016 report, and feature review and discussion of key findings by an expert panel, along with ample time for audience Q&A and discussion.
  • Business Acceptance Maturity Model (BAMM)  The Business Acceptance Maturity Model (BAMM) allows firms to self-assess and rate their policies and procedures against overall industry practices and standards – which can vary based on jurisdiction and conflicts clearance models. This panel will review and share real-world examples of the four distinct acceptance approaches, and explore how you can use the BAMM framework to drive the change and improvement you want at your firm.
  • Risk Staffing Approaches: Conflicts & beyond – How is your firm’s risk team organized? Is risk organized under a single individual or umbrella group? Or is it distributed? Do conflicts managers and other risk staff wield broad authority to resolve issues? Or are they directed to follow layered escalation paths as issues arise? This panel discussion will explore different approaches for staffing the risk function, the various the pros and cons of each, and approaches for evolving your own organizational approach to best achieve your specific risk and business goals.
  • Making the case for investing in risk Whether it’s for new technology, new staff positions, or new policies and practices – it’s no secret that making the case for investing in risk management can be challenging. But it’s critical to the long term health and success of every firm, and a cause worth advocating for. This panel will explore different strategies and approaches leaders have pursued to win mindshare, budget and support for risk initiatives. What are the “slam dunk” scenarios? What are the best arguments to make? Where’s the best place to start? Come hear real-world stories and advice from your peers – and bring your own to share as well.


Thursday, March 3, 2016

Law Firm Information Security: Making News, Changing Client Strategies




via Bloomberg BNA, come two stories highlighting information security. First, on the subject of threats facing law firms (and client concerns): "Verizon GC: Law Firms Are Prime Targets for Hackers" --
  • “Verizon General Counsel Craig Silliman said that he thinks law firms are prime targets for hackers. ‘Firms have to make sure they are not a weak link in the company’s overall cyber security profile, which at its most basic level means their standards for protecting data need to be at least equivalent to those of the companies they represent,’ Silliman said.”
  • “’Law firms hold a lot of sensitive documents about their clients. They are not just potential, but likely, targets for those looking to find sensitive information. We think it’s very important that law firms look at the threat environment and make sure their systems are up to standard. It’s something we’re in a regular conversation with our main law firms about. I think most large companies are talking to their law firms about this, so it’s important that the law firms be aware of their systems, be aware of the communications, be aware of the sensitivity of what they have, and make sure that they aren’t a vector for attack into the company’s intellectual property.’”
  • “'law firms are really most interesting, because they hold a lot of information about intellectual property, about potential mergers and acquisitions, things like that. It’s important to understand the nature of the potential threat that you face, and what it is about you as the law firm that’s most interesting to a potential bad guy...'”
Next, an interesting review of how firms are partnering with clients to address information security challenges, offering a combination of legal and technical expertise: "Latest Qualification for Cyber Security? No Law Degree" --
  • “Jeff Lolley joined Hogan Lovells in 2010 to help oversee the firm’s internal security issues. Even though he’s not a lawyer, during the past two years, Lolley gradually assumed a new role, helping the firm’s clients respond to a data breach, or with training and awareness on cyber issues. Now, he leads a unit of non-lawyers at Hogan Lovells that work alongside the firm’s partners in the Cyber Security Solutions practice group. And his title has grown from chief information security officer to also include managing principal of cyber risk services.”
  • “Lolley is not an isolated example: Across the country, law firms increasingly are turning to non-lawyers to help build their cyber security practice groups. Based on interviews with lawyers in this field, at least a half-dozen law firms including Hogan Lovells, Venable, Seyfarth Shaw, DLA Piper and others, are using non-lawyers, often professionals with deep backgrounds in technology and technical expertise, to complement the lawyers focused on data security and privacy.”


Wednesday, March 2, 2016

Event Reminder: Webinar on Terms of Business Management


 
This event is proving to be quite popular: Intapp is hosting a webinar for firms looking to more effectively and efficiently manage client terms of business.

This is a critical risk issue we've covered several times. (Probably most colorfully in noting a talk by a former law firm GC who described onerous client guidelines as "Bombs Waiting in Our Files")

Session Details
With clients issuing increasingly stringent guidelines, it’s critical that firms take their compliance responsibilities seriously. This simple fact is the bedrock of the client-firm relationship – and a key ingredient to delivering client success.

But keeping up with every rule and condition across multiple clients and matters can create significant overhead for lawyers and staff — which translates to real risk.
 
 Webinar: Intapp Open: Terms of Business Management
  • Date: Tuesday, March 8th
  • Time: 9 am PST / 12 pm EST
  • Registration: Limited to select firms. Please email Lea Schweitzer for more information.
Intapp Innovation
Intapp Open now provides a structured approach for storing, indexing and enforcing client mandates and other firm requirements, including outside counsel guidelines, engagement letters, and other internal requirements and standards. These capabilities are available integrated with the Intapp Open for business acceptance (intake + conflicts), or as a standalone product.

Pat Archbold, head of Intapp’s risk practice, and Grace Camoglu, Senior Product Manager will provide an introduction to Intapp Open for terms of business management and discuss how firms are using the software to achieve their strategic goals.


Webinar Agenda:
 
Key Challenges
  • Centralization and management of client obligations
  • Visibility and cross-functional access to client terms
  • Terms enforcement
Product Features
  • Capture and categorize client terms
  • Provide transparency and accessibility
  • Enforce requirements during matter execution
  • Integrate with key firm systems
  • Report on and analyze client commitments
Benefits of Enhanced Terms Management
  • Effectively comply with client rules
  • Deliver a superior client service experience
  • Retain and expand business relationships
  • Improve profitability
  • Gain a competitive advantage
 
Attendance is limited to select firms. Please email Lea.Schweitzer for more information.

Tuesday, March 1, 2016

Risk News: Contractor Conflicts, ICC Conflicts Policies & More



"More Tips for Firms Hiring Contract Attorneys" --
  • “Many law firms, faced with clients who want to reduce their legal spend, utilize contract attorneys to provide legal services at a reduced rate. As previously discussed, there are risks associated with hiring contract attorneys that implicate issues like the duty to supervise, the exclusivity of contract attorneys, overtime, and documentation of the employment arrangement. Those risks materialize in various ways, from ethical challenges and undetected conflicts of interest to wage and overtime claims.”
  • “While some legal malpractice insurers specifically ask about the use of contract attorneys in writing coverage for law firms, many do not. This type of ambiguity creates one of the greatest malpractice risks for law firms using contract attorneys.”
  • “Many policies require that, for coverage to exist, the services performed must arise out of an attorney-client relationship. For those law firms who retain contract attorneys as independent contractors (subject to IRS standards), this can be especially complicated. The law firm may find itself arguing that, on one hand, an independent contractor attorney does not represent the law firm's client for conflict purposes, but, on the other hand, does represent the client enough to fall within the firm's legal malpractice insurance coverage.
  • “Because of this potential struggle, it is recommended that law firms define their relationships with any contract attorneys and to confirm during the insurance application process that the legal malpractice insurer will provide coverage should a claim arise.”
"ICC clarifies when arbitrators should disclose potential conflicts of interest" --
  • “The International Chamber of Commerce (ICC) International Court of Arbitration has detailed the circumstances in which an arbitrator should disclose a potential conflict of interest. It has adopted new guidance to help arbitrators decide whether to disclose possible conflicts of interest in cases that they work on.”
  • “It is up to each arbitrator to decide whether a disclosure should be made, the ICC said. But the guidance note describes specific situations that may call the arbitrator's impartiality into question, including if the arbitrator or his or her law firm has represented one of the parties, has a business relationship with a party, or has a professional or close personal relationship with counsel for one of the parties or its law firm.”
  • “The ICC recently announced that it will now publish the names and nationality of arbitrators sitting on ICC cases on its website, with details of whether the appointment was made by the court or by the parties, and which arbitrator is the tribunal chairperson, as well as clear information on the cost consequences of delays in submitting draft arbitration awards.”
"Gibbons Shouldn’t Be DQ’d From Pollution Suit, Rexam Says" --
  • “Rexam Beverage Can Co. on Thursday urged a New York federal judge to reject Quanta Resources Corp.’s efforts to disqualify its counsel Gibbons PC from a suit alleging Rexam contributed to contamination at a Queens refining center owned by Quanta, saying the company’s motives were purely tactical.”
  • “Rexam argued in a memorandum of opposition filed by Frankfurt Kurnit Klein & Selz PC, its special professional responsibility counsel, that Quanta waited too long to argue that Gibbons should be disqualified because the firm had advised Quanta during its bankruptcy proceedings in the 1980s.”
  • “On Thursday, Rexam said that Quanta knew in August 2012 that two attorneys representing Rexam in the matter had joined Gibbons. Quanta waited a year before filing its original motion to disqualify and waited three years before filing the instant motion, according to Rexam.”