Bressler Risk Blog

I just discovered “Dear Ethics Lawyer” from Mark Hinderks at Stinson. Here’s an interesting recent piece on: “Positional Conflicts” —

• “Q: Dear Ethics Lawyer, I am handling a significant case in which I am preparing to argue to a federal district court in our state that a state law cause of action against our client under relatively recent legislation is preempted by federal law. I’ve just learned that one of my partners in the firm is coincidentally preparing to argue in state court on behalf of a different client that preemption does not apply.”
• “I discovered this by accident, given that our firm (similar to other firms) does not track the specific legal arguments being made over time in individual cases as part of its conflict-checking system. Now that I know about it, what do I do? Is this an actual conflict, or something that will just be difficult to explain to the clients if they find out we are arguing both sides of the same argument at the same time?”
• “A: Positional or issue conflicts occur when a lawyer (or firm) is advocating a substantive position in one matter that could be detrimental to the interests of another client in a different matter. This situation raises questions such as whether the first decision rendered will be persuasive or even binding precedent affecting the other case; whether the judge(s) will discount the lawyers’ advocacy knowing the firm is on both sides of the issue; and whether the clients will be concerned by, or even subject to divided loyalties of the lawyers involved?”
• “The issue is dealt with to a certain extent in Model Rule 1.7, Comment 24, which states that ordinarily ‘a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients,’ and that the ‘mere fact’ that precedent might be created adverse to the interest of a client in an unrelated matter does not create a conflict of interest. If, however, there is a significant risk that the advocacy for one client will materially limit the lawyer’s effectiveness for another client in a different case, then a conflict will exist.”
• “Formal Ethics Op. 93-377 (1993) also looks at the issue primarily in the framework of a material limitation conflict under Rule 1.7(a)(2). Is the importance of the issue likely to affect the ultimate outcomes? Is the determination in one case likely to have a significant impact on the determination in the other? Will there be any ‘inclination by the lawyer, or her firm, to ‘soft pedal,’ de-emphasize or alter certain arguments to avoid impacting the other case?’ It concludes on the one hand that a conflict does exist when a lawyer or firm argues opposing substantive positions in the same jurisdiction at the same time; and on the other hand that no conflict exists when the matters are not litigated in the same jurisdiction and there is no substantial risk that either representation will be adversely affected by the other. Of course, there is a huge gray area between these two outcomes, in which the lawyer(s)/firm involved must examine the factors referenced above as to whether a material limitation conflict exists.”
• “There is also the matter of whether the matter should be disclosed to affected clients, especially if the decision is to proceed with both representations. As a practical matter, disclosure and consent (where disclosure may be made, and consent obtained under Rule 1.7(b)) may cure both any actual conflict of interest and inoculate the firm against client surprise and disappointment upon learning its lawyer or firm is arguing a position adverse to its interest.”
• “In the situation you describe above, the two matters are not in the same jurisdiction (one is in state court, the other federal), but are in the same state, where decisions of state and federal courts on a legal issue are likely to have significant influence, one upon the other. You should consider whether either representation is likely to adversely affect the other given the importance of the issue involved, and whether there is any other material limitation on the ability of you and your partner to vigorously present your arguments in the interests of your respective clients, and to have them fairly received by the courts involved. The safe route is either not to knowingly proceed with both matters, or to obtain informed consent if possible from the affected clients.”

“Nelson Mullins Faces $2B Suits Over Alleged Conflicts” —

• “The former wives of two insurance mogul brothers have sued Nelson Mullins Riley & Scarborough LLP for $2 billion, claiming a partner there set up the couples’ estates while quietly conspiring with the brothers to shield marital assets from the wives in the event of divorce.”
• “In two nearly identical suits filed Wednesday in West Palm Beach, Florida, Michelle Waite and Sandra Cohen, who were married to Seth and Brad Cohen, respectively, said Nelson Mullins partner Jonathan Gopman jointly represented them with their husbands when he helped do their estate planning.”
• “But he then worked against the wives’ interests by taking steps with the Cohen brothers, who founded Insurance Care Direct, to cut the wives out of their shares of the marital assets without communicating with the women.”
• “Waite and Sandra Cohen estimate they were denied between $500 million and $1 billion each in what should have been their fair share of the marital assets in their divorces.”
• “Gopman placed marital assets outside the women’s reach, including through complex and unnecessary corporate restructurings and the establishment of foreign trusts, according to the suit. He also helped the brothers secret away marital assets over the course of several years, according to the suit.”
• “Gopman was at Akerman LLP in 2015 when he helped the couples set up their estates, according to the suit. He joined Nelson Mullins in July 2021.”
• “The ex-wives allege that the law firm knew Gopman had previously represented each couple jointly, but agreed to represent the brothers in their respective divorces despite the conflicts of interest.”
• “‘Because Nelson Mullins was involved as counsel in the divorce proceedings, as well as having its own counsel to defend Gopman and its interests in those same proceedings, Nelson Mullins was fully aware of the conflict of interests involved,’ the ex-wives said.”
• “Nelson Mullins also helped the brothers set up a new entity, Entratus LLC, which claimed ownership of the proprietary intellectual property developed over several years at ICD entities, according to the suit.”

David Kluft asks: “Can I wait until the Court finds a conflict before I start screening the new lawyer?” —

• “A CA lawyer represented Home Depot in a few slip and fall personal injury cases, including some involving traumatic brain injury claims. The representation concluded in 2014, she joined a new firm, and in 2025 the new firm (including this lawyer specifically) appeared in a personal injury lawsuit by a man claiming he rented equipment from Home Depot that malfunctioned, causing a traumatic brain injury.”
• “The firm didn’t seek a conflict waiver and didn’t seem to consider it a conflict at all. This confidence may have been based on the passage of time, or the fact that this was a completely different case, or that it was a different type of case (slip and fall vs. equipment malfunction).”
• “Home Depot moved to disqualify both the lawyer and the whole firm. The Court allowed the motion, apparently impressed with the argument that the matters were ‘substantially related’ because the same type of injury was alleged, and therefore the lawyer’s knowledge of Home Depot’s litigation strategies from a decade ago would give her an unfair advantage.”
• “Because the new firm hadn’t bothered to screen anyone from the lawyer’s knowledge, the whole firm was disqualified. The Court stated: ‘[S]creening should be implemented before undertaking the challenged representation or hiring the tainted individual.'”
• “[Ed [Kluft]. Note: Even assuming the judge was correct on the merits, he did a terrible job explaining why this case was distinguishable from other ‘playbook’ cases in which lawyers were not precluded from litigating against former clients, he failed to address the very large passage of time, and his reasoning taken literally would forever ban any lawyer from being adverse to any former client on certain types of cases, which is not what the conflict laws are trying to achieve. Sloppy opinion. Still, the firm should have seen this coming and implemented screening instead of assuming they would win the motion.]”
• “Decision: here.

“FBI warns of in-person data theft attacks from extortion gang” —

• “The FBI warned on Tuesday that the Silent Ransom Group (SRG) extortion gang is now targeting U.S.-based law firms in in-person data theft attacks.”
• “‘As of Spring 2026, SRG actors use a social engineering scheme to pose as an employee from the victim’s IT department. SRG actors either directly call or send phishing emails to urge employees to call the SRG actor posing as IT support,’ the FBI warned in a Tuesday flash alert.”
• “‘While on the phone, the SRG actor directs the employee to grant access to a remote desktop session. If that attempt fails, SRG sends a threat actor to the victim’s location to gain access to insert a storage device into the victim’s computer.'”
• “By going to the victim’s location in person, the malicious actors can steal data by connecting USB drives or external hard drives to the victim’s computer.”
• “‘Through phone calls and phishing emails, SRG actors pose as IT support to establish access to victim computers and exfiltrate data, usually through legitimate remote access tools or by sending an individual in-person to the victim company’s location to gain physical access to computers,’ the FBI added.”
• “SRG uses the stolen data to extort the victims by sending a ransom email that threatens to sell or post it on their leak site, and will also call the victims’ employees or clients to pressure them into beginning ransom negotiations.”
• “This week’s flash alert follows a May 2025 FBI private industry notification warning that the same extortion gang had been targeting U.S. law firms in callback phishing and social engineering attacks for more than two years.”

“Brownstein Hyatt Faces DQ Bid In Sports Betting Biz Fight” —

• “A sports-betting executive suing her former employer for defamation and contract breach is looking to oust the company’s Brownstein Hyatt Farber Schreck LLP attorneys, telling a Nevada federal judge that the firm’s prior work for her creates a conflict.”
• “The legal feud between Australian betting company PlayUp and its former U.S. CEO, Laila Mintas, has plodded along for nearly five years, with each side preparing for trial on Mintas’ claims of defamation, breach of contract and lost wages against the company. But in a Tuesday motion, Mintas’ attorneys claimed that a recently discovered conflict should prohibit the Brownstein Hyatt team from representing PlayUp.”
• “‘Disqualification is warranted because BHFS has an imputed conflict of interest,’ Mintas said. ‘To allow this conflict to remain when there are clear indications that it is being abused would undeniably erode public trust in the profession as a matter of policy.'”
• “At the center of the disqualification request is Brownstein Hyatt’s representation of Mintas while she was still employed at PlayUp, in a case brought by a co-founder of the gambling platform Bet.Works, alleging that Mintas and others conspired to push him out of his company. The matter was eventually settled, but Mintas believes that the dispute offered the Brownstein Hyatt attorneys crucial information.”
• “‘While BHFS characterizes this representation as ‘narrow,’ the scope was not limited to mere procedural filings, and instead offered insight into Dr. Mintas’s professional and personal life that could be — and may well be — weaponized by an adverse party,’ she said.”
• “In an April 27 letter, Brownstein Hyatt attorneys refuted Mintas’ assertions, saying there was ‘no basis — factually or legally — to conclude that a conflict exists,’ stressing that its work was limited only to ‘negotiating and finalizing a settlement.'”
• “The underlying case surrounds Mintas’ time at the company during the collapse of a potential acquisition by the now-defunct cryptocurrency trading platform FTX. PlayUp sued Mintas for tanking the deal, seeking $465 million in damages. Those claims were thrown out last year, but a Nevada federal court allowed Mintas’ counterclaims, including that the company’s leadership defamed her and denied her compensation, to proceed to trial.”
• “According to Mintas, who was born in Germany, Brownstein Hyatt’s prior work on her behalf made the attorneys privy to her immigration status, which she said may be pivotal in PlayUp’s efforts to defeat her case on jurisdictional grounds.”
• “In their letter opposing Mintas’ request for PlayUp’s counsel to exit the case, the Brownstein Hyatt attorneys said that if the company were to make a jurisdictional argument, the facts of her immigration status would have to be disclosed, a passage that set off alarm bells for Mintas.”
• “‘This is an extraordinary admission: BHFS is simultaneously arguing that it possesses no relevant confidential information while telegraphing the use of precisely that information as a basis for a subject matter jurisdiction challenge,’ she told the court.”

“Lawyers Can Drop Uncooperative Clients, Within Limits, ABA Says” —

• “Lawyers can stop providing services or seek permission to do so if a client doesn’t fulfill basic obligations in the attorney-client relationship, the American Bar Association said in a new ethics opinion.”
• “This option, under Rule 1.16(b)(5), is most commonly invoked when a client repeatedly fails to pay for legal services, the ABA noted in its Wednesday opinion. However, the rule can also be applied to clients who refuse to cooperate with their attorney, provide or update their contact information, or comply with other terms of an engagement agreement, the ABA said.”
• “This is true even in circumstances where withdrawing representation would inflict a material adverse effect on the client, the ABA said, with the caveat that attorneys must give their client ‘reasonable warning that the lawyer will withdraw unless the obligation is fulfilled’ before they can abandon their client.”
• “‘In addition to serving as a risk management tool for the lawyer and law firm, engagement agreements should provide the client with a meaningful understanding of the material terms of the relationship,’ the association said. ‘This Opinion focuses specifically on provisions concerning the client’s obligations.'”
• “The opinion lays out several limitations an attorney must consider when drafting engagement agreements.”
• “For example, engagement agreements can stipulate provisions that the Model Rules of Professional Conduct don’t require, such as more implicit client obligations like producing necessary documents and providing truthful information.”
• “An agreement could also have terms that are ‘not otherwise implicit’ as long as they’re ‘within ethical limits,’ the ABA said, including provisions that prohibit a client from recording conversations or disclosing the attorney’s identity on social media over the course of representation.”
• “Client agreements can’t be used to require clients to comply with terms prohibited under the Model Rules or other public policy, such as forcing a client to ‘promise not to later pursue a disciplinary complaint or bar grievance against the lawyer or law firm.’.”
• “The opinion emphasizes that attorneys must enforce engagement agreements that are accurate or not misleading to the client; the ABA bars agreements that mischaracterize the client’s prospective rights and obligations, in addition to the circumstances in which attorneys can withdraw representation.”
• “Agreements also can’t include ‘a blanket stipulation irrevocably consenting to the lawyer’s future withdrawal’ in circumstances when an attorney wishes to withdraw for a reason not specified and agreed to by the client, the opinion said.”

David Kluft asks: “Should defense counsel be disqualified if she knows the medical history of a prosecution witness?” —

• “A NJ man was on trial for murder. The prosecution planned to call the man’s cellmate to testify that the man had admitted the murder to him. The problem was that defense counsel briefly represented the cellmate years before, and during that time had access to his mental health records, which among other things discussed his battle with schizophrenia.”
• “The prosecution moved to disqualify her. The Court allowed the motion, finding that defense counsel’s familiarity with the medical records of the cellmate and the very serious mental health issues detailed therein would be ‘part of the calculus’ in any attack on his credibility, and that this required her disqualification.”
• “The NJ App. Division affirmed, noting in passing that the two matters were ‘substantially related’ for conflict purposes, presumably because they both involved the mental health of the cellmate. According to the court, there was a substantial risk that defense counsel would either have (a) used the confidential information from the former client (the cellmate), thus giving an unfair advantage to the defendant; or (b) failed to vigorously cross-examine the witness about his mental health for fear of using the confidential information. Either way, the Court agreed it was appropriate to disqualify her.”
• Decision: here.

“Law firm Wiley Rein hit with class action over data breach tied to Chinese hackers” —

• “Prominent U.S. law firm Wiley Rein has been sued in a proposed class action alleging the firm failed to protect sensitive personal data stolen by hackers believed to be affiliated with ​the Chinese government. The lawsuit was filed on Friday in the federal court in Washington by a ‌Florida resident and seeks class-action status for potentially thousands of people.”
• “The complaint alleges that cybercriminals accessed Microsoft 365 email accounts belonging to certain Wiley Rein personnel between July 2024 and June 2025 before the firm detected the intrusion last year. The stolen data ​allegedly includes names, addresses, dates of birth, financial account numbers, medical information, and full or partial ​Social Security numbers, according to the lawsuit. The firm did not begin notifying victims ⁠until on or around March 6, 2026, the complaint said.”
• “Wiley Rein acknowledged after an internal probe that ‘a group that may ​be affiliated with the Chinese government’ carried out the intrusion, according to the lawsuit. In a notice to at least one victim, Wiley Rein said that the firm was arranging for the person to have 12 months of complimentary credit monitoring, and that ​it had ‘taken additional steps to enhance our existing security measures.'”
• “Law firms, like other major U.S. businesses, have faced ​a wave of cyberattacks in recent years. Law firms are particularly attractive targets for sophisticated criminal and state-linked hackers drawn to the ‌vast ⁠troves of sensitive client data they hold.”
• “The complaint alleges the breach ​occurred through a so-called ⁠phishing email, and that Wiley Rein failed to implement basic cybersecurity safeguards, including multi-factor authentication and adequate staff training.”
  “‘Wiley Rein’s breach differs from typical data breaches because it ​affects consumers who had no relationship with Wiley Rein, never sought one, and ​never consented to ⁠Wiley Rein collecting and storing their information,’ the lawsuit said.