Friday, February 3, 2017

In the News: Presidential Risk



Much attention has been paid to current events. Several firms are finding themselves facing scrutiny from a variety of sources, highlight issues including potential ethical conflicts as well as risks associated with client selection. Here are several stories of note and interest:

"In The Polarized Era Of Trump, BigLaw Searches For Balance" --
  • "Despite many BigLaw attorneys’ personal opposition to Trump, prestigious and traditionally bipartisan firms have largely remained quiet and cautious following an unusually divisive election."
  • "Firms that have represented Trump, including Jones Day, Kasowitz Benson Torres & Friedman LLP, and Morgan Lewis & Bockius LLP, have benefited from his rise to power. To be perceived as taking a political side could be advantageous, risky or both, given the current political climate and the unpredictability of the new president."
  • "The alignment of law firms with or against the new administration in the legal battles to come could open rifts among attorneys and perhaps with some clients."
  • "California’s Legislature this month retained Covington & Burling to help it resist Trump's potential attacks on the state's immigration, environmental and health care policies. Legislators cited expected “extraordinary challenges” and “uncertain times” in a news release announcing the deal. Former Obama administration Attorney General Eric H. Holder Jr. will lead that effort for the firm."
  • "Hester told Law360 that his firm views California as just another client with a host of potential legal conflicts with the federal government. He said that the firm itself has no political preference; it has represented both Democratic and Republican organizations...Hester said that he has received some calls from clients about its representation of California. They weren't complaints, but merely concerns that the firm's representation of the Golden State might create a conflict with their own cases involving California government entities. The firm’s representation of California hasn’t caused them to drop any other cases so far, he said."
  • "Trump owes one of his most enthralling displays of legal-political theater to his longtime tax attorney, Sheri Dillon of Morgan Lewis. On Jan. 11, she stood next to Trump and a table piled high with paper and folders arguing that Trump’s widely criticized business conflict management plan was legal, appropriate and effective. She dropped her firm’s name three times, at the beginning and end of her remarks. It was a crown jewel in an unconventional press conference... Dillon and Morgan Lewis declined to comment for this article. To some watchers, Dillon’s performance was a stellar example of an attorney providing vigorous advocacy for her client — and a fine way of getting her firm’s name into the public. To others, the comments crossed a line and placed Dillon and Morgan Lewis in jeopardy."
Related: Newsweek and others noted: "The law firm Dillon works for, Morgan Lewis, was in the spotlight this week not only for its work on Trump’s controversial plans for his business but also because it received the 'Russia Law Firm of the Year' award last year from a London organization that ranks lawyers and law firms. Critics have questioned Trump’s ties to Russia and President Vladimir Putin, and the president-elect has at times appeared to try to distance himself from Putin."

"Giant Law Firm Overlooks Giant Trump Conflict… Sends ‘Oops’ Letter" --
  • "Perhaps Dentons has finally grown too big. The global behemoth of a law firm sent a threatening letter to CNN last week, after CNN pointed out that Trump’s nominee for Secretary of Health and Human Services, Rep. Tom Price, had purchased shares in an implant company conveniently before introducing legislation that would financially benefit the company. Then someone performed the conflict check."
  • "Well, it turns out that someone else at Dentons performed a simple conflict check and revealed that Dentons actually does a whole mess of work for CNN, prompting Mike McNamara, Dentons’s U.S. Chief Executive Officer, to write another letter apologizing to CNN."
Related: "Did Dentons really botch its conflicts check in feud between CNN and Trump's healthcare nominee?" --
  • "So is that what happened here? He just forgot to run a check? It seems unlikely, and not just because you would expect him to practise what he preaches. Campaign finance records show that Price, who represents Georgia’s sixth congressional district, has been a longtime client of Evans."
  • "As for CNN, is it plausible that Evans, a Trump surrogate who has appeared on the network and who works in the firm’s Atlanta office, would be oblivious that Dentons also represents the Atlanta-based network? This is doubtful. Dentons may be huge but the Atlanta office has just over 100 lawyers. And CNN is the kind of client that colleagues would mention. Even if Evans did not run a conflict check, you would think he would know."
  • "So what did happen? Evans’ own writing may provide an answer. 'In some circumstances, ‘thrust upon’ conflicts arise. It often involves a situation where a firm represents two different clients who suddenly have an unexpected pote'tial conflict and there is insufficient time to address and/or resolve the conflict,' he wrote. “More often than not, both clients have been firm clients without incidence.'"
  • "So far, that seems right. Price and CNN were both Dentons clients, but they were not adverse to each other until the CNN story."
"Unclear Role Of Trump's Special Advisers Has Some Concerned" --
  • "Earlier this month, President-elect Donald Trump named former New York City Mayor Rudolph Giuliani, who heads a cybersecurity practice at the Miami-based law firm Greenberg-Traurig, as his chief adviser on cybersecurity issues. Giuliani's new title is more than just another notch on his resume. It's also likely to be good for business. "The way the world works, if you're perceived as having proximity to power, that brings certain advantages," says William Galston, senior fellow in governance studies at the Brookings Institution."
  • "Giuliani told Politico his role as Trump adviser would present no conflict-of-interest, and he said he would never use his White House access to lobby the president."
  • "But Politico said Giuliani 'acknowledged that he might have business ties with some of the people he connects to Trump, and that he might be discussing government and private issues with some people.'"
Politico notes: "Because Giuliani is a volunteer, not a government employee, he won’t come under the remit of federal ethics rules that require officials to separate themselves from potential conflicts of interest."

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