David Kluft asks: “Do I have to tell my client who my other clients are if there is no conflict?” —

• “An IL company found out that that a departing employee, who was in the process of starting a competing entity, had been in touch with the company’s outside counsel law firm. The company asked the law firm what was up, and the firm stated that it did not represent the departing employee in any matter adverse to the firm, but ‘if you are also asking the broader question of whether we represent [her] on other matters, I cannot answer that.'”
• “The company later sued the firm on theories of fraudulent misrepresentation (falsely claiming there was no adversity) and fraudulent concealment (not disclosing whether they represented her at all).”
• “The 7th Cir. Affirmed dismissal of the fraudulent concealment allegation, because there was no duty to disclose the identity of one client to another absent a conflict. The Court also affirmed summary judgment against the fraudulent misrepresentation allegation, because the firm had not been paid any attorneys’ fees after the alleged misrepresentation so there was no harm.”
• Decision: here.

“Ayotte’s choice of Casella lawyer for Supreme Court raises alarm among environmental advocates: ‘Simply rewarding a political loyalist’” —

• “[New Hampshire] Gov. Kelly Ayotte chose Bryan Gould, an attorney and lobbyist for Casella Waste Systems, as her nominee for the New Hampshire Supreme Court last week, drawing concern across party lines about his selection could mean for the future of the state’s environmental protections.”
• “Gould is currently the lead attorney representing Casella in its lawsuit against the New Hampshire Department of Environmental Services, after regulators denied a key permit for the company’s plan to build a landfill in the North Country.”
• “State Rep. Kelley Potenza, R-Rochester, said that while she highly respects Ayotte for bringing waste issues to the forefront, Gould’s confirmation to the state’s highest court could be a ‘huge problem.'”
• “‘His relationship is incestuous with industry, as well as has an active lawsuit against the state right now,’ she said. ‘What is she thinking? She literally put forward one of the worst offenders who has trampled on the rights of citizens in the highest position of judicial power in New Hampshire.'”
• “Gould, a director at the Concord law firm Cleveland Waters and Bass, also served as legal counsel for Ayotte’s gubernatorial campaign. In May, Ayotte appointed him to a six-member judicial selection commission.”
• “Gould has also represented the New Hampshire Republican State Committee.”
• “In 2023, emails revealed that the state’s environmental agency consulted Gould during the legislative session on edits to a bill. In its original form, the legislation would have made it difficult for Casella to site a landfill in Dalton.”
  “John Corbett, a spokesperson for Ayotte, said Gould’s conflicts of interest would not affect the cases he hears should he be confirmed to the state Supreme Court.”
• “‘While Gov. Ayotte strongly opposes a landfill at Forest Lake, she knows Bryan Gould will continue to operate with the strongest professional ethics and recuse himself from cases involving Casella and the proposed project in Dalton,’ he said in a statement. ‘The governor is confident Gould will uphold our Constitution and lead with fairness and sound judgment as he hears cases that come before the Court.'”
• “Gould has worked as a lobbyist for Casella since 2020. This year, he has already received $99,050 in lobbying fees from the company, with $65,857 still outstanding, according to his financial filings with the Secretary of State. In 2024, he was paid $72,804 for his lobbying work.”
• “‘The fact that he has been involved and continues to be involved in these legal actions between his out-of-state client and the state of New Hampshire certainly makes it a lot more disconcerting,’ [State Rep.] Germana said.”
• “He also questioned Ayotte’s decision to nominate someone at 66, calling it ‘odd’ for a new justice. In New Hampshire, the mandatory retirement age for judges is 70.”
• “‘It’s really difficult to believe that the motivation behind this is anything other than simply rewarding a political loyalist,’ Germana said. ‘So, the fact that he has been involved, and continues to be involved in these legal actions between his out-of-state client and the state of New Hampshire, certainly makes it a lot more disconcerting.'”

“Big Law Firms Cool to Idea of Bringing on Burford’s Billions” —

• “Some Big Law leaders are skeptical of Burford Capital’s plan for minority investments in firms, in part because they don’t see a need for the cash. The publicly traded litigation finance pioneer last month floated the idea of buying a stake to several US law firms. Some legal leaders worry taking on these kinds of arrangements could breach state rules against non-lawyer ownership of firms. Others hesitate to relinquish any control, even for investments in back-office services only. And some struggle to know what they’d do with new money from the outside.”
• “‘Our service offerings are designed to complement our lawyers in delivering the best service to our clients,’ Miguel Zaldivar, chief executive officer of Hogan Lovells, said in an interview. ‘Profitability matters, but we also want to protect our unique culture. Even in the provision of ancillary services, I consider it a challenge.'”
• “The skepticism shows why Burford leaders have mounted something of a public relations campaign to persuade law firms of their deep experience investing in professional services. The investor, which has $3 billion in market capitalization, has been scouring for large law firms willing to take the jump as it engages in talks with several firms it hasn’t named.”
• “Burford since its founding in 2009 has pumped $11 billion into single lawsuits or portfolios of cases with the hope of reaping a share of awards—an investment practice known as litigation finance. The company now also wants to pour capital into law firms through managed services organizations, or MSOs, a structure used by private equity firms to invest in accountancies and healthcare providers.”
• “The model creates a separate business that houses service functions of a law firm, such as billing and human resources. The law firm then contracts with the MSO for those services, freeing up resources for managing partners to focus on their core business of serving clients.”
• “One person with knowledge of MSOs, who requested anonymity to discuss details of the industry, roughly estimated that more than $100 million has been invested into legal MSOs in the last 10 to 15 years. Some of the money is from traditional private equity firms, while some has come from litigation finance platforms, the person said.”
  “That’s not much money in the world of Big Law. To put that in perspective, the 58 largest law firms each cleared more than $1 billion in revenue in fiscal 2024, according to the American Lawyer.”
  ‘Hypothetical’ Talk”
• “Burford’s Lenkner said the MSO model doesn’t breach the US fee-splitting provision. Burford would be a ‘passive’ investor in the services organization, he said, and law firms would be well-placed to negotiate their continued control over their operations into contracts tied to any deals.”