Bressler Risk Blog

Hat tip to Mike Guernon who flagged this one for me (and is set to speak on the OCG panel): “California State Bar 28th Annual Statewide Ethics Symposium” —

NOTES:

• Looks like online registration is free (for the first 3000) but the deadline for that is April 23. So don’t dawdle…
• They’re offering 5 hours of participatory MCLE credit for you risk lawyers in the reader ranks…

AGENDA:

• 9:30 a.m.–9:45 a.m. Welcoming Remarks
• 9:45 a.m.–11:00 a.m. Recent Developments in Legal Ethics and Professional Conduct—What You Need to Know
  • This panel will discuss important developments in legal ethics, centering on recent and developing advisory ethics opinions prepared by COPRAC and other professional conduct developments. Topics will include COPRAC’s recent succession planning opinion and interim opinion concerning flat fees; recent developments in multijurisdictional and remote practices; and attorney wellness and mental health.
• 11:10 a.m.–12:25 p.m. Ethical Considerations of Artificial Intelligence in the Practice of Law
  • The panel will discuss current legal artificial intelligence (AI) use cases, emerging issues, pitfalls, and opportunities. We will explore risk mitigation and the increasing emphasis on the role of bias and cybersecurity.
• 12:25 p.m.–1:30 p.m. Lunch
• 1:30 p.m.–2:45 p.m. Blazing a New Trail in the Wild West of Outside Counsel Guidelines
  • This panel will address the evolving landscape of Outside Counsel Guidelines (OCGs) and their intersection with professional reasonability. Topics include: conflicts between OCG requirements and ethical obligations; compliance challenges with billing restrictions and staffing mandates; data security and confidentiality requirements; implementation of diversity directives; and development of internal compliance systems. The discussion will provide practical guidance for both law firm attorneys and in-house counsel on managing client-tendered terms of engagement while maintaining professional independence and ethical compliance.
• 2:55 p.m.–4:10 p.m. Securing the Bench: Protecting Judges Amid Escalating Threats
• This panel will focus on:
  • Types of Threats: An overview of the spectrum of threats—from physical intimidation and targeted harassment to cyberattacks and doxxing—affecting judges today.
  • Legal and Policy Frameworks: A review of current laws, including the First Amendment and the Rules of Professional Conduct, and proposals for strengthening legal protections for judges, including legislative reforms and policy recommendations.
  • Best Practices for Lawyers: What are the limits of zealous representation in the courtroom, in briefing, and in the public arena? When and how does free speech backfire?
  • What are Judges Doing to Protect Themselves? Best practices for personal and institutional risk assessments, including how judges can identify warning signs and work with security professionals; cybersecurity and interagency collaboration.
  • International Perspectives: Insights into how other jurisdictions address judicial safety, offering potential models for reform and improved practices.

For more information and to register, see their website.

Brad Wendel, professor at Cornell Law School, puslihed:”Conflicts for Quislings” —

• “The firms that have caved rather than challenge the egregiously unconstitutional executive orders issued by the Trump Administration have all agreed to provide tens of millions of dollars of pro bono assistance.”
• “Trump has recently suggested that he will use the firms’ pro bono services to help negotiate trade deals with countries subject to his tariffs. in a Truth Social post he described ‘build[ing] an unrivaled network of Lawyers, who will put a stop to Partisan Lawfare in American, and retore Liberty and Justice FOR ALL.’ He announced at a Cabinet meeting:”
  • ‘We have a lot of law firms that have paid me a lot of money in the form of legal fees. We’re going to probably use those firms … if we can – I think we can,’ Trump said during a meeting of his cabinet at the White House. ‘I think we’re going to try to use these very prestigious firms to help us out with the trade.’
• “How the Deals with Trump Create Conflicts of Interest. To set the stage, consider a recent event that may seem unrelated to law firm conflicts but is actually the heart of the matter (h/t Serious Trouble).”
• “A couple of weeks ago, Adam Schleifer, an Assistant United States Attorney in Los Angeles, was notified that he had been terminated at the instructions of Donald Trump. The L.A. Times reported that the termination came via a one-line email from a White House staff account. Needless to say, this is very much not the way terminations of federal prosecutors are normally handled. AUSA’s have civil service protection, and ordinarily any disciplinary action against them would go through chain of command in the Justice Department.”
• “So what happened? Schleifer was in charge of the prosecution of fast food executive Andrew Wiederhorn on federal tax-evasion charges, arising out of allegations that he had used corporate funds as a piggy bank to fund his personal expenses, including private jet travel, fancy vacations, and a Rolls-Royce. The L.A. Times reports that his defense team had ‘aggressively pushed Justice Department officials to drop the case.’ Reading between the lines, it is a plausible inference that Wiederhorn was a buddy of Trump, a donor to his campaign, or personally or financially close to a Trump supporter. Here’s the bottom line from the point of view of independence of the legal profession and the rule of law:”
  • ‘[A] former prosecutor who handled fraud cases in the U.S. attorney’s office and sought anonymity over concerns about facing professional backlash, said he believes Schleifer’s firing is ‘going to have an incredible chilling effect on any line federal prosecutor who is thinking about criminally investigating or prosecuting an executive of any company of any significance.’
  • ‘The message from Adam’s case is that if you’re going to indict some run-of-the-mill CEO of a company, you need to check if he’s a Trump supporter first,’ the former prosecutor said. ‘It’s going to cause line prosecutors to be considerably more careful about pursuing anyone who has even tenuous connections to the president, which is not good for the DOJ.’
• “In a Substack post, a partner at Jenner & Block, which is one of the firms suing over the unconstitutional EOs, explained why becoming part of Trump’s ‘unrivaled network of Lawyers’ can create conflicts of interest for the firms:”
  • ‘[I]f a law firm enters into this type of non-deal, I don’t understand how it can ever represent clients in any case that involves the government. Every time its lawyers file a brief, they will think: ‘On the one hand, I have to represent my client zealously, but on the other hand, I have to make sure not to undo the deal.’
  • ‘The firm might pretend it is defending its clients zealously. It might file legal briefs making all manner of legal arguments. But what if a lawyer uncovered information that made the government look bad? There would be massive pressure on the lawyer to look the other way. Maybe the lawyer would try to offer some explanation to his client as to why it’s strategically best to set the issue aside. But there would always be a question mark in the client’s head: ‘is my lawyer saying this because he believes it, or is the lawyer saying this because he’s trying to preserve his law firm’s settlement with the government?’
• “I think this is exactly right. However, the example of Adam Schleifer shows that the concern does not arise only in litigation against the government. A firm may also have to be careful not to anger an ally of Trump or one of his associates like Elon Musk or a contributor to Trump’s campaign or someone with whom he is in a financial relationship (like a shady cryptocurrency promoter). Doing so could lead to professional consequences like being fired as an AUSA or, in the case of a law firm, being deemed out of compliance with the terms of an agreement with the administration.”
• “But it’s even worse. Firms may have to worry not only about representing clients in litigation in ways that potentially make Trump or his supporters look bad. They also have to worry about transactional representation, like merger deals, in which government approval is a condition of the transaction closing.”
• “Imagine a big law firm that is working on a lot of transactional work for a number of clients across a wide range of regulated industries. Some of the matters may be M&A transactions, or they could be routine deals that require federal agency approvals, permits, licenses, or whatever. The CBS/Paramount/Skydance deal shows that this administration has no compunction at all about threatening to withhold agency approval if one of the parties does not fall into line with what Karoline Leavitt referred to as the ‘America first agenda.’ Client A needs approval from the FTC, FCC, or some other agency so that a merger can go through. Client B is litigating against a different government agency or even just a company controlled by a guy who gets Trump’s ear at Mar-a-Lago. The word comes down that Client A’s approval won’t come through unless Client B drops the case. That’s a really nasty conflict of interest, and it is entirely foreseeable given this administration’s personalized, friends-or-enemies approach to thinking about government interests.”
• “If you have any doubt that ‘America first agenda’ is just another way of referring to the full MAGA project, look at the EO that was entered against Susman Godfrey (which the firm, to no one’s surprise, is fighting). The EO claims that the firm is acting in a way that is ‘detrimental to critical American interests’ because ‘Susman spearheads efforts to weaponize the American legal system and degrade the quality of American elections.’ What was that effort that weaponized the American legal system and degraded the quality of American elections? Maybe delivering a good old-fashioned ass-kicking to Fox News in a defamation action brought by Dominion Voting Systems? Fox, of course, had eagerly promoted the false narrative pushed by Trump of widespread fraud in the 2020 presidential election. Any deviation from that narrative must be severely punished as anti-American. Do you think any law firm that has cut a deal with Trump, with the proverbial sword of Damocles of these EOs, could possibly represent a client like Dominion in a matter that might arose Trump’s ire?”
  A Brief Brush-Up on Conflicts of Interest”
• “This is a liability and risk-management concern for these firms, not merely a matter of client relations or a so-called ‘business conflict.’ Every U.S. jurisdiction has a conflict of interest rule based on ABA Model Rule 1.7. Some states employ varying language, like New York’s ‘differing interests’ standard, but the substantive standard is the same. Here’s Model Rule 1.7(a)(2):”
  • ‘A concurrent conflict of interest exists if . . . there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.’
• “The conflicts of one lawyer in the firm are imputed to all lawyers in the firm, under Rule 1.10(a), so if the firm is part of Trump’s network of lawyers, a lawyer doing administration-approved pro bono work has responsibilities to that client that may materially limit the representation of other firm clients, even if represented by a completely different team of lawyers, even in a different office of the firm.”
  “The key to understanding material-limitation conflicts is the concept of independent professional judgment. A lawyer must always be free to advise a client on a course of action, or take measures in the course of representing the client, that are based solely on the lawyer’s reasonable assessment of what is in the client’s best interests. This is an implication of the highly fiduciary duty of loyalty that characterizes the lawyer-client relationship. Comment [8] to Rule 1.7 explains:”
  • ‘[A] conflict of interest exists if there is a significant risk that a lawyer’s ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the lawyer’s other responsibilities or interests. . . . The conflict in effect forecloses alternatives that would otherwise be available to the client. The mere possibility of subsequent harm does not itself require disclosure and consent. The critical questions are the likelihood that a difference in interests will eventuate and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client.’
• “Something lawyers sometimes forget is that a conflict of interest exists, by definition, if there is a significant risk of this type of interference with independent professional judgment.”
• “So, to all you conflicts partners at the firms who have entered into deals with the White House . . . are you ready for this? Have you looked at all of your firm’s litigated matters to see if any of the adverse parties are buddies with Trump? Or whether they represent interests that are more aligned with the ‘America first agenda’ than your clients? Have you reviewed pending transactional matters to see if agency approval is required to serve the interests of Client A? If so, have you thought about whether something Client B has done may have pissed off Trump? Have you considered the concessions that will be demanded from Client B in order to keep the matter for Client A running smoothly?”
• “Most conflicts are waivable, provided that all affected parties give informed consent, which is defined by Model Rule 1.0(e) as ‘the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.’ But that ‘adequate information and explanation’ standard is very demanding in practice. In order to get Client A’s informed consent to the representation, in light of the risk that Trump may be pissed off by something you did in the course of representing Client B, you need to provide full disclosure. And that may require revealing information pertaining to Client B that you are duty-bound to keep confidential. (One of my favorite teaching cases on conflicts involves incompatible duties of communication and confidentiality.) While these firms so far are being tight-lipped about the terms of their agreements with the administration, it won’t be long before clients will start demanding to see them, and for good reason. If a firm cannot reveal information of one firm client to another, then the conflict becomes practically non-waivable, even if it might have been theoretically waivable. In that case, proceeding in the face of the un-waived conflict will be a breach of duty to all affected clients.”
• “Then there’s the more general, less client-specific risk associated with the provision of the firm’s promised $40-125 million worth of legal services to the administration, in negotiating coal mining leases or whatever. In normal circumstances a firm would be able to say no to a client’s request to provide legal services in connection with a matter. A firm subject to one of these agreements, however, might reasonably believe it has no option to decline to provide some work in furtherance of the ‘America first agenda.’ The firm may also not be permitted to exercise its usual independent judgment in deciding what other pro bono matters to take. It’s not at all farfetched to think that somewhere in White House counsel’s office there are some lawyers tasked with monitoring these firms work toward their commitment of providing free legal services to the administration. If lawyers have always hated oversight by liability insurers, wait until they experience the supervision of political commissars who will be looking for evidence of ideological non-conformity. I believe some of the lawyers in these firms think they will be able to continue to run their pro bono programs in the way they have always done so, but again taking Trump literally as well as seriously, I expect they’re going to find out that he really does think of them as ‘his’ law firms, to be ordered around and punished severely for non-compliance.”
• “Getting this wrong risks not only professional discipline but lawsuits from affected clients for negligence or breach of fiduciary duty. This is bread-and-butter work for those of us who do expert witness work in the professional responsibility area. Big-firm conflicts checking procedures are sophisticated, but it can be extremely difficult to pick up material limitation conflicts, given the many ways in which, per Comment [8], the ‘lawyer’s ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the lawyer’s other responsibilities or interests.’ The assessment of material limitation is not just something that happens at the outset of the representation but must be reevaluated over the course of the representation as positions and interests potentially re-align. A job that has always been extremely difficult just became much more so.”
• Worth reading his entire piece for even more detail and commentary.

David Kluft, Assistant Bar Counsel at Massachusetts Office of Bar Counsel, notes: “Tidbit: Can I represent both the litigant and the third party paying for the litigation?” —

• “Two individual defendants assigned an allergy skin test patent to a company, and the company agreed to indemnify them against lawsuits by the alleged inventor. The inventor sued the individuals (not the company), and the company paid for defense counsel.”
• “The Court disqualified defense counsel for violation of 1.8(f) (conflicts of interest created by third party payor), because the same lawyers also had attorney client relationships with the company; because there was some evidence the third party was directing the litigation; because the conflict waivers had been inadequate; and because the indemnity agreement had a cap which would allow the company to stop paying, which did not satisfy the conditions for third party payors under NJ law.”

“Top New York Judge’s Son, and His Boss, At Center of Ethics Dispute” —

• ” A top judge failed to disclose that his key legal advisor was romantically involved with an attorney arguing cases in his courtroom. The apparent conflict of interest extends to the highest levels of New York’s court system, as the law clerk’s father is the state’s chief administrative judge — who recently gave appointments to both the judge (his son’s boss) and the attorney (his son’s girlfriend).”
• “The case is the latest example of alleged favoritism in New York’s courts, particularly in Surrogate’s Courts that handle inheritance disputes worth millions of dollars.”
• “The young man had a key to unlock the suburban Nassau County home. That much was clear to the private investigator watching outside. The key soon unlocked something else: a secret. It was exactly the kind of evidence the investigator’s client, Shannon Hynes, was looking for.”
• “Hynes felt something was amiss in Queens Surrogate’s Court, where she was locked in an inheritance dispute with her brother. The judge overseeing her case kept taking actions that Shannon — a seasoned trial lawyer by trade — considered unusual. So she hired the investigator, who that day discovered the ‘smoking gun.'”
• “The young man with the key was Zachary Zayas, principal law clerk to Judge Peter Kelly — the same judge overseeing Shannon’s case. And the key opened a house owned by Cheryl Katz — the attorney representing Shannon’s brother in the inheritance dispute.”
• “Katz and Zayas were dating and living together. Neither the judge, nor the law clerk, nor the attorney disclosed this to Shannon.”
• “Kelly, who’d run the court for 14 years, had known for at least five months that his law clerk was dating Katz, according to comments Kelly made last year. And during that time, he issued several rulings favoring Katz’s client, while keeping Shannon in the dark about the relationship.”
• “This was a clear violation of ethics rules governing state attorneys and judges, according to Cynthia Godsoe, a professor at Brooklyn Law School who specializes in both family law and professional ethics.”
• “‘There absolutely should have been disclosure by Katz and the judge,’ Godsoe said. ‘It couldn’t be clearer. I’m just sort of astonished.'”

“Paul Weiss Pro Bono Leader Would Rather Quit His Job Than Do Work For Trump” —

• “‘This has been weighing on me since the November election. At this historical moment, I know that I belong back on the front lines fighting for the things that I have believed in since I first walked in the door of The Legal Aid Society as a staff attorney in 1981.'”
• “— Steven Banks, special counsel at Paul Weiss, in a statement noted by the New York Times, concerning his decision to leave the firm in the wake of its $40 million pro bono payola deal with Donald Trump to do away with an executive order.”
• “Banks, 68, who leads the Paul Weiss pro bono practice, told Reuters that he felt his ‘time to make a difference as a lawyer is narrowing.’ Moving forward, he will representing the Coalition for the Homeless with the Legal Aid Society, where he worked for three decades before joining Paul Weiss. A spokesperson for the firm thanked Banks for his years of service, noting, ‘We remain committed to providing impactful pro bono legal assistance to individuals and organizations in need.'”

“Lawlessness and Trump’s lawyers” —

• “President Donald Trump has sought retribution against law firms that previously opposed him or represented the Democratic National Committee. He has called for the impeachment of federal judges who issued orders against him, labeling one of them a ‘radical left judge’ and a ‘lunatic.’ He has commenced an investigation into law firms that engage in diversity, equity and inclusion initiatives.”
• “Trump has not acted alone in any of these extraordinary endeavors; in each instance, he has been enabled by federal lawyers working as White House counsel, in the Department of Justice, at the Department of Homeland Security, or at the Equal Employment Opportunity Commission.”
• “Even nonpartisans among us should perceive Trump’s statements and actions as a serious threat to the role of lawyers in the United States. Robust advocacy allows judges and juries to make informed decisions based on a fully developed factual record.”
• “The current spate of government lawyers who counsel Trump would be wise to take note of the fates of those lawyers who advised him during his first administration. Rudolph Giuliani was disbarred for filing frivolous legal complaints alleging fraud in the 2020 election. John Eastman was disbarred for assisting Trump with the fraudulent elector scheme.”
• “Trump does not hold a law license, nor does he seem to care about the fate of his advisors who do. But Trump’s lawyers should care deeply. Federal government attorneys hold their law licenses at the state level, and they can be disciplined by that state even if their conduct occurs out of state.”
• “If federal lawyers perceive their ‘client’ as the president — a proposition that might fairly be questioned even by those who believe in the theory of a unitary executive — they still owe duties to the court system, to their adversary, and to the public. Under attorney rules of professional conduct, sometimes those duties take precedence over duties to a client.”

“‘Pray I Don’t Alter It Any Further’: What Darth Vader Should Teach Law Firms About Settling With Trump” —

• “‘I’ve just made a deal that’ll keep the Empire out of here forever,’ Lando Calrissian explained in The Empire Strikes Back. We soon realize his deal involved allowing Darth Vader to ensnare the Han and Leia as bait to lure Luke Skywalker. Once Vader had Luke, everyone could go their separate ways. Then Vader decided to hand Han Solo to Boba Fett and require Leia and Chewbacca to remain under arrest in Cloud City, while Lando grumbled, ‘This deal is getting worse all the time!’ A few beats later, Vader he’d put Han on ice and ordered Leia and Chewy taken to his ship.”
• “‘You said they’d be left at the city under my supervision!’ Lando exclaimed.”
• “Sorry for the spoilers on a 45-year-old movie. With that, every Gen Xer and elder Millennial Star Wars fan learned that if you make a deal under duress with a retaliatory government official to save your business, you are a hopeless chump and will get systematically rolled. It was a raw demonstration of what happens when you negotiate with someone who doesn’t believe in the concept of negotiation.”
• “Biglaw firms striking deals with the Trump administration to — theoretically — ‘protect’ their firm or their clients from government interference, missed this lesson. These firms — Paul Weiss, Willkie, Skadden, Milbank (and potentially more to come) — now enter their Lando Era, watching the administration heap daily humiliation upon them while continually altering the deal to the firms’ detriment.”
• “But the important thing each of these firms want you to know is that this was a professional deal among very serious people conducted at a very serious boardroom table and not, in fact, the legal equivalent of getting choked out mid-sentence. And that it’s patently unfair that radical agitators — like, well, Above the Law — characterize these deals as ‘surrender’ or ‘bending the knee.’ No one seriously involved in these deals would say something like that!”
• “No matter how much these firms want to posture as though they made narrowly tailored, professionally negotiated agreements, the counterparty is using mainstream media time to dunk on them about how they renamed all the managing partners Reek and keep them locked in the White House basement.”
• “If the administration had only set fire to the crucially important ‘we’re innocent… this was just to avoid a distraction for our clients’ claim it would be bad enough. But now he’s moving Leia to his ship.”
• “In defending their deals, the firms have nurtured a press narrative that really all they committed to do is perform a lot of pro bono work for veterans — something that appeals to conservatives and liberals alike — in order to claim that this deal isn’t all that radical.”
• “Trump: ‘We have plenty of law firms. These are great law firms that we signed with. And I think part of the way I’ll spend of the money we’re getting from the law firms in terms of their legal time will be using these great law firms to represent us with regard to the many… “
• “‘Part of the way I’ll spend some of the money we’re getting from the law firms….’ That doesn’t sound like the firms are going to just do $100 million in veteran health claims.”
• “So far the law firms aren’t acknowledging these alterations to the deal. But the White House remains very clear:”
• “Trump says he will assign the law firms which cut deals with him to coal regulation cases. We asked the firms. None responded. But the White House did… ‘[Trump] looks forward to putting their pro bono legal concessions toward implementing his America First agenda’…”
• “And what are the firms gonna do about it? Other than privately mumble that ‘This deal is getting worse all the time!’ they’re going to go along with it because they’re already pot committed at this point. Reversing course now doesn’t get them anything but an even harsher executive order that they’ve already told the whole market they don’t have the courage to fight.”
• “These firms thought they were buying peace. What they bought was a public admission that they could be shaken down. And at every stage from here on, the terms will change. Because bullies don’t honor deals. They escalate. You give them access to a tibanna gas mine, and next thing you know, they’re freezing your friends in carbonite and conscripting you as the shadow Justice Department.”
• “The deal was always going to end like this. From the first deal, we’ve been saying it would end like this. Because we watched Empire Strikes Back and as a kindergartner we understood what happens if you’re stupid enough to make a deal like this.”
• “Now all those firms have left is to pray Trump doesn’t alter it any further.”
• “Another spoiler for you: he will.”

“Five Top Biglaw Firms Pledge Their Allegiance To Trump, Promising To Provide Legal Services ‘Beyond’ His Time In The White House” —

• “We now know that Kirkland & Ellis, Latham & Watkins, A&O Shearman, Simpson Thacher, and Cadwalader have all inked deals with Trump — and they’re far worse than the already bad deals other Biglaw firms like Skadden, Milbank, Willkie, and Paul Weiss got.”
• “Kirkland, Latham, Simpson, and A&O Shearman were among the Biglaw firms threatened with EEOC investigations concerning their DEI practices; with their pro bono payola deals, those menacing EEOC claims have now disappeared. The American Lawyer has the details on those poorly negotiated agreements.”

Interesting to see law firms commenting publicly on their peers’ activity. Here’s some of that.

Tony Schoenberg, Partner at Farella Braun & Martel LLP, wrote:

• “Another day, another BigLaw firm (or five) shows us what cowardice looks like. Meanwhile, over here we were busy filing the attached amicus brief on behalf of 253 members of Congress in support of two high ranking federal officials who were illegally fired by President Trump. I’m proud to work at a firm that is unequivocal about its commitment to the rule of law and the Constitution.”

Laura Belmont, General Counsel at Civis Analytics, wrote:

• “When I joined Latham & Watkins’ summer associate class in 2008, I didn’t know much about Big Law. What stood out to me about Latham? Pro bono hours counted toward billables.”
• “While at Latham, I worked pro bono with the Washington Lawyers’ Committee for Civil Rights and Urban Affairs on some of the most meaningful cases of my career. After two years, we secured a settlement affirming the right of a Muslim client in federal prison to observe his daily prayers. We brought a class action against the BOP challenging conditions where men with serious mental illness were cut off from medication, denied counseling, locked in cells 24 hours a day, and handed crossword puzzles instead.”
• “Now, reports suggest Latham may preemptively cut a deal with the Administration and offer a staggering $100M in “pro bono” services in areas of the Administration’s liking, including mining, tariffs, and border control.”
• “To Latham attorneys: I hope that you continue to have the privilege of doing the work that matters. If you need an ear, feel free to message me.”

“Simpson Thacher Lawyer Quits as Firm ‘Capitulates’ to Trump” —

• “Siunik Moradian fired off an email to colleagues on Friday, resigning moments after the firm announced the agreement. Simpson Thacher, along with several others, pledged pro bono or free legal services for Trump-aligned causes.”
• “‘By capitulating today, Simpson Thacher joins several other historic, powerful, influential and well-resourced law firms in bending the knee and kissing the ring of authoritarianism,’ Moradian said in the email, viewed by Bloomberg Law.”
• “‘Simpson Thacher’s decision today fundamentally changes ‘who we are as a Firm,’ Moradian said, referencing an internal email sent by Simpson Thacher chair Alden Millard. ‘I make a different choice. I will not sleepwalk toward authoritarianism,’ Moradian.”

Above the Law writes: “Skadden Posts Dream Job For Anyone Who Hates Themselves” —

• “Would you like to defend the indefensible? Biglaw has a job for you!”
• “A week after folding to the Trump administration’s demands like a damp cocktail napkin, Skadden posted a job that perfectly captures this moment in the life of a law firm flinging its reputation over a cliff:”
• “Finally, a career opportunity for the rare communications professional who wakes up each morning craving existential despair.”
  The job, listed on LinkedIn (hat tip to Daniel Barnes who posted it on Twitter), is exactly what you’d expect: coordinate ‘various public relations initiatives, monitors media for trends and topics of interest, identifies publishing opportunities for attorney-authored articles and client alerts, and searches for and circulates practice-specific media coverage.’ This listing is focused on the regulatory practice and the DC office, but since those are key areas likely to get repeatedly kicked in the face by the firm’s new liege, this won’t be any fun.”
• “The firm made a deal last week under the pretense of ‘supporting veterans,’ but — as we’ve seen play out in real time — Trump immediately interpreted this as blanket approval to draft Biglaw attorneys into his latest fever dream policies. From tariffs to coal to probably helping the IRS sue Sesame Street for ideological noncompliance, Skadden’s time is now fair game for the administration.”
• “So if you’re a seasoned PR expert who thrives in high-stakes environments, or just someone ready to go full Joker, Skadden’s got the gig for you.”
• “Honestly, $135K seems a little low for this job. Does it include hazard pay? Or a therapist on retainer? Because it probably should.”

“Federal Judge Rejects DQ Motion Against State’s Connell Foley Attorneys” —

• “A federal judge has rejected a motion to remove Connell Foley as legal counsel for several state officials, like New Jersey Gov. Phil Murphy and Attorney General Matthew Platkin, in a lawsuit alleging discrimination and racketeering.”
• “At the center of the dispute was Blueprint Capital Advisors’ (BCA) claim that a partner at Connell Foley, who currently represents the defendants, previously provided legal advice to a company principal, creating a conflict of interest. Connell Foley countered that it had proactively screened the attorney from the case out of an abundance of caution.”
• “However, U.S. Magistrate Judge Michael A. Hammer of the District of New Jersey firmly rejected BCA’s argument in an opinion issued Monday. Hammer held that the evidence offered by BCA amounted to ‘vague assertions’ and a ‘spattering of conversations’ that didn’t meet the legal standard for disqualification.”
• “‘BCA has not established an express attorney-client relationship,’ Hammer said. ‘BCA appears to concede as much, and focuses on the existence of an implied relationship.'”
• “In June 2020, BCA, a Black-owned asset management firm, filed a lawsuit in the U.S. District Court for the District of New Jersey against top state officials and others, alleging systemic racial discrimination and retaliation. The firm claims that New Jersey and its Division of Investment excluded it from managing state funds, misused its proprietary investment model, and collaborated with private entities to undermine its business prospects. The case is captioned Blueprint Capital Advisors v. State of New Jersey.”
• “‘At the core of this motion is whether Elnardo J. Webster II, who is now an attorney at Connell Foley, previously represented BCA or one of its principals, Jacob Walthour,’ Hammer said.”
• “‘Walthour claims that in 2016, Webster helped facilitate meetings with state officials, advised on strategic decisions, and provided legal counsel as BCA considered legal action against the state,’ Hammer said. ‘Webster, however, insists that he never gave legal advice, characterizing their conversation as a casual exchange in which Walthour asked if he knew anyone with political connections.'”
• “Walthour described past interactions, including emails and meetings going back to 2016, in which he allegedly sought legal advice from Webster.”
• “The court found that none of these contacts rose to the level of formal or implied legal representation. Notably, Hammer said, the only recorded phone call between the two that lasted longer than a minute occurred four years before the lawsuit was filed. Hammer also noted that Webster is primarily a real estate lawyer with limited litigation experience, making it unlikely he would be consulted for complex civil rights and securities claims in the present case.”

“Ninth Circuit Finds Pollution Exclusion Creates Conflict Requiring Independent Counsel” —

• “In L.A. Terminals, Inc., et al. v. United Nat’l Ins. Co., the Ninth Circuit, applying California law, affirmed in part the trial court’s grant of a policyholder’s motion for summary judgment on the duty to defend and obligation to provide independent counsel under a pollution exclusion. L.A. Terminals, Inc., et al. v. United Nat’l Ins. Co., No. 23-55483, 2025 WL 1024392, at *2 (9th Cir. Apr. 7, 2025).”
• “The insureds were sued for alleged environmental contamination from the operation of a marine terminal and chemical storage facility. The claimants alleged that hazardous materials leaked from storage tanks over a fifty-year period, and the insureds were negligent in storing the hazardous substances. The underlying complaint alleged that the contamination occurred ‘suddenly and accidentally, and over long periods of time.'”
• “The policyholders sought to access their CGL policies from 1982 through 1985, and the insurer issued a reservation of rights under Qualified Pollution Exclusions. The pollution exclusions included a sudden and accidental exception. The insured retained its preferred counsel to defend the underlying lawsuit, and the insurer refused to pay for the insureds’ choice of counsel. Instead, the insurer offered to appoint defense counsel.”
  “The Ninth Circuit’s opinion focuses on two major issues. First, as a threshold matter, whether the insurer had a duty to defend under the pollution exclusion. The court reasoned that the insured bore the burden to prove that the sudden and accidental exception to the pollution exclusion applied. The court noted that in California, ‘sudden refers to the pollution’s commencement and does not require that the polluting event terminate quickly or have only a brief duration[.]’ Id. at *1. The court found that the alleged contamination, which occurred over 50 years ago, could have been ‘sudden’ within the sudden and accidental exception to the pollution exclusion.”
• “Second, the court examined whether the pollution exclusion created a conflict of interest that required independent counsel for the insured. The court noted that ‘[a]lthough an insurer does not necessarily create a conflict merely by defending two parties seeking damages from each other in the same lawsuit, a conflict does exist where the insurer may be subject to substantial temptation to shape its defense to place the risk of loss entirely upon the insured, and independent counsel is necessary in those instances to protect the insured’s interests.’ Id. at *2. The court found a conflict of interest that necessitated independent counsel because ‘[t]he reservation of rights gave [the insurer] both the motive and opportunity to defend more vigorously against a liability theory based on sudden as opposed to gradual pollution.’ Id.”
• “The sudden and accidental exception is common to pollution exclusions. Policyholders should be familiar with the law applicable to their insurance policy and the arguments they can raise. Every state is different and requires a different analysis.”
  Policyholders often want to choose their own counsel, but insurers can be resistant to pay. Unsurprisingly, the policyholder’s choice of counsel is normally more expensive than the carrier’s choice. The creation of a conflict of interest through a reservation of rights is the first place to start when arguing that an insurer should pay for independent counsel. The arguments that the insurer should pay the full rate should focus more on the skill of the policyholder’s choice of defense counsel and desire to protect the insured’s tower. It can also be helpful to combine multiple insurers who are obligated to provide a defense to ‘add up’ to the rate of the policyholder’s choice of counsel.”
• “The reservation of rights gave United both the motive and opportunity to defend more vigorously against a liability theory based on sudden as opposed to gradual pollution. Strategizing in defending the case this way ‘would be to the financial advantage of’ United, creating a conflict and giving rise to a duty on United’s part to provide independent counsel.”

“Willkie Loses Longest-Serving Lawyer Over Trump Surrender” —

• ‘”Joseph Baio worked at Willkie Farr for 47 years. As a partner, he’d served on the firm’s executive committee. Most recently, the dean of the firm’s lawyers worked as a senior counsel. It takes a lot to make someone leave the firm they’ve worked with — and at times helped lead — for almost half a century. But Willkie Farr managed to find a way to alienate its longest-serving attorney when it turned coward and agreed to give Trump $100 million in pro bono legal services and somehow even more in dignity.”
• “Baio informed the current executive committee that he was leaving to ‘join the fight against governmental tyranny, unconstitutional decrees and social injustice, particularly at this critical time,’ a statement that deserves a swelling orchestral accompaniment befitting the end of a courtroom drama. It’s also a succinct acknowledgement of a lawyer’s ethical responsibilities that seems lost on some Biglaw firms right now.”
• “While a number of associates have publicly broke ties over the settlements and some law students are already telling firms in the ‘Order of the Obsequious’ that they are turning their backs on recruiting efforts, Baio is the most senior lawyer to depart a firm over a settlement. He is unlikely to be the last.”
• “Baio’s position as counsel affords him more flexibility than many partners, who cannot bolt on a dime and have to negotiate smooth transitions for their books of business at other firms. But Above the Law is already aware of corporate clients informing surrendering firms that they will take their business elsewhere in light of the concessions, seeing the deals as confirmation that the firms are incapable of standing up for themselves let alone their clients. When clients start threatening to walk in search of firms with backbone — or at least no drama — the partners will start trying to figure out how to move with them.”

“Silvergate Bankruptcy Probe Tainted by Conflicts, Examiner Says” —

• “Bankrupt crypto-bank owner Silvergate Capital’s investigation into its top officers was tainted by conflicts of interest, a court-appointed examiner said. An independent director, Ivona Smith, appointed to probe Silvergate’s collapse into bankruptcy, used the company’s own law firm, which created an ‘inevitable conflict of interest,’ according to a report issued Friday by examiner Stephanie Wickouski.”
• “Smith was appointed Silvergate’s independent director in August 2024, a month before the company filed for bankruptcy. She was asked to investigate possible misconduct by current and former directors and officers, including whether insiders improperly sold shares ahead of Silvergate’s collapse.”
• “But before conducting an investigation, Smith participated in the votes to approve the company’s pre-arranged chapter 11 plan, which included legal releases for those insiders.”
• “In her interview with the examiner last month, Smith said she didn’t recall any discussions of legal releases at that time and considered the releases to be ‘boilerplate,’ according to the examiner’s report. “
• “The bankruptcy court overseeing Silvergate’s wind-down authorized the examiner appointment following a request from Joseph Stilwell, who runs Stilwell Activist Investments. In his request in October, Stilwell, who had recently been elected to the board, alleged that Silvergate’s legacy directors enriched themselves by selling shares while keeping shareholders in the dark for two years. Stilwell also criticized Smith for failing to hire independent legal counsel.”
• “Smith issued her investigation report in December, concluding that pursuing claims against Silvergate’s insiders wouldn’t benefit the bankruptcy estate and recommended granting them legal immunity. But Wickouski, the examiner, said the report failed to support the ‘reasonableness of its conclusions.’ The Smith report hasn’t been made public. “

“Justice Department Limits Employee Engagement in ABA Events” —

• “The Justice Department will not allow employees to participate in American Bar Association events in their official capacities or on official time, in the Trump administration’s latest salvo against the legal group that has been critical of its actions.”
• “Deputy attorney general Todd Blanche’s Wednesday memo, sent to department employees and obtained by Bloomberg Law, escalates a clash between the administration and the voluntary lawyers’ association. The ABA has publicly denounced recent threats against federal judges and joined litigation against the government.”
• “DOJ employees may not, while acting in their official capacities, ‘speak at, attend, or otherwise participate’ in events hosted by the ABA, nor may they attend them during business hours as employee time is one the department’s ‘largest expenditures,’ the memo said.”
• “The department will no longer use taxpayer funds to pay for travel to ABA events, and employees who participate in events may not use their title in a way that could suggest the department ‘endorses or sanctions’ their personal views or those of the ABA, the memo said.”
• “DOJ employees in policymaking roles may not hold leadership positions in the ABA, renew existing memberships, or ‘write, speak, or otherwise publish materials in ABA-sponsored media of any kind’ without approval, Blanche said. These employees may only participate in ABA events if approved by their component head and the deputy attorney general.”
• “Career staff may attend ABA events and remain members, but any written contributions to the bar association’s published materials must be done off-duty and without government resources. The memo clarifies that employees cannot use any government device, internet access, or research databases to help them prepare materials for the ABA to publish.”
• “Blanche attributed the department’s change in position to the bar association’s recent lawsuit with other organizations challenging the administration’s freeze on foreign aid funding.”
• “‘The Department is actively litigating against the ABA, yet the Department continues to expend taxpayer dollars on ABA events, the ABA continues to use the participation of Department personnel to attract attendance to those events, and the ABA continues to use Department-engagement to legitimize positions it advances that are contrary to the federal government’s policies,’ Blanche wrote.”
• “The ABA is ‘free to litigate in support of activist causes,’ but the department’s speech ‘must be focused on achieving the Department’s core Constitutional mission,’ the memo said.”

“Charles Oakley wants Deputy Mayor Randy Mastro off MSG ejection case, claims ‘conflict of interest’” —

• “Knicks legend Charles Oakley wants First Deputy Mayor Randy Mastro bounced from his legal spat over his infamous 2017 ejection from Madison Square Garden – claiming the lawyer’s bid to stay on the case is a ‘conflict of interest.'”
• “The veteran litigator would be breaching Big Apple ethics rules by continuing to rep the arena, which receives lucrative city tax breaks, while serving as a top honcho in the mayor’s office, Oakley’s lawyer alleges.”
• “‘Courts have consistently doubted that any public servant – let alone a high-ranking official – can simultaneously serve the public while running a private law practice,’ reads a letter filed Wednesday in Manhattan federal court.”
• “Mastro has withdrawn in recent days from matters relevant to the city, like his work on New Jersey’s bid to kill New York’s congestion pricing plan, court records show. But the attorney, who has represented the arena and its billionaire chairman James Dolan in various matters for two decades, is still helping his long-time clients defend Oakley’s suit.”
• “Mastro has agreed to rep the Midtown arena for free, will appear in court in his personal capacity and not as a representative of the city, and has vowed to recuse himself from MSG-related matters while serving as first deputy mayor, a City Hall spokesperson said.”
• “The city’s independent ethics board approved the unusual setup, according to the mayor’s office, after Mastro said that he has very little work left on the case – a claim that Oakley’s lawyer contests – and that he’d request further advice if that situation changed.”
• “But Mastro has not been granted a ‘waiver’ that city employees are required to obtain before moonlighting in private jobs, Oakley attorney Valdi Licul wrote to the court on Wednesday.”
• “The mayor’s office maintains that the board found that, for now, no waiver was needed.”
• “‘New York City’s independent Conflicts of Interest Board evaluated the circumstances of First Deputy Mayor Mastro’s limited continued involvement in the Oakley litigation and advised he could stay on the case during this dispositive phase so long as he recuses himself from any issue involving his client during his city government tenure,’ spokesperson Kayla Mamelak Altus told The Post.”
• “Mayor Eric Adams announced plans to tap Mastro, formerly first deputy mayor under Mayor Rudy Giuliani, to the lofty post in his administration last month.”
• “An earlier bid to appoint him as the city’s Corporation Counsel, or top lawyer, failed after City Counsel members blasted his work representing landlords, anti-congestion pricing groups and other parties during his decades-long legal career.”

“Bar seeks comment on amendment to conflict of interest rule” —

• The Virginia State Bar is seeking public comment on a proposed amendment to Rule 1.9(c) of the Virginia Rules of Professional Conduct.”
• “The proposed amendment to the rule, which governs conflict of interest, would allow a lawyer to use information gained while representing a former client to that former client’s disadvantage ‘when the information consists solely of criminal history information that can be obtained from law enforcement databases or court records.'”
• “In a March 27 release from the VSB, the bar states that the proposal would ‘reduce the number of conflicts faced by criminal defense lawyers,’ as under the current rule, an attorney who learned of a former client’s criminal history during representation would have a conflict when representing a new client if that former client were an adverse witness.”
• “The VSB release also states that the information covered by the amendment is ‘typically provided by the prosecution to any lawyer representing the defendant,’ negating any special advantage for the attorney.”
• “Comments on the proposed amendment to Rule 1.9(c) can be submitted via email to VSB Executive Director Cameron M. Rountree at publiccomment@vsb.org. Comments must be submitted by May 7.”
• “The proposed amendment can be viewed here.”

“Hedge Funds, Private Equity Quietly Invest in Litigation Finance” —

• “Davidson Kempner Capital Management was identified as the funder behind patent cases against Amazon’s Audible Inc. last month, the first time the $35 billion hedge fund was publicly outed as a player in litigation finance.”
• “It’s a rare spotlight on hedge funds’ role in the outside backing of lawsuits, a now $16.1 billion industry that private equity firms and multi-strategy investment managers have been cashing in on for years. Funders dedicated to the sector actively market their services to law firms, but some asset managers choose to remain below the fray with their presence only revealed in court documents or regulatory filings, if at all. “
• “‘The market for capital and litigation finance is much larger than just the traditional litigation funders that advertise,’ said Rebecca Berrebi, a litigation finance broker.”
• “Asset managers often operate as limited partners investing in dedicated litigation finance funds, but they also directly back law firms and cases. Hedge funds co-invest with funders on deals to bankroll mass tort law firms or use insurance policies as collateral for loans. Berrebi says the private credit space is well suited to invest in litigation finance transactions, particularly portfolios.”
• “BlackRock, Ellington Capital, Cliffwater, and Gramercy Funds Management also invest in court fights and the lawyers behind them.”
• “BlackRock didn’t respond to a request for comment. Davidson Kempner, Ellington Capital, Cliffwater, and Gramercy Funds declined to comment.”
• “Funds’ preference to remain in the background could be because financing litigation is overall a small portion of their portfolios. Or because some funders could be backing litigation against companies in which they separately invest. Davidson Kempner last year added a stake in Audible owner Amazon.com, according to a public filing.”
• “Davidson Kempner is financing Audio Pod IP LLC’s suits against Audible Inc. through an LLC, according to the court filing. Lawyers for Audible outed the company in a countersuit filed in a federal court in Manhattan.”
• “‘Audio Pod deliberately reached out beyond its state of formation in Virginia to exploit New York’s robust financial market and obtain funding for its patent-assertion campaign against Audible,’ they said.”

Matthew Marrone at Goldberg Segalla writes: “Lawyers Beware: Litigation Funding Leads to Malpractice” —

• “As recently reported by Law360, a Pennsylvania lawyer and a litigation funder are facing racketeering and malpractice claims. A Pennsylvania federal judge recently declined to dismiss claims brought by a client accusing his former lawyer of engaging in a conspiracy to improperly charge him inflated legal fees to cover high-interest litigation loans.”
• “In the underlying matter, the client/plaintiff retained the lawyer to represent him in a lawsuit claiming he suffered neurological issues stemming from a titanium medical implant after installing a pole with a cell phone antenna near a train station. The client asserts that the lawyer promised him that he would receive a ‘life-changing amount’ of money from the injury suit and encouraged him not to return to work. The lawyer also allegedly encouraged the client to sign a $33,000 litigation funding agreement with a litigation funder, which came with a two-year repayment plan with a 25-percent interest rate.”
• “The suit dragged on, the client alleged, before the lawyer supposedly pushed him to accept a $475,000 settlement. Out of that settlement, the client received only $141,469 after costs and fees were taken out, despite experts stating he was owed nearly $3 million in damages. The final settlement was so small, because the lawyer allegedly took out his own litigation funding with the same funder and then tacked it, with interest, to the client’s bill, the suit claims.”
• “The litigation funder argued the RICO claim must fail, because providing funding as described in the complaint is its ‘precise business’ model. The judge noted that the client alleged ‘unauthorized, secret funding agreements that the enterprise used to defraud him,’ which is enough to support a racketeering claim as ‘facially plausible.'”
• “The judge found further that, because the client alleged that his lawyer ‘made multiple false misrepresentations and withheld material information from him,’ his claims for fraudulent inducement, malpractice, breach of fiduciary duty and civil conspiracy may survive at this stage.”
• “The lesson here? Litigation funding is fraught with peril for lawyers. If your client chooses to use litigation funding, make all efforts to do the following:”
  • “Confirm the client understands the terms of the funding agreement”
  • “Have the client – not you – sign the agreement with the funder”
  • “Avoid signing the agreement on behalf of yourself or your client”
  • “Ensure the client understands that the decision to sign the agreement is his/hers alone, without influence from you”
  • “Advise the client of the option to consult with other professionals (e.g., other counsel, an accountant, or a financial advisor) about the decision to sign the agreement”
  • “Obtain written/signed acknowledgement from the client of the foregoing”

“Key Amendments to the New York Rules of Professional Conduct” —

• “Earlier this year the presiding justices of the four Appellate Divisions issued a Joint Order approving amendments to the New York Rules of Professional Conduct. The amendments, which were proposed last year by the New York State Bar Association Committee on Standards of Attorney Conduct (COSAC) significantly alter Rule 1.10, which deals with the imputation of conflicts of interest, and Rule 3.4 regarding fairness to opposing parties and counsel.”
• “Rule 1.10(a) and the Imputation of Personal Interest Conflicts. Prior to its amendment, Rule 1.10(a) stated: ‘While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rule 1.7 [concurrent representation conflicts], 1.8 [special conflicts of interest] or 1.9 [successive representation conflicts], except as otherwise provided therein. ‘What this meant was that, as a general rule, if one lawyer in a firm was conflicted from representing a client, regardless of the reason, then every other lawyer in the firm would be similarly prohibited from undertaking the representation, regardless of the degree of separation between the conflicted lawyer and the other lawyers in the firm.”
• “Suppose, for example, that Lawyer A is approached about taking on a litigation adverse to a company in which Lawyer A’s spouse owns shares. Lawyer A may be prohibited from taking on the representation if there is a significant risk that Lawyer A’s judgment on behalf of the potential client would be limited by Lawyer A’s financial interest in the company (either directly or indirectly). See NY Rule 1.7(a)(2) (prohibiting representation where ‘there is a significant risk that the lawyer’s professional judgment on behalf of a client will be adversely affected by the lawyer’s own financial, business, property or other personal interests.’)”
• “Under the old version of Rule 1.10, Lawyer A’s conflict would be imputed to the rest of Lawyer A’s firm, regardless of its size or the impact that Lawyer A’s conflict actually had on the other lawyers in the firm.In other words, if there was a significant risk that Lawyer A’s judgment could be impaired by the conflict then that significant risk was imputed to the rest of the firm.”
• “The amendments to Rule 1.10(a) make clear that these type of personal interest conflicts generally will not be imputed to the rest of the firm so long as (1) the conflict is ‘based on a lawyer’s own financial, business, property or other personal interests within the meaning of Rule 1.7(a)(2)’ and (2) a reasonable lawyer would conclude that there is no significant risk that the representation by the other lawyers in the firm would be materially limited or that the independent judgment of those lawyers would be adversely effected. See NY Rule 1.10(a)(1)-(2).This amendment gives law firms more flexibility to assess personal interest conflicts on a case-by-case basis and determine whether a conflict as to the remainder of the firm is actually present.”
• “Rule 1.10(b) and a Law Firm’s Retention of Former Client Information. The courts also updated Rule 1.10(b) to clarify that when all of the lawyers who previously worked on a matter have left the firm, a law firm will not be disqualified from a representation simply because the firm is still in possession of files related to the former client.”
• “While the prior version of Rule 1.10(b) prohibited a representation if ‘the firm’ had confidential information belonging to the former client, the amended version of Rule 1.10(b) only mandates disqualification if ‘any lawyer remaining at the firm has actual knowledge or, or has accessed’ the former client’s confidential information.”
• “Rule 1.10(c) and Screening of Lateral Lawyers. The courts amended Rule 1.10(c) to expressly permit screening of lateral lawyers in certain instances. This is a major development. Before the amendment, Rule 1.10 would impute a lateral lawyer’s conflicts to the new firm in all instances except where the lateral lawyer did not acquire confidential information that was material to the matter at issue.”
• “In practice, this meant that, absent the narrow exception described above, if a lateral lawyer was conflicted from a representation because of the lawyer’s affiliation with their prior firm, the lateral lawyer’s conflict would be imputed to the remainder of the new firm and could be used as a basis to disqualify the new firm.”
• “The recent amendments to Rule 1.10(c) bring the rule closer to Model Rule 1.10(a)(2), which allows screening for lateral lawyers to avoid imputation of conflicts caused by the lawyer’s decision to join a new firm.”
• “While Model Rule 1.10(a)(2) permits screening of lateral lawyers under all circumstances, the amended version of New York Rule 1.10(c) permits screening of lateral lawyers except ‘where the matter is a litigation, arbitration, or other adjudicative proceeding and the newly associated lawyer, while associated with the prior firm, either (i) substantially participated in the management and direction of the matter, or (ii) had substantial decision-making responsibility in the matter on a continuous day-to-day basis.'”
• “In other words, while the new Rule 1.10(c) allows a screen to prevent the imputation of conflicts brought over by lateral lawyers in many circumstances, it will not prevent imputation of conflicts from a lateral lawyer who was a lead lawyer in a litigation matter and has decided to join the firm on the other side of the matter.”
  However, notwithstanding this limitation in the rules, it remains to be seen whether courts, which have generally approved screening, will draw the same distinction when evaluating motions to disqualify. Accord Hempstead Video, Inc. v. Incorporated Village of Valley Stream, 409 F.3d 127, 132 (2d Cir. 2005); Maricultura del Norte, S. de R.L. de C.V. v. Worldbusiness Capital, Inc., 2015 WL 1062167 (S.D.N.Y. March 9, 2015).”
• “As noted, this is a significant development in the New York Rules. Law firms and lawyers looking to move firms regularly struggle to navigate the complicated web of conflicts. How best to do that is the subject of another article, however, the change to allow screening to cure many of the run-of-the-mill conflicts that come up in lateral transitions is a significant step forward.”

“ORDER GRANTING MOTION TO DISQUALIFY DEFENDANT JUMIO’S COUNSEL PERKINS COIE” —

• “The Asserted Patents claim a priority date of July 2015. Perkins represented FaceTec on general corporate and intellectual property mattersduring FaceTec’s infancy, mostly in 2014 and 2015. At the time, FaceTec’s only product was ZoOm. During the course of its representation, Perkins’attorneys served as FaceTec’s outside general counsel and corporate secretary, and worked on FaceTec’s patent prosecution strategy to protect ZoOm. Through an affiliated entity, Perkins took an equity stake in FaceTec as part of its compensation. FaceTec contends thatit gave Perkins confidential information in this era that is nowmaterial to the current litigation.”
• “Inassessing whether the Asserted Patents were obvious as of the claimed July 2015priority date, a potentially key issue will be whether ZoOm’s commercial success at that time was attributable to theinnovative nature of thepatented features,rather than other differentiators. FaceTec’s CEO, Kevin Tussy,attests thatin 2014 and 2015,he provided Perkinswith confidential information about what FaceTec believed made ZoOm innovative. For example, in August 2015, Tussy sent a slide deck to Perkins, which identifiedZoOm’skey differentiators over competing products.Moreover, Tussy attests thatduring that time period,he discussed FaceTec’sstrategies for public relations, investments, marketing, and patent protection of the ZoOm technologywith Perkins’ attorneys. Perkins does not deny it received this information.”
• “It is understandable that Perkins concluded there was no conflict of interestbecause the firmdidnot prosecute the Asserted Patentsor other applications to which the Asserted Patents claim priority, and its patent prosecution work did not relate to the patented technology at issue. Nonetheless,there is a substantial risk that the information acquired by Perkins through its prior representation of FaceTec will become material to the current lawsuit. Therefore,the motion to disqualify Perkins as counselfor Jumio in this litigationis GRANTED.”
• “Perkins’ representation of FaceTec began in early 2014. In February of that year, Lowell Ness—a corporate partner at Perkins—executed a retainer agreement with FaceTec on behalf of the law firm.”
• “Based on the information in the record, it does not appear that Perkins’ patent prosecution work was substantially related to the litigation currently before the Court, nor does FaceTec provide evidence to support that inference.Thus, Perkins’ specific patent prosecution workdoes not provide a basis for disqualification.”
• “By contrast, Perkins’ corporate work and intellectual property counseling is substantially related to the pending litigation. A substantial risk exists that, through its representation of FaceTec, Perkins learned of confidential information that could be material to the resolution of issues in this case.”
• “Finally, Perkins’ implementation of a cautionary screen to wall off any attorney who had previously performed work for FaceTec cannotcure the problem. Ness remains at the firm, and Becker was still associated with the firm at the time Perkins began representing Jumio in this case.”
• “Rule 1.10would allow a cautionary screen to be used to cure disqualification if (1) Perkins was being disqualified based on one of their attorneys’work for a prior firm or work in which that attorney did not substantially participate, and written notice of the screen was provided to the former client FaceTec, or (2)none of the attorneys that receivedthe confidential information at issue wasstill associated with Perkins. Neither of those situations applies here. Accordingly, under Rule 1.10(c), disqualification can only be avoided if the conflict is waived by the former client, FaceTec, whichhas not occurred.”
• “Perkins implemented its internal screen without informing FaceTec of the conflict,and has provided no explanation for that failure. Such notice to the former client is critical to make ‘the interested party aware of the potential threat to its confidential information and the measures taken to prevent the improper use or disclosure of such information’ and to provide ‘an enforcement mechanism, in that the interested party will be able to suggest measures to strengthen the wall, and to challenge any apparent breaches.’ Kirk v. First Am.Title Ins. Co., 108 Cal. Rptr. 3d 620, 648(Ct. App. 2010). No such notice was provided here.”
• For more background on this matter and dispute, see this earlier update.

“Adams Case, Big Law Deals Launch Era Rife With Ethical Conflicts” —

• “Albany Law School’s Ray Brescia says judges must probe whether counsel from one of the Big Law firms that made deals with the president can effectively represent defendants in government cases—as the executive order threat still hangs over those firms’ heads.”
• “Almost at the same time that US District Judge Dale Ho was dismissing the prosecution of New York City Mayor Eric Adams on April 2, another major law firm agreed to provide volunteer time on causes preferred by President Donald Trump with the understanding that he will go easy on them.”
• “But these events are connected by more than just time. The apparent quid pro quo that doomed the Adams prosecution, and led Ho to rule that the Trump administration shouldn’t be able to hold the threat of continued prosecution of Adams ‘like the proverbial Sword of Damocles’ over the mayor, is precisely the kind of deal these law firms have struck to avoid executive orders damaging their business. Could Big Law’s wheeling and dealing cause greater havoc in the courts than Adams’s case did?”
• “Ho found he had to dismiss the prosecution of Adams in part because there was credible evidence that the Trump administration had dangled the prospect of abandoning the prosecution of the mayor before him to exact future policy concessions from him. Such an abuse of legal process is illegitimate and undermines a criminal defendant’s rights. Ho determined it was appropriate to not just dismiss the case, but to dismiss it ‘with prejudice’: that is, the Department of Justice couldn’t reinstate it at a later time should it determine Adams wasn’t acceding to the administration’s policy preferences.”
• “The prosecution—and the promise to abandon it—had all the hallmarks of an inappropriate quid pro quo and created a clear conflict that delegitimized the Adams prosecution. When law firms enter into agreements to accede to the demands of the Trump administration, they are creating similar conflicts of interest that threaten the legitimacy of criminal proceedings when they represent defendants in cases brought by the government.”
• “In order to protect the integrity of their proceedings, when judges know or have reason to know that a potential for a conflict exists, they have an affirmative duty to ensure lawyers appearing before them can provide conflict-free representation.”
• “The fact that law firms have struck agreements with the Trump administration raises serious questions about whether they can provide effective assistance of counsel in cases against the government.”
• “What happens if the Trump administration doesn’t like the way in which a particular case is being litigated by one of these firms? What’s to stop the administration from going back to those firms and telling them they should pull their punches, to not be so aggressive in their representation of a particular client that gets under the president’s skin? These agreements don’t provide any assurances that Trump won’t demand more concessions from the law firms.”
• “To ensure that both federal and state courts across the country are protecting the constitutional rights of the defendants before them, judges now must inquire whether any criminal defense attorney from one of these firms that has cut a deal with the Trump administration is operating under a conflict similar to the one that doomed the Adams prosecution.”
• “The outcome in the Adams case is a stain on the DOJ, and the profession as a whole. But it is just one case. As more firms agree to enter into deals with the administration, the potential mischief such agreements can cause in the courts is exponentially greater than the Adams affair and goes beyond just one case. It’s every case in which lawyers from these firms represent the defendants. As more firms take this path, it will create a significant drain not just on the courts that must conduct this review but also on clients themselves should they have to bear the burden of finding new counsel.”
• “There is one way to prevent this chaos though. Courts should start these inquiries immediately. Should judges find the lawyers operating under real constraints, they should disqualify those lawyers where appropriate.”
• “As firms—and their clients—realize that they can’t enter such agreements without it exacting a real cost, perhaps other firms considering whether they should also cut a deal with the Trump administration will think twice before they do so.”

“Kirkland & Ellis in talks with White House to avoid executive order, WSJ reports” —

• “Kirkland & Ellis, the largest U.S. law firm by revenue, is in talks with the White House to avoid an executive order similar to those levied against several of its rivals, the Wall Street Journal reported on Thursday.”
• “The news comes as President Donald Trump wages a pressure campaign against his perceived enemies in the legal profession, leading some major law firms to strike deals with the White House to avoid executive orders seeking to curtail their business with the federal government.”
• “Kirkland has been ranked for years as the top-grossing U.S. law firm by American Lawyer, with a reported $8.8 billion in revenues in 2024, and is known for its work on deals for private equity firms and for litigation.”

“Trump Announces Deal With Doug Emhoff’s Law Firm” —

• “President Trump announced Tuesday another deal with a law firm he had targeted for potential punishment, this time the one that employs Doug Emhoff, former Vice President Kamala Harris’s husband.”
• “Mr. Trump did not say why he targeted the firm. Along with its connection to Mr. Trump’s defeated opponent in the November election, the firm also employs a top investigator for the congressional committee that documented President Trump’s role in the Jan. 6, 2021, attack on the U.S. Capitol, and a litigator who spearheaded a lawsuit that two Georgia election workers brought against Rudolph W. Giuliani in which he was ordered to pay the women $148 million.”
• “Willkie, Mr. Trump said in a Truth Social post, committed to representing clients, no matter their political leanings, and pledged $100 million in pro bono legal work to causes Mr. Trump has championed. The firm, Mr. Trump said, would ‘not engage in illegal DEI discrimination and preferences,’ Mr. Trump announced in a Truth Social post.”

ABA Formal Opinion 516 April 2, 2025: “Terminating a Client Representation Under MRPC 1.16(b)(1): What ‘Material Adverse Effects’ Prevent Permissive Withdrawal?” —

• “ABA Model Rule of Professional Conduct 1.16(b)(1) permits a lawyer to voluntarily end, or seek to end, an ongoing representation if ‘withdrawal can be accomplished without material adverse effect on the interests of the client.’ A lawyer’s withdrawal would have a ‘material adverse effect on the interests of the client’ if it would result in significant harm to the forward progress of the client’s matter, significant increase in the cost of the matter, or significant harm to the client’s ability to achieve the legal objectives that the lawyer previously agreed to pursue in the representation.”
• “A lawyer may be able to remediate these adverse effects and withdraw in a manner that avoids or mitigates the harm that the Rule seeks to prevent. The lawyer’s motivation for withdrawal is not relevant under Model Rule 1.16(b)(1).”
• “Therefore, under the Model Rules, if the lawyer’s withdrawal does not cause ‘material adverse effect’ to the client’s interests in the matter in which the lawyer represents the client, a lawyer may withdraw to be able to accept the representation of a different client, including to avoid the conflict of interest that might otherwise result.”
• “The opinion addresses the meaning of the Rule’s phrase ‘material adverse effect on the interests of the client’ and provides a framework for analyzing when and whether such an effect prevents a lawyer from permissive unilateral withdrawal. The opinion concludes that a material adverse effect is one which, despite a lawyer’s efforts to remediate negative consequences, will significantly impede the forward progress of the matter, significantly increase the cost of the matter and/or significantly jeopardize the client’s ability to accomplish the objectives of the representation.4 In other words, the material adverse effect must relate to the client’s interests in the matter in which the lawyer represents the client.”
• “In the context of litigation, some courts have held that without the client’s consent, a lawyer may not withdraw from a representation to litigate against the now-former client.24 Lawyers who end a representation for this reason have sometimes been disqualified from representing the new client. The so-called ‘hot potato’ rule or doctrine comes from Picker International, Inc. v. Varian Associates, Inc., 670 F. Supp. 1363, 1365 (N.D. Ohio 1987), aff’d, 869 F.2d 578 (Fed. Cir.1989), where the court concluded, ‘a firm may not drop a client like a hot potato, especially if it is in order to keep happy a far more lucrative client.’ “
• “The implication of these decisions is that, even if the lawyer’s withdrawal would otherwise be permissible, the lawyer may not withdraw to litigate against the client whose representation is terminated. But some courts recognize that the principle is not absolute and that it should not necessarily apply when the lawyer’s withdrawal is not significantly prejudicial because, for example, ‘a lawyer’s representation is sporadic, non-litigious and unrelated to the issues involved in the newer case.'”
• “Rule 1.16(b)(1) and other Rules of Professional Conduct do not incorporate the ‘hot potato’ concept for the reason discussed above, namely, that a lawyer’s motivation for invoking Rule 1.16(b)(1) is irrelevant. Even if the lawyer’s reason for invoking Rule 1.16(b)(1) may be perceived as disloyal, the lawyer’s motivation is not relevant. The salient question under Rule 1.16(b)(1) is whether, by withdrawing from a representation, the lawyer will materially adversely affect the client’s interests in the matter in which the lawyer represented the client, not whether the lawyer will be adverse to the client in an unrelated matter after the representation is over.”
• “Courts are, of course, free to exercise their supervisory authority over trial lawyers by disqualifying those who drop a client ‘like a hot potato’ to advocate against that client in another case. Courts may elect to do so as a sanction or remedy for the lawyer’s perceived disloyalty or to remove the incentive for lawyers to end representations for what courts regard as inappropriate reasons. But it does not necessarily follow that the lawyer’s withdrawal, for a purpose of which courts may disapprove, constitutes a violation of the Rules of Professional Conduct for which a lawyer could be professionally sanctioned.”