Wednesday, May 24, 2017

EVENT: New York Risk Roundtable

Our next Risk Roundtable event will take place on Thursday, June 8th at the office of Shearman & Sterling LLP.

Centralizing Your Business Inception Process: Who, Why, What, How, When
  • More and more firms are looking to take the burden of conflicts review off of the shoulders of their fee earners. Some firms have been resistant to move this direction based on the assumption that the lawyer knows best. With the increasing amount of factors to consider and pressure to respond quickly, the winds of change appear to be blowing in the direction of a centralized clearance team.
  • The financial impact of freeing time for lawyers to do more billable work or pursue business development activities is of interest to most firms. The challenge of effectively staffing and making the transition to a new model can be frightening at the same time.
  • This roundtable intends to focus on these challenges by discussing and presenting real world experiences in making the move. We will be sharing ideas, best practices and technology tips to use when your firm is considering a move to a more centralized process.  Topics to be discussed include:
    • What clearance model works best for your team, and who should be involved
    • How to present the right information in context
    • What is the end result of the move and how did it benefit your lawyers
    • When is the best time to start thinking about other decisions in the new business process
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.

Sunday, May 14, 2017

Risk Doesn't Rest on Weekends (Lawyer Encryption, Lawyer Insider Trading and More)

With various other enterprises luring in our intrepid editor, and a pause in the action likely upon us, it felt like the right time to squeeze a week’s worth of content into a morning update. (This is a risk management blog, after all.) Here’s the latest that’s caught my eye recently:

"ABA Issues New Ethics Opinion on Encryption of Attorney-Client Email" --
  • "The ABA has released Ethics Opinion 477 (May 11, 2017) on encryption of attorney-client email."
  • "Those who do not want any rule requiring email encryption will rejoice if they skip down to the opinion's conclusion and read: 'A lawyer generally may transmit information relating to the representation of a client over the Internet without violating the Model Rules of Professional Conduct where the lawyer has undertaken reasonable efforts to prevent inadvertent or unauthorized access. However, a lawyer may be required to take special security precautions to protect against the inadvertent or unauthorized disclosure of client information when required by an agreement with the client or by law, or when the nature of the information requires a higher degree of security.'"
  • "They would be rejoicing prematurely at the absence of the words "email encryption required." The opinion notes that a hard and fast rule cannot be be crafted to apply to all situations, and therefore: 'A fact-based analysis means that particularly strong protective measures, like encryption, are warranted in some circumstances. Model Rule 1.4 may require a lawyer to discuss security safeguards with clients. Under certain circumstances, the lawyer may need to obtain informed consent from the client regarding whether to the use enhanced security measures ... In contrast, for matters of normal or low sensitivity, standard security methods with low to reasonable costs to implement, may be sufficient to meet the reasonable-efforts standard to protect client information from inadvertent and unauthorized disclosure.'"
  • "Walter "Chet" Little, who was a partner at the law firm Foley & Lardner when prosecutors said the trading took place, and Andrew Berke were charged with conspiracy and securities fraud in a criminal complaint filed in Manhattan federal court."
  • "Beginning in 2015, the complaint said, Little used Foley's document management system to access information about at least seven law firm clients including Oshkosh Corp and Harley-Davidson Inc, even though he billed no work for them."
  • "After learning about upcoming mergers, earnings and other corporate events involving those companies, prosecutors said, Little bought and sold stock and options ahead of public announcements, making more than $320,000 in profits."
  • "He also passed the inside information to Berke, prosecutors said. The SEC said Berke was an executive at a logistics company who has since 2013 lived in the same community as Little, Apollo Beach, Florida. Prosecutors said that by placing trades based on the inside information, Berke earned around $660,000."
  • "Daniel Farrell, a spokesman for Foley & Lardner, said in a statement that the 840-lawyer firm learned about the activity at issue in June 2016 and reported the matter to authorities. 'We take this matter very seriously, and we have zero tolerance for actions that violate our core values and the trust our clients place in us,' Farrell said."
Here's the full SEC complaint.

"Greenberg Traurig Accused of Trying to Invalidate the Same Patents It Prosecuted" --
  • "A former client has sued Greenberg Traurig, alleging the firm switched sides and used its knowledge of privileged intellectual property information from previous patent work to attempt to invalidate a patent for a new client’s benefit."
  • "And there’s the rub. In the past, Greenberg also performed extensive legal services for Apollo, according to the complaint. The work included two patents behind Apollo’s TrueCollect service, which gave the firm access to Apollo’s confidential, privileged information.
  • Now that Greenberg is representing Lantern, the complaint alleges that the firm advised Lantern not to pay and used the privileged information against Apollo to try to invalidate the patents so Lantern could avoid paying. According to the complaint, Greenberg has filed counterclaims seeking a declaratory judgment of invalidity and non-infringement of 'the very same patents that Greenberg helped to prosecute for Apollo.'"
  • "This lawsuit is based upon events that occurred more than 12 years ago and mischaracterizes the underlying facts,' the firm said in a statement. 'The issues raised in this lawsuit are already the subject of a pending motion in the litigation between Apollo and another party. We deny any wrongdoing and will contest this lawsuit.'"
  • "In addition, Lantern said that the sole remaining Greenberg attorney associated with Apollo’s provisional application, Bruce Neel, works in a different practice area group in an office hundreds of miles from Lantern’s attorneys, and has not conveyed any information regarding Apollo or its patents. After the firm learned of the potential conflict of interest, 'Greenberg immediately implemented an ethical screen barring any attorneys working on this lawsuit (or for Lantern in general) from access to any information or files relating to Greenberg’s prior representation of Apollo, and barring Mr. Neel from any access to or involvement with any legal work for Lantern or communication with Lantern’s litigation counsel about Apollo,' according to the court filing."
  • "'You cannot represent a new client against an old client if the work of the new client is substantially related to the work of the old client,' said [Michael] McCabe, who is the founder of McCabe Law, a firm that specializes in intellectual property ethics and disciplinary matters. “That prohibition lasts forever. … Whether it was one day ago or 20 years ago, it would still be a conflict to invalidate a patent you worked on.'"
And finally and overview of an issue I continue to find immensely fascinating: "Lawyer ethics and positional conflicts of interest" --
  • "ABA Standing Committee on Ethics and Professional Responsibility Formal Opinion 93-377- Positional Conflicts (issued in 1993) reviewed ethical issues when a lawyer represents one client in a matter in which the client’s interests regarding a substantive legal issue are directly adverse to a position the lawyer (or law firm) is advocating on behalf of another client on the same or similar issue."
  • "The opinion refers to paragraph (9) of the Comment to Rule 1.7 which stated as follows: 'A lawyer may represent parties having antagonistic positions on a legal question that has arisen in different cases, unless representation of either client would be adversely affected. Thus, it is ordinarily not improper to assert such positions in cases pending in different trial courts, but it may be improper to do so in cases pending at the same time in an appellate court.'"
  • "The opinion noted that representing two clients in different trial courts while advocating opposing sides of the same issue could also be a conflict of interest under Rule 1.7 just as if both matters were pending in the same appeals court.  A decision in a trial court could influence the outcome of a second matter in another trial court, and a decision in an appeals court could have an adverse effect on a matter pending in a trial court matter."
  • "Bottom line:  If the lawyer is considering taking a position for one client which is directly adverse to a position the lawyer (or law firm) is taking for another client on the same or similar issue, the lawyer must consider the potential conflict of interest and act accordingly."

Wednesday, May 10, 2017

More Risk Dreams...

Looking forward to seeing many readers next week at Intapp Inception. As always, if we cross paths, please feel free to say hello and attempt the secret risk blog handshake:
Well, maybe we should work on something a little more legal feeling... (How does one represent rules of professional responsibility
As noted previously, we have some great risk content in the works. I’ve been able to sit on a few panel prep calls and have been really impressed with the diversity of experience and insights the community is bringing to bear.
(This week there was one panelist who asked if the "gloves were off" in terms of being able to deliver uncensored opinion and commentary... We said yes. Perhaps not the best risk management decision, but definitely the right call for engaging and compelling content.)
We're also pleased to welcome several sponsors and partners who will be delivering sessions of their own design during mealtimes. I recently highlighted the Paragon track on cyber insurance.

Here are some others worth noting:
  • Tuesday Breakfast : American LegalNet. Best Practices in Calendar Management Workflows to Reduce Risk and Increase Efficiency 
  • In order to increase partner profitability, firms are focusing on efficiency. This means lower staffing ratios and greater centralization of functions. American LegalNet will discuss this development as it pertains to calendaring and docketing, specifically focusing on the move toward greater specialization and how it results in improved operations for many firms.

  • Wednesday Breakfast : Aurora North. Subject Matter Conflicts of Interest in Intellectual Property 
  • In this session, Becky Cacaci, Conflicts, Compliance and Records Attorney from Smith Moore Leatherwood, will join Aurora North Software to discuss techniques and best practices for spotting potential subject matter conflicts in transactional matters.

  • Wednesday Breakfast : Pinnacle. Making Better Decisions by Improving Data Quality in and with Intapp Flow and Intapp Open 
  • This session will focus on using the Intapp Open and Intapp Flow systems for data quality and stewarding. Pinnacle International Consulting will demonstrate how Intapp Open and Intapp Flow can be used to cleanse data in the PMS, particularly in preparing to migrate from Elite Enterprise.  We will also show how external data providers can be integrated to improve data quality and to drive risk assessment and client due diligence.
  • FileTrail (Lunch on Wednesday & Thursday): Future-Proof Your Law Firm's Records Management Software.
  • Being well-informed is the first step towards protecting law firms against future information governance risk. Don't miss out on the session "A Compelling Business Case for Deploying a New Records Management System." 
  • In this session, noted expert Patrick Tisdale will share his insights into how the most successful law firms take charge of this reponsibility, highlighing the process behind Dentons' recent decision to invest in and implement new records management software. He'll also cover how to law firms can ensure compliance with a range of outsides parties' needs (e.g., Outside Council Guidelines), as well as factors that will impact whether software works within their current ecosystems today and far into the future.
  • Patrick notes: "I am looking forward to meeting with law firm colleagues, and discussing how client expectations and regulatory demands are rapidly reshaping the nature of information governance as it has been practiced in firms - and the business transformation required to satisfy these demands."

  • Thursday Breakfast : Dun & Bradstreet. Beneficial Ownership - Why the Devil Really is in the Detail 
  • Do you know really your customers and suppliers? Are you confident your customer, supplier and partner data is robust enough to make your business compliant? Beneficial Ownership regulations are now placing enormous responsibility on businesses to truly understand the ultimate ownership of the organizations that they deal with. In this complex and rapidly evolving regulatory environment having the data to help your business make commercially sound and compliant decisions is critical. Join us to learn about rapidly changing regulatory landscape on Beneficial Ownership and how data and analytics can help you meet these changes.

  • Thursday Lunch: DocuSign. Intapp & DocuSign: Automate Client Intake and Improve Compliance with eSignature 
  • Learn how to use the pre-built integration between Intapp and DocuSign to reduce overall compliance risk, increase internal efficiencies and drastically improving overall client satisfaction. This session will include a working demonstration of the solution and in-depth discussion of eSignature legality and compliance. Learn how and why most of the Am Law 200 use eSignature today and will use it in the future.

Monday, May 8, 2017

Public Conflicts about Conflicts Allegations

A few conflicts stories making news. First, continuing the battle of words: "'Straight Outta Compton' Lawsuit: Greenberg Traurig Rips Disqualification Bid" --
  • "Greenberg Traurig, the law firm representing co-defendant NBCUniversal in the defamation lawsuit targeting the N.W.A biopic Straight Outta Compton, is facing a disqualification motion over a supposed conversation that happened 25 years old concerning Ice Cube's "No Vaseline." On Monday, the firm had its own outside counsel file a blistering response that ran the gamut from confidentiality to ethics."
  • "The typical conflict analysis would typically turn on whether there is a "substantial relationship" between prior and current representation."Putting aside that Mr. Katz denies advising Mr. Heller on that subject [of 'No Vaseline'], such a conversation could not possibly be substantially related to Plaintiff's claims regarding Straight Outta Compton, a movie that did not even exist at the time of those alleged communications," states Greenberg Traurig's response"
  • "Greenberg Traurig has several other arguments why the disqualification bid is meritless. The firm seizes on word that others — including Terry Heller, Jerry's nephew and the executor of the estate — were present at the supposed meeting. 'As a matter of black letter law, the presence of third parties destroys the privilege and thereby the confidentiality of any attorney client communication, unless such third parties were necessary participants," argues Greenberg Traurig's lawyers at Jenner & Block. "In addition, there is nothing confidential about the lyrics of 'No Vaseline,' which continued the very public airing of long-running grudges involving the group N.W.A. [sic]. Indeed, in the years since the alleged meeting with Katz occurred, Heller himself publicly disclosed the details of his relationship with N.W.A. in memoirs, screenplays and other public activities.'"
Read Greenberg's full response here.

Next: "One potato, two potato; hot potato brings DQ in Mississippi federal case" --
  • "Even though a Mississippi lawyer’s conflict of interest lasted only one day, that was enough for a U.S. magistrate judge to disqualify him from representing a client adverse to Allstate Insurance Co. on a coverage claim, in a ruling issued last week."
  • "Sending a termination letter to the insurer the day after accepting the new client’s case didn’t help the lawyer.  The judge found that the lawyer’s duty of loyalty required him to turn down the case, in light of the fact that he had pending cases in which he was directly representing Allstate."
  • "In the Mississippi case, the court said that the lawyer’s conduct was understandable:  he hadn’t received any new work from Allstate in over a year; his firm was wrapping up its work on the “handful” of cases it still had, the majority of which were near the end of their life-spans; and the firm planned to end its relationship with the insurer based on the fact that it was not getting new work. Nonetheless, said the judge, the lawyer and his firm had an attorney-client relationship with Allstate when the lawyer signed a contract to represent the claimant against the insurer, and he couldn’t abandon his existing client by dropping it like a hot potato."
Finally: "FBI To Quiz Holland & Knight Duo In Energy Tax Credit Case" --
  • "The FBI may question and audiotape a Holland & Knight LLP partner and lobbyist on a potential conflict of interest in the pair's defense of a businessman charged with wire fraud and tax evasion concerning renewable energy tax credits, a Pennsylvania federal judge said Thursday."
  • "David Dunham is seeking to have his indictment for wire fraud, tax evasion and obstruction of justice tossed on the grounds that federal prosecutors knew or should have known his original defense attorney, Holland & Knight partner John Brownlee, had a serious conflict of interest given Dunham had taken advice from Brownlee's colleague Michael McAdams, a Holland & Knight senior policy adviser, on some matters at issue in the case."
  • "The businessman has said in court papers that the government gained a significant tactical advantage after a conflicted Brownlee urged Dunham into proffer sessions with prosecutors with an eye toward a guilty plea."
  • "A spokeswoman for Holland & Knight did not respond Thursday to a call seeking comment."

Sunday, May 7, 2017

Inception Session: Cyber Risk Panel

Inception is nearly upon us (May 15-18 in San Francisco). We've previously covered the extensive risk content which will be presented as part of the main conference program.

I wanted to take a moment to spotlight a lunch track briefing sponsored by Paragon. The session will ask and answer: "Is Reputation Damage Insurable in Cyber Insurance?" --
  • "Possibly one of the biggest “cyber” exposures a law firm faces is to its reputation and there is a common misunderstanding that reputational damage cannot be insured. This is not entirely correct, reputation loss can be insured when framed within the prerequisites of insurability, i.e., that loss is a) fortuitous, b) calculable & c) definite."
  • "Loss arising from a data breach, network security or cyber event can certainly be fortuitous; the main challenges to insurability are therefore 1) agreeing a monetary value to reputation and 2) agreeing a period of loss which is definite. There are cyber policies which now provide coverage for loss of income arising out of adverse publicity following a data breach."
A panel of expert speakers will play various roles in an interactive review of the topic:
  • Lyndsey Bauer, Partner - Paragon International Insurance Brokers Ltd
  • Dixon Grier, Partner – MDD Forensic Accountants
  • Christina Terplan, Partner – Clyde & Co
  • Lisa Phillips, National Practise Advisor – Wells Fargo Insurance
(I've received a preview/overview last week and am now very curious to see how it plays live...)

Wednesday, May 3, 2017

Another Firm Modernizes Business Intake & Conflicts Management

"Dickinson Wright PLLC Partners with InOutsource to Implement Intapp Open" --
  • "InOutsource, an industry-leading global legal consulting firm, today announced Dickinson Wright PLLC has worked with the company to implement Intapp Open for both Intake and Conflicts. InOutsource enacted a comprehensive analysis, planning and implementation program for the Am Law 200 firm to reduce risk as well as automate and streamline its business intake and conflicts clearance processes."
  • "'InOutsource was hands-down the first choice for an Intapp Open implementation partner. They acted as a guide for best practices and proved invaluable as we moved from an outdated system to a modern one that can address our firm’s requirements. InOutsource helped our firm standardize and automate the new business intake process and subsequently reduce the risk associated with it,' said Michael P. Kolb, chief information and security officer for Dickinson Wright. 'I recommend InOutsource over other consultants I’ve worked with, and I’ve been doing this for 20 years.'"
  • "The Intapp Open implementation process began and concluded within a tight time frame – less than nine months for both Intake and Conflicts to launch – and finished under budget. InOutsource helped to refine business processes, identify and establish custom workflows, update the conflicts model, conduct a data integrity analysis and apply best practices and recommendations."
  • "Dickinson Wright, which has grown to more than 450 lawyers in 17 offices, previously relied on shared knowledge of cases and a 12-year-old software solution that was challenging to support internally. Intapp Open, a web-based application, will streamline management of the new business acceptance life cycle with a solution that is easy for administrators to configure, simple for lawyers, professionals and staff to execute and effortless for risk and management stakeholders to track and oversee."