Bressler Risk Blog

“Liveness detection IP court battle between Jumio and FaceTec turns nasty” —

• “A legal dispute between face biometrics and liveness detection providers is turning nasty, with accusations of bad-faith dealing and dishonesty leveled in U.S. federal court. Legal representatives for Jumio accuse FaceTec of mischaracterizing the prior work of a law firm that used to represent the latter, and now the former, in a motion countering FaceTec’s move to have the firm removed from the dispute over an alleged conflict of interest.”
• “Jumio’s representatives at Perkins Coie LLP say that FaceTec is merely attempting to smear the reputation of its litigation opponents, they say, citing the five months and 2,000 hours of work the law firm had spent defending the Palo Alto-based identity verification company before FaceTec filed its motion to remove it in December.”
• “Jumio’s opposing motion in the Northern District of California denies the substance of FaceTec’s motion to remove, and accuses its competitor of expressing manufactured confidentiality concerns with ‘tactical timing.'”
• “The law firm does not dispute that it worked with FaceTec, but argues that the billable hours reflect a relationship different and far shorter in duration than the 3D liveness provider indicated in its motion.”
• “Perkins Coie argues on Jumio’s behalf that it did not work on the patents in question, contrary to FaceTec’s claim, and what work it did for FaceTec did not involve any confidential information material to the case. The motion says that another firm, Weide & Miller, did most of the work on FaceTec’s patents, and Perkins Coie did only a tiny amount of work on patent applications for the company, all prior to 2016. It claims it did not work on patents involving the comparison of two pictures, and that no attorney that worked on other FaceTec patents remains with the firm.”
• “Perkins’ prior work for FaceTec ‘was not substantially related’ to the IP dispute, and the firm’s partner Lowell Ness was only an ‘occasional’ representative of FaceTec, according to the motion. Ness’ role as secretary for FaceTec at its founding was ‘customary’ and does not meet the criteria for disqualification, and the plaintiff’s other arguments are irrelevant, it says.”
• “‘FaceTec argues two main grounds for disqualification: prior work on certain patent applications, and prior work on non-patent matters,’ the motion states. ‘Neither ground requires disqualification because none of the work was substantially related to this case under California law. But FaceTec also waived its request by its unreasonable, prejudicial delay.'”

“Ala. Judge Won’t Recuse In Talc Fight Due To Law Firm Work” —

• “An Alabama federal judge will not recuse himself from a fight between two leading plaintiffs law firms in the multibillion-dollar litigation over Johnson & Johnson’s tainted talcum powder, saying Friday that his previous representation of Beasley Allen Law Firm won’t bias him against Smith Law Firm PLLC.”
• “In a six-page order, U.S. District Judge R. Austin Huffaker Jr. shot down Smith Law’s recusal request.”
• “It’s been more than five years since he represented Beasley Allen as a malpractice and disciplinary defense attorney at Rushton Stakely Johnston & Garrett PA, Judge Huffaker said, and he’s not especially close with anyone at the firm. He was appointed in 2019 by U.S. President Donald Trump.”
• “‘Beasley Allen was just one of numerous other law firms and attorneys that I represented over the years,’ Judge Huffaker said. ‘That representation was occasional over the course of the years and constituted a small fraction of my overall client base and revenue generations on a year-to-year basis.'”
• “Judge Huffaker’s ruling is the latest development in a bitter rift that’s opened between two former partners in the massive multidistrict litigation against J&J. Plaintiffs in the MDL claim they developed cancer from asbestos-tainted talcum powder.”
• “Beasley Allen sued Smith Law in Alabama federal court in September, claiming the firm has sold out its own clients for a quick payday by supporting a controversial $9 billion settlement offer by J&J in order to pay off ‘litigation funding loans perhaps as high as $240 million,’ according to its complaint. Beasley Allen is suing Smith Law for breach of contract, among other things.”
• “Smith Law hit back a few days later, suing Beasley Allen in Mississippi federal court for defamation over the ‘patently false’ accusations in its complaint.”
• “The two firms have been cooperating on the sprawling talcum litigation under a joint venture agreement since 2013, and together they represent roughly 11,000 plaintiffs. Both have been instrumental in driving the litigation forward over the years.”
• “J&J needs support from 75% of the roughly 100,000 individual talc claimants to move forward with the deal, and the pharmaceutical giant has reportedly been aggressively courting that support after two earlier proposed settlements withered on the vine.”
• “Beasley Allen, meanwhile, has been leading the opposition to the proposed settlement, claiming it still doesn’t provide enough compensation to claimants who allegedly contracted cancer from asbestos-tainted talcum powder. Beasley Allen and J&J have clashed repeatedly in court over the issue.”

“Judicial ethics complaints can’t be ignored in Maine” —

• “Maine’s Supreme Judicial Court finds itself with a thorny dilemma on its hands at the start of the new year. For the first time ever, one of its own members, Associate Justice Catherine Connors, has been recommended for discipline by the Committee on Judicial Conduct after failing to recuse herself for an important foreclosure case in which she cast the deciding vote.”
• “Though the issues surrounding recusal — opting out of case under consideration — are murky, leaving much to the discretion of the individual judge, the case itself is strikingly clear.”
• “Before joining the court in 2020 as Gov. Janet Mills’s first SJC nominee, Connors was a partner with Pierce Atwood, the Portland law firm. She argued and lost a case before the law court in 2017 that established a notably strict standard for how banks must present foreclosure documents.”
• “Basically, the court found that errors in such documents — such as misstating the amount owed the bank — invalidated the proceeding, essentially ending any need for repayment of the mortgage.”
• “That precedent was swept away in two foreclosure cases in 2024, including one – Finch v. U.S. Bank – where Connors was the deciding vote. This 4-3 decision relieved banks from the standards established in Pushard.”
• “Having argued the case that established the 2017 precedent, Connors checked with the Advisory Committee on Legal Ethics, which said she did not have to recuse because because she hadn’t represented either plaintiff.”
• “Still, recusal was the better option. During Connors’ confirmation hearing before the Legislature’s Judiciary Committee, responding to pointed questioning, she said she would ‘err on the side of recusal’ in foreclosure cases.”
• “Like most states, Maine ethics laws forbid not only a direct conflict of interest, but the ‘appearance’ of conflict.”
  “That’s what the Committee on Judicial Conduct determined. Given her foreclosure work for banks, it found, the public ‘would reasonably question her impartiality.'”
• “Asked by the SJC to recommend a specific sanction, it opted for a reprimand — the lightest punishment. Here we enter uncharted territory. Since it was formed as a judicial branch committee in 1978, Judicial Conduct has recommended discipline only 17 times, and never for a member of the SJC.”
• “As Maine’s highest court, the SJC now faces the uncomfortable task of potentially sanctioning one of its own members. To avoid this additional dilemma, some court observers suggest a panel of Superior Court trial judges be convened, or a group of out-of-state appeals court justices.”
• “There are pros and cons to any approach, and the decision will not be easy. Still, there is a legal process — very unlike the ethics crisis engulfing the nation’s highest court.”

“Proskauer Beats DQ Bid In NJ Hospital Antitrust Fight” —

• “A New Jersey federal judge refused to disqualify Proskauer Rose LLP from defending healthcare network RWJBarnabas Health Inc. in an antitrust lawsuit brought by competitor CarePoint Health Management Associates LLC, saying the present case wasn’t substantially related to work the law firm previously did for CarePoint.”
• “In a late November ruling unsealed Friday, U.S. Magistrate Judge Cathy L. Waldor wrote that CarePoint failed to establish that certain facts related to its prior representation by Proskauer were both relevant and material to its antitrust lawsuit against RWJBarnabas.”
• “She said that while CarePoint had suggested that the law firm had given it certain advice regarding related-party transactions, Proskauer had provided ‘foward-looking advice about whether the use of specific government funds for a small number of hypothetical transactions would pass muster under the relevant rules and regulations.'”
• “The only related party involved also appeared to be a hospital’s landlord, Judge Waldor wrote.”
• “One Proskauer attorney who was involved in CarePoint’s representation had described the firm’s involvement in a declaration, saying that Proskauer only provided advice concerning the permissibility of one hospital making rent payments to a related party and the implication of repaying a loan using COVID-19 relief funds.”
• “CarePoint sued RWJBarnabas in September 2022, accusing the New Jersey-based healthcare provider network of conspiring with others in a ‘years-long systematic effort’ to ‘destroy competition and to monopolize the provision of general acute care hospital services and related health care services’ in northern New Jersey.”
• “CarePoint, which recently filed for Chapter 11 bankruptcy, alleged that an ‘intertwined web of schemes’ had sought to ‘destroy’ three hospitals CarePoint operated as independent competitors to push CarePoint out of business through ‘serial acquisitions of competing hospitals and health care providers, as well as of the real estate necessary to operate competing hospitals.'”
• “In moving to disqualify Proskauer from representing RWJBarnabas, CarePoint asserted that the law firm had ‘open access to CarePoint’s confidential financial information and confidences.'”
• “‘By pursuing their strategy of blaming CarePoint’s founders, several of whom Proskauer apparently had attorney-client communications [with] … Proskauer has now caused this litigation to be substantially related to Proskauer’s prior representation of CarePoint,’ CarePoint said.”
• “RWJBarnabas, in response, snubbed CarePoint’s disqualification bid as a litigation tactic, ‘pure and simple.'”
• “In denying CarePoint’s disqualification motion, Judge Waldor also wrote that CarePoint was seemingly suggesting that Proskauer was extrapolating that CarePoint engaged in other related-party transactions.”
• “‘Stretched supposition is not fact, however,’ Judge Waldor wrote, adding that a ‘congruency of facts’ was needed to trigger a restriction on legal representation under a relevant Rule of Professional Conduct.”
• “‘In sum, the Court finds that Plaintiffs have not shown that this case is substantially related to Proskauer’s previous representation of CarePoint,’ Judge Waldor wrote. ‘Plaintiffs have therefore not met their ‘heavy’ burden of proving that Proskauer’s representation of Defendant runs afoul of [Rule of Professional Conduct] 1.9(a).’

“International Swimming League Sues Its Former Law Firm Over Negligence, Unfair Practices” —

• “The International Swimming League, which at this point has spent as much time in the courtroom as it ever did in a natatorium, is suing its former law firm for more than $7 million.”
• “The Zurch-based ISL and founder Konstantin Grigorishin sued the law firm Farella Braun + Martel in San Francisco Superior Court on December 30. The suit accuses the firm of professional negligence, breach of fiduciary duty, breach of implied contract, and unfair business practices in its anti-trust case against FINA (now World Aquatics)”
• Full complaint here.
• “The suit alleges that co-defendant Neil A. Goteiner, a partner in the firm, ‘persuaded ISL to hire Defendants…despite having little experience prosecuting antitrust actions.'”
• “That representing the three named athletes (Katinka Hosszu, Tom Shields, and Michael Andrew) in the anti-trust suit and the ISL in their suit represented a conflict of interest and they did not obtain ISL’s informed written consent to the joint representation.”
  “The matter of conflict of interest will prove peculiar to the general public, because ISL recruited the athletes to participate in their suit and instigated the legal proceedings against FINA.”
• “‘The potential conflicts between ISL and Grigorishin, ISL’s president and founder, included the fact that Defendants’ prior representation of Grigorishin provided Defendants with confidential information about Grigorishin and his finances that Defendants could leverage against Plaintiffs when ISL had liquidity issues impacting its ability to pay Defendants’ invoices.'”
  “‘The potential conflicts between ISL and the Swimmer Class Plaintiffs included the fact that both ISL and the Swimmer Class Plaintiffs were seeking economic damages from FINA (when FINA’s finances may have been insufficient to satisfy all clients’ claims) and likely would have to agree to any settlement and execution upon any judgment. Also, Defendants’ joint representation presented an obstacle to class certification (a fact that FINA raised in its opposition to the class certification in the Underlying Matter).'”
• “The suit is requesting that ISL and Grigorishin receive damages of $7.2 million, what they call the ‘full disgorgement of legal fees and costs…paid to defendants.'”

“Texas Firm Beats Arnold & Itkin DQ Bid In Hurricane Zeta MDL” —

• “A Texas state judge Thursday denied Arnold & Itkin LLP’s bid to disqualify the law firm defending a drilling rig owner in litigation stemming from Hurricane Zeta, finding that Arnold & Itkin hasn’t established that a defense lawyer who had worked for the firm was involved in anything substantially related to the current litigation.”
• “Harris County District Judge Rabeea Collier, in a brief order, denied Arnold & Itkin’s disqualification bid, which claimed that Karina Sanchez-Peralta of Ahmad Zavitsanos & Mensing, who represents Transocean Ltd., worked as a law clerk at Arnold & Itkin in 2022 and improperly sent herself confidential information about the Hurricane Zeta litigation before leaving the firm.”
• “The judge found that, while Sanchez-Peralta performed work for an Arnold & Itkin client who is now a medical expert for the hurricane litigation plaintiffs, Arnold & Itkin hasn’t established that the work Sanchez-Peralta was involved in is ‘substantially related to this litigation.'”
• “‘Additionally, plaintiffs have not demonstrated that they would suffer prejudice if disqualification were not granted,’ the judge said.”
• “The disqualification motion said that while Sanchez-Peralta was a clerk at Arnold & Itkin in 2022, the firm had for two years been representing plaintiffs in the multidistrict litigation created to handle seamen’s claims related to the hurricane. The crew members claim they were injured after Transocean forced their ship to remain in the path of the hurricane when it hit the Gulf of Mexico in October 2020.”
• “Ahmad Zavitsanos then ‘recruited’ Sanchez-Peralta before the end of her employment with Arnold & Itkin, the firm said, adding that she started there in September 2023 and became attorney of record for Transocean in the Hurricane Zeta MDL in March 2024.”
• “Sanchez-Peralta, who was chosen by her employer to serve as ‘lead attorney on all issues related to medical damages, witnesses and records,’ took work product from Arnold & Itkin related to the Hurricane Zeta MDL ‘in the final minutes’ of her employment, Arnold & Itkin argued.”
• “‘Then, according to her own LinkedIn profile, she took a job at AZA,’ the motion said. ‘Plaintiffs just discovered these violations and the conflict of interest after feeling compelled to investigate other potential ethical and professional violations based on Transocean and its counsel’s recent conduct in the media.'”
• “Arnold & Itkin was referring to news articles written by Texas Lawbook and Law360 that detail allegations Ahmad Zavitsanos has raised against Arnold & Itkin related to medical costs for Hurricane Zeta plaintiffs.”

“Summit: South Dakota regulator has conflict” —

• “The Iowa company proposing a carbon dioxide pipeline has formally requested that a South Dakota regulator recuse herself from the project’s permit application in that state because of an alleged conflict of interest — but the regulator said she does not have ‘a legal conflict.'”
• “In a letter sent last week, Summit Carbon Solutions asked South Dakota Public Utilities Commissioner Kristie Fiegen to disqualify herself. That would allow the governor to appoint another state official to fill in for Fiegen during the three-member commission’s consideration of Summit’s application.”
• “Summit wants to construct a $9 billion, five-state pipeline to capture and transport some of the carbon dioxide emitted by 57 ethanol plants to an underground storage area in North Dakota. The project would capitalize on federal tax credits incentivizing the prevention of heat-trapping carbon emissions into the atmosphere.”
• “The project has a storage permit in North Dakota and route permits in North Dakota, Iowa and Minnesota, while Nebraska has no state permitting process for CO2 pipelines. The project also faces litigation from opponents in multiple states.”
• “This is Summit’s second application in South Dakota, after the state’s Public Utilities Commission rejected the first application in 2023. Fiegen recused herself from those proceedings and was replaced then by State Treasurer Josh Haeder.”
• “At the time, Fiegen wrote a recusal letter saying she had a conflict because the pipeline ‘would cross land owned by my sister-in-law (my husband’s sister) and her husband.’ Fiegen also recused herself from an earlier, separate crude oil pipeline permit application for a similar reason.”
• “Fiegen has not recused herself from the new application, but Summit said the same conflict exists.”
• “‘As with your previous decisions,’ said the company’s new letter to Fiegen, ‘the facts and established South Dakota law support a decision that you should step aside.'”
• “Fiegen responded with a letter to Summit. In its entirety, Fiegen’s letter said, ‘I am an elected Public Utilities Commissioner and will carry out my duties as such. I do not have a legal conflict. I am sitting on the docket.'”
• “The Summit letter drew criticism from an attorney representing landowners opposed to the pipeline, Brian Jorde, of Domina Law Group in Omaha, who disputed the allegation that Fiegen has a conflict of interest.”
• “‘From my viewpoint she never had a conflict that rises to the level of recusal and certainly doesn’t now,’ Jorde wrote. ‘The isolated fact that she is related by marriage to a trustee of a trust that owns land that signed an easement with Summit is not a direct conflict.'”
• “Summit’s new letter said the logic that motivated Fiegen’s prior recusal remains unchanged. The company said her involvement risks violating South Dakota law, which the company said bars officials from participating in matters where conflicts exist.”
• “The letter said Fiegen’s failure to recuse herself could lead to litigation, an appeal of the commission’s eventual permit decision and delays in the permitting process.”
• “‘Because your family has a direct interest in the approval or denial of the permit, and because you previously recused yourself in two dockets based on the same facts, a court almost certainly would find it inappropriate for you to participate in this docket,’ the letter states.”

“Empowering In-House Solicitors: Solicitors Regulation Authority Releases New Comprehensive Guidance” —

• “The Solicitors Regulation Authority has issued updated guidance for in-house solicitors, emphasizing professional obligations, legal privilege, reporting wrongdoing, and handling conflicts of interest. It includes practical advice on managing privilege complexities and balancing confidentiality with public interest duties.”
• “Conflicts of interest: in-house solicitors are subject to professional obligations to avoid conflicts of interest – for example, where a solicitor is asked to act for a parent and subsidiary, they will need to consider the risk of a conflict arising. They will need to consider if the parent and subsidiary have aligned interest? Will there be a lot of negotiation? Will the relationship change? Can the information relating to each of them be kept separate and confidential? If it looks like there could be an issue with any of these points, it may not be appropriate for the in-house solicitor to act for both parties.”
• “Personal advice: the guidance also touches on providing advice to colleagues on personal matters, emphasising boundaries and ensuring that there is no conflict of interest. The guidance acknowledges that it can be possible to provide personal advice. It encourages in-house solicitors to:
  • Check their employment terms and internal policies first to see whether they are allowed to advise colleagues.
  • Think through the professional obligations (e.g. confidentiality, conflict and privilege).It gives the example of how advising a colleague on an employment contract might place a solicitor in conflict with their employer.
  • Consider if there is any applicable professional indemnity insurance cover and whether that extends to advising colleagues on personal matters.”
• “The guidance acknowledges that an in-house solicitor’s core obligation is to act in the best interests of their client. However, it also flags that solicitors have wider public interest duties to uphold the rule of law, act with independence, honesty and integrity, and maintain public trust. These wider public interest duties will, where they conflict with the client’s interests, override the obligations to the client and the organisation. This means there can be circumstances where a solicitor is obliged to do something that is not in the best interests of their client.”
  “Updated guidance is provided on where a solicitor is involved in conducting internal investigations: This update provides practical guidance to solicitors where they are involved in conducting internal investigations to help understand and manage regulatory risks and issues. The guidance acknowledges that there is no one-size-fits-all but sets out practical guidance for conducting an investigation, including… Independence: ensure investigators are free from conflicts of interest and maintain confidentiality and independence.”

“OCC Issues Cease and Desist Order Against Bank of America for BSA Deficiencies” —

• “The Office of the Comptroller of the Currency (OCC) today issued a cease-and-desist order (order) against Bank of America, N.A. (bank) for deficiencies related to its Bank Secrecy Act (BSA) and sanctions compliance programs.”
• “The OCC took this action based on violations and unsafe or unsound practices relating to these programs, including a failure to timely file suspicious activity reports and failure to correct a previously identified deficiency related to its Customer Due Diligence processes. The order also identifies deficiencies in the internal controls, governance, independent testing, and training components of the bank’s BSA compliance program.”
• “The order requires the bank to take comprehensive corrective actions to enhance its BSA/anti—money laundering (AML) and sanctions compliance programs, including the hiring of an independent consultant to assess the bank’s BSA/AML and sanctions compliance programs and conduct lookback reviews to ensure all suspicious activity was appropriately reported.”
• PDF: Cease and Desist Order

“Five charged by SFO over collapse of law firm Axiom Ince” —

• “The Serious Fraud Office (SFO) today charged five men, including two solicitors, with offences including fraud, forgery, and the destruction of documents, following the collapse of the law firm Axiom Ince and alleged improper use of over £60 million of client money. “
• “The firm’s CEO and director Pragnesh Modhwadia is charged alongside co-director Shyam Mistry and Chief Financial Officer Muhammad Ali with two counts of fraud by abuse of position. They are alleged to have misused client funds and exposed thousands of the firm’s clients to losses. “
• “Modhwadia and Mistry are also charged, alongside the firm’s Chief Technology Officer Rupesh Karawadra and Vice President of IT Jayesh Anjaria, with conspiring to conceal, destroy or dispose of documents relevant to a Solicitors Regulation Authority (SRA) investigation into the firm. All five are also charged with conspiring to mislead the SRA using false documents. “
• “Axiom Ince was closed by the SRA on 3 October 2023. At the time, the group had offices across the country, including in Birmingham, Bristol, Cardiff, Leeds, Liverpool, London and Manchester. “
• “The SFO’s investigation was opened 15 months ago and is one of its fastest to result in criminal charges. “

For those following this saga, Update 1 [Dec 25]: “Corporate Transparency Act Filing Requirements Reinstated: Act Now” —

• “The Corporate Transparency Act (CTA) filing requirements have been reinstated and most filings will now be due January 13, 2025 instead of the December 31, 2024 prior deadline. The bottom line is that any entity classified as a ‘reporting company’ under the CTA has to file with the Financial Crimes Enforcement Network of the Treasury (FinCEN). Each reporting company will have to file Beneficial Owner Information (BOI) for each person deemed a beneficiary owner (BOs). While a detailed discussion of the legal arguments in the cases challenging the CTAs constitutionality, and the counter arguments by the government would be interesting, that will not help those required to report to address that requirement.”
• “Reporting companies include closely held business entities whether they be limited partnerships (LPs), limited liability companies (LLCs), S corporations, other corporations unless they are specifically exempt. FinCEN has made the requirements broad and complex and even includes entities that might be inactive or terminated.”
• “Beneficial Owners include anyone who owns 25% or more of a reporting company or who has ‘substantial control’ over an entity. The definition of ‘substantial control’ is both broad and vague so that many people who are officers, directors, managers, key employees, etc. of a reporting company may have to provide information to the reporting company to report them as a BO. If a trust owns or controls interests in a reporting company, the filing requirements become exponentially more complicated and many or all people named in fiduciary and other capacities in the trust may have to provide BOI information to the reporting company.”
• “‘In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline…'”

Followed by Update 2 [Dec 26]: “FinCEN beneficial ownership registry deadline paused again” —

• “The January deadline for covered businesses to register their beneficial ownership information is once again on hold following a Dec. 26 order from the Fifth Circuit Court of Appeals.”
• “On Dec. 23, the Fifth Circuit lifted a nationwide injunction issued by the district court judge earlier this month in a Texas lawsuit challenging the Corporate Transparency Act, which requires covered businesses to report their beneficial ownership information to the Financial Crimes Enforcement Network. Three days later, ‘in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments,’ the panel of Fifth Circuit judges that will consider the merits of the government’s appeal of the preliminary injunction vacated that decision and once again enjoined enforcement of the reporting rule and CTA.”
• “The lawsuit in Texas was filed by the National Federation of Independent Business and several of its members. The plaintiffs argued that the CTA exceeded Congress’ authority to regulate interstate commerce, that it violates the First Amendment by compelling speech and infringing freedom of association and that it violates the Fourth Amendment by forcing the disclosure of private information.”
• “[See] FinCEN’s BOI page for updates and revised instructions.”

“Jenner & Block Hits Back at Keller Postman in Dispute” —

• “Jenner & Block is defending itself against allegations it hired a former FBI investigator to ‘harass’ people who filed claims against its client, video streamer Tubi.”
• “Tubi in a May 31 complaint accused Keller of bringing thousands of frivolous arbitration claims against it for running ads that allegedly targeted users based on age and gender. Jenner responded on Monday to allegations it acted unethically in its investigation into the validity of certain claims.”
• “Keller ‘seeks to divert the court’s attention from the troubling findings of Tubi’s investigation’ by calling Tubi’s investigation unethical, the company said in the new filing. Tubi is seeking to file an amended complaint which includes new evidence that would bolster its case against Keller, the lawyers said.”
• “Tubi says Keller’s business model is to flood target companies with a tidal wave of arbitration claims to pressure them into settling rather than paying the legal costs of fighting the claims. Many companies’ terms of service state that customers must arbitrate any dispute and typically companies pay for customers’ initial filings, which can cost anywhere from $100 to $325 per case, in addition to case management fees and arbitrator compensation.”
• “An estimated 4,500 claimants didn’t register with Tubi under the email addresses listed in the claimant’s arbitration demands, according to Tubi. An estimated 600 claimants started the registration process but didn’t complete it, or didn’t watch Tubi content using the account linked to the email address during the relevant time period. Another estimated 2,500 claimants completed the account verification process but didn’t watch Tubi content using the associated account during the relevant time period.”
• “Keller fired back in a motion to disqualify Jenner and a separate lawsuit against the firm last week, stating Jenner violated lawyer ethics rules by directing a former FBI investigator to coerce Tubi claimants into signing false declarations to support its case. Keller also claimed Jenner misled the court about the volume of claimants without registered Tubi accounts.”
• “Jenner first revealed it hired a former FBI agent to interview 22 of the 29 claimants who had withdrawn arbitration demands against Tubi in a Nov. 25 proposed amended complaint. Some former claimants said they weren’t aware of being represented by Keller Postman or having claims against Tubi, according to Jenner.”
• “Keller seized on the interviews in a Dec. 9 motion to disqualify Jenner and oppose its motion to file an amended complaint. Keller said the investigator interviewed the claimants without the knowledge of their counsel at Keller and coerced them into making false statements. Keller included exhibits by claimants asking to withdraw their previous statements.”
• “Although Jenner claimed the investigator only interviewed withdrawn claimants, Keller said its client relationship with the withdrawn claimants didn’t end once their claims were withdrawn. ‘Jenner’s response ignores what every lawyer knows: counsel can represent clients in a ‘matter’ regardless of whether a pleading has been filed or withdrawn,’ Keller said in a Dec. 9 court filing.”
• “The former FBI investigator hired by Jenner to interview the withdrawn claimants, Stephanie Talamantez, declared in the Monday filing that she ended every interview with a claimant who claimed to still be represented by Keller Postman. Talamantez also denied asking the withdrawn claimants to sign declarations at their initial meetings.”
• “‘I never pressured anyone into signing a declaration, and I told them all that doing so was voluntary,’ Talamantez stated. ‘I also asked them to review the declaration and advised that they should only sign it if what was stated in the declaration was accurate.'”
  ‘Fundamentally Flawed’”
• “Tubi also stated its response to Keller’s call for disqualifying Jenner & Block would be filed ‘in due course.'”

“Fani Willis is disqualified from prosecuting Trump election case in Georgia, appeals court rules” —

• “A Georgia appeals court has ruled that Fulton County District Attorney Fani Willis and her office must be disqualified from the criminal racketeering case she brought against President-elect Donald Trump and his allies over their efforts to alter the results of the 2020 election.”
• “In a 2-1 decision Thursday, the court found that Willis had created the appearance of a conflict of interest stemming from her romantic relationship with an outside prosecutor whom she hired to help run the case.”
• “‘This is the rare case in which disqualification is mandated and no other remedy will suffice to restore public confidence in the integrity of these proceedings,’ Judge Trenton Brown wrote, addressing the legal implications of Willis’ relationship with prosecutor Nathan Wade.”
• “The ruling appears likely to require the case to be assigned to another prosecutor. But Trump’s imminent inauguration as president means the charges against him are almost certain to either be paused while he is in office or dismissed entirely. The proceedings against Trump’s co-defendants — including close allies like former chief of staff Mark Meadows and lawyer Rudy Giuliani — could continue to grind forward during Trump’s presidency.”
• “The prosecution has been stalled for months while Trump and other defendants pressed their claims that Willis and Wade had a financial conflict because they were taking lavish vacations together while Wade was under contract with her office as a special prosecutor on the case.”
• “In March, following high-profile televised hearings featuring testimony from Willis and Wade, Fulton County Superior Court Judge Scott McAfee concluded the prosecutors’ relationship had caused an appearance of impropriety. However, he ruled that Willis could remain on the case if Wade resigned from the team. Wade stepped down within hours of that ruling.”
• “But the divided state appeals court panel found that Wade’s resignation did not go far enough. Willis, the elected Democratic district attorney for the Atlanta area, could appeal Thursday’s decision to the Georgia Supreme Court. But if it stands, it will further derail a case that has been mired in delays and controversies.”
• “Reassigning the case to another prosecutor’s office could take months or even years. And it’s far from clear whether a new prosecutor would agree with Willis’ overarching legal theory, which centered on deploying Georgia’s racketeering law to charge various Trump allies with a conspiracy to try to overturn President Joe Biden’s victory in the state. The newly assigned prosecutor could even choose to drop the case altogether.”
  “The criminal charges are currently pending against 15 defendants after several other defendants reached early plea deals.”

New York: “Judicial Ethics Opinion 24-82” —

• “A town justice may accept a position with the town’s highway department and “ghostwrite” a town’s state and federal grant applications for street, sidewalk, sewer, and infrastructure repairs, provided the judge does not personally solicit funds, permit the use of the prestige of judicial office for fund-raising, or permit the judge’s name to appear as the author or signatory on any grant applications.”
• “We have advised that a town justice may be employed as a laborer in the town highway department, subject to disqualification in matters involving the highway department (see Opinions 08-57; 00-62; see also Opinion 19-07 [discussing three categories of outside employment with the same municipality]).”
• “We have also advised that judges may ‘ghostwrite’ a not-for-profit charitable organization’s fund-raising letters and grant applications that will be signed, submitted and circulated by others without crediting the judge, provided the judge’s name and office do not appear on the applications and are not otherwise used for fund-raising or solicitation (see Opinion 23-145; see also Opinions 23-118 [full-time judge may prepare and submit grant applications in role as food pantry administrator, provided judge does not sign them]; 23-11 [part-time judge may write grant applications in role as volunteer treasurer for local fire company, but must not lend their name to any fund-raising activity]). [1]”
• “Accordingly, we conclude the inquiring judge may accept outside employment with the town highway department and, in that capacity, ghostwrite state and federal grant applications for the town highway department so long as the judge does not sign the applications or otherwise personally solicit funds or permit the use of the judge’s name or the prestige of judicial office for fund-raising.”
• “Assuming the position ‘will not involve the judge in the exercise of high-level executive or management authority on behalf of the town,’ we note that the judge must still disqualify ‘if his/her direct supervisor or municipal department appears as a party in a case before the judge’ (Opinion 19-07).”

“FaceTec accuses law firm of ‘betrayal’ in patent dispute with Jumio, iProov” —

• “Nevada’s FaceTec has accused its former legal representation of a conflict of interest in its patent dispute with California’s Jumio, and filed a motion to have the firm disqualified from the case.”
• “The case concerns a complaint of Willful Patent Infringement by Jumio Corporation, filed on June 14, 2024. Per the text, ‘FaceTec alleges herein that Defendant Jumio makes, uses, offers for sale and sells in the United States products, systems, and/or services that infringe one or more claims of each of the FaceTec Patents-in-Suit.'”
• “In another twist, the actual tech that FaceTec says infringes on their patent belongs to the UK’s iProov. Having explored a partnership in 2019, Jumio and FaceTec parted ways. Jumio pursued a partnership with iProov, which, per the complaint, ‘thereafter deployed for Jumio a liveness detection technology that infringes on FaceTec’s patent rights.'”
• “Now FaceTec claims that Jumio, having failed at prior efforts to develop its own liveness tools, is using FaceTec’s proprietary liveness detection as a model.”
• “Having crawled through the Northern District of California court system, the case has now reached a boil, with FaceTec calling out its former legal representative, Perkins Coie LLP, for representing Jumio in the dispute.”
• “FaceTec says that since the firm has previously represented it in matters concerning the same patent, its working for Jumio constitutes a conflict of interest – and a ‘betrayal.'”
• “‘Defendant Jumio is well aware of both FaceTec and its patented technology,’ it says. ‘Jumio is a direct competitor of FaceTec and provides competing biometric liveness detection software products.'”

Hat tip to Simon Chester for flagging: “The Law Society Takes Conflicts of Interest Seriously: Knocking on Wood” —

• “In ‘The Lawyer as Friend,’ a famous 1976 law review article, Charles Fried proposed that a lawyer should act as a ‘special-purpose friend’ to each of his or her clients. Within the bounds of the retainer, Fried argued, the lawyer must adopt the interests of the client as their own — just as a friend would.”
• “This analogy helps clarify why conflicts of interest are so toxic to lawyer-client relationships. A conflict of interest usually arises because a lawyer’s loyalty to a client is undermined by the their work for other clients, or by the lawyer’s own personal interests.”
• “A client feels betrayed if they learn (for example) that their lawyer is taking legal fees from the client’s adversary, or learns that the lawyer has some other good reason to want the client’s cause to fail. The stab — like the wound from his friend Brutus that killed Julius Caesar — is especially painful because it’s a stab in the back.”
• “When other people witness such betrayals, the reputation of the enitre legal profession suffers. After all, if people can’t trust us to loyally serve our clients and advance their legitimate interests within the bounds of the law, then what good are we to society?”
• “A large Bay Street law firm has been credibly alleged to have acted in a conflict of interest, thanks to some outstanding investigative reporting by Zach Dubinsky of CBC News.”
• “For several years, McMillan LLP has been a go-to law firm for the Paper Excellence corporation. This large Canadian forestry company has been represented by McMillan on transactions worth over $6 billion, including its acquisitions of Domtar and Catalyst Paper. Those deals would have generated very substantial legal fees for McMillan.”
• “The ethical problem arose when McMillan took on a new retainer, for the Forest Stewardship Council (FSC). That client’s main work is administering the ‘FSC’ certification, which you may have seen stamped on some wood products:”
  The Certification Business, and its Temptations”
• “The problem is that it’s manufacturers who pay FSC for the right to use the stamp. Using the stamp helps sell more product. And so there is a pecuniary temptation for certifiers like FSC to adopt lax rules, and to look the other way if a fee-paying manufacturer breaks them.”
• “One of FSC’s rules is that, in order to remain certified, a company must not only avoid destructive forest practices, but must also not be ‘indirectly involved’ with companies that do so. In November 2023, Greenpeace Canada complained to FSC that Paper Excellence was indirectly involved with Asia Pulp and Paper. That company had been decertified by the FSC in 2007 for destructive forestry practices. Drawing on the CBC’s reporting, Greenpeace alleged that Paper Excellence was effectively a corporate sibling of Asia Pulp & Paper, insofar as both were controlled by Indonesian forestry company Sinar Mas. This type of corporate relationship, if substantiated, would constitute ‘indirect involvement’ according to FSC rules and disqualify Paper Excellence from using the stamp.”
• “That allegation was contested by Paper Excellence, and so the FSC sought corporate law expertise to conduct a review.”
• “The firm that FSC hired was none other than McMillan LLP. As readers will recall, McMillan had cashed a number of cheques from its client Paper Excellence in the past, and probably hoped to do so again in the future. And yet, in this new retainer for FSC, McMillan was to neutrally and dispassionately form an opinion about whether Paper Excellence should lose its lucrative access to the FSC certification.”
• “McMillan LLP concluded that Paper Excellence should keep that certification. Whatever the merits of that conclusion, it is hard to understand how it could have been ethical for McMillan to accept the FSC brief. Large sums in future legal fees from Paper Excellence could have been sucked out of McMillan’s posh Bay Street headquarters, had the firm ruled the other way.”
• “By taking this retainer, the firm effectively became adjudicator of Greenpeace’s case against Paper Excellence. A judge who was very recently employed by a certain corporation should clearly not be assigned to hear a lawsuit involving that corporation (especially if they might be paid by them again in the near future). Likewise, McMillan seems a very problematic choice of adjudicator for this case impugning its former (and potentially future) fee-paying client.”
• “As noted above, the garden variety conflict of interest is problematic because it damages client interests. But in this case, the clients had no problem with it.”
• “FSC told the CBC that it had ‘conducted a conflict of interest check and found none,’ prior to retaining McMillan. It presumably learned of the firm’s prior work for Paper Excellence in conducting this check”
• “But that doesn’t make the conflict of interest go away or render it unproblematic. Consent of the client does not automatically resolve a conflict-of-interest problem, under Canada’s Model Code of Professional Conduct. After all, the question of whether McMillan is a suitable law firm to invetigate Paper Excellence on behalf of FSC doesn’t only affect Paper Excellence and FSC. It affects all consumers who want to be able to rely on the FSC certification as a true sign of ethical forestry practices. It affects every Canadian — whether or not they buy wood — because we all have an interest in upholding a legal profession able to act loyally and professionally.”

“Lateral Attorney Transitions Under the Ethics Rules” —

• “Law firms hiring lateral lawyers should be careful that they are not conflicting themselves out in the process. This is because a lateral lawyer’s conflicts are imputed to the new firm under the Rules of Professional Conduct (RPC). This principle applies to lateral partners as well as associates.”
• “Absent informed consent, confirmed in writing, a lawyer may not switch sides and sue a former client in the same or a substantially related matter. New York Rule of Professional Conduct 1.9 prohibits a lawyer from acting adversely to a former client about whom the lawyer acquired material confidential information:”
• “Unless the former client gives informed consent, confirmed in writing, a lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client:”
  • “1. Whose interests are materially adverse to that person.”
  • “2. About whom the lawyer had acquired information protected by Rules 1.6 [the confidentiality rule] or paragraph (c) of this Rule that is material to the matter. (NY RPC 1.9(b))”
• “The U.S. Court of Appeals for the Second Circuit has ruled that disqualification may be ordered where:”
  • “(1) The moving party is a former client of the adverse party’s counsel.”
  • “(2) There is a substantial relationship between the subject matter of the counsel’s prior representation of the moving party and the issues in the present lawsuit.”
  • “(3) The attorney whose disqualification is sought had access to, or was likely to have had access to, relevant privileged information in the course of his prior representation of the client. (Hempstead Video v. Incorporated Village of Valley Stream, 409 F. 3rd 127, 133 (2nd Cir. 2005) (holding that counsel’s connection to law firm was too attenuated to impute disqualification to entire firm)).”
• “When hiring a lateral lawyer, the new firm must screen for potential conflicts with former clients. This is because RPC 1.10 imputes such conflicts to the entire firm:”
• “But not every lawyer who assisted on a case is deemed to have represented a client within the meaning of the Rules of Professional Conduct. Junior lawyers who played minor roles in a matter will not be subject to disqualification. For example, a lawyer who merely does research, or drafts routine documents, is not necessarily subject to disqualification. See Silver Chrysler Plymouth v. Chrysler Motors, 518 F. 2nd 751 (2nd Cir. 1975). Professor Roy Simon writes that the ethics rules do not require disqualification of junior lawyers with fleeting, de minimus roles:”
• “In one leading case, a lawyer from a large firm had done some research and drafting work for an auto company. (Silver Chrysler Plymouth v. Chrysler Motors, 518 F. 2nd 751 (2nd Cir. 1975)). When the lawyer started his own firm, he became adverse to the former client. A motion to disqualify the lawyer was denied due to the de minimus nature of the associate’s work. As the Second Circuit reasoned:”
• “‘[The associate’s] involvement was, at most, limited to brief, informal discussions on a procedural matter or research on a specific point of law. … But there is reason to differentiate for disqualification purposes between lawyers who become heavily involved in the facts of a particular matter and those who enter briefly on the periphery of a limited and specific purpose related solely to legal questions.’ (Silver Chrysler Plymouth, 518 F. 2nd at 756).”
• “As currently constituted, the New York Rules do not expressly provide for an ethical screen except in limited circumstances. However, a proposal by the New York State Bar Association Committee on Standards of Attorney Conduct (COSAC) would incorporate an ethical screen into the New York rules. That proposed rule change contemplates screening to avoid imputation of conflicts to the firm under RPC 1.10 in most cases. The COSAC proposal has not been adopted by the Appellate Division.”
• “But the courts have designed solutions not contemplated by the Rules of Professional Conduct. Case law permits ethical screens depending on the facts of each case. These facts include the size of the outgoing and incoming law firms, the likelihood that the lateral lawyer has been exposed to confidential information, and the precautions taken by the new firm to prevent the spread of confidential information.”
• “As mentioned, screening is not addressed for most conflicts in the New York Rules of Professional Conduct. However, the courts have held that screening is permissible in some instances, depending upon the facts. The best practices for firms seeking to implement screening are as follows:”
  • “1. Written acknowledgement. The disqualified lawyer should acknowledge in writing the fact of the screening, and the obligation not to discuss any aspect of the tainted matter with other colleagues at the firm. Firm management should instruct the legal and non-legal staffs not to discuss the matter with the screened lawyer.”
  • “2. File separation. Have the files in the tainted matter placed in an area separate from the firm’s other client files and made accessible with codes known only to the team members working on the matter. The paper and digital files for the tainted matter should remain inaccessible to the incoming lateral lawyer. In addition, the disqualified lawyer’s office should be, insofar as practicable, physically remote from the offices of other lawyers working on the tainted file.”
  • “3. Non-participation in fees. The tainted lawyer should not share in any fees from the conflicted matter. If the lateral lawyer is not paid on straight salary, then the firm should send a memorandum to its comptroller regarding the disqualified lawyer’s nonparticipation in the fees generated in the matter.”
    Conclusion”
    “Disqualification of a tainted lawyer may be imputed to the incoming law firm. The incoming lawyer may be disqualified if they had access to confidential information at the prior firm. There is a rebuttable presumption that the incoming lawyer had access to such information. This presumption may be rebutted upon a proper showing that the lawyer in fact did not have access to material confidential information. In addition, the transitioning lateral lawyer should be denied access to paper and electronic files regarding the tainted manner.”

“Big Law Firms, Clients Battle Over Advance Conflict Waivers” —

• “The tug-of-war between Big Law firms and their most profitable corporate clients has shifted in favor of firms as they increasingly use advance conflict-of-interest waivers seeking to govern whether, and when, they can represent competing corporations at the same time.”
• “Courts increasingly are finding that firms devising advance waivers are taking care to be more specific so they can avoid being targeted by their own clients over conflicts—or at least can beat them in court when they get sued.”
• “Federal judges over the last 18 months have refused to disqualify leading law firms like Kirkland & Ellis, Sullivan & Cromwell, and Paul Hastings in lawsuits involving companies like Coca-Cola Co. and IBM Corp. This wasn’t the case as little as six years ago, when judges regularly took a harsh view of such waivers.”
• “‘Over time, firms have started drafting better waivers, so that clients feel like their interests are being better protected,’ said Doug Richmond, who advises law firms as a senior vice president with Lockton Companies LLC. As a result, ‘courts are tending to view these waivers with much less hostility than they used to.'”
• “Courts historically have been suspect of ‘very broad blanket’ advance waivers, said Cornell Law School Professor W. Bradley Wendel. But ‘I do think courts are willing to enforce the well drafted ones, and I suspect that law firm in-house counsel have gotten better at drafting them,’ he said.”
• “Legal ethics rules generally prohibit law firms from representing parties adverse to existing clients unless they receive a waiver that allows them to do so. Advance conflict waivers in retainer agreements say clients will waive those conflicts if the situation arises. They provide firms with a ready-made way to ask clients to agree—ahead of time—to allow the firm to represent others in ethically sticky situations.”
• “Determining the boundaries of advance conflict waivers have been key parts of SuperCooler Technologies Inc. v. The Coca Cola Co., IBM Corp. v. Micro Focus Inc., and US v. Tournant. In each, a federal judge granted a firm the right to continue despite alleged conflicts of interest.”
• “A federal court rejected Micro Focus’s motion to disqualify Kirkland from representing IBM in a copyright and breach of contract case, concluding that the law firm’s concurrent representations of IBM and Micro Focus were a ‘consentable conflict to which Micro Focus, a sophisticated user of legal services,’ had provided advance and informed consent.”
• “Micro Focus agreed in writing via the prospective waiver that Kirkland ‘may represent, or may already represent,’ parties in litigation directly adverse to Micro Focus, so long as the matters aren’t ‘substantially related’ to Kirkland’s representation of the company, said Judge Vincent L. Briccetti, of the US District Court for the Southern District of New York.”
• “Another federal judge denied Coca-Cola’s bid to bar Paul Hastings from suing Coke for more than $100 million on behalf of SuperCooler. When the soda giant agreed to the waiver, ‘Coca-Cola knew what Paul Hastings is, what Paul Hastings does, and the types of clients Paul Hastings represents,’ Magistrate Judge Robert M. Norway wrote. Paul Hastings’ engagement letter is ‘unambiguous,’ Norway said. Coke ‘understood and consented’ to the firm serving as counsel to an opposing party in future litigation.”
• “In another case, Sullivan & Cromwell’s failure to advise hedge fund manager Gregoire Tournant of a potential conflict of interest didn’t negate the confidentiality waiver that was part of the engagement letter, said Judge Laura Taylor Swain.”
• “The agreement ‘made a thorough disclosure of the risks and benefits that were posed by the joint representation,’ Swain wrote, and Tournant was represented by independent counsel when he signed it.”
• “‘IBM and SuperCooler are bellwether cases,’ said Matthew Henderson, a legal ethics and professional responsibility partner with Hinshaw & Culbertson. ‘I think this does reflect a trend.'”
• “Waivers feed the confirmation bias myth of the large-firm lawyer as the only advocate ‘who can grasp complex, large corporate transactional matters,’ she wrote in an Oct. 24 paper. ‘That is, until a client reaches a breaking point and files for disqualification.'”
• “Advance waivers have helped Big Law attorneys simply shelve fundamental legal ethics precepts, London said in an interview, like loyalty and fiduciary duty. ‘It may be old-fashioned to say, but clients hire lawyers to be on their side.'”

“We Don’t Need More Disclosure Rules for Litigation Funding” —

• “More litigants are obtaining financing from third-party litigation funders due to rising legal costs, the complexity of litigation, and the need to balance financial disparities between parties. Proponents argue that third-party litigation funding empowers plaintiffs to pursue cases against wealthier defendants.”
  “The necessity of disclosing litigation funding remains contentious. Several US courts—in states such as New Jersey, Texas, and California—have begun requiring parties to disclose funding arrangements. But the rules vary. The US Supreme Court’s Advisory Committee on Civil Rules created a subcommittee to consider the issue of funding disclosure, but the committee’s work will likely be a years-long process.”
  “There are concerns that third-party litigation funding may encourage plaintiffs to seek higher settlements and could improperly sway case strategies, potentially compromising legal integrity. Critics worry lawyers might prioritize funders’ interests over their clients’.”
  “Defense counsel say funding agreement disclosure is essential to clarify the funder’s influence on the case, and courts are cautious about external parties with financial interests but without the ethical obligations attorneys have. The interests of the plaintiffs’ counsel may diverge from their client, especially if a settlement doesn’t adequately cover or exceed the client’s recovery and the third-party litigation funder’s claim.”
  “The ethical rules governing an attorney’s duty to consult with and keep their clients informed are primarily outlined in Rule 1.4 of the American Bar Association’s Model Rules of Professional Conduct. These rules are intended to ensure that clients are well-informed and can make educated decisions about their legal representation.”
  “The justification for third-party litigation funding disclosure hinges on the assumption that attorneys may prioritize their personal interests or the funder’s interests over their clients.’ But existing attorney ethics rules, such as Rule 1.7 and New York Rule of Professional Conduct 1.8(i), already address potential conflicts. These rules aim to ensure attorneys remain loyal to their clients, making additional disclosure requirements redundant.”
  “The question is whether special rules are needed to ensure compliance with existing ethical rules.”
  “Judges are vigilant about ethical violations, including conduct they suspect may result from third-party litigation funding. They recognize unreasonable behavior through various courtroom interactions, including motions and mediations. Inevitably, irrational and unreasonable behavior becomes apparent and judges know how to deal with it.”
  “Attorneys are the face of a case to the court. They—not the third-party litigation funder—risk sanctions when they cede control over litigation. Attorneys had better know that risk when they sign up for the litigation funding that includes giving control to the third-party litigation funder.”
  “Law firms may use other forms of financing to fund litigation such as a firm line of credit, which may be used for day-to-day operating expenses as well as to fund litigation. And the firm’s overall financial health can affect litigation strategies. Disclosure of third-party litigation funding may lead to revealing other potential direct and indirect financial influences on case strategy to the defendant’s advantage.”
  “Disclosure of litigation funding gives an advantage to the defense counsel in knowing how long it can run the meter of its adversary before bringing the adversary to its knees.”
  “Courts should decide cases with third-party litigation funding the same way as those without: on the law and the facts. The existing ethics rules and careful judicial oversight are sufficient safeguards against misconduct.”

“Panel finds no conflict of interest in divorce, probate matters” —

• “An attorney need not withdraw from representing a client in a divorce proceeding despite opposing counsel serving as the probate judge overseeing an unrelated matter in which the attorney represents a different client, the Rhode Island Supreme Court Ethics Advisory Panel has ruled.”
• “The attorney inquired into whether withdrawal from representing the client in the divorce proceeding was required under the Rules of Professional Conduct.”
• “‘The inquiring attorney represents a client (‘Client 1’) in a divorce proceeding. The lawyer for the opposing party in the divorce proceeding is also a probate judge before whom the inquiring attorney represents a different client (‘Client 2’) as an heir against a surviving spouse in an unrelated contested matter,’ the panel noted.”
• “‘The Panel finds that under the facts as described by the inquiring attorney, no conflict of interest exists here. The interests of Client 1 and Client 2 are not directly adverse because they are unrelated parties involved in unrelated matters — one a divorce proceeding, the other a contested probate matter,’ the panel wrote.”
• “‘Additionally, neither representation is materially limited by the inquiring attorney’s responsibilities to either Client 1 and Client 2 or any other party. … Therefore, the inquiring attorney is under no obligation to withdraw from representing either Client 1 or Client 2,’ the panel added.”
• “The two-page decision, Rhode Island Supreme Court Ethics Advisory Panel Op. 2024-11, can be found by clicking here.”

“As Global Law Firm Mergers Keep Coming, Could There Ever Be a New Swiss Verein?” —

• “The Swiss verein model for law firm combinations has benefited a handful of global firms looking to sustain growth and increase size and scale, but the fact that only a small number of firms have combined using the verein structure has experts wondering whether it is still a viable business strategy.”
• “Large firms such as Dentons, DLA Piper and Baker McKenzie embraced the verein approach in the early part of the 21st century, using the model to place them in the upper echelons of the Am Law 100. Other recent trans-Atlantic mergers, however, including the combination between Allen & Overy and Shearman & Sterling that created A&O Shearman, and the merger between Herbert Smith Freehills and Kramer Levin Naftalis & Frankel to become HSF Kramer, have avoided the Swiss verein route, leading to questions over whether the model is losing luster.”
• “‘The verein model for law firm combinations is still a prominent business model for many international law firms, but its popularity and effectiveness have come under scrutiny in recent years,’ said Zain Atassi, a principal with recruiting firm Lateral Link. ‘Whether it remains a favored model depends on the perspective of the firm, its clients, and the specific markets in which it operates.'”
• “One of the draws to operating as a verein is the ability for large firms to expand internationally while still respecting local regulations. Another is liability protection, since firms under the verein model are considered to be separate legal entities. And yet another benefit is M&A flexibility, since the structure makes it easier to bring in new firms or dissolve relationships without having to restructure the entire organization, Atassi said.”
• “But some experts say it’s not all upside when it comes to vereins, which is reflected by the fact that only a small number of global firms today are actually structured as Swiss vereins.”
• “‘One of the biggest criticisms of the verein model is that it can create a fragmented culture, coupled with leadership and governnance issues,’ said Atassi, of Lateral Link. ‘Because member firms operate independently, there can be challenges when it comes to aligning strategies, managing conflicts, or implementing firm-wide initiatives.'”
• “Clients can also develop the perception that firms under the verein model are ‘fragmented rather than fully integrated,’ which can pose an issue for firms, Atassi said.”
• “Critics of vereins note that the impression that firms who merge this way are looked at as one, single global law firm is illusionary, and also that vereins open up the door to greater risks of conflict of interest for attorneys associated with verein firms.”
• “One example of verein conflicting interests involved global firm Dentons, which had been representing a company in an international investigation for patent infringement brought by a U.S. clothing retailer, which sought to have Dentons disqualified from the case because the retailer was also a client of Dentons, according to a 2017 paper written by then-law student Gabriela Chambi of American University, Washington College of Law, who now works as a senior associate with Hudson Cook.”
• “The verein structure serves the purpose of globalization and limited risk, but ‘you’re not going to be a proper, true firm in the sense that a partnership typically is,’ Mclaren said. ‘The question for the verein is, is there clear direction globally and what (are they) trying to achieve? Are all the partners in their organizations aligned and are they committed in the same way?'”
• “Also, ‘bigger from a global perspective isn’t always better,’ said one recruiter who has experience working with Big Law firms who spoke anonymously because of potential client conflict.”
• “Furthermore, partners looking to move to another firm will not necessarily consider whether a firm is structured as a verein as a determining factor when deciding to make a lateral leap, one industry expert said.”
• “‘All they really want to know is, ‘How is this going to affect me personally, and will it affect the amount of money that I make,” said Jeffrey Lowe, a legal recruiter with CenterPeak. ‘They’re really looking more at the quality of the firm, so they’re much more focused on the perception of the firm’s profitability and prestige rather than the structure that they have.'”