Webinar Recording — Innovating Risk Management with Applied AI (Sponsor Spotlight)

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Intapp cloud-based risk and compliance products have included AI capabilities for many years. If you were unable to join the webinar on March 5, you can discover how Intapp compliance solutions can help you leverage recent and upcoming AI enhancements in the cloud by watching the recording here.

This session covered:

  • Key enhancements added to Intapp risk and compliance products in the past year
  • A review of current and upcoming AI capabilities
  • Recommendations and available resources for your journey to the cloud

BRB Risk Jobs Board — Conflicts Attorney (Vinson & Elkins)

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In this BRB jobs update, I’m pleased to highlight an open role at Vinson & Elkins: “Conflicts Attorney” with unique listings online for their open locations: Dallas, Houston, and Austin

  • This position will be joining the Firm’s growing Conflicts Department, and primarily responsible for analyzing, resolving, and documenting conflicts of interest issues, related compliance issues, and conducting new client background research.

Primary Duties and Responsibilities:

  •  Create and analyze conflicts reports and identify and resolve potential ethical or business conflicts issues relating to new business, lateral attorneys, new staff, and marketing initiatives
  • Draft conflicts waivers and ethical walls as needed to resolve potential conflicts of interest
  • Advise attorneys regarding ethical obligations relating to conflicts of interest and other issues covered by the Rules of Professional Conduct
  • Assist attorneys and secretaries in understanding the firm’s conflicts and business intake policies and procedures.
  • Facilitate intake processes on behalf of attorneys as necessary
  • Conduct background research on new clients
  • Perform legal research and prepare memoranda relating to professional responsibility and risk management
  • Provide on-call coverage for after-hours, weekend, and holiday emergency conflicts checks as scheduled
  • Perform related duties as assigned

Position reports directly to Sr. Director of New Business Intake & Conflicts – position has no subordinate staff


  • Three or more years of relevant professional experience working in a law firm conflicts environment – big firm experience preferred.
  • Position requires a working understanding of large law firm processes and procedures as well as a general familiarity with various practice areas handled by the firm.
  • A working understanding of the Rules of Professional Conduct and ethics law and opinions relating to conflicts of interest is critical.


  • Attention to detail, and ability to work with autonomy while making sound judgments
  • Effective time management and the ability to independently prioritize and manage multiple job assignments simultaneously
  • Excellent communication and interpersonal skills; Strong customer service skills and ability to interact effectively with a broad range of people in a professional manner
  • Experience with legal writing and research
  • Collaborative mindset and ability to work as part of a larger team


See the complete job posting [separate entries for Dallas, Houston, and Austin] for more details on the job requirements and to apply for this position.

Learn more about working at the firm on their careers page:

  • Vinson & Elkins’ business professionals provide high quality client service and support to the various practice groups and are the building block to the success of the firm. We promote an environment where we value and respect each team member’s contribution.
  • Opportunities for training and development allow our business professionals to continue to enhance their skills so that they can continue to grow in their current position or seek other positions within the firm.
  • Our outstanding work environment, competitive salaries and comprehensive benefit package, has resulted in many long-tenured employees.

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

Risk Update

Audio, Visual & IP Conflicts News — Dual Representation in Netflix IP Matter Meets Clear Conflicts, Music Executive Calls “Conflict”

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Whitestone Law Disqualified from Dual Representation in Netflix Patent Infringement Battle” —

  • “In an unfolding patent infringement dispute against Netflix, California federal judge has ruled that Whitestone Law is unable to simultaneously represent both the plaintiff, a Finnish inventor, and the nonparty that footed part of the inventor’s legal bills. The decision was made on the basis that interests of the two parties have diverged following certain allegations made by Netflix against them both.”
  • “This ruling was a result of the determination that the potentially conflicting interests between the inventor and the financial backer could not be justifiably represented by a single law firm. While the precise nature of Netflix’s accusations remains undisclosed, the ruling underscores the crucial role of legal ethics in managing client representation particularly in patent infringement cases.”


  • “Whitestone Law has represented Valjakka in this matter at various times, including by defending his deposition on October 12, 2023.”
  • “It has also represented AiPi… Recently, however, as Whitestone Law attorney Joseph Zito conceded at the hearing on this motion, Netflix has made allegations concerning AiPi that render AiPi adverse to Valjakka. Specifically, Netflix accuses both AiPi and Valjakka of transferring and using litigation settlement proceeds in a manner that violated the California Uniform Voidable Transactions Act (“CUVTA”) and this Court’s September 21, 2023 injunction.”
  • “Thus, both Valjakka and AiPi ‘have been accused of things by Netflix,’ where they ‘acted together . . . to some extent and not together in other extents,’ and consequently, both Valjakka and AiPi “will have an incentive to point the finger at each other.”
  • “The facts before the Court demonstrate a significant violation of the duty of loyalty by Whitestone Law. Going forward, vigorously representing either AiPi or Valjakka will require attempting to damage the other one’s interests, both as to the responsibility for any CUVTA violation and as to any claim Valjakka might make concerning alleged misrepresentations by AiPi. That is a direct conflict of interest.”
  • “Accordingly, Whitestone Law cannot represent both Valjakka and AiPi without violating the duty of loyalty.”

Music executive sues industry lawyer Joel Katz, Greenberg Traurig firm” —

  • “A music executive has filed a legal malpractice lawsuit, opens new tab against U.S. law firm Greenberg Traurig and Joel Katz, a former shareholder at the firm and longtime recording industry adviser, accusing them of botching contract negotiations for a job with Warner Music Group.”
  • “Michael Flynn, a former music executive for Sony Music’s Epic Records and Universal Music’s Capitol Records, said Katz and current Greenberg Traurig shareholder Duane Sitar ‘actively used their positions of trust to benefit Warner, themselves, and others’ while he was their client.”
  • “The lawsuit, filed Tuesday in Fulton County, Georgia, Superior Court, said Katz and Sitar helped Warner ‘devise a pretext for breaking its promise of employment’ to Flynn.”
  • “Warner was trying to avoid legal action from a competitor, which stood to lose one of its key executives who wanted to join Warner and work with Flynn, the lawsuit said.”
  • “A spokesperson for Greenberg Traurig and Sitar said Flynn’s lawsuit is ‘an old, previously dismissed claim which we consider meritless and will be contesting.'”


Risk Update

Conflicts Allegations Evaluated — Freed from Disqualification (But “Frowned” At), “Lawyer as Witness” Conflicts Concerns

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Opioid Judge Rejects DQ Motion, But Cautions Motley Rice: ‘The Court Frowns’” —

  • “A federal judge on Monday declined to disqualify Motley Rice from dozens of opioid cases, but said he was ‘very uncomfortable’ with its government client arrangements.”
  • “U.S. District Judge Dan Polster, in the Northern District of Ohio, found the timing of pharmacy benefit manager OptumRx’s Dec. 15 disqualification motion to be suspect, particularly since it could have raised its concerns as early as 2018, when the judge appointed Motley Rice member Joe Rice to the plaintiffs’ executive committee in the opioid multidistrict litigation.”
  • “‘If OptumRx always intended to move to disqualify Motley Rice as MDL co-lead counsel, then the court finds the timing of OptumRx’s motion somewhat troubling,’ he held.”
  • “OptumRx, owned by United HealthCare, alleged that Motley Rice used its subpoena power in prior government cases to obtain confidential information, which it could use in the opioid cases against pharmacy benefit managers. Motley Rice represented Hawaii, the District of Columbia and Chicago in separate cases against OptumRx and other pharmacy benefit managers over insulin pricing.”
  • “But Polster questioned OptumRx’s claim that Motley Rice obtained confidential documents while representing Chicago in a previous government case given that those materials should have been provided in the multidistrict litigation.”
  • “Polster agreed with OptumRx, however, that Motley Rice was, in fact, acting as a ‘public officer’ in its prior government cases and is now representing private clients, even though they are cities and counties.”
  • “‘The language of the retainer agreement cannot change what Motley Rice actually did,’ the judge, who held a hearing last month, ruled. ‘The unavoidable fact is that, when Motley Rice served government subpoenas and received documents in response—even if it was acting on behalf of those governmental entities under a contingent fee, independent contractor agreement—it had been granted authority to wield the power of the government.'”
  • “He cautioned members of the plaintiffs bar about potential conflicts in similar circumstances.”
  • “‘The court is very uncomfortable with the malleability of this quasi-government-employment configuration,’ he wrote. ‘If private outside counsel, like Motley Rice, intends to enter agreements where it has the power to wield (and potentially abuse) government power, then it needs to adhere to all the same rules to which government lawyers are subject. Motley Rice and all other law firms should carefully take this into account going forward.'”
  • “‘There is a real difference between a law firm’s representations of a governmental entity as a private client and a law firm’s wielding the authority of that government. The facts happen to work in favor of Motley Rice in this case: were it not for the standing repository obligations, and the nature of the investigation materials OptumRx produced, the court’s discussion and analysis in this order might have been different.'”

Prosecutors may call on Nadine Menendez lawyers as witnesses in bribery case” —

  • “Despite a recent change in representation, Nadine Arslanian Menendez may soon be on the hunt for another lawyer. Recent court filings show that the government may bring David Schertler and other members of his law firm to the stand as witnesses against her and her co-defendants in a federal corruption and bribery case.”
  • “Her co-defendants include her husband, Sen. Bob Menendez, and three New Jersey businessmen, including Wael Hana and North Jersey developer Fred Daibes. The third, Jose Uribe, recently flipped his not guilty plea to guilty.”
  • “The United States attorney for the Southern District of New York requested a hearing to ensure Nadine Menendez ‘understands and knowingly waives the multiple issues arising from her continued retention of Mr. Schertler and his law firm,’ U.S. Attorney Damian Williams wrote in a letter to Judge Sidney Stein on Sunday.”
  • “A proposed list of questions was included in the court document and outlined whether there is a conflict of interest or other potential problems related to Schertler, as well as Danny Onorato and Paola Pinto, who also represent Nadine Menendez, due to their personal knowledge of certain facts that the government has alleged are relevant.”
  • “‘The Government believes that Schertler participated in, among other things, relevant conversations with you and counsel for your co-defendants Robert Menendez and Wael Hana,’ court documents said.”
  • “The conversations included such topics as the nature and purpose of the payments co-defendant Uribe made for a Mercedes-Benz that Nadine Menendez received, the nature of payments Hana made towards Nadine Menendez’s mortgage, and the purpose of repayment for both.”
  • “There is also a question of communications Nadine Menendez had with Schertler regarding a presentation he made to the United States Attorney’s Office on Aug. 11, 2023, the purpose of that presentation, and communication he had with counsel for Nadine and Bob Menendez.”
Risk Update

Imputation Refutation — New ABA Ethics Opinion on Mitigating “Prospective” Client Conflicts During Intake

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What are ‘reasonable measures’ to prevent law firm conflicts? New ABA ethics opinion explores” —

  • “An ethics opinion released Wednesday by the ABA’s Standing Committee on Ethics and Professional Responsibility addresses what constitutes ‘reasonable measures’ personally disqualified lawyers can take to ensure that the conflicts of interest are not imputed to their law firms.”
  • “Formal Opinion 510 focuses on when a lawyer considers a matter from ‘a prospective client’ but is “not retained.” The crux of the ethics opinion addresses limiting exposure to obtaining more ‘disqualifying information’ than ‘reasonably necessary.'”
  • “For example, one should ‘warn the prospective client that the lawyer has not yet agreed to take on the matter and that information should be limited only to what is necessary for the lawyer and client to determine whether to move forward with an engagement,’ according to the opinion.”
  • “If the lawyer does not take such reasonable measures to minimize the risk of receiving additional disqualifying information, then the lawyer’s conflict will be imputed to the entire firm, according to the opinion.”
  • “It centers on Model Rule 1.18 of the ABA Model Rules of Professional Conduct, which covers lawyers’ duties to prospective clients. A lawyer is disqualified from representing a prospective client in the same or substantially related matter against them only if the lawyer receives disqualifying information that could be harmful, according to the rule.”
  • “But even if a lawyer possesses disqualifying information, when is the lawyer’s conflict imputed to the entire firm?”
  • “Under the rule, the conflict of interest of the individual lawyer is not imputed to the person’s firm in two situations: when the prospective and impacted clients provide informed consent or the disqualified lawyer takes reasonable measures to avoid hearing details that are not necessary for client intake determinations.”
  • “‘Once a lawyer has sufficient information to decide whether to represent the prospective client, further inquiry may be permissible, but it will no longer be ‘necessary.’ That means once a lawyer has decided there is any basis on which the lawyer would or must decline the representation, stopping inquiry on all subjects would place the lawyer in the best position to avoid potential imputation of a conflict to other lawyers in their firm,’ according to the opinion.”
  • “If the lawyer is disqualified, then the firm must timely screen the disqualified lawyer, according to the opinion. Such screening is ‘timely when it takes place once a law firm becomes aware there is a potential conflict in representing someone adverse to the former potential client.'”

PDF of the full opinion: “Formal Opinion 501: Avoiding the Imputation of a Conflict of Interest When a Law Firm is Adverse to One of its Lawyer’s Prospective Clients



BRB Risk Jobs Board — Manager, Risk and Compliance (Osler)

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In this BRB jobs update, I’m pleased to highlight an open role at Osler: ” Manager, Risk and Compliance” —

  • Reporting to the Director, Conflicts & Risk Management, the Manager, Risk and Compliance will be responsible for managing the Firm’s risk management processes (with an emphasis on compliance), systems and activities, including national processes for lateral hires; outside counsel guidelines (OCGs); responding to regulatory requests for information; and our annual quality assurance program on a national level.

Major Responsibilities:

  • Supervise and mentor the Ethics & Risk Specialists and OCG Analysts
  • Manage the Firm’s outside counsel guidelines program
  • Manage the Firm’s conflict clearing process for lateral hires, nationally, including conflict searching, ensure candidate documentation is completed and received in a timely fashion. Manage internal and external communications.
  • Coordinate onboarding of laterals with Records team and New Business Intake team relating to matter transfers. Produce related reports as necessary
  • Manage responses to client anti-corruption and compliance questionnaires
  • Manage and respond to Regulatory requests for information ensuring responses comply with applicable privacy laws
  • Manage the Annual Quality Assurance program
  • Assist in the administration of legal professional departures, preparation of reports, liaising with lawyers, assistants, and other Firm Administrative departments, as required
  • Is a key member of the Ethics & Conflict Committee, track issues, manage meetings, action items and circulate meeting minutes.
  • Respond to queries relating to risk management at the Firm
  • Participate in risk presentations to lawyers and assistants on aspects of risk related policy and regulation including providing guidance on ethical walls
  • Manage and administer the Firm’s Ethical Wall process to comply with the Firm’s ethical responsibilities to maintain clients’ information in confidence
  • Evaluate, develop and implement technology solutions
  • Act as project lead and subject matter expert for risk related projects
  • Conduct routine compliance checks on compliance with various elements of the Firm’s risk management policies
  • Monitor industry trends and standards
  • Follow procedures and policies governing the Firm’s risk management activities and responsibilities
  • Perform other duties as assigned

Position Requirements (Education and Experience)

This position requires a law degree or a minimum of 5 years of legal experience with an emphasis on risk, compliance and regulatory knowledge. An equivalent combination of risk related education, training and experience in other regulatory environments may be considered. Bilingualism will be considered an asset

Knowledge and Skills

  • Understanding of risk management and regulatory compliance within an organization
  • Excellent analytical and problem-solving skills. Able to quickly identify and analyze complex issues to provide practical solutions.
  • Strong research skills. Able to consider and analyze divergent legal positions often under time pressure
  • Excellent verbal and written communication skills. Able to provide clear instructions or advice; persuasively communicating risk processes and policies
  • Excellent multi-tasking skills. Able to effectively manage a range of duties and responsibilities, organizing and prioritizing multiple tasks simultaneously and completing them to a high standard
  • Self-motivated, highly organized with excellent time management skills
  • Strong IT skills. Have exceptional computer skills and proven ability to learn new software and programs and keep up to date with developments (including enhancements to the Firm’s systems)
  • Experience in the area of risk, ethical and regulatory environment in which law firms operate and a solid understanding of the various professional regulatory bodies relevant to legal practice
  • Proven ability to work as part of a team. Capable of building and maintaining effective working relationships to become a trusted advisor to lawyers, assistants, other firm admin departments and the Ethics & Conflicts Committee with a willingness to cooperate and share knowledge
  • Proactive in taking ownership for the resolution of issues and able to work with minimal supervision, ability to exercise judgment, ability to work with limited direction

See the complete job posting for more details on the job requirements and to apply for this position.

Learn more about working at the firm on their careers page:

  • We believe everyone in our firm plays an important role in our success. Joining Osler means being part of an exceptional team that is passionate about collaboration and is committed to creating a stimulating and supportive work environment where your contribution matters.
  • We are a firm that values and promotes diversity, and provides equal opportunity and accessibility to all firm members. We are also deeply passionate about giving back and support a variety of social and community initiatives.

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

Risk Update

Professional Rules — ABA Guidance on Navigating Mass Tort Matters (Client Intake & More), Evolving SRA Guidance on In-house Lawyer Ethics, Conflicts & Professional Responsibility

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Mass tort attorneys must ensure compliance with new ABA guidance” —

  • “True to their name, mass torts involve thousands, sometimes hundreds of thousands, of claims, myriad data points, and numerous steps from intake to resolution. The management of such legal endeavors requires nonlawyer staff and solutions capable of organizing, analyzing, and securely maintaining vast amounts of client information.”
  • “In mass torts and class actions, it is common to delegate initial client intake to nonlawyers, whether that is support staff or technology platforms. When delegating tasks in that way, it is imperative that mass tort attorneys comply with all relevant ethical rules, opinions and laws, including the recent guidance from the American Bar Association (ABA).”
  • “The ABA’s recently released Formal Opinion 506, opens new tab addresses a lawyer’s ethical obligations when delegating specific prospective client intake tasks to a nonlawyer… For mass tort attorneys seeking to retain clients and avoid potential legal pitfalls, a comprehensive understanding of Formal Opinion 506 is crucial. In order to remain in compliance with this guidance, there are a few crucial steps mass torts attorneys must take.”
  • “Delegating prospective client intake tasks to nonlawyer assistants, whether that is staff or technology, requires establishing clear and comprehensive policies within a law firm. These policies should outline the specific tasks that can be delegated, emphasizing the importance of following ethical standards.”
  • “Training should be designed to instruct nonlawyer staff on the ethical aspects of their responsibilities and ensure they have a comprehensive understanding of the limitations imposed by ABA Model Rule 5.3 and Formal Opinion 506.”
  • “For example, Formal Opinion 506 states, “trained intake personnel may check for conflicts of interest, collect basic information from prospective plaintiffs or class members for lawyers to ascertain their eligibility to make a claim, and explain how fees and costs are charged in such cases.” But as detailed below, there are certain questions to which only a lawyer can respond.”
  • “Continuous supervision is important to monitor the performance of nonlawyer assistants and address any issues promptly, maintaining the integrity of client interactions.”
  • “At intake, always provide the option for a potential client to speak with the attorney handling their case. Confirming that prospective clients have the opportunity to communicate directly with the attorney who will be handling the case is fundamental to adhering to Formal Opinion 506. Lawyers must take steps to guarantee that prospective clients have the opportunity to discuss fee agreements and the scope of representation with the specific lawyer that would be representing them, prior to signing an engagement letter — not just an attorney employed by an intake center or marketing firm.”
  • “Additionally, the Opinion discusses the application of Model Rule 5.5, opens new tab, which determines whether nonlawyers can answer specific legal questions based on jurisdictional definitions. As the Opinion states, ‘If the prospective client asks about what legal services the client should obtain from the lawyer, wants to negotiate the fees or expenses, or asks for interpretation of the engagement agreement, the lawyer is required to respond to ensure that the non-lawyer does not engage in the unauthorized practice of law…'”
  • “Therefore, the intake process should be designed to facilitate attorney-client communication, allowing clients to discuss their matters, ask questions, and seek clarification on legal aspects, fees, the scope of representation, and objectives. In offering this option, attorneys not only comply with this new guidance but also create transparency and trust in the attorney-client relationship.”
  • “Nonlawyers can perform an initial screening of prospective clients by checking for conflicts of interest, utilizing website intake questions, and employing conflict-checking algorithms. By checking for conflicts at the outset, law firms can ethically represent the prospective client without fear of conflicting with existing clients or other obligations.”
  • “Ensuring compliance with ABA guidelines at every stage of client intake is crucial, especially for mass tort attorneys who are often representing thousands of plaintiffs. By performing the necessary work at the beginning of a client relationship, firms can avoid ethical pitfalls and focus on their important work seeking justice for their clients.”

SRA tells employers what they cannot ask in-house lawyers to do” —

  • “Draft guidance for employers of in-house solicitors, which aims to establish a mutual understanding of what lawyers can and cannot do, has been published by the Solicitors Regulation Authority (SRA).”
  • “Among other things, it says employers should not put in place personal objectives, performance rewards and incentives that create an ‘inherent risk of conflict’ between the regulatory and legal objectives of the role.”
  • “An example of this would be a bonus focused solely on completing a deal rather than completing it ‘in a way that aligns to your agreed legal and regulatory risk appetite.'”
  • “The regulator has issued three other pieces of draft guidance to support in-house solicitors, covering identifying the client when working in-house, handling internal investigations, and reporting wrongdoing by an employer.”
  • “The SRA is seeking views on the drafts before it formally adopts them.”
  • “They are a response to an SRA review which found last year that in-house lawyers were generally able to withstand pressures on their independence but a minority reported demands to act unethically.”
  • “The draft guidance for employers stresses that in-house lawyers ‘should be empowered and supported to raise concerns,’ and not disciplined or punished for doing so.”
  • “Employers should ‘provide systems and processes to allow solicitors to meet their obligations to provide independent and impartial advice, avoid conflicts of interest and act in the best interest of their client.'”
  • “This included allowing the legal function to be able to participate in leadership and operational roles/decisions across the business, and helping the board and executive to set their legal and regulatory risk appetite and deliver against this.”
  • “‘However, solicitors should not be penalised for declining to participate in an activity or role where there a real likelihood of conflict of roles or of infringing regulatory obligations would arise from this participation. For example, acting as the director of a subsidiary or leading a sales initiative.'”
  • “In-house lawyers are told that, where wrongdoing persists despite their reporting concerns, ‘you should carefully consider whether you can meet your regulatory obligations and continue working for your organisation.'”

For more, see the SRA guidance: “Working in-house” —

  • “Following on from our thematic review, and our wider programme of activity directly engaging with in-house solicitors, we have developed a range of draft resources and guidance materials, specifically tailored to the in-house sector.”
  • “We are publishing these materials in draft form to give the wider in-house community an opportunity to consider the content, and provide us with any feedback ahead of them being finalised. Please provide any feedback, via our online form, by 19 April 2024.”
  • “The materials include:
    • Guidance for employers on a solicitor’s professional obligations
    • Key points for governing boards and chief executives
    • Guidance and case studies on identifying your client when working in-house
    • Guidance and cases studies on reporting concerns about wrongdoing when working in-house
    • Guidance on running internal investigations”
Risk Update

Anti-money Laundering Updates — “Astonishing” Lapse Alleged in “Polite to PEP” AML Matter — SRA Setback in Law Firm AML Prosecution, SRA Updates & Guidance

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Banker’s Lawyer Accused of Being Too Polite to Vet His Funds” —

  • “A top law firm faced allegations that it broke UK money-laundering rules by being too polite to ask a politically connected banker from a former Soviet republic how he got his cash.”
  • “Dentons overrode an internal warning urging ‘extreme caution’ in dealing with him as a client and failed to ask the banker where his wealth came from in case it might be ‘impertinent or impolite,’ legal regulators had alleged at a London court. While the tribunal dismissed the case Monday, finding no breach of the industry watchdog’s principles, it did find proof of shortcomings regarding money-laundering rules.”
  • “The banker, who can’t be identified due to a court order, had spent tens of millions of pounds on London property and a family member is now the subject of a separate police probe. Dentons fought the case at the tribunal, arguing that it took ‘adequate measures’ to establish the banker’s source of funds. Lawyers for the firm said it knew that the client held a ‘substantial shareholding’ in a state-controlled bank. “
  • “The regulator’s lawsuit is one of just a small number of cases scrutinizing the role of professional services in enabling the flow of illicit finance into Britain. Few cases go to trial in the UK despite the police estimating that hundreds of billions of pounds are laundered through the UK annually.”
  • “The banker became a client of Dentons in 2013 after an acquisition of a smaller firm, and was immediately identified as a ‘politically exposed person’ — a term used to ascribe a higher level of risk and one that puts the onus on the firm to scrutinize transactions. But Dentons never asked the banker for his salary or the the size of his shareholding in the bank.”
  • “Dentons lawyer Francois Chateau, now based in New York, told the Solicitors Regulation Authority in an interview that he never asked the banker how much he earned. ‘In Europe, in my culture, we don’t do that. You don’t ask err, how much do you make?’ according to Chateau. He said he’d never asked anybody to show him their bank account and to give evidence of what they own that would be ‘visible for everybody to see.'”
  • “The regulator called Chateau’s answers ‘astonishing,’ saying that he adopted an ‘extraordinarily credulous attitude towards individuals of apparently spectacular wealth.'”
  • “Dentons persisted with keeping the banker as a client even after the firm’s general counsel said in 2014 that it shouldn’t continue working for him.”
  • “Dentons’ lawyers said even if the firm had breached money-laundering rules then its conduct wasn’t sufficiently serious to merit any kind of penalty.”

SDT dismisses case against Dentons as SRA left with massive costs bill” —

  • “The solicitors’ regulator has suffered a major setback after its prosecution of the world’s biggest firm by headcount effectively failed.”
  • “Following a six-day hearing at the Solicitors Disciplinary Tribunal, the panel dismissed all allegations against Dentons and directed the Solicitors Regulation Authority to shoulder its own costs. The SRA has since revealed its costs came to £189,000 inclusive of disbursements and VAT.”
  • “In its prosecution, the SRA alleged that the firm had breached money laundering regulations through its retention of a client from 2013 to 2017. The client, who by an order of the tribunal cannot be identified, had been chairman of a bank owned by a former Soviet state with a poor record for corruption and transparency.”
  • “The SRA sought to argue that Dentons made insufficient checks on the client’s source of wealth and funds, while the firm insisted that the regulator was not basing its prosecution on money laundering regulations that were in place at the time.”
  • “The tribunal deliberated at the end of the week and returned on Monday morning to say that one allegation relating to checks on the client’s source of wealth had been found proved, while the rest were not proved. After an intervention from Dentons to say that this allegation was dependent on the others and there was no jurisdiction to find it proved, the tribunal came back an hour later and dismissed the one remaining allegation.”
  • “The SRA then sought to argue that Dentons should be ordered to pay a contribution towards its costs, saying that the case was properly brought and an ‘important yardstick’ for the regulator and the profession.”
  • “Dentons submitted that the SRA had not taken into account its own guidance from the time of the alleged misconduct and had made no criticism of the firm’s systems and controls.”
  • “Despite both sides being asked to make submissions on costs, at no point during the hearing was it explained what the SRA’s costs were. The tribunal made no order, meaning the SRA has to pay its costs in full. A full judgment with the SDT’s reasoning will be published in around seven weeks.”

SRA (updated March 5): “Sectoral Risk Assessment – Anti-money laundering and terrorist financing” —

  • “We are responsible for the supervision of authorised firms for their anti-money laundering (AML) compliance, and we take our responsibilities very seriously. We owe a duty to society at large, and to protect the integrity of the legal sector through tackling intentional and unintentional enablers of money laundering.”
  • “This document sets out information on money laundering, terrorist financing and proliferation financing risk that we consider most relevant for firms we supervise.”
  • “We will continue to refresh this sectoral risk assessment on a regular basis to keep up to date with emerging risks and trends.”
  • “We have seen increasing numbers of firms facilitating vendor frauds. This involves properties, usually residential, being targeted by fraudsters and being sold without the consent or knowledge of the genuine owners, with fraudsters often impersonating the owners. The conveyancing process is attractive to fraudsters because it provides both the method of committing the fraud and the means of laundering.”
  • “Amendments to the Regulations in 2022 mean that all firms must now carry out an assessment of their exposure to the risk of proliferation financing. Simply put, this means the risk of the firm being involved with the global proliferation of nuclear, chemical, biological or radiological weapons by groups and countries which are not permitted to have them under international treaty. This includes both materials for weapons, and also ‘dual-use goods’. These are goods which are not manufactured as weapons but could be used in weapons or to produce them, for example fertiliser.”
  • “There are similar risks in the use of new types of financial technology, for example, fund transfer systems and crowdfunding platforms. Any use of new technologies should be preceded by an assessment of the risks they may introduce and effective mitigation of these risks where possible.”
  • “A separate issue which is of growing importance is the issue of sufficient resourcing of AML work. As economic conditions have continued to deteriorate, firms are likely to be under pressure to reduce costs, and elements of businesses that are not directly revenue generating may see their budgets reduced.”
  • “Whatever decisions are made about resourcing, firms need to understand that economic conditions do not change the requirement to comply with the Regulations. In fact, the economic conditions are more likely to increase a firm’s exposure to would-be money launderers, emboldened by a perception that they are in a position of relative strength in dealing with firms. Potential clients may seek to emphasise the amount of revenue they can bring to a firm as a bargaining tactic.”
Risk Update

Conflicts Contests — Public Fight Over “Private” Client Confidentiality/Conflict Clash, Anonymous Ivy League Ethics/Conflicts Complaint

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Motley Rice Cites ABA Ethics Opinion in Opioid Disqualification Duel” —

  • “Motley Rice, facing possible disqualification from dozens of opioid lawsuits, has turned to the latest formal opinion about the American Bar Association’s professional conduct rule governing ethics guidance for government lawyers.”
  • “OptumRx Inc., a pharmacy benefit manager and defendant in the opioid lawsuits, is attempting to disqualify Motley Rice, which it says previously obtained confidential information from the company while serving as outside counsel to Hawaii, the District of Columbia and Chicago. Motley Rice has insisted there is no conflict, but a federal judge in the opioid multidistrict litigation wanted more information about the firm’s representations.”
  • “Now, Motley Rice has turned to the ABA Standing Committee on Ethics and Professional Responsibility’s Feb. 28 formal opinion to the Model Rule of Professional Conduct 1.11, which prohibits a lawyer with confidential government information about a person from representing a private client ‘whose interests are adverse to that person.'”
  • “In a March 1 supplemental brief, the plaintiffs’ executive committee, which includes Motley Rice member Joe Rice, in Mount Pleasant, South Carolina, said the cities and counties the firm now represents in the opioid cases are public entities, not ‘private clients,’ as defined in the ABA rule opinion.”
  • “‘This conclusion supports plaintiffs’ arguments that the government entity bellwether plaintiffs are not covered as private clients,’ the committee wrote, ‘where plaintiffs have the right through discovery to obtain and use the investigation documents at issue, and in fact already have obtained and used many of these documents.'”
  • “Also, the brief said, the information Motley Rice obtained in the prior government cases was not confidential because it could be accessed through routine discovery.”
  • “‘Motley Rice wielded government power when it investigated OptumRx. It obtained confidential information about OptumRx through those investigations,’ Alston & Bird partner Brian Boone, in Charlotte, North Carolina, wrote for OptumRx, which is owned by United HealthCare. ‘Now it is litigating against OptumRx in private civil litigation when it can use that confidential information to OptumRx’s material disadvantage.'”
  • “Rule 1.11 addresses a long-standing ethical debate about when private plaintiffs firms serve as outside counsel to government entities, particularly state attorneys general. The representation is particularly common in mass torts, where states and local governments sue companies for public nuisance.”
  • “Last month’s ABA opinion addressed two areas of ambiguity, one involving the definition of a ‘private client,’ which is relevant to the Motley Rice matter, said Dru Stevenson, a professor at South Texas College of Law in Houston. He called the disqualification debate in the opioid lawsuits a ‘close case.'”
  • “OptumRx is insisting that Motley Rice had subpoena powers while representing Hawaii, D.C. and Chicago, which it used to obtain confidential documents. And the ABA rule opinion confirms that lawyers qualify as public officials when accepting ‘special’ government appointments, as Motley Rice did, according to its court filing. Two lawyers who represented OptumRx in the prior government cases—Michelle Grant, of Dorsey & Whitney in Minneapolis, and Hogan Lovells partner Allison Caplis, in Baltimore, Maryland—filed declarations about Motley Rice’s subpoenas.”
  • “The rule opinion also confirms that Motley Rice’s public entity clients in the opioid cases qualify as ‘private clients,” Boone wrote. He called Motley Rice’s interpretation of the ABA opinion “dangerous.’ ‘If accepted,” he wrote, “it would give free rein to private lawyers to seek out special appointments so they can use government power for their own private profit.'”

WilmerHale Work for Harvard Scrutinized in Ethics Complaint” —

  • “An anonymous ethics complaint targeting prominent WilmerHale attorney William Lee is calling on the Massachusetts attorney general’s office to investigate the firm’s relationship with Harvard University, where Lee served on its governing board for over a decade.”
  • “Lee and Wilmer Hale represented the elite school in its attempt to defend its race-based admission policy from legal attacks by conservative groups, a battle it lost at the Supreme Court last summer. The firm also coached ex-Harvard president Claudine Gay for what turned into a highly damaging congressional hearing on antisemitism that helped lead to Gay’s ouster.”
  • “Although the complaint represents another instance that spotlights WilmerHale’s ties to Harvard, the fact that one of the firm’s top lawyers served on the university’s board as it paid millions of dollars to the firm does not on its face represent any wrongdoing, said Stephen Gillers, a New York University legal ethics professor.”
  • “Lee, a lead trial lawyer for Harvard in the high-profile litigation that led to the end of affirmative action at colleges, is the target of the complaint filed with the Massachusetts attorney general’s office over an alleged conflict of interest, a spokesman for the AG confirmed Friday. “
  • “The anonymous complaint, the New York Post reported, claims the WilmerHale partner and Harvard alumnus Lee may have violated conflict of interest rules for public institutions.”
  • “‘There was nothing improper about the firm’s legal representations of Harvard,’ WilmerHale said in a Monday statement, noting Lee recused himself from all of the school’s decisions concerning the case.”
  • “The university told the Harvard Crimson, a student-run newspaper, in 2018 that Lee did not bill the school for his work on the affirmative action case, ‘nor does he receive any payment for revenue based on the firm’s billing to Harvard as part of the case.'”
  • “There’s no evidence suggesting ‘Lee, on behalf of Harvard, personally participated in any decision for the school in which his law firm had an interest,’ said Gillers. ‘The fact that Lee was on the Harvard board while his firm and he represented the school violates no rule.'”
  • “WilmerHale ensuring that no compensation went to Lee from the case appears to show the firm was ‘bending over backwards to ensure there is no issue at all,’ said Scott Cummings, a UCLA School of Law professor.”
  • “The only problem would be if WilmerHale, a firm with deep trial and appellate benches, got ‘more work than it normally would,’ Cummings said. ‘As long as there aren’t any allegations of unfairness, then I don’t see the problem.'”
  • “Lee stepped down from Harvard Corp. in June 2022. In December, he worked with the WilmerHale team that coached Gay before the congressional hearing on antisemitism on campus following the Oct. 7 Hamas attack on Israel, according to the Harvard Crimson.”
Risk Update

Risk Rule Evolution — ABA Seeks Input on Cross-border Practice Rules, New International Arbitration Conflicts Guidelines

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ABA Requests Public Comment on Possible Regulatory Implications of Exploring Possible Amendments to Model Rule of Professional Conduct 5.5 to Increase Permissible Cross-Border Practice” —

  • “The ABA Center for Professional Responsibility Working Group on ABA Model Rule of Professional Conduct 5.5 (MRPC 5.5) is requesting public comment on an Issues Paper it developed regarding possible regulatory implications associated with exploring possible amendments to MRPC 5.5 to increase permissible cross-border practice.”
  • “‘Since the last large-scale review of ABA MRPC 5.5 (Unauthorized Practice of Law; Multijurisdictional Practice of Law), technology, globalized legal practice, and client expectations regarding the delivery of legal services have continued to evolve.'”
  • “‘In light of these developments, as described further below [in the Issues Paper], questions have arisen as to whether Model Rule 5.5 remains fit for purpose, or whether the reality of 21st-century legal practice and delivery of legal services merits changes to the current manner in which multijurisdictional practice is permitted.'”

New Guidelines on Conflicts of Interest in International Arbitration

  • “The Arbitration Committee of the International Bar Association has published revised Guidelines on Conflicts of Interest in International Arbitration (“IBA Guidelines“). The new text modernizes the previous version of the Guidelines (2014) without fundamentally amending them and will continue to be widely applied in all types of arbitrations (commercial, investment, sports, maritime, etc.).”
  • “First published in 2004, the IBA Guidelines have become a widely accepted instrument reflecting international standards of impartiality and independence of arbitrators.”
  • “Some of the most relevant amendments to the general standards in Part One of the Guidelines:
    • Arbitrator’s disclosure impeded by secrecy rules: the new General Standard 3(e) calls on arbitrators not to accept an appointment or resign if the arbitrator considers that he or she should make a disclosure, but that professional secrecy rules or other rules of practice or professional conduct prevent such disclosure.
    • Failure to disclose: the new General Standard 3(g) expressly recognizes that a failure to disclose certain circumstances does not necessarily mean that a conflict of interest exists;
    • Parties’ due diligence obligation: General Standard 4(a) includes a presumption that a party shall have learned of any fact or circumstance which a reasonable enquiry would have yielded if conducted at the outset of or during the proceedings and waived the right to raise an objection based on that fact or circumstances if not raised within 30 days.
    • Relationship between the arbitrator and the arbitrator’s law firm or employer: the text of General Standard 6 – in particular the concept of “law firm” – has been modernized to reflect the evolution in the structure and mode of international legal practice.”
  • “The following additions to the orange list are the amendments which are most relevant in practice.
    • Experts: arbitrator currently serves, or has acted within the past three years, as an expert for one of the parties or an affiliate of one of the parties in an unrelated matter (Item 3.1.6), or has, within the past three years, been appointed as an expert on more than three occasions by the same counsel, or the same law firm (Item 3.2.9). At the same time, it is clarified that the arbitrator, when acting as arbitrator in another matter, heard testimony from an expert in the current proceedings constitutes a Green List Item (Item 4.5.1).
    • Co-arbitrators: arbitrator and counsel for one of the parties currently serve together as arbitrators in another arbitration (Item 3.2.12), or an arbitrator and their fellow arbitrator(s) currently serve together as arbitrators in another arbitration (Item 3.2.13).
    • Relationship between arbitrator and expert: arbitrator is instructing an expert appearing in the arbitration proceedings for another matter where the arbitrator acts as counsel (Item 3.4.3).
    • Mock trials: arbitrator appointed by one of the parties to assist in mock-trials or hearing preparations on two or more occasions within the past three years (Item 3.2.10).
    • Publicly advocating an opinion on the case: the 2024 version of the Guidelines clarifies that this orange list situation includes advocating an opinion through social media or on-line professional networking platforms (Item 3.4.2).”