Bressler Risk Blog

Rhode Island Supreme Court Ethics Advisory Panel Op. 2025-15: “Attorneys – Conflict – Prospective client” —

• “Where (1) an attorney agreed to represent the family of a nursing home resident who had recently fallen and died and (2) approximately one week later, the intake department at the attorney’s law firm conducted an interview of a prospective client who worked as a nurse and potentially was involved in the fatal fall, the attorney’s sole remedy is to withdraw from the representation of the decedent’s family, as the nurse’s intake interview created a conflict under the Rules of Professional Conduct.”
• “‘The inquiring attorney agreed to represent the family of a nursing home resident who had recently fallen and died (the ‘Decedent’). Approximately one (1) week later, the intake department at the inquiring attorney’s law firm conducted an interview of a prospective client who described him- or herself as a nurse who had worked at the same nursing home at which the Decedent had fallen and died (the ‘Nurse’).”
• “The Nurse sought representation because a resident to whom he or she may have incorrectly administered medication had fallen and died, thereby potentially threatening the status of his or her nursing license and exposing her to potential civil liability. Although the Nurse did not mention the resident’s name during the intake interview, other information he or she did divulge — such as the dates on which the medication had been allegedly incorrectly administered — led the inquiring attorney to strongly believe the Nurse was referring to the Decedent.”
• “‘The inquiring attorney reports that the intake interview was conducted entirely by office staff and no attorney from his or her law firm had or has since spoken to the Nurse. Nonetheless, he or she wonders whether the Nurse’s interview creates a conflict requiring him or her to withdraw from representing the Decedent’s family. …”
• “‘It is the Panel’s opinion that the Nurse’s intake interview does create a conflict under the Rules of Professional Conduct requiring the inquiring attorney to withdraw from the representation of the Decedent’s family. …”
• “‘As an initial matter, because the Nurse actively sought representation from the inquiring attorney, it is clear he or she is a prospective client within the meaning of Rule 1.18 of the Rules of Professional Conduct. …”
• “‘… Rule 1.18 places certain limitations on an attorney’s use of information gleaned from a prospective client. … Second, Rule 1.18(c) prohibits an attorney and his or her associates from ‘represent[ing] a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter,’ with certain exceptions set forth in Rule 1.18(d)(1) and (2).”
• “‘It is this second limitation, under Rule 1.18(c), which is of relevance here. Its applicability turns on two (2) factors. First, the interests of the Decedent’s family and the Nurse must be materially adverse in the same or a substantially related matter. Second, the inquiring attorney must have received information from the Nurse that could be significantly harmful to him or her in the matter.”
• “‘The Panel finds that the facts as described by the inquiring attorney satisfy both prongs of Rule 1.18(c). First, there exists the substantial risk that the interests of the Decedent’s family and of the Nurse are materially adverse in the same matter due to the Nurse’s potential involvement in the Decedent’s death. … Second, such information would undoubtedly be of significant harm to the Nurse in this matter, as it would bear on both the Nurse’s possible liability in a civil action as well as the risk of losing his or her nursing license. Together, these facts are sufficiently disqualifying to trigger Rule 1.18(c)’s prohibition on representation here. …”
• “‘It follows that, given the applicability of Rule 1.18(c) to this matter, the inquiring attorney’s sole remedy is to withdraw from the representation of the Decedent’s family. …”
• “‘In withdrawing from the representation, the Panel urges the inquiring attorney to take all reasonable steps required by Rule 1.16(d) to mitigate the consequences to the Decedent’s family of his or her withdrawal, including, but not limited to, providing notice to them of his or her intention to terminate representation — thereby permitting them time to select replacement counsel — returning their papers and property, and refunding any unearned fees or expenses, if any. This is a non-exhaustive list of mitigation steps; the particular circumstances of the matter may require additional efforts. …’ “
• Full opinion: here.

“Terry Rozier paying for friend’s lawyer in gambling case a potential conflict, feds say” —

• “Federal prosecutors asked the judge overseeing the illegal sports gambling case involving Terry Rozier to determine if a conflict of interest exists because the Miami Heat guard is paying the legal fees of one of his codefendants. Prosecutors said in a new legal filing on Tuesday that Rozier’s lawyer may ultimately try to blame that codefendant, Deniro Laster, for the crime as well, allegations that Rozier’s lawyer has denied.”
• “Lawyers for the U.S. Attorney’s Office said in the filing that Rozier is covering legal fees for Evan Corcoran, the attorney representing Laster, and that they want the judge to determine if that relationship could impact Corcoran’s representation of Laster. They have asked Judge LaShann DeArcy Hall for a hearing that would, at a minimum, make Laster aware of those potential conflicts, and could possibly lead to him getting a new lawyer.”
• “Rozier, who has made more than $100 million during his NBA career, is longtime friends with Laster. Prosecutors allege Rozier told Laster that Rozier was leaving a March 2023 game early. Laster, according to an indictment filed in October, sold that information to a group of sports gamblers, who then made wagers on Rozier’s statistics for that game. Rozier and Laster were both arrested and charged this fall on two federal counts and have both pleaded not guilty.”
• “The prosecutors said in the filing that Jim Trusty, Rozier’s lawyer, has made public comments ‘suggesting that Rozier’s defense strategy at trial will be to inculpate Laster.'”
• “‘Neither Terry’s longstanding generosity towards a friend since childhood nor Evan Corcoran’s representation create any actual ethical issues in this case,’ Trusty told The Athletic. ‘My comments about Mr. Laster have not been to ‘blame’ him for anything – my focus has been on the fact that even if the government’s allegations about Mr. Laster are true, that does not mean Mr. Rozier did anything wrong.'”
• “‘The primary concern is that this payment structure creates an obvious incentive for the attorney’s divided loyalties between (i) his client Laster and (ii) the person paying his legal fees, co-defendant Rozier,’ the assistant U.S. attorneys said in the filing. ‘Particularly in light of Rozier’s attorney’s public comments placing the blame on a ‘friend’ who is almost certainly Laster.'”
• “Prosecutors pointed to Trusty’s comments in the days after Rozier’s arrest, where he said that Rozier told a friend that he would come out of the game. Trusty told CNN that Rozier ‘relied on a bad friend’ and told Fox News, ‘whatever that friend did is not on Terry (Rozier).'”
• “Prosecutors have called for the judge to name a lawyer for Laster who would advise him on any potential conflicts of interest. They did not say that the issues they raised are disqualifying for Corcoran to serve as Laster’s attorney.”
• “Rozier is also waiting on a response to a motion he made last week to dismiss the case. The motion has been filed to the prosecutor’s office, but has not been made public yet. Trusty indicated in a court hearing last week that Corcoran would join that filing as well.”

“Building a Proactive Risk Management Culture: Lessons from Law Firm General Counsels at the Aon Law Firm Symposium” —

• “At the 2025 Aon Law Firm Symposium, four experienced law firm general counsels – Martin S. Checov, O’Melveny & Myers LLP; Diana K. Ashton, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP; Kathryn J. Fritz, Fenwick & West LLP; and Amanda Kushnir, Blake, Cassels & Graydon LLP – shared their ideas, strategies, and best practices for developing and sustaining a proactive risk management culture. We recap below some of the key insights from this excellent faculty.”
• “Cultivate Relationships Firmwide:”Developing strong relationships between the general counsel’s office and lawyers and staff across the firm fosters trust, encourages early engagement with risk issues, and helps ensure that risk management is viewed as a resource rather than a barrier. A law firm general counsel must be visible, approachable, and responsive, and known as a good listener and problem solver. If these connections within the firm do not exist or if people are not comfortable contacting the general counsel, the general counsel is more likely to encounter difficult issues after they arise rather than being in a position to provide guidance on the front side of tough matters.”
• “Engage Management at All Levels: Law firm general counsels must work closely with senior leadership and practice group heads to secure their support and make sure that risk management is integrated into decision-making throughout the firm. Keeping firm management informed about emerging risks and bringing attention to behavior issues observed within the firm’s ranks is a critical part of this role. A risk management update should be a standing item on the executive committee’s agenda. Moreover, when the law firm’s general counsel has an important message to communicate to the firm, it is often advisable for leadership to convey it in tandem with the general counsel.”
• “Deliver Targeted Training and Education: Careful consideration of the intended audience is paramount when developing risk management training and education. These programs should be tailored to the needs of different groups, such as associates, lateral partners, administrative assistants, and business professionals. For instance, train senior lawyers expected to develop business on conflicts clearance, educate members of the human resources department on privacy issues, instruct administrative
• “Conduct Informal Audits to Assess Compliance: Law firms can have the best risk management policies in place, but policies are only effective if they are followed. To confirm that policies broadcast to the firm are working in practice, the general counsel should conduct periodic informal checks to monitor compliance, identify areas for improvement, and then adjust implementation strategies as needed. This process is most successful when the general counsel establishes strong relationships with the right people across firm departments.”
• “Provide More than a Simple ‘No’: Lawyers are less inclined to approach the general counsel if the individual in that role is perceived as consistently rejecting their proposals. A practical strategy is to consult with lawyers about the requirements for a potential ‘yes’ response, such as identifying the relevant stakeholders to speak with and outlining any additional steps necessary for the firm to proceed. The path to ‘yes’ may not look very good in the end and, upon further review, many lawyers will independently arrive at a decision of ‘no.'”
• “A law firm general counsel must act as a ‘partner’ to all members of the firm, maintaining a degree of separation from firm politics, balancing independence with collaboration, and always keeping the firm’s best interests in mind. This perspective is crucial for guiding the firm through complex decisions and maintaining a resilient risk management culture.”

Leigh Zidwick, Sr Director Info Governance at DLA Piper US, sent in her analysis: “IG Hiring Trends in Law Firms: What We’re Seeing Across the Industry” —

• Over the past several months, many of us have noticed something new in the legal market: a sharp uptick in Information Governance–related hiring activity. There have been a few requests lately to share open positions with the Legal IG Roundtable, and many firms are expanding or redefining IG roles in ways we weren’t seeing even a year or two ago.
• While there isn’t yet a single public statistic that quantifies “new IG roles in the last 12 months,” the directional indicators are consistent and strong. Here’s a snapshot of what’s driving this momentum:
• 1. AI Adoption Has Become the Catalyst
  • Law firms are rapidly moving from experimenting with generative AI to implementing it – especially with tools like Microsoft Copilot, M365 integrations, and iManage AI capabilities.
  • This shift is exposing an uncomfortable truth: You cannot deploy AI responsibly without strong Information Governance. Firms are realizing that unclassified, duplicative, ungoverned data creates unacceptable risk when connected to AI tools. As a result, IG teams are being asked to define governance models, retention, classification, data minimization, and AI-related risk controls.
• 2. Recruiters Are Reporting Increased Demand
  • Legal tech recruiting firms have said explicitly that demand for IG professionals has increased in the past year, particularly in roles touching AI governance, M365/Teams, data lifecycle management, and privacy/security alignment.
  • We’re also seeing new hybrid titles, such as: Information Governance Manager (AI/Analytics), IG & Data Governance Lead, M365/Copilot Governance Manager, Director of Information Lifecycle & AI Enablement
  • This is a shift in both volume and specialization.
• 3. Firms Are Formalizing IG as a Strategic Function
  • Participating firms in recent IG staffing surveys have highlighted: Multiple distinct IG roles within the same firm. • Increased headcount in the past 12–18 months. Future hiring plans tied directly to AI and M365 transformation initiatives.
  • This is a notable evolution from prior years, when many IG programs were under-resourced or rolled into other departments.
• 4. Advisory and Vendor Ecosystems Are Reinforcing the Trend
  • Consultancies, managed services groups, and legal tech vendors have all built AI-governance and IG-readiness practices because firms have accelerated demand. Their service offerings often mirror internal hiring trends.

What This Means for Our Community

• The Legal IG Roundtable is now seeing more job traffic, more recruiter outreach, and more firms looking for guidance on how to build or expand IG teams. It’s a sign that:
  • IG is no longer a “back-office function
  • Organizations are recognizing IG as strategic infrastructure for law firms, not just compliance overhead
  • IG is foundational to AI readiness and risk management
  • The role of IG professionals is expanding in scope, recognition, and strategic importance
• If these trends continue—and all signals suggest they will—we may soon enter the first real IG talent shortage the legal industry has experienced. The rise of “AI and IG” roles signals a career growth opportunity for those with both governance and technology fluency.
• Our community is helping shape what this next era looks like.

David Kluft asks: “Am I disqualified if my firm is merging with a firm that represents the opposing party’s corporate affiliate?” —

• “An AL plaintiff sued a corporation for discriminatory termination. After the litigation commenced, the plaintiff’s counsel’s firm merged with another firm that had been hired by a corporate affiliate of the defendant in an unrelated litigation.”
• ” The defendant moved to disqualify plaintiff’s counsel, but the Court denied the motion. The Court held there was no conflict because the corporate affiliates were distinct corporate entities and, under an old Alabama bar ethics opinion, a lawyer may sue a parent company while representing a wholly owned subsidiary in an unrelated litigation, provided the separate identity of the companies prevents the risk that confidential information will be misused.”
• ” The Court also explained that the cases were being handled by geographically distinct offices of the newly merged firm, and the attorneys on the respective matters would have no communication with each other.”
• Decision: here.

“Iowa Supreme Court rules for Democratic auditor in dispute with GOP AG” —

• “What began as controversy over settlement agreements for three Davenport city officials who alleged they had been harassed has resulted in a win for Iowa State Auditor Rob Sand over Iowa Attorney General Brenna Bird after the state Supreme Court sided with Sand’s office.”
• “Bird, a Republican who’s often been at odds with Sand, the sole statewide elected Democrat, argued in the case leading to the Friday, Dec. 5, ruling that her office, as the state’s legal counsel, should represent the auditor’s office in an ongoing court case regarding the legality of the settlement agreements for the Davenport employees. Sand, a lawyer and former state assistant attorney general, contended that his office should be able to represent itself.”
• “At issue was Sand’s allegation that Davenport may have violated open-meetings laws when its City Council approved the settlements, totaling $1.8 million, in December 2023, weeks after they were announced and months after they were signed.”
• “Sand noted the council had held closed sessions to discuss litigation around the period when the settlements were made and again before its vote. His office called Davenport’s city attorney, who allegedly approved the settlements without council authorization, a ‘walking audit risk’ and suggested the city lacks effective internal legal controls over expenditures.”
• “Iowa District Judge Jeffrey Bert did not rule that Sand could see the closed meeting records. But in a May 2024 order, Bert found that Sand’s office could access attorney-client protected information, as opposed to the separate category of ‘attorney work product,’ and he ordered the city to provide the records to him for his private review to determine which category applies in this case.”
• “Davenport appealed, arguing that both attorney-client communications and attorney work products should be protected from the auditor’s subpoena under Iowa law.”
• “According to the Supreme Court’s 6-0 ruling, written by Justice Edward Mansfield, Bird’s office in an initial brief backed Sand’s position that state law entitles his office to request attorney-client communications. But the day before that brief was due, she advised him she was removing that part of the brief and would refuse to argue for that position. The ruling said she explained that she disagreed and that the position was unlikely to succeed.”
• “Sand then filed his own brief through the general counsel for his office and Asked the court to block the brief from Bird’s office, the ruling said.”
• “Sand and Bird’s clash reflects a broader disagreement stemming from the Republican-dominated Iowa Legislature’s 2023 passage of a law that limited Sand’s ability to force state agencies to provide documents. Sand in a statement suggested Bird ‘doesn’t want the Auditor’s Office to argue we should get this evidence of waste, fraud and abuse, because that could lead to us getting evidence about other waste, fraud and abuse in other cases.'”
• “Bird’s office described her dispute with Sand as a disagreement not over the scope of the auditor’s power but about legal strategy.”
• “‘Iowa law makes clear that it is the job of the Attorney General’s Office to represent the state in court, not the auditor’s. We have checks and balances for a reason,’ Bird said in a statement. ‘As we have thoroughly discussed with the auditor’s team, our brief makes the most sound and strategic arguments to help the state win its case in court.'”
• “The Supreme Court in its ruling found that the Attorney General’s Office has a conflict of interest in representing Sand’s office because the ‘she believes it would be disadvantageous to the state as a whole’ to allow the auditor’s office to view the attorney-client records.”
• “‘The auditor wants to argue for affirmance of the district court’s view of the auditor’s legal authority, and the attorney general does not want to do so in part because of legitimate concerns about the impact such a decision would have on other state officers and agencies,’ Mansfield wrote. ‘That’s a conflict.'”
• “Also at issue was whether the auditor’s office needed the approval of the Executive Council of Iowa — a state board comprised of Sand, Gov. Kim Reynolds, Secretary of State Paul Pate, State Treasurer Roby Smith and Agriculture Secretary Mike Naig — to use alternative counsel if the Supreme Court disqualified Bird’s office.”
• “The court found that state law requires executive council approval to use paid attorneys outside of state government, not attorneys already working for the state, as was the case with Sand’s office. Mansfield noted in his opinion that Sand’s office previously represented itself in a 2021 case before the Supreme Court.”

“‘A masterful coup’: law firm behind Musk pay lawsuit faces internal revolt” —

• “In early 2024, two hard-nosed lawyers who had just helped defeat a $55bn pay package for Tesla chief executive Elon Musk gave an exultant talk at Columbia Law School detailing their stunning triumph over the world’s richest man. Now those two star partners, Greg Varallo and Jeroen van Kwawegen, are at the centre of an ugly rupture at the powerhouse shareholder law firm Bernstein, Litowitz, Berger & Grossmann.”
• “On Thursday, van Kwawegen announced he had departed BLB&G to form his own firm, JVK Law, and that about a dozen lawyers representing virtually the entire BLB&G corporate governance practice, as well as additional support staff, would soon join him.”
• “Coincidentally or not, a decision from the Delaware Supreme Court on Musk’s pay package is expected any day and will give final word on both the cancellation of the $55bn arrangement and a $345mn attorney’s fee award which mostly accrues to BLB&G.”
• “In an interview with Bloomberg Law on Thursday announcing his new firm, van Kwawegen said he ‘had a fundamentally different vision about what the law firm should look like, what the culture is that you should have and whose interests you should be serving first’, an apparent criticism of his previous firm’s management.”
• “BLB&G later fired back in a statement, saying it was ‘disappointed that Mr van Kwawegen has made misleading statements about his departure from the firm’.”
• “BLB&G added that van Kwawegen had not left voluntarily but had been terminated after the firm’s leadership determined that he ‘engaged in misconduct that was inimical to the best interests of the firm’. The firm declined to specify the nature of the alleged misconduct.”
  “In any instance, the public fracas has rocked an important corner of corporate law just as regulators and politicians are seeking to shift the legal balance between companies and investors. ‘Jeroen has pulled off a masterful coup. My hat is tipped,’ said one rival shareholder lawyer.”
• “BLB&G was founded in 1983 and has more than 100 lawyers across the US. It made its name in federal securities law litigation, typically bringing class action lawsuits on behalf of shareholders against listed companies, alleging that sharp drops in stock price were the result of disclosure failures.”
• “Varallo and van Kwawegen, on behalf of BLB&G, had petitioned the court for a $7bn fee in the form of Tesla shares for the victory in the pay package case, a figure that shocked even some plaintiff law firms who were otherwise sympathetic to BLB&G. The trial court knocked down that number to $345mn, still the largest single award in Delaware history, should the state’s supreme court confirm it.”
• “At the same time, the future of Delaware corporation litigation remains uncertain as the state has recently enacted sweeping changes to protect boards of directors from shareholder lawsuits. The legislature is also considering a new law to potentially reduce fees paid to lawyers who win big settlements or judgments.”
• “For now, the legal community is looking to see which clients stay with the reconstituted BLB&G governance group and which land at JVK Law, which will have to determine how to underwrite the considerable investment in contingency cases.”
• “The drama at the firm that took down Musk has not escaped the entrepreneur’s fans on X. ‘When 8+ partners walk out [of BLB&G] citing concerns about whose interests the firm serves, that’s not just a personality conflict — that’s a crisis of purpose,’ read one X post on Thursday.”

More recent conflicts decisions of note from Bill Freivogel:

• Pinnacle in Home Care, LLC v. 1 Source Senior Care, LLC, 2025 Ark. 193 (Ark. Dec. 4, 2025).
  • Both parties “are licensed to provide targeted case-management and personal-care services.” 1 Source is suing Pinnacle and certain former employees of 1 Source for certain abuses arising out of Pinnacle’s having hired those employees. Law Firm began representing Pinnacle and the former 1 Source employees.
  • As those employees left Pinnacle, Law Firm withdrew from representing the employees. 1 Source moved to disqualify Law Firm from representing Pinnacle because it appeared Pinnacle would defend by blaming those employees, being former clients of Law Firm. The trial court granted the motion to disqualify.
  • In this opinion the court affirmed, finding a Rule 1.9 violation. The opinion did not mention a standing issue. The court continued clinging onto an “appearance of impropriety” standard although admitting the Arkansas rules excluded it.
• Maddicks v. 106-108 Convent BCR, LLC, No. 656345/2016 (N.Y. Sup. Ct. N.Y. County Nov. 17, 2025).
  • This is a rent overcharge class action. Defendants moved to disqualify Plaintiffs’ law firm (“Law Firm”), because Law Firm had represented some Defendants in rent overcharge cases involving, in some cases, the same units involved in this case.
  • The court found this was a former-client conflict, but, because Defendants waited for many months before making the motion, Defendants waived the conflict.
• Option Consommateurs & Gagnon v. Samsung Elecs. Canada Inc., 2025 QCCS 4209 (CanLII) (Super. Ct. Que. Nov. 20, 2025).
  • This class action is against Samsung for manufacturing defective washing machines. In this opinion the court held it was proper for members of plaintiffs’ legal team to be class members.
  • There was an issues about those lawyers having contacted certain Samsung employees; however, the court excused those contacts because the employees were not of “a decision-making role.” The court warned the lawyers to be careful about that.
• Nocita v. Housing Auth. of Grays Harbor Cnty., No. 3:24-cv-05771-TMC (W.D. Wash. Nov. 12, 2025).
  • Plaintiff is suing Authority for wrongful eviction and related claims. Lawyer is representing Authority. Plaintiff moved to disqualify Lawyer because Lawyer had previously represented another state agency regarding the dependency of Plaintiff’s children.
  • In this opinion the court denied the motion to disqualify. In construing Rules 1.9 and 1.11, the court said although such successive representation of different government agencies “has the potential to implicate” ethics rules, such was not the case here.

“Why the SEC’s top accountant is weighing changes to audit inspections, conflict-of-interest rules” —

• “The Securities and Exchange Commission is evaluating whether to change rules around conflicts of interest for auditors and their clients, how its audit watchdog handles inspections of accounting firms and the cost for companies of complying with requirements.”
• “Accounting standard setters need to more closely scrutinize the costs of disclosures for companies applying new rules, SEC Chief Accountant Kurt Hohl said Monday at a conference in Washington, D.C. ‘What we don’t want to happen is essentially a high compliance cost to dissuade companies from accessing the public market,’ Hohl said.”
• “Hohl, who has served as chief accountant since July, advises the commission on accounting and auditing issues and oversees interpretation of accounting rules. Hohl spent 26 years as a partner at Ernst & Young, rising to global deputy vice-chair of the Big Four firm’s global assurance professional practice and retiring in 2023. He also previously worked at the SEC from 1989 to 1997.”
• “What do you want to see change with the SEC’s auditor independence rules? The regulator last eased these rules in 2020.”
  • “The independence rules are fairly clear. You can’t have direct business relationships with audit clients. Where it gets complex is where you basically are partnering with a nonaudit client and that nonaudit client uses an audit client as part of their service delivery. That’s what adds complications to the situation. Looking and seeing how pervasive that is, looking and making sure and talking with firms to understand how that affects how they monitor and enforce their independence requirements is something that’s top of mind.”
• Is that a greater issue amid companies’ AI partnerships and private-equity money pouring into accounting firms?”
  • “There are complications that AI adds to the business development relationship required under the auditor independence rules. Also private equity is buying some of these smaller accounting firms and making the decision that we don’t want to serve in the public company market anymore because it’s too expensive for us to operate in that space. Auditor choice is a priority. We want to make sure that companies accessing the public markets—we’re trying to encourage companies to come to the marketplace—have a choice of audit firms in which to pick from.”
    “There’s nothing in the works to loosen the independence rule. But we want to take a look at how the changing business environment affects our independence rules to make sure that they continue to be fit for purpose in the environment. We’ll work closely with the commission in terms of our observations and how they apply to the current rules, and we’ll decide what to do at that time.”
• “What would a potential change to auditor independence rules look like?”
  • “I talk to the private-equity firms all the time. Some of the things that I did in retirement was actually consult for PE firms. The focus was, hey, look, if you’re going to do this, there’s a cost to basically build a high-quality audit practice that serves the public markets. You have a lot more rules that you have to comply with and the expectation is the work that’s going to be done is going to be the highest quality standard.”
  • “That’s one of the things that I talk to PE firms about. If you’re going to do this, you’ve got to go all in in order to make the investments that are necessary to serve that marketplace and encourage them to stay in because we want competitive options available.”
• “You’ve said you want the PCAOB to add more context to their inspection reports on audit firms. What would that look like?”
  • “I mean, wouldn’t you like to know what the particular market share is and what types of clients that your auditors were serving? If I basically said here’s an auditor who’s not doing so well in quality and they basically do like these types of audits, that’s some level of context. I have no predisposed notion on what goes into the inspection report. If the PCAOB shifts to a quality control or quality management process, that adds complications because the statute limits what they can say immediately. But I think that’s probably a better way to go because the true accountability for a firm’s quality rests with their organization structure, with their system of quality management and ultimately with the firm’s leader, not the particular engagement team who’s getting inspected.”
• “Should the PCAOB be folded into the SEC and do you expect lawmakers to revive that push?”
  • “Audit regulation is incredibly important. We need basically high-quality auditing standards so that we have a robust capital market in the United States. Whether it’s part of the SEC or part of the SEC’s oversight of the PCAOB, it’s critically important to our ecosystem. I don’t follow Capitol Hill very closely, but based on the fact that we were closed for 43 days and we couldn’t even get a simple vote on a continuing resolution, I doubt if we’re going to basically see PCAOB elimination and folding into the SEC anytime soon.”

David Kluft asks: “Does a prior authorized disclosure of confidential information waive confidentiality on the subject matter?” —

• “Company A hired a TX lawyer to draw up agreements with Company B over certain oil and gas drilling leases. When Company A declared bankruptcy, Company B filed an adversary action for declaration that its rights were not part of the bankruptcy estate.”
• “The lawyer submitted an affidavit for Company B, against his former client Company A’s interests, that was ‘replete with internal discussions with his former clients and his mental impressions regarding the representation.'”
• “Company B argued that the information in the affidavit was not confidential, or alternatively it was subject to a waiver, because it merely reflected conversations the lawyer had with the counterparty, which his former client authorized.”
• “The Court held that the lawyer breached his duty of loyalty: ‘a prior authorized disclosure … does not waive [the lawyer’s] continuing duty of confidentiality’ because “confidential information does not become freely revealable after a prior disclosure.”
• Decision: here.

Bill Freivogel always spots the most interesting updates, including:

• Callery v. HOP Energy, LLC, No. 20-3652 (E.D. Pa. Dec. 1, 2025).
  • Plaintiffs moved for class certification, which Defendant, HOP, did not oppose. Several “objectors” claimed class counsel were not adequate on seven grounds. One ground was counsel had a conflict because they had filed a RICO case, which caused disclosure of certain confidential information relating to this case. In rejecting that basis (along with all the others), the court did not see how that disclosure constituted a conflict for class counsel.
• PTC Therapeutics, Inc. v. Acurex Biosciences Corp., No. 25-cv-04594-AMO (N.D. Cal. Nov. 26, 2025).
  • PTC moved to disqualify Lawyer/Expert and Law Firm. Both had once worked for Bio Electron. In 2019 PTC purchased “substantially all of BioElectron assets.” In this Order the court denied the motions to disqualify. Because PTC purchased fewer than all BioElectron assets, BioElectron’s confidentiality rights did not pass to PTC.
• Inspire Medical Sys., Inc. v. Nyxoah, Inc., No. 25-667-RGA (D. Del. Nov. 18, 2025).
  • Law Firm has never represented Defendant. However, Law Firm has represented Underwriter in a number of securities offerings by Defendant. Law Firm represents Plaintiff in this case. Defendant moved to disqualify Law Firm. In this opinion the magistrate judge granted the motion to disqualify. Law Firm would have learned too much about Defendant during due diligence in the earlier offerings, making Law Firm’s representation of Plaintiff “deeply improper.” In addition to that rubric, the magistrate judge wades into the problematic “appearance of impropriety.” A good example of an underwriter case going the other way is HF Mgm’t. Serv. LLC v. Pristone, 818 N.Y.S.2d 40 (N.Y. App. Div. 2006).
• Delgado v. Meta Platforms, Inc., 2025 WL 3251621 (N.D. Cal. Nov. 21, 2025).
  • Defendant moved to disqualify Plaintiff’s expert (“Expert”). In this order the court denied the motion. The order is very fact-specific. Expert had had several contacts with lawyers for Defendant including emails and telephone calls. Expert had alerted Defendant’s lawyers of a possible conflict. The court felt there just wasn’t enough contact of the sort that would create an expectation of confidentiality. Moreover, the court felt the case was at a stage where Plaintiff would be unnecessarily prejudiced by a disqualification.

“Law Firm Disqualified in Ford Lawsuit Spurs Debate on Expert Witness Ethics” —

• “… the disqualification of the law firm Quill & Arrow from representing in a lawsuit against Ford Motor Company due to irregularities involving an expert witness.”
• “… the court ruled that the firm improperly communicated with an expert witness hired for the case… the judge’s decision was grounded in allegations of an undisclosed conflict that undermined the legal process’s integrity.”
• “The case highlights a crucial issue in legal ethics: the impartiality and independence of expert witnesses. Legal experts argue that this disqualification serves as a cautionary tale for law firms to maintain transparency and adhere strictly to procedural norms when engaging external experts.”
• Additional detail in the order: here.

“Litigation Funder Certum Launches MSO Aimed at Mass Tort Firms” —

• “Another litigation funder is investing in the law firm space, by taking over a managed service organization to provide pre-litigation support for mass tort and personal injury firms.”
• “Texas-based Certum Group, which specializes in litigation finance and related insurance offerings, acquired a managed service organization in October. Rechristened Certum Legal Solutions, the MSO has already partnered with several firms working on a fees for services basis, but will consider acquiring stakes in law firms down the road, said Certum Group’s managing director David Diamond.”
• “Litigation funder Burford Capital in August said it was exploring MSOs and other options for investing in firms, while Big Law’s McDermott Will & Schulte said last month it is considering selling a stake in the firm to outside investors.”
• “The service organizations, increasingly seen in the healthcare and accounting industries, are getting a closer look in the US legal market as a way for firms to raise capital and steer clear of restrictions on direct investments in most states. Some MSOs are entities spun off from law firms so that outside investors can take direct stakes, while others are created to offer services directly to firms. Certum is part of the latter camp.”
• “Certum Legal CEO Asim Badaruzzaman built the MSO last year inside New Jersey law firm Sbaiti & Company, where he serves as partner and chair of the mass tort practice group. The firm has handled cases in major mass torts, including litigation over injuries and illnesses allegedly caused by water contamination at Camp Lejeune, PFAS ‘forever chemicals,’ and weedkiller Roundup.”
• “The MSO will continue to service Sbaiti while also taking on other firms, although Badaruzzaman declined to name them. The company will handle case intake and discovery support tasks done by a mix of attorneys and non-lawyers. Certum Legal has proprietary tools to manage integration with medical records providers, an app that allows the MSO to communicate with clients directly, and uses automation to receive documents, Badaruzzaman said.”
• “Mass torts and personal injury law are ‘ground zero’ for MSOs, according to Rich. She said her team has about 40 different projects right now, with about half in personal injury or mass torts.”

“Private equity overcomes California hurdle to expansion in US legal market” —

• “Private equity has scored a partial victory in its push to expand in the US legal market, after lobbyists softened legislation in California that threatened to disrupt liberalisation of law firm ownership rules.”
• “Attorneys in the country’s largest state will be allowed to partner on some legal work with investor-owned law firms under the terms of a law signed by Governor Gavin Newsom.”
• “A previous version of the legislation would have banned all such work, in an attempt to freeze out new potential competitors from other states that allow non-lawyers to own law firms.”
• “The California legislation signed by Newsom on Friday originally aimed to keep ABS firms out of the state by banning local attorneys from co-counselling and fee sharing with any firm owned partly by non-lawyers.”
• “After an intense lobbying effort by a group of ABS firms, the legislation was watered down so that it bans co-counselling only on contingent-fee cases such as personal injury claims. That was a particular focus of the bill’s sponsor, the Consumer Attorneys of California, a trade group for plaintiff-side trial lawyers who take on corporations and government agencies.”
• “As amended, the law allows fee sharing as long as there is a dollar figure stated in the contract, as well as in a limited number of other circumstances.”
• “‘This is a move away from the outright prohibition on sharing fees and seems to be tailored to preventing ABS firms competing on contingency fee business,’ said Austin Maloney, a partner at Hunton Andrews Kurth, which advises professional services firms on mergers and acquisitions.”
• “The outcome was described as an improvement on the original bill by ABS firms that had backed the lobbying effort, albeit not a total victory.”

“Private Equity-Big Law Tie Ups Could Disrupt Associate Careers” —

• “Private equity and Big Law appear increasingly destined for the equity-ownership altar. Such a marriage was unthinkable a generation ago, thanks to longstanding bans on non‑lawyer ownership and control of law firms. But that prohibitionary wall has been chiseled away—first by litigation finance and outsourcing, and more recently by jurisdictions relaxing ownership limits (notably the UK, Australia, and Arizona).”
• “The management services organization, or MSO, model goes yet a step further, replacing the chisel with a jackhammer. In its simplest form, the model splits a firm into two entities. One practices traditional law, while the other—the MSO—owns and runs the ‘non‑lawyer’ functions: human resources, payroll, billing, business management, office leases, and (increasingly) information‑technology infrastructure. The law firm then buys or leases those services back under an affiliate contract.”
• “The MSO business pitch is seductively simple: Let lawyers lawyer, while professional managers—and their investors—handle everything else. And there are plenty of examples to go around: MSOs long ago penetrated medicine, dentistry, accounting, and other professional services. Perhaps their arrival in law was only a matter of time.”
• “Now add an MSO to the mix. If ‘IT services’ reside within the MSO, as is common, the MSO could own, operate, and continuously train a private LLM—selling its outputs back to the law practice. As the LLM continues to improve, lawyers increasingly risk becoming glorified conduits for AI‑generated analysis.”
• “In the meantime, junior partners and associates are still needed, not only to check for hallucinations and spurious results but also to produce the memoranda, markups, and deal documents that will calibrate the model dynamically—effectively transferring their experience and judgment into the MSO’s future asset pool. And as client deliverables become progressively anchored to the model’s output, the IT portion of the MSO is poised to capture an outsized share of law firm invoices. Whether this is a good thing depends on one’s perspective.”
• “Clients will no doubt applaud clearer invoices and lower charges from the MSO model, at least initially. And many a senior partner is sure to cheer on this development, too, for a simple reason: PE investments monetize both current goodwill and future client flow through a one-off cash transaction, letting today’s senior partners absorb the cash payout in the form of higher salary and bonuses before sailing into retirement.”
• “But junior partners, non‑equity partners, and associates are unlikely to celebrate. After investment proceeds are distributed and the MSO is cleaved away, the legal practice may be functionally forced into ‘buying back’ its own historical expertise through LLM queries. The end result may be that there will be less left over for future lawyer cohorts at the law firm, even as those same cohorts are expected to correct errata and train the model for the sake of improving accuracy (and the MSO’s future profitability).”
• “With diluted ownership of their own work product, will these cohorts play ball or will they decamp to non‑MSO firms? And even if they stick around, will they sprout alligator arms when it comes to sharing their own client materials, or strategically convince their clients to forbid the use of confidential documents to train the model?”
• “State bar authorities and professional associations (such as the American Bar Association) will elbow in on the party as well. ABA Model Rule 5.4 still forbids non‑lawyer ownership of the practice of law in most jurisdictions. If an MSO‑controlled LLM comes to dominate legal service delivery, has the firm ceded de facto control of legal operations and professional judgment?”
• “If so, the claim that the MSO isn’t ‘practicing law’ becomes harder to defend, inviting a stiff-arm that could reverse the pendulum swing—re‑internalizing AI tools and training within lawyer-owned firms. Ironically, younger lawyers who may roll their eyes at many professional guardrails could become their biggest defenders here.”
• “Is the MSO a wise move? Like most interesting legal problems, this question invites a characteristically lawyerly answer: It depends. Although the promise of attracting private equity investment capital is intriguing, the threats of the MSO structure noted are just as real. We suspect some firms may simply wait on the sidelines, at least for now, while others plunge ahead.”
• “Private equity can bring scale, systems, and discipline to legal services. But absent thoughtful architecture, the MSO model risks shifting control and value away from the lawyers who owe duties to clients and the courts. Firms that embrace this approach will need to think carefully about structural design. And to answer this challenge, they may require a good (most likely human) lawyer.”

“Everything Old Is New Again: Why Law Firm MSOs Fit Comfortably Within Existing Ethics Rules” —

• “The business of law is evolving. Today, management services organizations (MSOs) for law firms are becoming an increasingly attractive tool to allow lawyers and law firms the ability to leverage outside investment and support.1 Investors exploring these models are enticed by the promise of professionalized operations, scalable technology, data infrastructure, human resources (HR) and payroll efficiencies. Lawyers and law firms are interested in the ability to access outside capital and logistics support through a parallel, nonlawyer-owned entity.”
• “These structures raise obvious ethical questions: Can lawyers partner with an MSO? Can they invest in one? Can an MSO participate in revenue? Can an MSO hire, discipline or evaluate lawyers? And where is the line between legitimate administrative services and the unauthorized practice of law?”
• “Taken together, this body of authority shows that partnerships between law firms and MSOs are not brand-new structures requiring brand-new rules. Instead, they are a modern tool in a time-honored industry of outsourcing and co-employment arrangements. These arrangements have been addressed by regulators and ethics authorities for decades, and the principles that made PEOs permissible (with guardrails) apply with equal force to MSOs. This Holland & Knight article traces that history, summarizes MSO-specific opinions and distills common principles for structuring a compliant law firm/MSO partnership.”
• “Across jurisdictions, the ethical analysis is remarkably consistent. These arrangements require the law firm to firmly remain at the helm, directing every aspect of legal work and exercising unqualified authority over professional judgment. The outside entity – whether called a PEO, an employee-leasing company, a management company or an outsourcing provider – operates strictly in a supportive role, never crossing into the domain of legal practice and never exerting pressure on the lawyer’s decisions. Its function is purely administrative, not advisory, and its compensation reflects that distinction, avoiding any form of fee-splitting that would compromise professional independence.”
• “Within this framework, client confidences are treated with the same sanctity as if the lawyers were employed directly by the firm, and conflicts of interest are scrutinized under identical standards. Transparency is paramount: When required, communications about the structure must be candid and accurate, leaving no room for misunderstanding. When these elements align, the entity is not a shadow law firm, but a logistical partner – one that enables operational efficiency without eroding the ethical bedrock of the profession. These principles now serve as the foundation for the ethical analysis governing modern MSOs.”
• “Texas Ethics Opinion 706, issued by the Professional Ethics Committee for the State Bar of Texas, is the first modern ethics authority to substantively and explicitly address MSOs.15 The opinion analyzes a nonlawyer-owned, support-services company that provides a bundle of operational services, including marketing, payroll, HR and technology, and proposes to charge law firms a percentage of revenues while also offering lawyers an opportunity to hold equity in the MSO.”
• “First, Texas concludes that paying an MSO a percentage of the firm’s revenues is impermissible fee-splitting with a nonlawyer. Even if the MSO does not practice law and even if the percentage is designed to reflect services performed, tying the MSO’s compensation to the firm’s legal revenues crosses Rule 5.04(a). This is consistent with every PEO opinion from the last three decades: A nonlawyer entity cannot receive a share of legal fees, directly or indirectly.”
• “Second, Texas also affirms that lawyers may invest in or own equity interests in companies that provide law-related services, including MSOs…”
• “Firms must analyze conflicts arising from MSO relationships the same way they analyze conflicts arising from a PEO and other temporary lawyer arrangements. If lawyers have ownership interests in the MSO, referrals between the firm and MSO may require informed written consent from clients.”
• “Lawyers must remain responsible for the conduct of nonlawyer personnel performing delegated functions. Lawyers must supervise MSO personnel who perform delegated functions and must ensure that those personnel act in ways consistent with lawyers’ professional obligations.”
• “Firms must describe the law firm/MSO relationship accurately in marketing, engagement letters and client communications. Where required, clients must understand which entity is providing legal services and which is providing business support.”

“Why All Lawyers (Even Solos) Need to Take Deepfakes Seriously – and What You Can Do About Them” —

• “Let’s start by defining the word deepfake. A deepfake is a hyper-realistic image, video, or audio forgery that was edited or generated using artificial intelligence. These synthetic media can convincingly mimic real people saying or doing things they never did; can portray events, people, or things that are not real; and are difficult if not impossible for humans to reliably distinguish from the real thing.”
• “Making matters worse, deepfake technology is rapidly advancing; is widely available to the masses; and with tools like Synthesia, DeepFaceLab, and Resemble AI, it’s easy for bad actors to fabricate content with minimal technical skill.”
• “Given the above, the implications are profound. The concerns that come immediately to mind include evidence tampering, social engineering scams, impersonation, reputational attacks, and malpractice exposure.”
• “Reputational Attacks – What if an opposing party in a contested divorce were to create a deepfake of you making racist remarks, touching someone in an inappropriate way, or threatening someone and the video goes viral? Your reputation that took years to build could be gone in an instant. You and I both know that attacks on reputations have been going on for years. Deepfakes just make the chances of this type of attack succeeding a heck of a lot better.”
• “Malpractice Exposure – What if you fail to recognize or challenge evidence that was not authentic? What if you rely on synthetic media without proper verification and it turns out the media is a deepfake? What if deepfakes are used in a disinformation or defamation campaign against a client and you fail to properly advise the client on how to respond? Missteps like these can all too easily lead to disciplinary complaints and malpractice claims.”
• “Mandate the use of an out-of-band communication process to verify the legitimacy of every request to transfer funds, regardless of who the person making the request is and the communication channel the requestor is using. To clarify, an out-of-band communication is a method of challenge and response to the requestor of a transfer, payment, or delivery of funds using a communication method that is separate and distinct from the communication method the requestor originally used. For example, if the instructions come in the form of a video call, you might try to verify the veracity of the instructions by seeking to confirm them via a text message or phone call using a previously verified number.”
• “Include a Digital Evidence Integrity and Deepfake Risk Provision in Your Engagement Agreements – Clients may not realize how costly or complex it can be to prove what is real and what is not. Given that the authenticity of digital evidence is increasingly under threat, a provision such as this can help protect clients from surprise costs, prepare them for possible attacks on their credibility, and help ensure that their own evidence can withstand scrutiny. I had Microsoft’s Copilot draft the following sample provision:”
  “Client Acknowledgment of Digital Manipulation Risks:”
  • “Client understands and acknowledges that advances in artificial intelligence and digital editing technologies—including but not limited to ‘deepfake’ audio, video, and image generation—pose a growing risk to the authenticity and reliability of electronically stored information (ESI) and multimedia evidence. These technologies may be used to fabricate or alter content in ways that are difficult to detect without expert analysis.”
  • “Preservation and Authentication of Client Evidence: To safeguard against potential challenges to the integrity of Client’s own evidence, Client agrees to cooperate in preserving original files, metadata, and chain-of-custody documentation for any digital materials relevant to the matter. Upon request, the Firm may recommend or engage forensic professionals to assist in authenticating Client-provided evidence. The cost of such services shall be borne by the Client unless otherwise agreed in writing.”
  • “Responding to Potentially Manipulated Evidence from Opposing Parties: If the Firm reasonably suspects that evidence submitted by an opposing party has been digitally manipulated or generated using deepfake technologies, the Firm may advise Client on the feasibility and cost of challenging such evidence. This may include retaining forensic experts, conducting authenticity analyses, and filing appropriate motions. Client understands that these efforts may involve significant time and expense, which are not included in standard engagement fees.”
  • “Limitation of Firm Responsibility: “While the Firm will exercise reasonable diligence in evaluating the authenticity of evidence, it cannot guarantee the detection of all forms of manipulation or fabrication. The Firm’s role does not include forensic analysis unless expressly agreed upon in a separate writing.”

ABA Formal Opinion 519: “Disclosure of Information Relating to the Representation in a Motion to Withdraw From a Representation” —

• “When moving to withdraw from a representation, a lawyer’s disclosure to the tribunal is limited by the duty of confidentiality established by Rule 1.6(a) of the ABA Model Rules of Professional Conduct. Unless an explicit exception to the duty of confidentiality applies or the client provides informed consent, the lawyer may not reveal ‘information relating to the representation’ in support of a withdrawal motion.”
• “Disclosure of information relating to the representation is not “impliedly authorized in order to carry out the representation” under Rule 1.6(a) or otherwise impliedly authorized even when Rule 1.16(a) requires the lawyer to seek to withdraw.”
• “If disclosure is permitted by an exception to the duty of confidentiality, such as when disclosure is required by a court order, it must be strictly limited to the extent reasonably necessary and, whenever possible, made through measures that protect confidentiality such as by making submissions in camera or under seal.”

“More Than Legal Fees: The True Price Of An Ethics Investigation For Lawyers” —

• “Attorneys who find themselves in the crosshairs of an ethics investigation or disciplinary proceeding face significant costs. When a lawyer receives a bar complaint, they typically focus on what it will cost to pay an attorney to represent them. But the true price of an ethics investigation involves much more than just lawyer fees. Lawyers faced with an ethics complaint need to be mindful of the full extent of costs to which they are potentially exposed.”
• “An attorney who must hire another attorney naturally will focus on their attorney’s fees and expenses. Depending on the gravity of the situation, those outside lawyer expenses may be substantial. Moreover, the fees for representation in defending a bar complaint may, or may not be, covered by insurance—provided the lawyer has any (many do not, and most jurisdictions do not require lawyers to be insured).”
• “Some malpractice insurers provide coverage for disciplinary defense counsel. However, those policies normally limit such coverage. Typical policies provide indemnity in the range of $10,000-$50,000. Depending upon the seriousness, complexity, and duration of the matter, those limits of coverage may not be nearly sufficient–although it certainly can help.”
• “Lost Opportunity Costs. While many ethics investigations are conducted in secret and thus are not generally publicly available, the lawyer may still be obligated to inform others who have a right, or need, to know. That disclosure, in turn, can cost a lawyer substantial opportunities.”
• “If the practitioner is looking into a lateral move, they will likely be required to disclose a pending bar investigation or disciplinary proceeding to prospective employers. Good luck with that. Until the ethics matter is finally concluded, a lawyer may find it very difficult to change career paths or find new work opportunities. “
• “If the targeted practitioner holds another professional license, such as a professional engineering , securities broker, or real estate license, they may be required to disclose the ethics matter to their other licensing bodies. That may result in an adverse impact on other licenses until the ethics investigation fully plays out. “
• “Time Costs. Lawyers have an affirmative duty to cooperate with ethics investigation and cannot simply ignore the process. Those investigations can require the lawyer to divert time they might otherwise spent on more productive or pleasant activities into dealing with the investigation.”
• “The time commitment may be substantial–particularly if disciplinary counsel files a formal complaint seeking to publicly sanction the lawyer. Especially if the lawyer has a busy practice, any time they must spend on their ethics case could affect how much time they have to work on billable work or client development.”
• “Health and Wellness Costs. Turns out that being a respondent in a bar investigation, against a deeply-pocketed adversary, in a secret forum, in which your ability to earn a living is on the line, can mess with your head–literally. Fight-or-flight kicks in. Fear, anxiety, depression, self-blame, and anger are all common responses to the lawyer disciplinary process.”
• “Bar investigations can trigger mental health issues, which in turn can trigger, or exacerbate, physical health issues. Stress kills. The whole process can literally make a lawyer sick.”
• “Add to this the fact that a significant percentage of attorneys already suffer from mental health or addiction issues. Studies confirm that members of the legal profession are much more likely to have a mental health or addiction issue than members of other professions.”
• “Bad Settlement Costs.”USPTO and other state or federal bar investigations and disciplinary proceedings are marathons, not sprints. Practitioners who find themselves sucked into one must prepare for a long game. And many practitioners reach a point where they just cannot take it anymore.”
• “When settling, the lawyer who is tapped out is not engaging in an arms-length negotiation. They are not compromising. They are capitulating. When they do, they may agree to terms of settlement that are unfavorable, unreasonable, unwarranted, untrue, and downright unfair. Bar settlements are the product of grossly disproportionate bargaining power.”
• “Ethics cases are physically, mentally, financially, and emotionally draining ordeals. They are a lawyer’s worst nightmare.”

“Palantir Investor Says Williams & Connolly’s Conflict of Interest Cost Him $1B in Stock Proceeds” —

• “Investor Marc Abramowitz filed a malpractice suit against Williams & Connolly in District of Columbia Superior Court on Sunday, accusing the firm of advancing its own financial interests rather than securing the best results and settlements for Abramowitz in his years-long dispute with technology company Palantir.”
• “Abramowitz, an early investor in Palantir, claims that the elite litigation firm engaged in a conflict of interest while representing Abramowitz against Palantir, specifically by amending its fee agreement with Abramowitz in one case to allow the firm to take a 15 to 20% stake in any sale of his Palantir stock, depending on if the case was settled before trial.”
• ‘The new compensation structure…created egregiously illegal and nonwaivable conflicts of interest for Williams & Connolly, which gave the firm incentives to improperly advise Abramowitz, negligently or intentionally, to sell his Palantir stock and to settle the Palantir litigation, all in a manner benefitting the firm but causing plaintiffs massive damages,’ the suit, filed by Charles Remus III of Remus, Weddle & Cavenee, alleges.”
• “According to the suit, Abramowitz first hired Williams & Connolly to represent him in 2016 after his first attempted sale of his Palantir stock to a Chinese asset management firm, CDH Investments, fell through. In that attempted transaction, Abramowitz aimed to sell his shares for between $9.25 and $11 per share for a total of $64 million; however, the suit says, Palantir instead reached out to CDH Investments directly and convinced the company to buy shares directly from Palantir instead of Abramowitz.”
• “After Abramowitz’s sale fell through, the sale price of Palantir’s stock fell and, according to the malpractice suit, left Abramowitz unable to secure a comparable deal for his shares. Abramowitz hired Williams & Connolly in 2016, and the firm first filed a books-and-records action in Delaware in March 2017 against Palantir which was summarily dismissed by the Delaware Chancery Court.”
• “After the records action, the malpractice suit says, Williams & Connolly filed a tortious interference claim against Palantir in December 2017. The dispute between Abramowitz and Palantir continued as Palantir later filed an action against Abramowitz in Germany in 2018.”
• “In July 2019, the malpractice suit claims, Williams & Connolly amended its fee agreement with Abramowitz in only the tortious interference case, laying claim to a contingent percentage of any recovery in that case as well as a 15 to 20% stake in any sale of Abramowitz’s Palantir stock. That stake was capped at ‘three times the amount of the firm’s time charges on the tortious interference case,’ according to the suit, adding that the firm also ‘dramatically increased the hourly rates it charged’ Abramowitz at the same time, although Abramowitz did not discover this for a year after the firm failed to send invoices for its services.”
• “Under the new fee agreement, the suit claims, the firm had a financial interest in convincing Abramowitz to sell his Palantir shares for less than $10 per share in order to maximize the firm’s total payment in the tortious interference case. If Abramowitz’s shares sold for more than $10 each, the suit says, he would have had no recoverable damages in the tortious interference case and could abandon the action.”
• “In fact, the suit alleges, Williams & Connolly advised Abramowitz to sell his Palantir shares in August 2020, just before the company was slated to go public. The suit alleges the firm advised Abramowitz of this to ensure that the stock sold for less than $10 each; as such, Abramowitz sold his stock for $6 per share, or a total of $33 million, the suit says, estimating based on Palantir’s November 2025 peak stock price of $207 per share that the 2020 sale cost Abramowitz more than $1 billion.”
• ‘The Engagement Letter Amendment incentivized the Firm to convince Abramowitz to sell his shares below $10 dollars so that the Firm could (i) lock in Abramowitz’s damages, thereby eliminating any chance of Abramowitz dropping the case and guaranteeing both the Firm’s ability to increase the cap and its chance to recover a contingency fee, and (ii) immediately collect a multimillion-dollar bonus rather than face the uncertainty of payment if Abramowitz were to hold the stock well into the future,’ the suit claims.”
• “In yet another conflict of interest, the suit claims, the new fee agreement also incentivized Williams & Connolly to settle the tortious interference case without settling any of the other cases filed against Abramowitz by Palantir, which the firm continued to work on under an hourly fee-arrangement.”
• “‘Settling only the Tortious Interference Case enabled Williams & Connolly both to maximize its contingency fee—because a global settlement in which Palantir’s cases against him were also settled would have resulted in a lower monetary recovery for Abramowitz—and to bill Abramowitz for another $3.2 million in fees over the next five months’ before settling a second case, along with other pieces of litigation, in 2022, the suit claims. ‘In response to Abramowitz’s repeated inquiries about a global settlement, the Firm told him it was ‘too difficult’ and that the legal team was ‘too tired’.'”
• “After the settlement in 2022, the suit claims, Williams & Connolly requested a $3 million retainer from Abramowitz for additional work in an upcoming trial against Palantir, threatening to drop Abramowitz as a client.”
• “In total, Williams & Connolly’s representation of Abramowitz spanned six years and eight separate lawsuits involving Palantir spread across a number of state and district courts, as well as the case in Germany. The malpractice suit alleges other separate incidents of malpractice throughout the course of the representation, including an allegation that partner Barry Simon fell asleep while participating in a hearing via telephone in the German case, which was subsequently referred for criminal review for attempted litigation fraud.”
• “The suit ultimately accuses Williams & Connolly with legal malpractice and breach of fiduciary duty, and seeks compensatory damages, disgorgement of attorneys’ fees paid to Williams & Connolly, attorneys’ fees and costs, and pre- and post-judgment interest.”

“Suit Alleges King & Spalding Coerced Ex-Client Into Lit Funding Agreement Amid ‘Massive Overbilling’” —

• “A Chicago business owner is alleging that King & Spalding and several of its lawyers overbilled him and later pressured him to borrow from a litigation funding firm, leading to $4 million in alleged damages.”
• “David Pisor and PSIX LLC, in a lawsuit filed Friday in Illinois state court on Friday, claim he received ‘fraudulent entries, duplicative entries, and entries unrelated to Pisor’s representation.’ Pisor said the firm tied its fee structure to the litigation funder, ‘inflating their hourly rates midstream.'”
• “‘Even though it never went to trial, KS and its partners turned Pisor’s matter into a ‘full-employment-act’ for defendant KS’ Chicago office—32 individuals inefficiently handled Pisor’s matter, often duplicating, triplicating and quadrupling the same work,’ claims the lawsuit, which alleges legal malpractice and breach of fiduciary duty.”
• “Pisor’s lawsuit also alleges that an entity named ‘Defendant SC220163,’ affiliated with litigation funding firm Statera Capital Funding, violated the Illinois Consumer Legal Funding Act.”
• “Representatives at King & Spalding and Statera did not immediately return messages seeking comment on Monday.”
• “Pisor alleges King & Spalding engaged in overbilling through improper timekeeping practices, failed to conduct adequate due diligence and facilitated predatory litigation funding.”
• “‘This action arises out of a culture of greed and a pattern of unlawful activities at defendant KS,’ the suit stated. ‘Pisor retained the firm to protect a business he built from the ground up—valued at over $130 million—but was instead stripped of control, liquidity and clarity through a calculated orchestration of dependency, manipulation and concealment.'”
• “It stated the firm ‘failed to exercise reasonable care in their representation,’ and ‘negligently handled Pisor’s legal needs, engaged in massive overbilling and mismanagement.'”
• “‘But, worst of all, when Pisor was unable to fully pay defendants’ unconscionable fee invoices, defendants coerced Pisor into a statutorily unlawful pre-forward paid litigation funding arrangement solely for defendants’ benefit,’ Pisor’s suit stated.”
• “The suit stems from a 2015 deal between Pisor and former business partner Jim Lasky. After they co-founded Maple & Ash restaurant in Chicago’s historic Gold Coast neighborhood, its success led to the partners establishing a company that launched other restaurant ventures in Chicago, Phoenix and Los Angeles. However, a rift over finances between the partners led Pisor in 2022 to hire King & Spalding and its lawyers named as defendants in the suit, including partners Lazar Raynal, Thomas Ahlering, Mary Liz Brady, Jake Downing and Jonathan Talansky; former partners Thomas E.’Ted’ Keim Jr. and Jade Lambert Routson; and former associate Matthew J. Dixon.”
• “Eight partners, 10 associates, three counsel, seven paralegals and two litigation support members recorded about 3,000 billable hours and charged more than $3.55 million in legal fees over 11 months, Pisor said in the suit, noting the invoices ‘demonstrate the use of partner-level attorneys to do the work of paralegals and associates.'”
• “Pisor ultimately obtained litigation financing through Statera Capital Financing, doing business as ‘Defendant SC220163,’ and the financing ‘imposed significant fees on plaintiff,’ the suit stated. The financing arrangements ‘primarily benefited defendant’s financial interests,’ violated its ethical and professional duties, and created a direct conflict of interest in violation of Rule 1.8 of the Illinois Rules of Professional Conduct, it stated.”
• “‘King & Spalding directed Pisor toward litigation financing—then tied their fee structure to it, inflating their hourly rates midstream,’ the suit stated.”

“Former Home Depot attorney can’t help sue it” —

• “A federal court in California granted Home Depot’s motion to disqualify an attorney and law firm as counsel of record for the customer who is suing the retail giant over an injury; the skid-steer loader he rented pitched forward and his seatbelt failed, so he hit his head against the vehicle.”
• “The attorney used to represent Home Depot in personal injury lawsuits, and she was privy to confidential information in a case similar to the current one.”
• Decision: here.

“Counselling Two Clients in the Same Matter: Trump/Blanche” —

• “President Donald Trump, obviously expecting loyalty—actually, obeisance—appointed several of his personal attorneys to high Justice Department positions… And, directly pertinent here, Todd Blanche, his former chief criminal attorney as Deputy Attorney General at the Justice Department. There can be little doubt as to why Trump would choose them for these particular roles.”
• “Blanche, however, holds the second highest Justice Department position and has presided over the Jeffrey Epstein investigation after serving as Trump’s criminal attorney in private practice. He, therefore, is the single Trump former attorney who has literally been presented directly with a direct conflict. That is, he has (undoubtedly) conferred with Trump about the Jeffrey Epstein matter as Trump’s private lawyer. And he has been the attorney responsible for the Epstein investigation on behalf of the Justice Department in which he, oddly, interviewed Ghislaine Maxwell.”
• “That said, Blanche’s relationship with Trump has been extremely unique. In private practice, Donald Trump was literally Blanche’s only client. And even if Trump hadn’t been Blanche’s only client, Blanche would have had a duty of undivided loyalty to him—a duty that would surely exist in futuro. Blanche would be required to demonstrate that ‘loyalty’—i.e., maintain any confidences that Mr. Trump had imparted to him, even after his representation of Mr. Trump as a private citizen was long ended—and particularly when later serving in a governmental capacity.”
• “So, where would Blanche stand concerning his attorney-client responsibilities if, during the Trump presidency, Trump, as one might easily suspect, has continued to confidentially discuss with the Deputy Attorney General conduct that Trump initially revealed to Blanche pre-presidency—say, for example, about any relationship he may have had with Jeffrey Epstein?”
• “Stated otherwise, suppose the president wants, now, to discuss with Blanche a personal subject unrelated to his presidency, what ethical obligation does Blanche have either to citizen (or president) Trump to alert him to the possible perils of discussing it with him? Meaning, the potential danger of Blanche being later compelled to disclose the confidence, inasmuch as Blanche cannot technically act in the capacity of citizen Trump’s lawyer any longer.”
• “Simply put, it would clearly be improper for Blanche to talk substantively about it to Trump while he, as the Justice Department’s lead attorney, is conducting a formal government investigation that potentially involves Trump’s prior conduct. However, if Blanche chose to do so (especially inasmuch as Trump, a layman, not truly knowledgeable about privilege restrictions), what would Blanche’s obligations be? At the very least, wouldn’t Blanche be obligated to give Trump so-called Upjohn Warnings?”
• “And what does that mean? Under the Supreme Court’s decision in Upjohn Co. v. United States, 449 U. S. 383 (1981) an Upjohn Warning is a statement that a corporate counsel (here, Blanche, as an attorney for the United States), would give to the employee of the ‘corporation’ (here, the president)—clarifying that the attorney-client privilege belongs to the company, not to the individual employee. It ensures that the employee understands that his statements can actually be disclosed to the company and potentially to third parties even without the employee’s consent.”
• “It basically tells the employee (here, Trump), that (1) the attorney represents the company, not the employee; (2) the attorney-client privilege belongs to the company, not the employee; (3) the company can waive the privilege and disclose the employee’s statements to others without the employee’s consent; and (4) that the employee may wish to seek other counsel.”
• “Now, given Trump’s inordinately close relationship with the Justice Department—and here, in particular, given that Mr Blanche was Trump’s single-client criminal lawyer—it seems highly unlikely that Blanche would even consider the rigamarole of Upjohn Warnings if Trump were on the verge of imparting his concerns about Epstein when and if the heat got hot.”
• “One would certainly have wanted to be a fly on the wall when/if Trump proposed talking to Deputy Attorney General Blanche about his relationship with Jeffrey Epstein. One might imagine that Blanche would have discouraged any such conversation. But, as we know, Trump doesn’t typically take ‘no’ for an answer lightly (and likely wouldn’t be especially concerned if Blanche even urgently tried to describe his ethical obligations when encouraging the President to simply keep his mouth shut).”
• “We may never know whether Trump himself demanded that Blanche himself conduct the infamous Ghislaine Maxwell interview in which she basically ‘acquitted’ Trump of any wrongdoing relating to Epstein. Either way, it’s hard to believe that Blanche conducted that interview without having in advance heard directly from Trump his side of the Epstein/Trump story (and, by the way, from Maxwell’s lawyer exactly what she would say, and wouldn’t say, about the President’s conduct when questioned).”
• “That said, what words of comfort—or were any really necessary?—did the ‘all in’ Blanche give Trump to make him comfortable that anything he told Blanche would remain confidential? We’ll probably have to wait for Trump’s book for at least his version. At bottom, can one possibly imagine a greater conflict than that which confronted Blanche—agreeing to head a spectacular government investigation focused in part on the president, after having separately represented him as an individual?”

“Abu Dhabi Fund Blocks $800 Million Private-Equity Asset Shuffle” —

• “A Houston-based private equity firm was stopped in its tracks when an investor cried foul as it tried to sell one of its assets to itself, one of the first times such a dispute has spilled into public view.”
• “Energy & Minerals Group had already lined up investors for a continuation fund of at least $800 million when Abu Dhabi Investment Council sued over the maneuver and halted the process, according to people with knowledge of the matter.”
• “The sovereign wealth fund — an independently run unit of Mubadala Investment Co. — last week sued to stop the private equity firm from shuffling natural gas producer Ascent Resources LLC into a different vehicle, court papers show.”
• “The fight is a rare public rebuke in the the world of private equity, where investor disputes are more often cordial and private. But as buyout shops increasingly turn to offbeat maneuvers like continuation funds to return capital, investor frustration is growing. Middle Eastern allocators in particular are becoming unhappy with some of the tactics used to prolong asset sales or delay distributions.”
• “The continuation fund would have allowed some Energy & Minerals Group investors to cash out of their stakes in Ascent Resources while bringing fresh money in. But ADIC’s lawsuit alleges the process was tainted by conflicts of interest and governance missteps.”
• “‘Defendants have made multiple material misstatements and omissions about the proposed transaction and employed a variety of coercive tactics,’ lawyers for ADIC wrote in court papers. ‘In so doing, EMG has placed its own self-interest above the interests of its investors,’ they added.”
• “Energy & Minerals Group has backed Ascent, the biggest natural gas producer in Ohio, for more than a decade. It has invested in the company through at least two funds along with a secondary fund it established in 2017, filings show.”
• “The continuation fund would have seen Energy & Minerals Group take a bigger stake in Ascent at a depressed valuation, lawyers for ADIC allege. The private equity firm dismissed exit alternatives like an initial public offering or a merger without fully exploring them, they argue.”
• “The case is Abu Dhabi Investment Council Company PJSC et. al. v. The Energy and Minerals Group, 25-1389, Delaware Chancery Court (Wilmington).”