Monday, October 24, 2016

Interview with a Conflicts Guru

Bill Frievogel was recently interviewed by Bloomberg BNA. An important voice in the risk community shares his latest thinking in: "Conflicts Guru Gives Lowdown on Firms' Top Frustration" --
  • "No other ethics issue has as wide an effect on the day-to-day business of law as do conflicts of interest. A conflict can mean turning away a great client or lateral hire, exposing you and your firm to malpractice liability, and even—in thankfully rare cases—criminal liability. It's no wonder that law firm general counsel cited conflicts as their top risk management concern in a recent study."
  • "Q.What are the most common types of conflicts for large firms? A.While I have not done a statistical analysis, I would guess former-client situations under Model Rule 1.9(a) and the application of the “substantial relationship” test—for law firms of all sizes. Related to that, in particular for larger firms, are lateral movements among law firms where the firms are opposing each other, and the lateral may be infected with having participated in the matter or has information about it. This implicates imputation under Model Rule 1.10 and the issue of whether a screen will cure the problem."
  • "Q.Can firms use screening mechanisms to avoid or deal with conflicts? A. About half the states specifically recognize non-consensual screens as a way to deal with lateral lawyers. Almost all states recognize screens in the case of lateral government lawyers and judicial personnel. Screens established with the consent of all involved should always work. Getting the consent is another issue."
  • "Q.What's the idea of “conflicts counsel”? A.In litigation where a law firm finds that a current or former client will be an adverse witness, and hostile cross-examination is probable, a few courts have allowed the law firm to stay in the case if another firm is brought in to conduct the cross-examination. Other courts disagree. In a Chapter 11 bankruptcy, a law firm may be able to represent the debtor or the unsecured creditors' committee if the firm will designate “conflicts counsel” who will be on call to handle a matter that might otherwise disqualify the law firm. Such was the case in Exco Resources, Inc. v. Milbank, Tweed, Hadley & McCloy LLP (In re Enron Corp.)"
  • "Q. When is a conflict of interest likely to engender a malpractice claim? A. The situations are many and varied. There are two prominent categories in my mind. First, where a law firm loses a litigation costing a client a lot of money. Then the client learns that the law firm had other representations or relationships possibly causing the law firm to “throw” the case, or not do the best job. The other category is a business failure where the failed client learns the law firm had other relationships, which caused the law firm to structure the business or transaction in a way to favor someone else, to the detriment of the client."
  • "Q.You're in Chicago. Are the Cubs going all the way? A. Argh! You would ask that. I am a lukewarm Cubs fan, because I grew up in Southern Illinois with Harry Caray and the Cardinals. The Major League playoffs can break your heart, but it would be a great party here."

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