Risk Update

Outside Counsel Guidelines (OCGs) — Client Retention Rules, Information Governance and New Industry Survey

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A few updates of note on the always-urgent topic of Outside Counsel Guidelines (OCG) and compliance challenges. This time perspectives from a few vendors and industry associations.

First, published in the latest ILTA Peer to Peer Magazine (via FileTrail): “Outside Counsel Guidelines & Client Retention Requirements:The Information Governance Opportunity” —

  • “High-profile security breaches and tougher laws and regulations governing data protection and data privacy have led to heightened client awareness of the risks associated with poorly managed information. Law firms now face more client scrutiny of their information governance policies and procedures than ever before. RFPs from clients and prospects are requiring detailed information on how firms manage and apply IG, while clients’ outside counsel guidelines are making very specific demands regarding records retention.”
  • “Audits to assess how firms are enforcing these requirements are also happening more frequently, causing a significant strain on internal resources. Clients requesting copies of their files can also cause a significant strain on firm resources, particularly if the firm does not have the right systems and processes in place to quickly gather and review the relevant records prior to release back to the client.”
  • “Is your firm making the most of technology to manage client-specific IG and retention requirements? The challenge that most firms now face is significant, particularly if their own IG policies and programs need to be brought up to date.”
  • “We’ll review some of the best practices which information governance and records management leaders have raised during a recent series of strategic briefings and discussions across the U.S.”
  • Download the full article published in the Summer 2019 issue of ILTA’s Peer to Peer magazine

Next, the ALA has kicked off an interesting exercise: “New Survey to Examine Outside Counsel Guidelines From the Firm Perspective” —

  • “The goal of outside counsel guidelines is to make the corporate/law firm transaction process more transparent and efficient. And their use is only growing—Altman Weil’s 2018 Chief Legal Officer survey found that 79% of legal departments provide guidelines for billing, expenses, matter staffing and matter management, and 66% are actively enforcing those guidelines.”
  • “But are OCGs actually effective? Corporate legal department surveys seem to think so, but one new survey is hoping to receive more answers from the opposite side of the equation.”
  • “The survey looks to help bridge that gap between corporate expectations and reality for law firms, providing figures on OCGs by practice area, firms’ level of compliance, partner/lawyer involvement in OCG compliance, and more.”
  • “That makes standardization potentially a pipe dream for OCGs as long as this competition exists. But understanding in the form of a survey could be a first step towards at least some optimization of the process. And that could mean cost savings for law firms when they realize what’s at stake with non-compliance.”
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Risk Update

Varsity Blues Conflicts News — “Aunt Becky” Wins One (With One Pending)

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Statistically, it looks like many are particularly interested in the latest developments tied to the Varsity Blues matter. So, here’s the latest: “Judge says Loughlin, husband can stick with their law firm” —

  • “Actress Lori Loughlin and her fashion designer husband, Mossimo Giannulli, will be able to continue using a law firm that recently represented the University of Southern California, which is an alleged victim in the sweeping college admissions bribery case, a federal judge allowed Tuesday.”
    “But Magistrate Judge M. Page Kelley declined to rule on a different potential conflict of interest in the couple’s legal representation and said she would decide later, calling it more serious.”
  • “The couple are accused of paying $500,000 to have their two daughters labeled as recruits to the USC crew team, even though neither participated in the sport. They have pleaded not guilty to charges of conspiracy to commit fraud and money laundering.”
  • “Lawyers for the Los Angeles-based Latham & Watkins law firm, which Loughlin and Giannulli have retained for representation, said Tuesday that it represented USC in an unrelated real estate case that had been handled by different lawyers. Prosecutors had argued that retaining the firm could pose a serious conflict, especially if the firm’s lawyers questioned USC officials at trial or gathered information from the university during the case’s discovery phase.”
  • “But in court Tuesday, Assistant U.S. Attorney Eric Rosen acknowledged that USC, as of this month, was no longer a client. Instead, he argued, there is a potentially greater conflict with Giannulli’s additional counsel from the firm Donnelly, Conroy & Gelhaar.”
  • “The firm represents Davina Isackson, who, along with her husband, California real estate developer Bruce Isackson, has pleaded guilty to paying $600,000 in shares of stock to get their daughters into USC and the University of California Los Angeles.”
  • “Judge Kelley said she would decide later on that potential conflict, a type that is ‘typically considered to be the most serious… This is the situation where judges most often remove lawyers from cases, if they are representing someone who is cooperating against another person,’ Kelley told Giannulli.”
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