Risk Update

Interesting Conflicts of Interest — School Cheating Collateral Order Conflict Appeal Introspection, Bankruptcy Conflicts Landscape for Infowars & Alex Jones

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Infowars’ Bankruptcy Judge Removes Top Advisors, Orders Probe” —

  • “Infowars’ parent is facing a major setback in its Chapter 11 case after a bankruptcy judge removed its top attorney and chief restructuring officer for their failure to disclose prior connections to company founder Alex Jones.”
  • “Texas bankruptcy Judge Christopher M. Lopez on Tuesday evening sided with the Justice Department’s bankruptcy watchdog and rejected motions by the parent company, Free Speech Systems LLC, to hire attorney Kyung Lee or his firm, Shannon & Lee LLP, as the company’s bankruptcy co-counsel. “
  • “Free Speech Systems filed for Chapter 11 protection in July after Sandy Hook Elementary School shooting victim families won judgments against far-right conspiracy theorist Jones and his website for falsely claiming the massacre was a hoax.”
  • “Lee and his firm have potential conflicts due to their representation of three other Jones-affiliated companies in a previous bankruptcy, the court found Tuesday. That created a conflict of interest that is adverse to Free Speech Systems’ bankruptcy estate, it said.”
  • “Free Speech System’s motion to employ W. Marc Schwartz as its chief restructuring officer was also denied. Lee and Schwartz had been working for the debtor for months. Schwartz had begun preparing a bankruptcy plan that would use the company’s disposable income to pay creditors.”
  • “‘I do think there was some lack of candor in this case,’ Lopez said. ‘I’ve expressed concerns since the first hearing about what happened. And as this case has progressed, and based on what I’ve heard today and the evidence that I was able to review, those concerns continue to exist.'”
  • “In June, three Jones-affiliated companies—InfoW LLC, IWHealth LLC, and Prison Planet TV LLC—struck a deal with the Justice Department’s US Trustee to dismiss their bankruptcy cases pending in Texas. Schwartz and Lee also for a time worked with those three debtors during the previous bankruptcy but never disclosed the relationship to the court, the US Trustee said. “

Denied: Defense Lawyer Can’t Withdraw From Litigation Over School Cheating Scandal” —

  • “In a case of first impression, the Supreme Court of Georgia has affirmed that the denial of a motion to withdraw as counsel based on alleged conflicts of interest is not directly appealable.”
  • “Atlanta Judicial Circuit Public Defender Stephen R. Scarborough no longer wants to represent his six clients, citing an alleged ethical conflict of interest, as some clients name each other in their defenses.”
  • “After Fulton County Superior Court Judge Jerry W. Baxter denied the attorney’s motion to withdraw representation and the Georgia Court of Appeals dismissed his appellate challenge, Scarborough appeared before the Supreme Court of Georgia in April to argue his case.”
  • “Scarborough attempted to convince the high court that the collateral order doctrine supported his motion.”
  • “Under the doctrine, parties may appeal interlocutory rulings if the order conclusively determines the disputed question, resolves an important issue completely separate from the merits of the action or would be unreviewable on appeal from a final judgment.”
  • “Across the aisle, Fulton County Chief Senior Assistant District Attorney Kevin C. Armstrong argued the doctrine failed to support Scarborough’s motion. He noted that the appellants had access to ‘a future remedy,’ since they could obtain relief through an interlocutory appeal.”
  • “Five months after the oral argument, the Supreme Court of Georgia issued a unanimous opinion affirming the lower courts’ rulings. ‘We granted certiorari in this case to determine whether a trial court’s order denying a motion to withdraw as counsel based on alleged conflicts of interest is immediately appealable under the collateral order doctrine,’ read an opinion drafted by Justice Shawn E. LaGrua. ‘We conclude that such orders do not fall within ‘the very small class’ of trial court orders that are appealable under that doctrine.'”
  • “‘We reach this conclusion because orders denying a counsel’s motion to withdraw based on an alleged conflict of interest are not ‘effectively final,’ even as to counsel’s interest, in the sense needed to justify application of the collateral order doctrine.'”
  • “Instead, LaGrua highlighted a more extreme remedy Scarborough could opt to entertain. She wrote that, if the public defender felt strongly that remaining on the case would violate rules of professional conduct and create ethical conflicts of interest for his clients, he could exercise ‘another long-recognized option’ by choosing to ‘disobey the order and potentially be held in contempt of court.'”
  • “‘The attorney can then appeal directly from any resulting contempt ruling under OCGA § 5-6-34 (a) (2),’ LaGrua explained. ‘We recognize that this avenue for appellate review places the attorney in a very difficult position, but it is a means of obtaining direct appellate review set forth in Georgia statutory law that lifts the issue presented in this case out of the realm of non-reviewability.'”
Risk Update

Risk Updates — Rogue Lawyer Reveals Risk, Litigation Funding Meets Judicial Conflict, Bed Bath Conflict, Virginia Bar on Child/Parent Conflicts

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Litigation Funder Wins $1.2 Million Over Lawyer-Judge Connection” —

  • “A Texas attorney must pay $1.2 million to a litigation funder that sued him for malpractice after he failed to disclose a conflict of interest involving a judge, a US district court ruled.”
  • “The attorney, Sergio Muñoz Jr., failed to tell his ex-client, Law Funder LLC, he had a business relationship with a judge presiding over a case the company joined because of its litigation investments, the firm alleged in a lawsuit.”
  • “Litigation funders provide capital to plaintiffs or their lawyres in exchange for portions of cash settlements and financial awards. The Law Funder had retained Munoz in 2011 to protect its investments in lawsuits filed by a Mexican law firm whose ownership became a subject of a divorce proceeding.”
  • “Muñoz was a co-principal in a professional corporation with Judge Jesse Contreras, who presided over the divorce case. The connection ultimately prompted the removal of the judge in the case as well as a voiding of all his orders. Law Funder later withdrew from the proceedings because it didn’t have the money to start over.”

Billion-dollar class action lawsuit against Bed Bath & Beyond – and its CFO who jumped to his death off NYC’s ‘Jenga’ building – is in jeopardy after law firm handling case BOWS OUT” —

  • “A shareholder lawsuit that is thought to have possibly played a role in the suicide of Bed Bath & Beyond’s former Chief Financial Officer appears to have run into legal trouble.”
  • “The $1.2 billion suit, which some have suggested contributed to Gustavo Arnal’s stress, has just been passed over to a new law firm based outside of Washington D.C. after a ‘conflict of interest’ occurred that ‘would like have seen it thrown out by a judge’.”
  • “Arnal, 52, was listed as one of the defendants in a class action lawsuit brought by a group of shareholders who claim they lost around $1.2billion when Arnal and majority shareholder Ryan Cohen allegedly engaged in a ‘pump and dump’ scheme that saw them sell off shares at a higher price.”
  • “However it appears as though the attorney involved, Pengcheng Si, was both acting as counsel and the plaintiff resulting in a clear conflict of interest.”

Rogue Attorneys Lurking In Law Firms” —

  • “An attorney can be a free agent, or part of a team. Increasingly, it seems the attorney can be both, at once. Carasco v Schlesinger 2022 NY Slip Op 33021(U) September 8, 2022.”
  • “David B. Cohen is an example of an attorney taking a case on in a partnership, leaving the partnership, moving on to a new firm, taking a case with him, but not transferring it to a new firm. When it all goes wrong, the question remains: Who is the attorney?”]
  • “On or about December 8, 2014, plaintiff signed a retainer agreement with defendant law firm Julien & Schlesinger (“J&S”)… ‘It is undisputed that, on January 6, 2016, Schlesinger, was no longer an employee of J&S, which ceased operations in 2015, became an associate at defendant Morelli Law Firm, PLLC.'”
  • “‘On or about January 28, 2016, plaintiff commenced a personal injury action in this Court styled Hazel Carasco v City of New York, Consolidated Edison
    Company, and Halcyon Construction Company, et. al., under Ind. No. 105779/1.'”
  • “‘Between February 2017 and July 2018, this Court (d’ Auguste, J. and Tisch, J.) issued orders dismissing the underlying action against the defendants therein based, inter alia, on plaintiffs failure to provide discovery. Doc. 54.'”
  • “Plaintiff fails to raise an issue of fact regarding whether she was represented by MLF. The sole retainer agreement she signed in connection with the underlying action was with J&S.”
  • “Plaintiff’s presumption that there would be a continuation of the retainer agreement she signed with J&S when Schlesinger moved to MLF is insufficient to raise an issue of fact…”
  • “Plaintiff conceded at her deposition that Schlesinger never told her that MLF represented her, but rather that he was representing her and that he worked for MLF. Plaintiff even conceded that Schlesinger told her as early as April 2016 that MLF was reluctant to take her case and there is no evidence that plaintiff was ever told that MLF agreed to represent her.”
  • “This Court acknowledges that plaintiff met with Schlesinger at MLF’ s offices on 3 or 4 occasions, that MLF appeared as counsel ofrecord on eLaw and/or eCourts, evidently because Schlesinger was affiliated with the firm, and that plaintiff received email correspondence from Schlesinger via MLF’s email server.”
  • “While the foregoing facts may be some indicia that MLF represented plaintiff, this Court finds that they do not raise a material issue of fact regarding whether she had an attorney-client relationship with the firm…”

Comments Sought on Conflicts Representing Children and Parents in Personal Injury Cases” —

  • “The Virginia State Bar seeks public comment on Legal Ethics Opinion 1893, a proposed advisory on representing children and “next friends” as plaintiffs in personal injury cases.”
  • “This proposed opinion addresses possible conflicts of interest when a parent, guardian, or other ‘next friend’ engages a lawyer to represent a minor child in a personal injury case against a tortfeasor, when the parent or guardian may also have a lien for past and future expenses for medical treatment of the child. “
  • “In the proposed opinion, the Standing Committee on Legal Ethics concluded that generally there is no conflict of interest because the interests of the parent and the child are usually aligned and the parent’s relationship with the child raises a presumption that the parent is acting in the child’s best interests.”
  • “The opinion also gives guidance on the types of conflicts that could arise – when the ‘next friend’ is directing the lawyer’s representation in an unreasonable way that is detrimental to the best interests of the child, or there are inadequate assets to compensate both the parent and the child.”
  • “If there is a conflict between the parent’s and child’s interests, the child cannot waive any conflict because of their lack of legal capacity, and the lawyer cannot reasonably accept consent of the parent on behalf of the child. In that case, the lawyer may seek appointment of a guardian ad litem to protect the child’s interests, may seek judicial approval of a proposed settlement, or may petition a court to appoint a substitute ‘next friend.'”
jobs

BRB Risk Jobs Board — Client Intake Manager (Mintz)

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Mintz is hiring a “Client Intake Manager” —

This position can be based in Boston or Washington, DC. A JD is a plus but not required. The ideal candidate brings 5+ years of experience working in the conflicts department of a law firm or professional services firm (or equivalent experience).

  • “The Client Intake Department is principally responsible for responding to requests for conflict checks associated with prospective new clients, new matters, potential lateral attorneys and support staff candidates, and other related matters. The Department is also responsible for maintaining accurate records regarding the above matters and monitoring compliance with related best practices and policies throughout the lifecycle of each such matter.”
  • “The Client Intake Manager will be responsible for supervising the day-to-day operations of the Department. The Client Intake Manager ensures all such requests submitted to the Department are responded to promptly and within stated time frames by Department staff, provides direct supervision to Department staff in the fulfilment of these requests, and monitors compliance with all firm policies, procedures, and best practices.”

Key Responsibilities Include:

  • Manage and oversee day-to-day operations of the Firm’s Client Intake Department.
  • Develop, manage and lead a growing team of direct reports.
  • Supervise the Department’s processing of submitted requests to ensure compliance with Firm policies, best practices, and the Department’s own expectations.
  • Supervise the Department’s processing of conflict checks related to potential lateral attorneys and support staff candidates.
  • Conduct conflicts-related training of lateral attorneys.
  • Create and maintain information walls and screens.
  • Supervise conflict and intake records creation and maintenance and manage related data flow and systems.
  • Supervise the testing and implementation of new systems, as needed.
  • Participate in the training and professional development of Department staff.
  • Assist in the development of forward-looking intake policies and procedures, including by staying current with industry trends and evolving best practices, and coordinating and conducting training of attorneys and assistants regarding the same.
  • Implement improvements to reporting, clearance, data collection, and maintenance processes for both laterals and new business intake; collect, analyze, and report information from the conflicts team to assist in developing best practices and procedures.
  • Work closely with partners to identify and effectively process to conclusion potential conflict and intake issues and certain limited professional responsibility matters, as requested.
  • This role requires 60% in office presence; remote work is permissible 40% of the time.

See the complete job posting for more detail on job and to apply.

Learn more about working at Mintz on their careers page:

  • “We know that any organization is only as good as its people, and we expect the best from ours. Whether you recently passed the bar, are looking for a change later in your career, or possess gifts in administration, we want you to succeed. You win, we win: it’s that simple. So, what do you care about? How would you like to be challenged? We will ask; come prepared with your answers.”
  • “We recognize that the firm’s success is dependent on having high-quality professionals in every position. Our staff members are vital contributors to the delivery of outstanding legal services. We seek talented and driven individuals who are committed to producing exceptional work, and providing critical support to our attorneys. Our environment offers collegiality, intellectual curiosity, teamwork, and an opportunity to grow professionally. We encourage enthusiasm, take pride in our work, and reap the benefits of working with a great group of colleagues.”

And if you’re interested in seeing your firm’s listings here, please feel free to reach out

Risk Update

Ethical Screen and Security News — Law Firm Security Breach Hits HIPAA, Lawyer Screening Stories

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Law firm informs 255K of HIPAA data incident 10 months after hack” —

  • “Warner Norcross & Judge recently informed the Department of Health and Human Services of a Health Insurance Portability and Accountability Act data breach impacting 255,160 individuals. The law firm provides employment and immigration services to healthcare entities, including three of the largest hospital systems in Michigan.”
  • “On Oct. 22, 2021, WNJ first discovered unauthorized activity on ‘some of its systems’ and took steps to secure the network. A digital forensics firm was brought on to investigate and to perform a ‘data mining and manual review.'”
  • “WNJ found that personal and protected health information was contained in the protected systems, including names, dates of birth, Social Security numbers, driver’s licenses, passports, and government IDs, annual compensation amounts, benefit contribution details, credit or debit card numbers and PINs, financial accounts or routing numbers, and other sensitive data.”
  • “The notice appears to explain the lengthy delay in notifying patients as tied to its data mining to identify impacted information and individuals. But under HIPAA, covered entities and business associates are required to report within 60 days of discovery, not at the close of an investigation.”

Firm Yanks Atty From Ga. Clinic FCA Suit After DQ Bid” —

  • “A Georgia law firm agreed to pull one of its attorneys from representing doctors at an orthopedic clinic defending a False Claims Act suit, after a former clinic executive raised concerns that the attorney worked for the U.S. Department of Justice when she filed whistleblower allegations.”
  • “Griffin Durham Tanner & Clarkson LLC said it will replace attorney Charles W. Byrd on the case defending two Athens Orthopedic Clinic surgeons against claims they violated federal anti-kickback laws. The clinic’s former chief operating officer, Rebecca Hockaday, agreed to drop her motion to disqualify the firm with Byrd no longer on the case.”
  • “Hockaday alleged in her disqualification motion that Byrd had access to confidential and privileged information that could be integral to her case as part of his role as an assistant U.S. attorney at the time she filed the whistleblower complaint against the clinic.”
  • “Clarkson assured Hockaday that neither he nor anyone else at the firm had received confidential or privileged information from Byrd regarding the case, she said in the motion. The firm also agreed to ensure that Byrd was ‘timely screened from any participation in the matter,’ Hockaday said, and would receive no part of the fees arising from it. She also said the firm agreed to give the government the ability to ensure those promises were kept.”
  • “The surgeons had previously responded to the disqualification motion by arguing Byrd couldn’t recall having any substantive involvement in the suit when he was an assistant U.S. attorney and said that, prior to agreeing to represent them, he had inquired with the U.S. Attorney’s Office for the Middle District of Georgia about whether he had any involvement with the suit during his tenure with the office. According to the filing, Byrd was told he hadn’t and that it had been handled by another attorney.”

And via Bill Freivogel:

  • Lecompte v. C.F. Woodford & Son, Inc., 2022 WL 4129410 (Super. Ct. Conn. Sept. 12, 2022). Plaintiff is suing Defendants for injuries suffered on Defendants’ premises. Firm 1 represents Defendants. Firm 2 represents Plaintiff. Lawyer was employed at Firm 1 when this case began. Lawyer moved to Firm 2. Defendants moved to disqualify Lawyer and Firm 2. In this opinion the court denied the motion. In a fact-intensive analysis the court found that Lawyer did not represent Defendants while at Firm 1 and learned nothing about the case while there. Thus, there was no basis to disqualify Lawyer or Firm 2 and no need for a screen at Firm 2.”
  • In re Maxus Energy Corp., 2022 WL 4113656 (3d Cir. Sept. 9, 2022). In this Chapter 11 proceeding the liquidating trustee is suing YPF S.A., and others, for fraudulent conveyance and related claims. Firm 1 is representing the trustee. Firm 2 is representing YPF. Lawyer, while at Firm 2 did substantial work on the case for YPF. Lawyer moved to Firm 1, which erected a timely screen. YPF moved to disqualify Firm 1. The bankruptcy judge denied the motion, terming the screen “robust.” In this opinion the Third Circuit affirmed. The court noted that the Bankruptcy Court for the District of Delaware had adopted the ABA Model Rules. The only unique circumstance here was that when Lawyer changed firms, she was engaged to a lawyer in her new firm. (They ultimately married, but the opinion is not clear when.) While Lawyer was not apportioned any fees from this case, her “spouse” was not so treated. YPF felt that for the screen to be effective, the spouse should also be denied a share of fees from the case. Nope, said the Third Circuit, construing Model Rule 1.10(a)(2)(i).”
  • Lowes v. Lowes, 2022 MBQB 156 (CanLII) (Ct. Q.B. Man. July 29, 2022). Divorce case filed by W. One of W’s lawyers was Lawyer employed by Law Firm 1. After W replaced lawyer, Lawyer left Firm 1 and joined Law Firm 2. Law Firm 2 is representing H in this case. W moved to disqualify Law Firm 2. In this opinion the master denied the motion. Firm 2 had erected an “ethical wall” (herein, “Screen”). In an exhaustive discussion of authorities throughout Canada on screening laterals, the master relied primarily upon guidelines in the Law Society of Manitoba Code of Professional Conduct. The Manitoba guidelines are consistent with those recommended by the Federation of Law Societies and the Canadian Bar Association. We will not set forth the guidelines’ requirements for Screens other than to say that they work in Canada, and there were no surprises here.”

 

Risk Update

Risk News — New New Jersey Outside Counsel Guidelines Curtails Conflicts Waivers & Positional Conflicts, “ENGAGE” AML Response, Law Firm CEO Conflicted Out

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The acting Attorney General of New Jersey has released updated Outside Counsel Guidelines which go into effect this November. More at this page: “New Jersey Office of the Attorney General” with a PDF of the complete guidelines themselves here.

  • “Law firms retained by the Division of Law are required to comply with the Division’s Outside Counsel Guidelines, which were last updated in January 2015. Over the past several months, the Guidelines have undergone a thorough revision and are posted here for a reference. The new Guidelines go into effect on November 1, 2022. The Guidelines include detailed information about conflicts of interest, staffing, billing, confidentiality, and engagement of third-party vendors, among other topics.”
  • “One common question is whether a private law firm can perform work for a particular state agency when that firm also represents clients adverse to a different state agency. The issue has been discussed in a number of ethics opinions and court rulings, which were most recently summarized in a May 2019 Attorney General letter.”

From the guidelines:

  • “State agencies cannot waive any conflicts that the Rules of Professional Conduct (“RPCs”) prohibit, and counsel should neither request nor expect the Attorney General to grant such a waiver. See RPC 1.7(b)(1 ), 1.8(1) and 1.9(d)”
  • “State agencies cannot waive any conflicts that the rules of professional conduct prohibit, and counsel should neither request nor expect the attorney general to grant such a waiver.”
  • “Counsel must avoid a conflict of interest involving the State client they represent. As part of the retention process, the Division of Law will identify those entities the Division deems to be the ‘client’ for conflicts of interest purposes.”
  • “The Division prohibits counsel that represent a State client from:
    • a) Representing private parties before the State client (or its officers) in an adversarial, transactional or non-adversarial proceeding…
    • b) Representing private parties in any matter in which the State client is also a party, if the private party has interests adverse to the State client.
    • c) Representing the State client in a matter in which a private client is adverse to the State if the firm represents the private client in other matters, even if the firm does not represent the private client in the matter involving the State client.
    • d) Representing the State agency in a matter in which a private client appears before the agency, submits an application to the agency or otherwise is requesting the agency take some action or refrain from taking some action, if the firm represents the private client in other matters, even if the firm does not represent the private client in the matter before the agency.
    • e) Representing a private party who has interests adverse to the State client.
    • f) Representing another client where the outside counsel’s knowledge of the State’s legal positions or strategy, derived from the representation or prospective representation of the State client, could be used to the advantage of the other client or to the disadvantage of the State client.”
  • “A conflict may also arise from counsel’s advocacy of positions conflicting with important State interests. Positional conflicts could arise in litigation matters, transactional matters, and lobbying efforts. Prior to your engagement, your firm should carefully review whether any such conflict exists or if there is a potential for such a conflict. Whether a positional conflict exists is a fact-sensitive determination.”
  • “Outside counsel, however, should generally avoid advocating a position that would limit the authority of the State client, would expand the scope of potential liability of the State client, or would require the State client to divulge information that the State client generally regards as confidential or privileged.”
  • “Outside counsel must promptly report positional conflicts to the designated attorney before the firm accepts an engagement that will require the firm to advocate a position that may be adverse to a State legal interest or otherwise prejudicial to the interests of the State.”

And for those tracking Congressional activity on AML rules, Nigel Riley at Intapp advises: “ENABLERS Act: Enhance your risk and compliance management” —

  • “For years, experts have warned professional service firms in the U.S. that they need to start preparing for money laundering regulations. And in recent months, those warnings have become impossible to ignore.”
  • “The latest and loudest alert came in July 2022, when the U.S. House of Representatives proposed the Establishing New Authorities for Businesses Laundering and Enabling Risks to Security (ENABLERS) Act. This bipartisan legislation, aimed at so-called gatekeepers, would expand anti-money laundering (AML) surveillance — currently required of financial institutions — to professional services firms, requiring accounting and law firms to collect, monitor, and report specific types of client information.”
  • “Passage of the ENABLERS Act is not guaranteed. It’s currently an amendment to the National Defense Authorization Act (NDAA), which observers expect congress to vote on by December. It could undergo significant changes prior to the final vote, or not pass at all this year.”
  • “My advice to firm leaders is simple:
    • Don’t delay. Proactively prepare by enhancing your KYC and AML processes.
    • Focus on the long-term. Augmenting your firm’s risk and compliance programs can have ongoing, positive impacts on other aspects of your business.”
  • “Firms will have to find their own path, but they can get there by focusing on three key areas:
    • Process — Now is the time to thoroughly review current policies and practices, including overall governance framework and risk and compliance protocols for assessing risks associated with accepting new clients and engagements, clearing conflicts, onboarding new business, monitoring engagement performance, and managing client relationships. You can also map out a plan for review and conduct a gap analysis against the newly proposed requirements.
    • People — The risk and compliance team shouldn’t be the only function to prepare for the new regulatory requirements. Instead, a cross-functional evaluation of the client lifecycle and all touchpoints provides a better approach to comprehensively assessing your firm’s current risks, capabilities, and staffing needs. Enhancing team resources, upskilling staff, and identifying inefficiencies can create additional capacity to satisfy the new requirements and allow staff to allocate more time to higher-value work and analysis.
    • Technology — It’s critical to determine if your firm’s current software is optimal enough to support more robust tracking, greater amounts of data, and enhanced reporting as required by the proposed legislation. Take this opportunity to reconsider the software tools currently in use at your firm, evaluate paper-based or manual processes, and identify areas prone to human error where automation and systems integration could mitigate risks and make adopting new regulations easier.”
  • “As my colleague and risk management expert Meg Block notes, preparing for the requirements of the ENABLERS Act will require firms to review client onboarding procedures and create additional mechanisms for ongoing monitoring throughout the client lifecycle. This process could create long-term benefits.”
  • “Whether or not the ENABLERS Act passes this year, the message is clear: Professional services firms need to prepare for AML regulatory requirements. By starting now, firms can better understand how the regulations may affect them and where they need to focus.”

Finally, interesting news on a law firm CEO conflict for the Ince Group plc (Stock Ticker: INCE), which describes itself: “As well as providing legal services, The Ince Group provides accounting, financial services, consulting and pensions advice to clients.” “Former Ince chief exec removed as company director over ‘conflict of interest’ concerns” —

  • “The former chief executive of the listed law firm Ince has been removed from his position as a company director with immediate effect, it was announced yesterday.”
  • “In July, Adrian Biles confirmed he would step down from his role as Ince’s chief executive and resign from the board upon completion of £8.6 million fund raising project through the issuance of new shares and a loan.”
  • “In an announcement to the stock market yesterday, Ince said Biles ‘has been removed as a director of the Company with immediate effect, as a result of circumstances which may give rise to a conflict of interest between Adrian Biles and the Company.'”
  • “The consequences of all this can be seen in the company’s latest financial results in which revenues dipped 3% to £97 million. Ince’s share price also dived 50% to around 5p following the July announcement that it would be undergoing further financing. The listed law firm’s shares price tumbled further to 4.33p in the wake of yesterday’s announcement.”
jobs

BRB Risk Jobs Board — Director of Conflicts and New Business Intake (Richards, Layton & Finger)

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John Ferko, the firm’s COO, reached out to note that Richards, Layton & Finger, Delaware’s largest law firm, is seeking an experienced attorney to manage the firm’s conflicts and new business intake functions in Wilmington, DE.

The successful candidate will be responsible for managing the conflicts, new business intake and due diligence teams. More at: “Director of Conflicts and New Business Intake” —

Key Responsibilities Include:

  • Manage the conflicts, new business intake and due diligence teams, systems, and processes, ensuring potential conflicts are quickly accurately identified and resolved and conflicts are cleared for new matters, new clients, and lateral attorneys.
  • Provide leadership and facilitate departmental team building and training.
  • Review, assess, recommend, and communicate improvements to conflicts and new business intake processes, procedures, and policies.
  • Work with General Counsel on issues relating to conflicts of interest and due diligence; provide support through the regular review and identification of potential issues under client Outside Counsel Guidelines.
  • Oversee the firm’s Intapp Walls database; train firm users on Intapp Conflicts and New Business Intake applications and continuously develop the firm’s use of these systems.

For additional detail:

  • You can see the specific job posting here
  • And read more about professional life and benefits at the firm  on their careers page:
    • Our professional staff plays an integral role in delivering the exceptional service that stands as the bedrock of our firm’s reputation. We deeply value our professional staff and promote a welcoming, supportive environment that enables our employees to reach their professional and personal goals.
Risk Update

Risk Appeals (Fee Matters) — Screening Success, Fee Dispute Conflict Called

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White & Case Lawyer Conflict Screen Cleared by Appeals Court” —

  • “White & Case LLP properly screened a newly hired attorney from a conflict that would have otherwise spread to the entire firm and disqualified it from participating in a bankruptcy case, the Third Circuit ruled on Friday.”
  • “Jessica Lauria, formerly called Jessica Boelter, worked at Sidley Austin LLP, which represented YPF SA in a case brought by Maxus Liquidating Trust in connection with the Chapter 11 bankruptcy of Maxus Energy Corp. She was later hired by White & Case, which represented the trust and is where her husband also works.”
  • “White & Case timely screened Lauria from involvement in the matter, but her former client YPF sought to disqualify the firm, saying the screening was insufficient. The bankruptcy court denied the disqualification bid.”
  • “The US Court of Appeals for the Third Circuit affirmed that decision, agreeing with the lower court that White & Case’s screening followed the rules, which included a requirement that the conflicted attorney not receive any portion of the fees.”]
  • “The appeals court rejected the argument that Lauria’s husband receiving fees meant the screen was not properly conducted.”

via the always excellent Legal Profession Blog: “Fee Dispute Leads To Directly Adverse Conflict” —

  • “This appeal involved a dispute over the division of a personal injury settlement between a predecessor law firm (“Litster”), a successor law firm (“IILG”), and a client who was subjected to unfair and deceptive trade practices in violation of the Idaho Consumer Protection Act (“ICPA”). Litster represented Melissa Gryder for approximately three years before IILG took over representation and settled Gryder’s case roughly two months later.”
  • “Gryder had followed her attorney, Seth Diviney, from Litster to his new firm, IILG. After Gryder’s case was settled, Litster sued IILG and Gryder, claiming a portion of the settlement fund for its incurred attorney fees and costs. Gryder, through Diviney as her attorney, counterclaimed that Litster had violated the ICPA and could not recover from the fund.”
  • “The district court granted Gryder summary judgment on the liability portion of her ICPA counterclaim but reserved the mechanics of her elected ICPA remedy (rescission) for trial. By the time of the bench trial, the district court understood, based on representations by Diviney, that only IILG and Litster claimed a stake in the disputed fund—not Gryder. From this, the district court balanced the equities and divided the disputed fund between only IILG and Litster while reducing Litster’s share to account for its ICPA violation. IILG and Gryder appealed the district court’s division of the fund and Litster cross-appealed the grant of partial summary judgment to Gryder.”
  • “Next, the Court concluded, sua sponte, that Diviney had engaged in an unwaivable concurrent conflict of interest on appeal—and throughout this case below. The Court explained that Litster, IILG, and Gryder have competing claims on how to distribute the fund. Yet, at all times, Diviney represented both Gryder’s and IILG’s directly adverse claims in the same litigation.”
  • “To ensure procedural due process, the Court declined to, on appeal, determine the appropriate sanction for Diviney’s ethical violation. Instead, the Court remanded the matter for the district court to determine the appropriate sanction after a hearing.”
  • The court wrote:
    • “We note that the cost of disqualifying Diviney from representing Gryder on her ICPA claim may, at this stage, outweigh any benefits Gryder would receive from conflict-free counsel. It has been nearly six years since Gryder’s underlying personal injury occurred, the parties have been disputing the distribution of Gryder’s personal injury settlement for over two years, one trial has already occurred, and a judgment against Gryder has been entered. Moreover, Diviney and IILG’s right to compensation in Gryder’s underlying personal injury case is materially entwined with Gryder’s right to deny Diviney and IILG a fee for the same under Gryder’s ICPA cause of action.”
Risk Update

Ethics Updates — Lawyer Personal Interest Conflicts (Relationships & Beliefs v Financial), Judicial Conflicts Considerations

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Hat tip to Bill Freivogel for noting a recent opinion issued by the Advisory Committee on Professional Conduct (New Jersey): “OPINION 743: RPC 1.10(a) – Imputing Conflicts of Interest That Are Based on a Personal Interest of the Lawyer” —

  • The Advisory Committee on Professional Ethics received an inquiry regarding a law firm that was retained to advise a client entity in a commercial loan refinancing. The client entity is fully owned by a parent limited liability company that has two members who each own equal shares. A shareholder in the law firm is one of the two members of the parent company.
  • “The Committee found that the lawyer with the financial stake has a conflict of interest based on a personal interest of the lawyer, Rule of Professional Conduct 1.7(a)(2), and that the affected lawyer’s conflict of interest is imputed to the firm under Rule of Professional Conduct 1.10(a).”
  • “The exception for imputing ‘personal interest’ conflicts in Rule of Professional Conduct 1.10(a) is narrow and generally includes only interests arising due to family relationships or personal beliefs, not business or investment interests.”
  • “See Michels, K., New Jersey Attorney Ethics, § 24:3-1(a), p. 618 (Gann 2022) (the ABA comments suggest that the RPC 1.10(a) exception for imputing personal conflicts ‘does not apply when the affected lawyer’s interest is pecuniary or proprietary’).”
  • “Family-based or belief-based personal interests ordinarily are not considered to present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm. Conflicts arising from a lawyer’s personal business interests – particularly when those business interests affect the client’s objectives of legal representation – ordinarily would present a significant risk of materially limiting the representation of the client by the other lawyers in the firm.”
  • “If, however, the lawyer with the relationship is not handling the case, the conflict is not likely to materially and adversely impair the representation of the client by the remaining lawyers in the firm. This personal interest conflict generally is not imputed to the firm 5under RPC 1.10(a), though the affected lawyer should be screened from the matter. Ibid. In this case, the client need not be informed of the relationship or provide consent to a conflict.”

Judicial Ethics Opinion 21-164” —

  • “Provided the judge is satisfied they can be fair and impartial, the judge may preside in a case where (1) the plaintiff is an attorney who frequently appears before the judge and was previously co-counsel with the judge’s sibling on several discrete cases and (2) plaintiff’s counsel rents office space in the same office as the judge’s sibling and also is an elected county legislator representing the district where the judge resides.”
  • “We note, initially, that there is no indication here that the judge’s sibling has any involvement or interest in the case before the judge. Nor does the inquiry suggest that any litigant or attorney in the case is the partner or associate of the judge’s sibling (see Opinion 06-111) or has a current, ongoing business relationship with the judge’s sibling (cf. Opinion 95-35 [judge should recuse in cases involving appearances by a law firm, where the judge’s spouse, who is a lawyer, has a continuing counsel relationship with the law firm, and not merely a retainer interest in occasional, separate, discrete cases]).”
  • “We do not believe the judge’s impartiality can reasonably be questioned merely because plaintiff’s counsel “rents office space in the same office” as the judge’s sibling (see e.g. Opinion 14-91).”
  • “We have also advised that a judge is not disqualified in a matter merely because a litigant or witness before them is an attorney who regularly practices before the judge (see e.g. Opinions 17-130; 14-120; 14-62; 09-239; 07-122; 92-49). We likewise conclude here that the judge’s impartiality cannot be reasonably questioned merely because plaintiff is also an attorney who regularly appears before the judge.”
  • “Finally, we believe the judge’s impartiality cannot reasonably be questioned merely because the plaintiff was previously co-counsel with the judge’s sibling “on several high-profile criminal cases.” We note that a judge is disqualified, subject to remittal, when their sibling’s law partners or associates appear before the judge (see Opinion 06-111).”

Judicial Ethics Opinion 22-16” —

  • “A judge need not disqualify from a custody case merely because the judge’s confidential secretary has connections to both parties through marriage, but must insulate the secretary from any involvement in the matter. If a party objects to the judge’s participation in the case, the judge has the sole discretion to decide whether to exercise recusal.”
  • “A judge is presiding in a custody case in which the judge’s secretary has personal connections to both sides through marriage. Specifically, the secretary was formerly married to one party and formerly married to an ex-partner of the other party.”
  • “Where a judge’s staff member has a conflict, ‘it is ordinarily sufficient to insulate the staff member and disclose the insulation’ (Opinion 19-72).”
  • “Here, too, we believe the judge’s impartiality cannot ‘reasonably be questioned’ based on the secretary’s personal connections with both sides in the custody case (22 NYCRR 100.3[E][1] [emphasis added]). Accordingly, this judge need not disqualify merely because the judge’s confidential secretary has connections to both parties through marriage, but must insulate the secretary from any involvement in the matter. Because disqualification is not mandatory here, the judge ‘is the sole arbiter of recusal’ (People v Moreno, 70 NY2d 403, 405 [1987]) even if a party objects to the judge’s participation.”
jobs

BRB Risk Jobs Board — NBI Conflicts Manager (Alston & Bird)

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I’m quite pleased to highlight another job posting from my friend Rodney Miller, Director of Business Information Governance at Alston & Bird. (Always nice to see repeat participants taking advantage of this resource.) He reports a new opening at the firm: “New Business Intake Manager” —

  • “The Atlanta office of Alston & Bird is seeking a New Business Intake Manger (NBI Manager) to oversee the firm’s new business intake function on a global basis.”
  • “This position is eligible for remote flexibility. Details will be discussed during the interview process.”

Key Responsibilities Include:

  • The NBI manager will oversee the New Business Intake team and set the strategic direction for the firm’s new business intake function.
  • The NBI Manager will also oversee the implementation of standardized new business intake procedures across offices and liaise with partnership and firm leadership on client intake needs and issues, with escalation to Loss Prevention as needed.
  • Individual will maintain expertise in new business intake best practices and advise firm leadership on areas for improvement.
  • Serve as Business Lead for firm projects involving new business intake.
  • Manage and oversee the day-to-day operations of the NBI Department.
  • Develop training materials and ensure the professional development of Department staff.

Skills Needed to be Successful Include:

  • Prior new business intake experience utilizing automated intake workflow systems in a law firm environment required.
  • Additional skill sets such as prior supervisory experience; excellent written communication skills and the ability to draft and execute complex communications including policies and procedures, and instructional documents.
  • Strong knowledge of ethical, legal and risk management rules and requirements governing conflicts of interest and conflicts resolution process required.

For additional detail:

  • You can see the specific job posting here
  • And read more about professional life at Alston & Bird on their excellent careers page, where I learned that Alston has continued is streak, ranked by Fortune as one of America’s ‘100 Best Companies to Work For now for 23 consecutive years.

 

A few more things…

Rodney holds special honor as the first person to sign up for a BRB job listing. We were catching up on risk generally and his philosophy specifically, when the idea for this now successful experiment came up. At the time, I asked him a few questions relating to his firms work environment and thought I’d re-share the highlights:

Rodney says that professional development is a core part of working on the risk team at Alston & Bird:

“With our firm’s commitment to being a great place to work, we also want to make sure that our staff members are motivated and set up for success. Each risk team member has their own professional development plan. They have aspirations and things for reach for, and a strong appreciation of the importance of what they do, what they bring to the table, and how to grow, present and create opportunities for themselves.”

A few years ago, Rodney introduced a training program covering conflicts searches, analysis and reporting, as well as presentation and communication skills:

“Each analyst has the opportunity to develop his or her presentation skills in front of an audience — a real confidence booster which translates into more confident conversations with our lawyers… Our conflicts analysts have a stronger appreciation for what our lawyers are looking for, and are highly motivated and focused on delivering exactly what they need.”

And it’s just nice to see how this firm recognizes the importance of the conflicts department, as well as their commitment to excellence:

“I’m proud of the way we’ve professionalized and raised the profile of the conflicts department within the firm. It’s not just a group of folks providing your report of conflicts, it’s so much more involved than that. Each member of the team understands that they are very important spokes in the wheel, tied to new business intake, outside counsel guidelines, and all the restrictions that come into play. All of this is exciting to them, and to me. In the end, it comes down to trust. Our conflicts review committee can trust that every conflicts analyst on the team has a foundational understanding of conflicts searching and how it impacts the firm’s business.”

Does this sound like a good fit for you or someone you know?

If so, get in touch with Alston & Bird directly, or pass this on! (And tell them BRB sent you.)

Risk Update

Risk Revealed — IP Lawyer-to-CEO Called on Conflicts Concerns, Ernst & Young Split is On

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Samsung Wants Former In-House Atty DQ’d From Patent Suit” —

  • “Samsung has asked a federal judge in Texas to disqualify its former top in-house IP attorney from participating in a suit over smart speaker technology being pursued by the lawyer’s new patent-rights venture.”
  • “The tech giant filed a disqualification motion on Thursday arguing that Dr. Seung-Ho Ahn, the founder of the Singapore-based Synergy IP Corp., should be barred from involvement in the case as he could unfairly leverage information he gained during his nearly two decades of service for Samsung.”
  • “Synergy, which Ahn founded shortly after his departure from Samsung in 2019, is suing the company alongside co-plaintiff Staton Techiya LLC for alleged patent infringement related to Samsung’s Bixby smart speaker platform.”
  • “But Samsung argued on Thursday that Ahn and another former Samsung lawyer, Sungil Cho, who joined Synergy not long after its founding, needed to be ‘walled off’ from participating in the case.”
  • “Neither Ahn nor Cho is listed as counsel for Synergy or Staton Techiya, although Samsung claims they’re providing legal guidance and information they only have because of their previous employment there.”
  • “‘Synergy’s business model is essentially legal in nature, as it makes money by acquiring patent rights with the goal of convincing counsel at target companies to take a license — and sues those companies if they refuse to pay,’ the disqualification motion said.”
  • “While the motion’s heavy redactions make murky some of the specific allegations against Ahn and Cho, it is clear Samsung wants to level a playing field it claims has been tilted by the use of its former lawyers’ deep understanding of the company’s inner workings.”
  • “‘Ahn’s actions violate his obligations under Texas and national ethical standards that prohibit attorneys from participating in matters that are both adverse to a previous client and substantially related to matters in which they previously represented that client — standards that apply to Ahn’s conduct in this case regardless of whether he chooses to enter a formal appearance,” Samsung argued. “It would severely prejudice Samsung to be forced to litigate this case against its own former in-house IP attorneys, and Samsung therefore requests that the court disqualify them and order them to refrain from any input, decision-making, or advice related to the patent infringement claims in this litigation.'”
  • “Samsung argued that Synergy can’t disguise Ahn’s alleged legal work for Synergy by giving him the title of CEO rather than general counsel or legal chief, and that Cho shouldn’t be permitted to sidestep ethical tenets either.”
  • “According to court records, Synergy and Staton Techiya have agreed to put voluntary measures in place to screen Ahn and Cho from communications regarding the patent infringement claims being raised as part of the litigation.”

[h/t to Simon Chester for noting]: “Ernst & Young splits into separate audit and advisory businesses” —

  • “Bosses at the ‘big four’ accountancy firm Ernst & Young have decided to move ahead with a radical break-up plan to separate its audit and advisory businesses, which will now be put to a vote by its 13,000 partners.”
  • “Voting at EY, which has offices in more than 150 countries and employs 312,000 people globally, is expected to begin on a country-by-country basis towards the end of this year and conclude early next year.”
  • “The industry has come under pressure for a major overhaul to tackle potential conflicts of interest to avoid future accounting scandals and business failures.”
  • “Its leaders hope the audit and advisory arms can grow faster once they have been separated, as the break-up will remove conflicts of interest and operational challenges.”
  • “EY’s chief executive, Carmine Di Sibio, has said a global split could bring in an extra $10bn a year for the consulting arm in advisory fees from big technology companies, as the firm is barred from selling advice to audit clients.”
  • “The proposed split has received support from Sir Jon Thompson, the chief executive of the Financial Reporting Council, the UK accounting regulator.”