Sunday, April 30, 2017

Hollywood Hip Hop Conflicts (Encore)

("Only [judges] can judge me.")

"Glaser Weil Conflict to be Reconsidered in Tupac Biopic Lawsuit" --
  • "An L.A. County Superior Court judge should have looked a little harder at the relationship between law firm Glaser Weil and its former client before denying a motion for disqualification, an appellate panel has ruled. The firm represented Randall Emmett, George Furla and their combined production company, Emmett/Furla Productions, in an arbitration in 2012 — and now is up against them in a lawsuit over a Tupac biopic on behalf of Morgan Creek Productions."
  • "'Plaintiffs contend the trial court abused its discretion in failing to determine whether there is a substantial relationship between the Fox arbitration and Morgan Creek matter,' writes presiding justice Tricia Bigelow.  'We agree and remand for further proceedings.'"
  • "'The evidence and representations in the record regarding Emmett and Furla’s role in securing financing through an entity they owned, combined with aspects of the Morgan Creek litigation thus far, make it necessary for the trial court to determine whether there is a substantial risk Glaser Weil’s representation of Morgan Creek against plaintiffs will involve Emmett and Furla’s confidential information acquired in the course of Glaser Weil’s prior representation,' writes Bigelow."
Here's the full opinion.

(For those playing along, we note that judge's name is aptly poetic...)

Thursday, April 27, 2017

Hollywood Conflicts Allegations Always Make Headlines

(You are about to witness the strength of risk knowledge.)

Straight out of the Hollywood Reporter comes: "Judge Asked to Disqualify Universal's Law Firm From 'Straight Outta Compton' Suit" --
  • "After a brief pause, thanks to the death of the plaintiff, former N.W.A manager Jerry Heller's defamation lawsuit over Universal's Straight Outta Compton is again live. The first order of business is a motion that aims to kick Universal's attorneys at Greenberg Traurig off the case."
  • "But before he died, Heller didn't appreciate Paul Giamatti's depiction of him in the N.W.A biopic Straight Outta Compton, so he filed a lawsuit claiming that the film defamed him by holding him responsible for breaking up the group and taking advantage of the artists, including Dr. Dre and Ice Cube."
  • "In a motion to disqualify on Monday, the plaintiff points to communications between Jerry Heller and well-known Greenberg Traurig partner Joel Katz and contends there's a conflict. 'Specifically, in or around 1992-1993, Ruthless Records and Jerry Heller engaged Joel Katz, and Joel Katz advised Jerry Heller regarding subjects of legal issues substantially related and material to this case, specifically, involving defamation allegations against Defendant O'Shea Jackson, Sr.. p/k/a/ 'Ice Cube.''"
  • "Nevertheless, according to the law papers, Katz provided advice to Heller about suing over the Ice Cube song "No Vaseline." Those who are N.W.A fans or who have seen Straight Outta Compton will recognize this track. It's the one that Cube authored after his departure from the group and was a direct attack on his former groupmates. In the film, after Giamatti's character listens to "No Vaseline," he's irate and even threatens to get the Jewish Anti-Defamation League involved."
And Law360 reports:
  • "The estate's motion to have Greenberg Traurig removed argues that Heller shared confidences with Katz relevant to the current suit, including details about Heller’s broken relationship with Ice Cube and money disputes. That information could give the defendants an unfair advantage against Heller or at least raise the appearance of a conflict of interest, the Heller estate said, calling on the court to “err on the side of caution” and disqualify Greenberg."
  • "'This motion is meritless, as we believe will be shown when the motion is fully briefed,' a Greenberg spokesperson said."

Wednesday, April 26, 2017

WEBINAR: Replace LegalKEY & ARM. Budget for FileTrail

Our expert risk consulting colleagues at InOutsource are co-hosting a webinar on replacing LegalKEY and ARM (FileSurf) records management systems.

We've covered some of the risks associated with legacy systems. For firms looking to plot a migration strategy, this session offers new insights and advice:

"Replace LegalKEY and ARM. Budget for FileTrail" --
  • LegalKEY and ARM (aka FileSurf) have come to an end. They will no longer be developed or the systems and servers will no longer be properly supported.
  • It’s time to change. FileTrail, a 100% browser-based solution, is the most modern and developed platform in legal. Designed to be deployed and operational in months, it includes:

    • Integrations with multiple Document Management Systems and the Intapp suite
    • New updates and features released every quarter – included in cost of maintenance
    • On-premise and cloud options
    • Process management and workflow tools that go way beyond circulating files
Join InOutsource, FileTrail’s implementation partner in legal, as they demonstrate FileTrail’s robust functionality.

To sign up, visit their registration page.

Monday, April 24, 2017

Indemnity Increasing Indeed In OCGs

"BigLaw Losing Fight Over Indemnity In Counsel Guidelines" --
  • "In a buyer’s market for BigLaw services, corporate clients are increasingly demanding — and getting — firms to shoulder the risk of unforeseen or unwelcome outcomes from legal work, experts said at a Thursday gathering of professional liability specialists."
  • "While broad indemnity provisions being built into outside counsel guidelines vary in breadth, the more onerous seek to force firms to take responsibility for costs of even unsuccessful challenges related to legal work, documents, or transactions, or lawyer 'mistakes' that don’t resemble malpractice."
  • "Anthony Davis of Hinshaw & Culbertson LLP and other panelists at an American Bar Association conference in Boston noted that the full risk of the rising tide of such indemnity agreements is still unclear, even as they have become a common feature of corporate counsel contracts. So far, only a single court has issued a ruling on the enforceability of a firm indemnity agreement with a client absent a finding of a legal error. But that ruling went against the firm, raising the specter that others will be forced to bear the costs of some unforeseen client dispute with only a distant relationship to their work."
  • "Speaking to about 60 malpractice specialists and insurance professionals at the ABA’s National Legal Malpractice Conference, Seyfarth Shaw LLP general counsel Lori Roeser said her worries about the new breed of guidelines include partners signing them without a careful look and then filing them away without notification to the business."
  • "The firm now requires all such guidelines to be submitted to her office, she said, and includes a reminder on conflict intake forms. Seyfarth also has an indemnity provision 'checklist' to determine if the guidelines could put the firm on the hook for future disputes not covered by their policy, and if so, for what."

Thursday, April 20, 2017

Dreams of Risk: Inception 2017 is Nearly Here (With an Amazing Risk Track...)

We're in the home stretch for Inception 2017, with exciting new information to share on the details of the conference program and the (near and dear to my heart) risk track.

I wanted to take a moment to highlight a slice of the great risk content that will be featured. Once again, we have a dedicated Risk Roundtable program track on Wednesday. That includes a GC breakfast session. (And we have a "risk day pass" option available for qualified attendees. Email: for details and check our program PDF for session descriptions, which you can download here:

Some key sessions, panels and topics which should incite interest:
  • Panel summary and discussion of key takeaways from the morning GC breakfast
  • Risk staffing approaches for conflicts management
  • Enhancing the business impact of risk management
  • Making the case for investing in risk
  • Expanding client evaluation (beyond conflicts, how to address client health, strategic alignment and other factors)
  • Enhancing intake through better client requirements and terms of business management
  • Integrating third party data into business acceptance
  • Case studies about migrating from legacy conflicts applications
  • Advanced topics and scenarios in new business intake
  • Advanced topics in conflicts management and compliance (AML, KYC, etc)
  • Addressing business intake/conflicts management as part of general Practice Management System (PMS) migrations and upgrades
  • Information security trends and drivers
  • Why Walls, information barriers and screens now matter more than ever
Complementing the risk content PDF, the latest agenda, event overview and a new “Dear Manager” letter template (for those who might need some assistance making the case for investment to their supervisors) are all online at:

(This is a great opportunity for the legal risk community to get together in an amazing and inspiring forum. Hope to see you there!)

Wednesday, April 19, 2017

Risk News Roundup (Professional Standards, Client Security Standards & More)

A smattering from my recent reading list, starting with: "Fate of California Rule Overhaul Now in Court’s Hands" --
  • "California’s multiyear initiative to update its standards governing lawyer conduct shifted to the state supreme court at the end of March when the California state bar sent the court a complete package of proposed professional conduct rules."
  • "California is the only state that hasn’t yet remodeled its lawyer conduct rules along the lines of the ABA templates."
  • "In an interview with Bloomberg BNA, commission member George S. Cardona, Los Angeles, highlighted several areas in which the proposed revisions would align California’s rules with the rules of other jurisdictions, including several conflicts rules, rules on supervision within law firms, the choice-of-law rule, and advertising rules."
  • "'We’ve adopted the ABA format and structure on conflicts on interest,” he [Commission member Mark L. Tuft] said. Regarding the current-client conflicts rule, the commission kept pieces from California’s existing rule but used the structure and format of Model Rule 1.7, Tuft said."
"What Companies Can Demand From Law Firms on Data Security: Association of Corporate Counsel releases first set of model cybersecurity practices."
  • "When hackers broke into the computer networks of two major law firms in New York last year, stealing confidential client information allegedly used for insider trading, cybersecurity jumped up on the list of issues keeping in-house counsel awake at night. The targeting of the law firms served as a wake-up call for the legal industry. Indeed, in surveys, the Association for Corporate Counsel has seen more and more in-house lawyers describe cybersecurity as 'extremely' important."
  • "The ACC, an organization representing more than 42,000 in-house lawyers, on Wednesday released its first set of model cybersecurity practices to help corporate legal departments ensure that outside firms safeguard their company’s confidential information. The guidelines read like a contract between a company and its outside counsel, spelling out how the law firm will handle sensitive information. Among the association’s “highly recommended” measures: Demanding that law firms encrypt all confidential information in their systems."
And Bill Freivogel notes:
  • "Jaskula v. Dybka, 2017 IL App (1st) 160014-U (Ill. App. Unpub. March 23, 2017). The trial court had disqualified Defendants’ lawyer. In this opinion the appellate court reversed. The opinion contains an unremarkable “substantial relationship” analysis along with noting a three-year delay in bringing the motion. Of most interest — at least to us — was the appellate court’s emphasizing the trial court’s error in considering the “appearance of impropriety” as grounds for disqualification. That standard is not in the current Illinois Rules of Professional Conduct and was specifically rejected in Schwartz v. Cortelloni, 685 N.E.2d 871 (Ill. 1997)."

Monday, April 17, 2017

New Business Intake – Thomson Snell & Passmore Selects Intapp

"Thomson Snell & Passmore Selects Intapp Open for New Business Intake" --
  • "Thomson Snell & Passmore LLP, a leading law firm in the South East and the oldest law firm in the world, has selected Intapp Open for new business intake. Intapp Open is a new business intake (NBI) application which has been adopted by more than 200 firms worldwide, designed from the ground up to address the specific needs of firm management, lawyers, risk staff and IT stakeholders."
  • "With over 120 lawyers, Thomson Snell & Passmore offers a wide range of services to both private and commercial clients across 25 areas including wills, trusts and tax planning; property law; employment law; dispute resolution; and many others. Lights-On Consulting assisted TS&P with a thorough selection process for an NBI application, as part of a larger engagement to replace and upgrade its practice management system (PMS)."
Said Roland Millar, the firm's Finance Director:
  • "As we were evaluating new practice management systems, it became clear that the leading options would not be able to support our existing processes for new business intake."
  • "Intapp Open offers the functionality we need to maintain our existing workflow for client evaluation and AML risk assessments, and to add a further level of sophistication into our risk rating methodology. We especially like its ability to manage different workflows depending on the requirements of individual practice areas."
Said Chris Turk, Regional Vice President for UK/EMEA, Intapp:
  • "Forward-thinking firms are taking the opportunity to rethink and redesign their new business intake processes in tandem with upgrading their practice management systems."
  • "We’re pleased to work with Thomson Snell & Passmore in realising its vision for an NBI system that combines rigour with efficiency and an intuitive, modern interface for lawyers and staff alike."
Thomson Snell & Passmore will be working with Opes Consulting, an Intapp Certified Services Partner, on the implementation of Intapp Open.

Sunday, April 16, 2017

Money Laundering Rules Shift, AML Breaches Cost Partners Money

via Legal Risk Solicitors comes: "Anti-money laundering: a seismic shift" --
  • "HM Treasury published draft The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) on 15 March 2017. These are intended to implement the provisions of the Fourth EU Anti-Money Laundering Directive with effect from 26 June 2017."
  • "The Regulations will introduce significant changes for any firm doing business in the regulated sector. All firms will have to undertake a thorough review of their anti-money laundering and counter-terrorist finance policies and procedures to ensure they are truly aligned to their own individual risk profiles. The changes are extensive and the draft runs to 106 pages, hence our reference in the heading to a seismic shift."
  • "Each firm will have to produce a written risk assessment taking account of a number factors prescribed in regulation 18, including its clients, countries where it operates and services – which the Solicitors Regulation Authority (SRA) will be required to check;"
  • "Firms will need to undertake risk profiling on client/matter engagement (and evidence it!) and apply customer due diligence not only to all new customers but also at appropriate times to existing customers on a risk-sensitive basis, or when the relevant circumstances of a customer change and in certain other circumstances specified in regulation 27;"
  • "Nobody should think they can escape under the radar: the SRA itself will be subject to review through a new Office for Professional Body AML Supervision, to be hosted by the Financial Conduct Authority (FCA).  We have advised firms on SRA investigations into alleged failures to carry out adequate due diligence and investigation of source of funds, and there have been a number of cases in the Solicitors Disciplinary Tribunal and SRA sanctions."
  • "We are already advising firms, including international, City and regional practices on implementing the new compliance requirements and training, and have advised hundreds of firms since the profession became subject to anti-money laundering regulation in 2004."
And, on this topic: "Three Clyde & Co partners receive £10,000 fines for money laundering breaches" --
  • "Three Clyde & Co partners have each been fined £10,000 by the Solicitors Disciplinary Tribunal (SDT) for breaching money laundering rules. [The partners] all of who are based in London, admitted that they had allowed the firm’s client bank account to be used as a banking facility, which breached a number of regulations under the SRA Accounts Rules 2011 and the Money Laundering Regulations 2007."
  • "Duffy and Purnell admitted that they had not heeded the Law Society’s Fraudulent Financial Arrangements warning or the Warning Notice on Money Laundering, in that they acted as escrow agent in transactions on behalf of a client that had the hallmarks of dubious financial arrangements or investment schemes."
  • "Clydes has also been ordered to pay £50,000 by the SDT for its failure to comply with accounting rules. The firm admitted that it failed to have in place adequate procedures to deal with dormant client balances, which breached the Solicitors Accounts Rules 1998."
  • Said the firm: "'We have worked constructively with our regulator, the SRA and we are confident that the circumstances which led to these breaches could not happen again. We have since reviewed and strengthened a number of aspects of our approach to risk management."

Thursday, April 6, 2017

Risk Grab Bag (Suing the Regulators, Lawyer Liability, Conflicts, Hot Potatoes & More)

  • "Former Torys LLP lawyers Beth DeMerchant and Darren Sukonick are suing the Law Society of Upper Canada for damages totalling $22-million, alleging the regulatory body was malicious in its prosecution of them over alleged errors in their work for Hollinger Inc. more than 15 years ago."
  • "Former Torys LLP lawyers Beth DeMerchant and Darren Sukonick are suing the Law Society of Upper Canada for damages totalling $22-million, alleging the regulatory body was malicious in its prosecution of them over alleged errors in their work for Hollinger Inc. more than 15 years ago."
  • "The Law Society appealed the decision to the Law Society Tribunal Appeal Division, which dismissed the appeal in 2015. In January, 2017, the appeal division increased the costs awarded to the two lawyers from a total of $500,000 to $1.3-million to cover their legal fees."
  • "The lawyers, both of whom have since retired, filed a lawsuit this week against the Law Society, seeking general and special damages of $21-million and further aggravated and punitive damages of $1-million."
  • "The suit alleges the Law Society knew it didn’t have sufficient evidence to prosecute the pair after conducting an investigation, but pushed ahead in part because of public criticism that the organization hadn’t disciplined any lawyers over controversial Hollinger business transactions."
  • "Courts have typically ruled that defendants in legal proceedings cannot sue regulatory bodies and tribunals for prosecuting them in good faith, even if the prosecution does not succeed and the accused are cleared. But some cases have succeeded when there is evidence of negligence or wrongdoing by prosecutors."
"7th Circ. Wary Of Expanding Atty Liability In Mayer Brown Suit" --
  • "A Seventh Circuit panel had serious questions Thursday about a lawsuit brought against Mayer Brown LLP by lenders of a $1.5 billion loan held by General Motors Co., expressing concerns that reviving the class claims would dramatically expand attorney liability."
  • "The suit stems from an error a Mayer Brown paralegal had made as the firm drew up documents while representing GM in the payoff of a different loan. Rebooting the case would hold attorneys responsible for the way their errors impact people other than their own clients, judges said during oral arguments Thursday in the lenders’ appeal."
  • "The error, which had resulted in the inadvertent release of the lenders’ security interest in the $1.5 billion loan, came to light after GM filed for bankruptcy in 2009."
  • "The lenders argued that although Mayer Brown was representing GM in the loan payoff deal, the law firm had a responsibility to JPMorgan and the lenders that opened it up to liability. But that theory was rejected by a district court judge, a decision at least two of the Seventh Circuit judges seemed to agree with."
And, much like a certain doctor, one should never forget about the good work pursuing by Bill Freivogel, who has noted several updates:
  • " Prince v. Chatman, 2017 NLTD(G) (CanLII) (S. Ct. Newf. & Lab. March 2, 2017). Suit by Prince to quiet title. Chatman hired Law Firm to defend him. Prince moved to disqualify Law Firm. In this opinion the court denied the motion. The evidence was that in 1975 a senior partner in Law Firm had briefly represented Prince’s husband in an attempt to get several family members to agree on a division of the property in question. Both the husband and the senior partner have since passed away. In a fact intensive analysis the court held that the senior partner in 1975 would not have received “confidential information” from the husband that would be “relevant” to this proceeding or that a current member of Law Firm will use such information to the prejudice of Prince."
  • Lectric Ltd., Inc. v. DGW, Inc., 2017 WL 1149335 (N.D. Ill. March 28, 2017). Plaintiff is claiming that Defendants 1, 2, and 3 are breaching its common law trademark for “T-3” headlamps for classic cars. Lawyer initially represented all three defendants. Plaintiff moved to disqualify Lawyer because of possible conflicts among the three defendants. After receiving the motion Lawyer withdrew from representing Defendant No. 1. Defendant No. 1 never responded to Plaintiff’s motion. Defendants 2 and 3 are owned by one individual (“Owner”). In this opinion the court found violations of Rule 1.7 but ruled Lawyer could continue for 2 and 3 if Lawyer would obtain consents from all three defendants. The court also struck the pleadings Lawyer filed during the conflict and said they could be refiled after the requisite consents were produced. Among other findings, the court found that Lawyer’s dropping Defendant No. 1 violated the “hot potato” rule, thus making this a current client/Rule 1.7 situation. The court also found that Lawyer could have a conflict as to Defendants 2 and 3 even though they were owned by the same individual. Neither the court nor the parties appear to have raised, or addressed, the standing issue."
  • "Akagi v. Turin Hous. Dev. Fund Co., Inc., 2017 WL 1076345 (S.D.N.Y. March 22, 2017). This is a housing discrimination case brought against two groups of defendants. We will call them Owners and Managers. Law Firm started out representing both groups. Part way into the representation Law Firm filed a state court action for Owners against Managers. That case is related to this case. In the face of a motion to disqualify, Law Firm withdrew from representing Managers in this case. Nevertheless, certain parties have moved to disqualify Law Firm from representing Owners in this case. In this opinion the court granted the motion. The court viewed this as a current client conflict even though Law Firm had dropped Managers. The parties had signed a joint defense agreement and a conflict waiver. In parsing those, the court felt neither was an adequate waiver of this current client conflict."

Wednesday, April 5, 2017

Laterals Come, Laterals Go (Sometimes "Behaving Badly")

The ABA BNA Lawyers' Manual on Professional Conduct weighs in with: "Don’t Waive Protocols for Laterals, Speakers Say" -
  • "Law firms may regret it if they treat a prospective lateral hire with kid gloves just because the lawyer can bring lots of business to the firm and wants a quick decision, according to a March 2 panel discussion at the 16th Annual Legal Malpractice and Risk Management Conference."
  • "A law firm trying to land a star should still adhere to its usual protocols even if it means working overtime to clear conflicts of interest and check out the candidate, speakers said at a session entitled 'Tales From the GC’s Office: What’s Keeping Law Firm General Counsel Busy.'"
  • "An initial question that firms must confront when considering a lateral hire is how far to check back for conflicts of interest. In audience polling on this issue, the largest group of respondents—32 percent—said they look back three years, and another large group of respondents—25 percent—said they check conflicts going back more than six years."
  • "The cost of having conflicts staff work overtime and weekends is minor compared with the consequences of getting disqualified in a matter, Roskoski [deputy general counsel, Latham & Watkins] said."
  • "Meyer [partner, Hinshaw & Culbertson] polled the attendees on whether they conduct background checks on all lateral partners. Nearly a fourth of the respondents—23 percent—said they don’t do background checks on prospective laterals. Giokas [general counsel, Bryan Cave] said she found that surprising and expected that everyone would do background checks.Roskoski agreed. 'Our clients insist on it,' he said." Meyer noted that outside counsel guidelines in a lot of areas require background checks of all personnel, not just lateral partners."
"Texas IP Firm Gets Restraining Order Against Ex-Atty" --
  • "A state judge in Houston on Friday granted a temporary restraining order to an intellectual property law firm that filed suit a day earlier against one of its former attorneys, alleging he had stolen client information and used it to launch his own firm."
  • "Matthews Lawson McCutcheon & Joseph filed its lawsuit against Erik J. Osterrieder on Thursday, alleging that he violated an agreement not to run his own firm while employed at MLMJ, and also that he operated his firm, at least partially, from its office spaces."
  • "The temporary restraining order issued Friday prevents Osterrieder from using or deleting any of MLMJ's information in his possession, and requires he return the information this week. The order further prohibits Osterrieder from contacting any MLMJ clients and requires him to return any information related to those clients this week as well."
  • "According to the petition, the firm alleges that while Osterrieder was employed with the firm, he operated his separate firm from at least February 2016 until February 2017. Firm leaders asked him twice during 2016 if he was operating his own firm, and he denied it, the firm told the court in its petition. It was in February that the firm discovered Osterrieder was transferring its clients to his side firm, in violation of his written agreements with the firm, and in breach of his fiduciary duty to the firm."
  • "Ken Breitbeil, a shareholder in McFall, Breitbeil & Eidman who represents Matthews Lawson, said 189th District Judge Bill Burke of Harris County granted a temporary restraining order on Friday. He said his client is still determining how many client files Osterrieder may have opened for his personal firm while working at Matthews Lawson. 'It's an example of lawyers behaving badly,' Breitbeil said."
More via Texas Lawyer.

Tuesday, April 4, 2017

More (Clients + Government + Politics) = More (Client-Firm Conflicts + Press Risk)

Several updates this week about streams crossing across various domains. First: "Trump’s SEC Nominee Has a Major Conflict-of-Interest Problem: Jay Clayton is tied to big banks and corporations—and that could hold up fraud enforcement." --
  • "The dominant theme of Thursday’s Senate Banking Committee hearing with Jay Clayton, nominee for chair of the Securities and Exchange Commission, was conflict of interest. Not the well-documented conflicts of some of the more notorious members of the Trump administration but the conflicts of Clayton himself. A partner at the high-powered corporate law firm Sullivan & Cromwell, Clayton represented Wall Street banks throughout his career.
  • "But it goes further, because the executive order also forces recusal in any matter in which Sullivan & Cromwell, Clayton’s former law firm, is involved. And the firm’s roster of clients is massive. An analysis of its recent clients published by Allied Progress estimates that Clayton would have to withdraw “from cases involving nearly one-third of the institutions on the Financial Stability Board’s list of ‘global systemically important banks.’” Plus, as Warren points out, “any reasonably strategic company…could simply hire [Sullivan & Cromwell] to represent them before the agency, and you couldn’t vote for enforcement of that company.” Clayton mildly disputed this, but it’s accurate."
  • "Why is this important? Clayton promised at the hearing to “enforce the law strictly” and to “root out any fraud and shady practices in our financial system.” But without Clayton’s input, the committee would be down to an even number of Democratic and Republican appointees. Normally that would be a 2-2 split, but currently, there’s a vacancy on each side. And if those commissioners disagree along party lines, a deadlock would mean not moving forward on enforcement. So putting a chair on the SEC who has to constantly recuse himself on enforcement matters really advantages corporation, as a tie lets them off the hook."
Next: "Florida paid law firm for meeting with House speaker" --
  • "Blurring the lines between his role as an up-and-coming Republican legislator and his job as an attorney, the law firm of House Speaker Richard Corcoran once charged the state for a meeting with Corcoran in his capacity as a lawmaker."
  • "Newly-released billing records show that in October 2014 the firm of Broad and Cassel charged the state's economic development agency ahead of a meeting between its affiliate, the state Division of Bond Finance, and Corcoran — putting the meeting in the crosshairs of a new review by the governor of potential conflicts of interest. At the time Corcoran was not speaker but he already was viewed as one of the most powerful members in the Legislature."
  • "But the administration of Gov. Rick Scott is raising questions about Broad and Cassel's work on behalf of the state as a potential conflict of interest. The firm has earned nearly $300,000 in the last six years representing Enterprise Florida, the agency has said."
  • "The Tampa Bay Times first reported last week that the firm has been working on behalf of Enterprise Florida, which gets the bulk of its money from the state. Kim McDougal, the chief of staff for Scott, on Monday sent a letter to all state agencies demanding that they look at legal contracts with outside law firms, especially with those firms that have legislators on their payroll. 'The employment of a legislator by a law firm that conducts business with the state could easily be perceived as a conflict of interest,' McDougal wrote."
  • "A managing partner of the Jones Day law firm is striking back against Mayor Mike Duggan, calling him a “political hack” concerned only with “self-interest” amid the mayor’s claims the city was misled on assumptions that determined future payments to its pension funds."
  • "In a Feb. 23 letter to an attorney retained by the city and the mayor’s deputy chief of staff, Stephen Brogan of Jones Day called Duggan’s belief that a lawsuit against the global law firm could be viable a “delusion.” Brogan rejected Duggan’s assertion that former Emergency Manager Kevyn Orr and his team made efforts to mislead city officials on negotiated pension assumptions in the historic debt-reduction plan."
Putting a point on the meta-matters in play, Above the Law took its own editorial lens to the situation: "Jones Day Responds To Critics With Standard Petulant Hissy Fit" --
  • "That’s when the state hired Kevyn Orr, a noted Jones Day partner, to take on the mantle of unelected czar of Detroit, tasked with shepherding its bankruptcy to completion. Orr dutifully resigned from the firm before assuming his new responsibilities… and then he hired Jones Day to reap the multi-million dollar legal bills he would ring up during his tenure. Orr has since returned to the firm."
  • "In a purely legal sense, this isn’t a conflict. But there’s a reason we generally employ the maxim “to avoid even the appearance of impropriety.” From the perspective of the people of Detroit, the state threw over their future to a former law partner who sent millions to his old firm and then jumped back to share in that firm’s success. Not exactly endearing to his supposed constituents, and the sort of move that, understandably, puts every deficiency in his tenure under a microscope."
  • "Wow. I just… wow. Seriously, what does this serve? Why “poke the bear” of the potential adversary who has already pulled back? And it’s not just the matter of insulting Mayor Duggan himself — this letter accuses the people of Detroit of electing “a long line of corrupt Detroit politicians.” These people liked this guy so much they elected him as a write-in candidate.[1] When you insult him as incompetent and tell the city that they’re all stupid, it can only intensify the political pressure to take action against the firm, deserved or not. Brogan may spell out sound defenses against Mayor Duggan’s complaints, but the whole tone of this letter underscores the contempt everyone involved with the Emergency Manager process has for the citizenry they are supposed to serve."

Monday, April 3, 2017

On Disqualifications: You win some, you lose some

We know that it can be less than pleasant to find one's firm noted on these virtual pages in relation to a disqualification. (Though, a fictional character or two of note, known to be quoted from time to time, would likely suggest that in this arena most players understand that this is "all in the game.") With that, we find two timely examples, featuring a firm recently both winning and losing in this arena:

First: "Judge declines to disqualify Boston law firm in trademark suit" --
  • "Law firm DLA Piper should not be disqualified from representing the defendant in a trademark infringement suit even though one of its attorneys had represented the plaintiff in the past, a federal judge ruled after finding that the January retirement of the attorney removed any remaining risk of a conflict of interest."
  • "The plaintiff, California Association of Realtors, argued that disqualification was required because DLA Piper had represented it in the past and had not taken steps to close its “general advice” account until after the law firm became aware of the potential conflict with the defendant, website operator PDFfiller."
  • "But U.S. District Court Judge Indira Talwani concluded that the retirement of Jeffrey Shohet, the lawyer who handled the plaintiff’s account, in addition to ethical screens put in place to protect the plaintiff’s confidential information, warranted permitting DLA Piper’s continued representation of an opposing party in a matter unrelated to the firm’s prior work for the former client."
  • "The judge wrote that 'no attorney remaining at DLA Piper has confidential information material to the matter. For these reasons, as to future litigation, Shohet’s retirement removes the bar against DLA Piper attorneys’ representation here.'"
Next: "Judge Disqualifies Kasowitz and DLA Piper in Contract Dispute, Citing Conflicts of Interest for Both Sides" --
  • "A recent disqualification ruling that prevents Kasowitz, Benson, Torres & Friedman from representing InterActiveCorp in a property contract dispute with The Georgetown Co. had an unusual side effect: It revealed why a high-profile family law practice left Kasowitz last year."
  • "But the decision, issued by New York Supreme Court Justice O. Peter Sherwood, was unusual in another way: The judge also disqualified Georgetown's lawyers from DLA Piper, effectively barring counsel on both sides from representing their respective clients."
  • "At the time, Rose was also a client of Kasowitz's in a long-running divorce case handled by former partners Eleanor Alter, Adam Wolff and Jenifer Foley. The trio left Kasowitz along with a handful of others in May 2016 to form their own family law boutique, Alter, Wolff & Foley... Sherwood also disagreed with Kasowitz's position on the conflict question, and on March 3 disqualified the firm from continuing to represent IAC in the property rights case. 'In this case, Kasowitz seeks to represent a party whose interests are not merely competing but are substantially adverse to Rose,' the judge wrote."
  • "Sherwood's ruling didn't only include an analysis of Kasowitz, however. The judge also found that Georgetown's lawyers at DLA Piper had a conflict of their own, since the firm had previously represented IAC subsidiary in an unrelated case in California."
Of course, as a different fictional character, representing a literal figure, would likely also note: "When you got skin in the game, you stay in the game / But you don’t get a win unless you play in the game"


Sunday, April 2, 2017

Client Selection, Client Risks, Clients Trump reports that, with assets in excess of $150M and disclosed fees paid to the firm in excess of $75,000 in its past fiscal year, the Wallace Global Fund has parted ways with its law firm, citing matters tied to client selection and advocacy: "Investment Fund Fires Morgan Lewis for 'Enabling' Trump With Ethics Advice" --
  • "Morgan, Lewis & Bockius, you’re fired, client H. Scott Wallace told the firm’s leader this month in a scathing letter condemning its representation of President Donald Trump."
  • "The letter, dated Tuesday and first reported by Politico, appears to be the first public sign of client blowback directed at Morgan Lewis over partner Sheri Dillon’s work concerning the Trump family business and the president’s duties and ethical obligations."
  • "Addressing Morgan Lewis chair Jami Wintz McKeon, Wallace called the firm’s legal sign-off on Trump’s sons running his trust and other ethics issues 'an unprecedented invitation to corruption and an assault on our democracy... Americans deserve a president of undivided loyalty,' he wrote. 'Your firm has denied them that. We cannot be complicit in that.'
  • "Morgan Lewis declined to comment on Wallace’s three-and-a-half-page letter, which includes a bullet-pointed list of what he calls 'ethical carnage.' The list includes China’s sign-off on Trump-related trademarks days after he voiced approval for the 'One China policy; the Washington, D.C., Trump Hotel marketing to diplomats; potential connections to Russia; and a 'marketing bonanza' for Trump’s Mar-a-Lago resort, among others. 'It is painfully obvious that Trump is using his office for personal gain. And Morgan Lewis is enabling and legitimizing this,' Wallace wrote."

Saturday, April 1, 2017

Ethics and Litigation Finance

Regarding this interesting issue, increasingly making news, comes a survey report sponsored by an entity in the financing space, in conjunction with the news site Above the Law, offering a good overview of several risk and ethics issues: "A Litigation Finance Ethics Primer" --
  • "Lake Whillans recently partnered with Above the Law and conducted a survey on litigation finance to learn details on who is using it, impressions of their experience, who isn’t using it and why."
  • " firms with the most experience using litigation finance were the very largest and very smallest firms surveyed: law firm size of 500+ lawyers (48.57%) and law firm size of 2-5 lawyers (58.54%). Litigators whose practice concerns the energy industry had the highest proportion of firsthand experience followed by the technology sector; finance/banking had the lowest. A resounding 85% of those with firsthand litigation finance experience would use it again."
  • "In general, a lawyer can (but it is not obligated to) raise the prospect of litigation funding to a client who may lack funds or wants to hedge litigation risk (the two most off-cited reasons to seek litigation finance per our survey).  As the American Bar Association’s Commission on Ethics 20/20 put it in its informational report on litigation finance, 'if it is legal for a client to enter into the transaction, there would appear to be no reason to prohibit lawyers from informing clients of' the existence of litigation finance companies or referring clients to particular litigation funders. The lawyer should disclose the potential conflict between her interest in having her fees paid and the client’s choice to use litigation funding, disclose any relationship with a funder, and obtain informed consent as necessary."
  • "The prohibition on champerty–which has been defined by the U.S. Supreme Court as “[helping another prosecute a suit] in return for a financial interest in the outcome”– is fading in the United States where it ever existed at all. Federal law never adopted the prohibition; neither did states such as California and Texas."
  • "Communications with a funder are not per se protected by the attorney-client privilege, since the financier, while often comprised of trained attorneys, is not acting as the client’s legal counsel. There is an unsettled question as to whether the common interest exception would nonetheless apply; courts that have considered it have split on this issue."
The full report is also available online here.

In related news, the Second Circuit just upheld the ban on private investments in law firms.

And for those reading to the end (always recommended), a fascinating historical tidbit: "A Texas-Sized Centennial for Vinson & Elkins" --
  • "Three years later, in 1924, Elkins made arguably a bigger contribution to the firm’s growth by starting a bank, Harrington said. Called the Guaranty Trust Company, it eventually became First City National Bank, one of the largest banks in Texas by the 1970s. As the bank chairman, Elkins offered his law partners access to credit, and gave his law firm a steady stream of clients — any of his bank clients would be referred to Vinson & Elkins for their legal needs."
  • "'I couldn’t say definitely if Elkins was the only lawyer to start a bank, but it is definitely unusual,' said William Henderson, a law professor at Indiana University. 'Of course, in the 20s, there wasn’t the public’s concern over conflict of interest like there is now.'"