Sunday, December 11, 2016

EVENT: Toronto Risk Roundtable (January 2017)

Our next Risk Roundtable event in our series on outside counsel guidelines is set for January 11th in Toronto. We're delighted to feature Simon Chester, Senior Counsel, Client Solutions at Gowling WLG, as our guest speaker.

He'll revisit his the point he made last year that outside counsel guidelines (OCG) are “bombs” waiting in law firm files, and that firms need to take action now to mitigate the substantial risks associated with OCG management.

Simon will by joined by Eric Nerland, Risk Practice Leader at Intapp, who will focus on the increasing compliance pressures being imposed by clients and how a firm can deliver on key client commitments. He will also share a short update on Intapp Open terms of business management system, a solution that helps firms finally manage, centralize, classify and report on client terms, RFPs and communications in a structured fashion.

And, as always, we’ll have plenty of time for open discussion, peer exchange and networking.

Attendance is by invitation only and is limited to qualified law firms and personnel. Please contact for more details.

Thursday, December 8, 2016

VIDEO: Law Firm Perspective: Risk Case Study

Here's a seven minute video interview of Andy Jurczyk, CIO of Seyfarth Shaw on his firm's investment in risk technology:

Intapp Open — A Journey Forward
  • "We just recently finished the Open implementation, and finally brought our new business intake process into the electronic world, and the workflow associated with that, which is a project that went great."
  • "We originally had a contract with The Frayman Group, and we were ready to roll out our workflow software, and the acquisition happened. Of course, there's always questions about what's going to happen next. We had a number of Intapp meetings, and agreed on a delivery schedule and resource allocation to complete the project. Everything went great from that point on. We had some good resources that were applied."
Intapp Open — In Practice
  • "We finally finished the workflow and programming associated with the open product, and chose our Boston office as our pilot. Our Boston office is a little bit challenging because of some of the work that we do and the volume of the matters that get opened up in that office."
  • "We thought that would be great from a stress test perspective, and we rolled it out, and everybody loved it. It had more requirements, from a data collection perspective, which we thought we'd get some pushback on, but just the opposite happened. It was easy. It gave people insight into the matter opening process. They knew what the status was, where it was going."
  • "We still thought: 'Well, I wonder if that's an anomaly. Let's roll out another office,' and we went to the other side of the coast to our West Coast office, with the same results. Everybody was very happy about the product and welcomed it. We just finished the rollout firm wide, and it's been accepted, and everybody has provided very positive input for it. I'd think the value of the workflow is important for us."
On Intapp
  • "Intapp is one of those companies that I think is easy to do business with. In my role, I spend a lot of time with a lot of companies and a lot of people that run those companies, and one of the most impressive thing, for me, is the focus on the client at all levels from all personnel within the firm. It's a very well run company. It's easy to do business with. There's a lot of transparency on current product and future product, and so you have a good feel for what they're working on, where they're going, and that personally helps me strategically in budgets and being able to determine what the next steps are for our business and where we're going to take it."

Wednesday, December 7, 2016

Recent Conflicts News & Updates

A few stories and updates of note, starting with the latest from Bill Freivogel:
  • "Screening; Electronic Files: Estate of Kennedy v. Stuart A. Rosenblatt, C.P.A., 2016 WL 6543629 (N.J. App. Div. Nov. 4, 2016). This opinion’s description of the parties and the procedure is somewhat befuddling (to us, at least).  Therefore, we will take extreme liberties in simplifying the facts in order to reach the key issue for this audience: the application of N.J. Rule 1.10(b) (same as M.R. 1.10(b)) to electronic files remaining in the law firm when the lawyers handling the matter in question have left, taking the paper files with them. Law Firm defended a lawyer (“Defendant Lawyer”) in a prior malpractice case (“Prior Case”). After Prior Case was dismissed, the lawyer representing the plaintiff in Prior Case (“Lawyer”) joined Law Firm. Lawyer then filed the same case as before, including against Defendant Lawyer (“This Case”). In This Case Defendant Lawyer moved to disqualify Law Firm. Law Firm defended the motion because the lawyers working on Prior Case had left and taken the paper files with them. The issue was whether the electronic files left behind disqualified Law Firm under Rule 1.10(b)(2). The trial court granted the motion. In this opinion the appellate court reversed “conditionally” and remanded for further proceedings. Law Firm had erected a “screen” around the electronic files. However, the court said that if someone in Law Firm looked at the substance of the retained electronic files, Law Firm should be disqualified. If, however, all Law Firm lawyers did was look at metadata to determine whether anybody in Law Firm had looked at the files substantively, then the Law Firm should not be disqualified. The appellate court felt that New Jersey’s recent adoption of its version of M.R. 1.6(b)(5) (N.J. Rule 1.6(d)(5)), helped inform its decision here, even though the N.J. version came after the events in question. The opinion also discusses the nuts and bolts procedure that should be followed in resolving the remaining issues, and directs Law Firm to delete any electronic files remaining."
  • "Waiver; Passage of Time (posted December 2, 2016) Worth v. Worth, 2016 WL 7007721 (E.D. Pa. Nov. 29, 2016). The parties litigated this derivative action in state court for nine months. They now appear in federal court with different lawyers. Law Firm is representing the company and individual defendants. The plaintiff moved to disqualify Law Firm. In this opinion the court denied the motion because the plaintiff allowed a different law firm to represent the company and individual defendants for nine months in state court without objection."
  • "Of Counsel (posted November 30, 2016) LoPorto v. County of Rensselaer, No. 1:15-CV-0866 (LEK/DJS) (N.D.N.Y. Nov. 16, 2016). Lawyer filed this case for Plaintiff. Two individual defendants, A and B, were represented by Law Firm. After filing this case Lawyer became of counsel to Law Firm. Plaintiff and A and B reached an agreement to settle by dismissing A and B. The court held a conference to discuss the settlement. There the court learned of Lawyer’s of counsel status at Law Firm. The court ordered the lawyers to address this conflict.  After the lawyers did so, the court, sua sponte in this opinion disqualified Lawyer and Law Firm."
"More Conflicts Arise On Kirkland Team for Turkish Trader" --
  • "A hearing Wednesday in a New York federal court intended to address two possible conflicts with a Kirkland & Ellis LLP team representing a Turkish gold trader accused of violating Iran trade sanctions revealed several additional issues with the firm’s banking clients."
  • "Instead, one of Zarrab’s 14 lawyers, Viet Dinh of Kirkland & Ellis, told Judge Berman than six additional banks involved in transactions worth hundreds of millions of dollars at the heart of the case are also on Kirkland’s client roster."
  • "Moreover, he and another one of Zarrab's lawyers, Paul Clement, were also representing one of the banks that prosecutors claim were victimized by Zarrab's scheme in another ongoing federal case, representing a "metaphysical" conflict issue in the case."
  • "Zarrab and two others were charged in March with acting on behalf of the Iranian Bank Mellat and others on a U.S. sanctions list. He was initially represented in part by a Bancroft PLLC team that including Dinh and Clement."
  • "But in September, Kirkland announced it was absorbing the entire 17-attorney team at Bancroft, a renowned appellate firm. That created conflict issues for the four former Bancroft partners on Zarrab's deep legal team."
  • "Dinh argued Wednesday that the possible conflicts between the Zarrab and the banking clients were at worst indirect, and could be handled with an ethical wall in the firm. He also said he’d gotten Zarrab’s informed consent for the former Bancroft lawyers to continue to represent him, as well as conflict waivers from Bank of America and Deutsche Bank."
  • "He likened the issue to lawyers who represent a plaintiff suing a defendant who happens to have insurance coverage from a company also represented by the plaintiff firm in unrelated matters. 'It’s analogous to an indirect springing conflict,' he said."
  • "But Dinh also acknowledged that even if he could secure waivers from the other six Kirkland clients and erect an ethical wall in his new firm, he and Clement were also personally representing one of them, HSBC, in a Second Circuit appeal. 'We can’t wall ourselves off, and Mr. Zarrab understands that metaphysical issue,' he said."

Tuesday, December 6, 2016

Outside Counsel Guidelines -- Keeping up on the Conversation

Always important to listen to the client side of the equation. Here is a recent article from Sterling Miller, former General Counsel for Sabre Corporation (and Travelocity prior to that): "Ten Things: Preparing Outside Counsel Guidelines – The Keys" --
  • "Managing your relationship with outside counsel can be challenging. The good ones work hard to make it easy but, even so, there are times when you and your outside lawyers are not on the same page... There are many facets of your relationship with outside counsel that you need to think about and constantly manage. One way to do this is through an engagement letter. While this is a good device to manage some aspects of a particular project, the better path is to create and maintain a set of 'Outside Counsel Guidelines' — a standing set of rules for how you and your outside counsel will interact on key issues, especially on billing."
  • "1. Be reasonable. I have been on both sides of the aisle as General Counsel and as outside counsel. One thing I always tried to ensure was that, as in-house counsel, we were reasonable in what we included in our outside counsel guidelines and in the manner in which we interacted with our outside counsel, especially over billing and invoicing. My assumption was that outside counsel wanted to do a good job, wanted to comply with our guidelines, and wanted to ensure that we felt that we got value for the money we spent with them."
  • "7. Conflicts. As firms consolidate, conflicts become a real issue. One thing I have seen larger firms try to obtain is a blanket waiver of conflicts (sometimes called “advance conflicts waivers”). I would say no to this, and set out your policy on this in your guidelines. Moreover, you should set out that you expect the firm to advise you before undertaking any representation of a client who’s interests are generally adverse to the company, for example a competitor. It may not be an actual “conflict” under the ethical rules, but it’s fair to ask outside counsel to advise you of such representations."
  • "Additionally, if your law firm for some reason needs to withdraw from a representation of your company (either voluntarily or via court order) because of a conflict, you should require that the firm pick up the cost of transferring the matter to new counsel and for getting new counsel up to speed on the matter and if for some reason there is work product that can no longer be used due to the conflict, that the firm refund you the fees and costs associated with that work product."
  • "8. Guidelines trump retention letter. Most retention letters are prepared by outside counsel, which is fine. However, when you get the retention letter don’t just skim over it and sign it as is (even if they send it to you as a signed pdf). Take the time to read through it and ensure that a) it accurately reflects your understanding of how the engagement will work and any special terms or pricing you agreed to, and b) that there is nothing in the retention letter that conflicts with your Outside Counsel Guidelines. If either is not the way you want, change it – do not be afraid to mark up the retention letter. One thing I frequently did (especially if most of the letter was fine) was simply hand-write by my signature “Nothing in this letter trumps the [Company Name] Outside Counsel Guidelines and in the event of a conflict, the Outside Counsel Guidelines shall govern.” On occasion, I am glad I wrote this into the engagement letter."
  • "9. Guidelines do not replace a conversation with outside counsel. You can write the most elaborate Outside Counsel Guidelines, covering everything from A to Z, but in my experience your guidelines do not replace the one thing that is most important – regular conversations with your outside counsel about the relationship, especially around billing and costs. It may feel a bit scary and even awkward but nothing will pay back dividends like an honest conversation with your outside counsel about the bills."
  • "10. Review annually. If you are a regular reader of my blog you know that one thing I preach consistently is that you cannot prepare policies and guidelines and then just leave them on the shelf until “something happens.” You need to schedule regular reviews and you need to create the right team to help with that review – potentially even folks outside the legal department... Outside Counsel Guidelines can be a very helpful tool to help manage your relationships with outside counsel. Don’t be afraid to rewrite them from scratch every few years – the legal profession is changing way too fast to just sit back and assume what you already have is good enough. And, there are many other topics you can/should cover in your guidelines, e.g., confidentiality, media relations, “up-the-ladder” reporting, dispute resolution."