Thursday, June 29, 2017

Video Update: Inception Retrospection




As US readers get ready for a brief July 4th break, I wanted to take a moment to thank everyone who joined us for Inception17 last month. The event grew 40% over 2016, with great participation and passion from the risk community.
Special shouts outs to:
  • Really everyone in the community who made the journey, helped produce content, sat on panels and posed probing questions driving the dialogue
  • Attendees at our session on AML compliance. (For pitching in "bucket brigade style" to move dozens of chairs a few rooms over, when the hotel flagged that the overflowing room was a bit of an issue, should the fire marshal come knocking -- talk about risk management in practice!)
  • The few that snuck up and attempted the secret risk blog handshake. (That really made my week. >smile<)
Here's a three minute highlight video featuring many familiar faces and key highlights from the experience:

https://www.youtube.com/watch?v=YaNIxqTYngU

(It's pretty slick.)

Friday, June 9, 2017

On Client Selection (Presidential Edition)




Several interesting stories in the news. This one on client selection and risk management was certainly eye catching: "Four top law firms turned down requests to represent Trump" --
  • "Top lawyers with at least four major law firms rebuffed White House overtures to represent President Trump in the Russia investigations, in part over concerns that the president would be unwilling to listen to their advice, according to five sources familiar with discussions about the matter."
  • "Among them, sources said, were some of the most high-profile names in the legal profession, including Brendan Sullivan of Williams & Connolly; Ted Olson of Gibson, Dunn & Crutcher; Paul Clement and Mark Filip of Kirkland & Ellis; and Robert Giuffra of Sullivan & Cromwell."
  • "Others mentioned potential conflicts with clients of their firms, such as financial institutions that have already received subpoenas relating to potential money-laundering issues that are part of the investigation."
  • "Other factors, the lawyer said, were that it would 'kill recruitment' for the firms to be publicly associated with representing the polarizing president and jeopardize the firms’ relationships with other clients."
  • "Another lawyer briefed on some of the discussions agreed that the firms were worried about the reputational risk of representing the president. One issue that arose, this lawyer said, was “Do I want to be associated with this president and his policies?” In addition, the lawyer said, there were concerns that if they took on the case, “Who’s in charge?” and 'Would he listen?'"

Thursday, June 8, 2017

LegalKEY Replacement (Four Reasons Why)



From the team at FileTrail comes: "4 Reasons It’s Time To Replace LegalKEY" --
  • "If you haven’t heard, future development for LegalKEY is over. However, that’s no surprise to anyone still using LegalKEY. Although the company hasn’t announced their records management system is being sunsetted, customers haven’t gotten any significant upgrades or product enhancements in the last 5-7 years. To give you an idea of how little effort is going into LegalKEY these days, they’ve actually gone the way of ARM/FileSurf—by outsourcing product support."
  • "Keep in mind that staying with a product that has taken this road doesn’t bode well for the future. HP sunsetted ARM, with a final end of life in the past."
  • "Today, if you’re on LegalKEY you’re paying annual support and not getting anything in return. Plus, to get LegalKEY to run on a later version of SQL it will cost you time and money. (And we’re not talking SQL 2012, 14 or 16—this is just to get you to SQL 8.) While that might not be enough to convince you to make the switch, here are four other reasons why it’s a great time to get off LegalKEY."
“It has been many years since we have had any LegalKEY upgrades or significant product enhancements. Since future development is over, we have turned to FileTrail to replace LegalKEY. FileTrail provides the flexibility, continual development, software integrations and advanced reporting features we need to properly manage our records program going forward.” 
-- John Churchill, Records Department Manager, Nelson Mullins Riley & Scarborough     


Read the full article for detail on the top for reasons and opportunities FileTrail flags for making the change:
  1. Saving Money
  2. Automating Information Governance
  3. Integrating Document Management
  4. Scaling Systems and Processes

Monday, June 5, 2017

ITC Conflicts Allegation (Section 201)




Here's another interesting one: "Chinese solar company pitches conflict of interest claim in Section 201 case" (free subscription) --
  • "A Chinese solar panel producer is claiming that the law firm representing a U.S. solar company pursuing a Section 201 safeguard petition against foreign imports of solar products has a conflict of interest in the case, which it says should be dismissed."
  • "Suniva, which filed for Chapter 11 bankruptcy in April, wants the U.S. International Trade Commission to employ Section 201 of the Trade Act of 1974 and slap duties on imports of crystalline silicon photovoltaic cells (CSPV) and modules."
  • "But Wuxi Suntech Co., Ltd, in a May 14 letter to the ITC, claims that Suniva's law firm -- Mayer Brown LLP -- has a conflict of interest given its affiliation with both ‘pro and against Chinese solar PV manufacturers,’ the Chinese company said. Suntech claims to be one of the largest photovoltaic cell manufacturers and exporters to the U.S."
  • "'As a result of the bankruptcy reorganization of Suniva, Inc., the interests of Suniva and its shareholders are conflicted,' the letter states. 'The acting by Mayer Brown for the Chief Restructuring Offier (sic) of Suniva, Inc. clearly conflicted with the interests of its other client, Wuxi Suntech, which again has not been consented by us.'"
  • "Suniva Inc. and Suntech are owned and controlled by the same parent entity -- Shunfeng International Clean Energy. ‘It is to our shock that Mayer Brown continued to represent the Chief Restructuring Officer of Suniva, Inc. after it had entered into bankruptcy reorganization in April 2017, and filed a petition on behalf of CRO on April 26th 2017 for safeguard relief actions that may seriously affect our capacity to continue exports to the US market,’ Shuangquan He, president of Suntech, wrote in the May 14 letter."
  • "Mayer Brown fired back with a May 16 response to the ITC, claiming that it had been given consent to proceed with its representation of Suniva. ‘Accordingly, when Suniva, through the parent entity, asked the Firm to undertake this representation, we reminded Suniva’s parent of our work for Suntech and our need for an informed consent and waiver,’ the law firm wrote. ‘Suntech, through the parent entity, provided that informed consent waiver.’"

Sunday, June 4, 2017

When Conflicts Allegations Cut Deep (Or: From Russia... Again)




There's been a clear trend of the conflicts space becoming more of a "rough and tumble" kind of world. Here's a striking example of extreme, gloves-off escalation of allegation (and given the nature of the matter it's important to emphasize allegation), following our previous coverage of the underlying matter, comes:

"Former client says BakerHostetler lied to court to avoid disqualification"
  • "For nine months in 2008 and 2009, BakerHostetler represented the hedge fund Hermitage Capital Management in the investigation of a $230 million fraud scheme in Russia that began with the theft of the corporate identities of Russian companies in Hermitage’s portfolio. BakerHostetler earned $200,000 in the engagement."
  • "Now Hermitage is asking a federal judge to order its onetime lawyers to cough up $1.4 million in fees – not money Hermitage paid to BakerHostetler but legal fees Hermitage laid out to other lawyers in order to get BakerHostetler bounced from a U.S. government suit to recover some of the alleged proceeds of the Russian fraud. BakerHostetler represented the defendant in the forfeiture case, a Cyprus-based real estate holding company called Prevezon."
  • "In the fee motion filed Tuesday, Hermitage flat-out accused two prominent BakerHostetler lawyers of making 'repeated misrepresentations' to a federal trial judge and the 2nd Circuit in a misguided attempt to hold onto the firm’s Prevezon assignment. The motion, filed by Hermitage’s lawyers at Susman Godfrey, claims BakerHostetler partners John Moscow and Mark Cymrot falsely assured U.S. District Judge Thomas Griesa that the firm’s previous Hermitage assignment was related to a different Russian fraud scheme, not the fraud underlying the Prevezon case."
  • "And to compound the law firm’s betrayal, according to Hermitage, after it persuaded Judge Griesa to allow it to remain in the case for Prevezon, BakerHostetler demanded discovery from its onetime client Hermitage in order to portray Hermitage as the true villain of the story."
  • "Said BakerHostetler: 'We do not comment on pending litigation involving our firm. We will respond to the complaint - and our response will speak for itself.'"

Thursday, June 1, 2017

Risk & Conflicts Updates (Presidential Edition)




Having recovered (mostly) from another amazing Inception experience (thank you to the enterprising reader who attempted the secret handshake!) we now return to our regular, semi-regular risk updates. Starting by catching up on various updates and allegations making news and stirring debate recently:

"Marc Kasowitz helped Trump through bankruptcy and divorce. Now he's taking on the biggest case of his career" --
  • "Now, President Trump is giving the $1,500-an-hour attorney a new assignment as his private counsel in the probe of Russia’s meddling in the 2016 presidential election. His hiring was first reported by Fox Business and ABC News."
Which played out in one way with: "Lieberman Withdraws From Consideration as F.B.I. Director" --
  • "Former senator Joseph I. Lieberman (I-Conn.) has withdrawn his name from consideration for FBI director. Lieberman cited the potential appearance of a conflict after President Trump hired his longtime attorney Marc Kasowitz — who is a partner at the same law firm where Lieberman is senior counsel — as his outside attorney in the ongoing investigations into Russian meddling in the 2016 election."
  • "'I have decided to withdraw my name from consideration for this nomination,' Lieberman said. 'With your selection of Marc Kasowitz to represent you in the various investigations that have begun, I do believe it would be best to avoid any appearance of a conflict of interest, given my role as senior counsel in the law firm of which Marc is the senior partner.'"
Next, ALM noted last week: "Robert Mueller, Jamie Gorelick and the Wilmer Problem" --
  • "Suddenly, it’s not so simple. Because until last week, Mueller was a partner at Wilmer Cutler Pickering Hale and Dorr—where his colleague in the firm’s Washington, D.C. office, a fellow member of both the strategic response and regulatory and government affairs groups, was Jamie Gorelick. Jared Kushner’s lawyer."
  • "That wasn’t such a big deal when Kushner was just President Trump’s son-in-law seeking assistance with conflict-of-interest issues and financial disclosures. Mueller didn’t personally represent him. But now, rumors are swirling that Kushner is the “significant person of interest” alluded to in a Washington Post report on Friday, “someone close to the president” under investigation for working with the Russians."
  • "If this is true—and I don’t know if it is; the best source appears to be New York magazine contributor Yashar Ali, who claims to have confirmed it with four people—it could present a substantial ethics conflict for Mueller."
Which was followed by: "DOJ: No ethics conflict for special counsel in Russia probe" --
  • "The Justice Department has determined that former FBI Director Robert Mueller's appointment as special counsel to oversee the federal investigation into Russian interference in the 2016 election complies with ethics rules."
But then this week the Washington Post notes (what some might call "the double yoink" maneuver): "The White House may claim Mueller has conflicts of interest. Oh, the irony." --
  • "But now the White House and its allies may be preparing to claim that former FBI director Robert S. Mueller III has conflicts of interest that prevent him from assuming his role as special counsel in the Trump-Russia investigation. Like so many of their other ethics claims, this one does not hold up."
  • "Their first argument is that Mueller must stand down from the investigation for at least a year because lawyers in the law firm from which he just resigned, WilmerHale, represent Jared Kushner and Paul Manafort, two people who may be involved in the investigation. It appears, however, that Mueller never represented either of these individuals nor obtained any confidential client information about either of them. Under the professional conduct rules of the District of Columbia, among the toughest in the nation on lawyers moving in and out of government, Mueller is free to leave the firm and, as special prosecutor, investigate and if appropriate prosecute either of these individuals represented by his former firm."
  • "Ironically, it is in just such a situation as the Mueller case — if the government officials involved are lawyers and therefore subject to bar ethics rules on the revolving door — that a conflicts waiver would be appropriate. If the White House were to resist granting such a waiver for Mueller and his staff while secretly approving waivers to lobbyists and others, that action would represent not only an abuse of government ethics rules but also yet another data point in an emerging pattern of obstruction of justice."
And on the related topic of legal service options: "West Wing aides brace for big attorney bills" --
"Longstanding conflict-of-interest restrictions limit White House employees from taking free or discounted legal advice, but aides who need lawyers have some options for getting help."
  • "Long-standing conflict of interest restrictions limit White House employees in many circumstances from accepting free or discounted attorney advice, and history is littered with examples of a president’s team buried under more than a hundred thousand dollars (George Stephanopoulos, under President Bill Clinton), if not millions (I. Lewis “Scooter” Libby, under President George W. Bush), in legal fees."
  • "Trump aides who can’t afford a premier $1,500-per-hour white-collar lawyer on their government salaries have options. They can file for public subsidies, lean on their homeowners’ insurance or tap lawyer friends for pro bono help. But even then, veterans of White House scandals stretching back to the Ronald Reagan era say that some of the staffers who get caught in Special Counsel Robert Mueller’s crosshairs will want to start pinching pennies."
  • "Trump aides can ask friends or family for free or discounted legal advice — with the caveat they must detail that help as a gift on their next financial disclosures forms. They also can seek out lawyers who historically have charged their government clients lower fees — though that set up is often wrought with ethics restrictions. Law firms that have business before the executive branch — a category that covers some of Washington’s bigger legal operations — present conflict of interest challenges for White House staffers who would need to recuse themselves from the firm’s issues."