Bressler Risk Blog

Mark Hinderks, head Stinson LLP’s legal ethics and professional responsibility practice writes:  “Navigating a Tricky Matter-Intake Problem Involving a Conflict and Confidential Information” —

• “A former law school classmate newly appointed as a corporate general counsel called to ask me to represent his company to file a preemptive suit in a favorable forum against a competitor.”
• “He told me confidentially that based on internal documents, they believe the suit probably only has a 40-60% chance of success, but by getting to the favorable forum, they hope there will be sufficient pressure on the opponent to lead to an early and more favorable settlement.”
• “I ran a conflict check and discovered that the firm (not involving me) currently represents the opposing party in a small, unrelated real estate matter. What can I do to be able to go forward? This could be a really big ongoing client.”
• “At first read, this appears to be a straightforward Model Rule 1.7 concurrent conflict concerning unrelated matters that could be ameliorated by an appropriate waiver request to each client, with approvals confirmed in writing. The twist here is that you may be unable to effectively ask for the waiver. In order for a waiver of a conflict to be effective under Rule 1.7(b), there must be ‘informed consent.’ That requires that ‘each affected client be aware of the relevant circumstances and of the material and reasonably foreseeable ways that the conflict could have adverse effects on the interests of that client.’ Rule 1.7, Cmt.18.”
• “Here, the company that wishes to hire you is trying to beat the competitor to the courthouse (and thereby establish the first filing in a favorable forum different than the one the competitor (the firm’s current client) would choose.”
• “This puts you in a bit of a ‘Catch-22.’ You would have to disclose to your firm’s existing client the nature of the matter and the prospective client’s identity to obtain ‘informed consent’ and, therefore, an effective waiver.”
• “Because the prospective client’s strategy here is a preemptive surprise attack that requires confidentiality until executed, you would need your prospective client’s consent to disclose the relevant information to your existing client. But it is likely that your prospective client will not agree to your disclosure of that information to their opposition, because their opponent will then be able to withhold consent long enough, or otherwise act quickly to file their own action in a different forum.”
• “This likely means you must decline the matter, at least for now. It is possible that you could seek informed consent from the existing real estate client to be involved later (with the approval of the prospective client to make necessary disclosures) after the suit has already been filed and the reason for secrecy about the identity of the client and the matter has passed.”
• “But, you also have another issue. You have received confidential information from the prospective client about their race-to-the-courthouse strategy and their in-house assessment of the strength of their case before running a conflict check, and before specific agreement to be their counsel. By doing so, you have already placed yourself and the firm in a dilemma concerning duties to the existing real estate client.”
• “The best practice when discussing a new matter with a prospective client (or a current client) is to perform and clear a conflict check before acquiring any information the prospective client considers to be confidential. The most direct way to do this is to state to the prospective client at the time of initial contact to only provide you with the basic information necessary to perform the conflict check…”

“Burr & Forman Faces Data Breach of Health Care Client Information” —

• “Am Law 200 law firm Burr & Forman experienced a data breach that affected nearly 20,000 people, according to a public notice that said the incident occurred when ‘an unauthorized actor gained access to certain documents and information’ on the firm’s systems.”
• “The firm said it was the victim of an October data breach that was ‘quickly contained.’ However, the firm said its analysis indicated the breach impacted the data of two health care clients subject to HIPAA. ‘We continue to address this matter with those clients directly and to comply with all required notices and actions,’ said Kathryn Whitaker, chief marketing officer, in a statement.”
• “The firm, represented by Constangy, Brooks, Smith & Prophete, said it received the personal information in connection with its legal services for client Oceans Healthcare, according to the report. Another client was not identified.”
• “An investigation determined the affected data included some protected information, such as names, Social Security numbers, medical coding information with dates and insurance data, according to a breach incident report.”
• “In a ‘Notice of Data Security Incident’ posted on its website, the Birmingham, Alabama-based law firm said it ‘enhanced its network security’ and reported the incident to the FBI after learning of the incident.”
• “It then began conducting an investigation and began notifying affected individuals of the incident earlier this week, including providing ‘resources’ to assist them, the notice stated.”
• “Burr & Forman is one of the latest Am Law 200 law firms reporting a data breach. As The American Lawyer reported this month, 2023 saw a rise in law firm data breaches, as well as class action litigation tied to the events. Bryan Cave Leighton Paisner, Cadwalader, Wickersham & Taft and Smith, Gambrell & Russell were all sued over data breaches last year. Cadwalader and Smith Gambrell had their suits dismissed; Bryan Cave was dismissed as a defendant in one lawsuit as another is ongoing.”
• For more see their: “Notice of Data Security Incident“

“Are you ready for the Law Society’s new client ID requirements on January 1, 2024?” —

• “As of January 1st, 2024, the Law Society of Ontario requires lawyers who only meet with clients virtually to verify their clients’ identity online by authenticating their identification documents, or using an alternate, approved verification method. This ends the emergency virtual-verification measures that permitted verification through simply viewing identification documents online.”
• “The virtual authentication of identity is done via technology that does multiple searches/verifications of the client’s identity. For examples of such technology, the Law Society of Ontario refers lawyers to a directory maintained by the Digital Identification and Authentication Council of Canada.”
• “The Law Society does not restrict lawyers to only using the suppliers in the DIACC directory, provided the technology satisfies the Law Society’s criteria to determine whether an individual’s government-issued photo identification document is true and genuine.”
• “If you will not be meeting your client in person, you will be required to virtually verify their identity and authenticate their identification documents if your legal services include the receipt, payment or transfer of funds. The Law Society has created several resources to provide additional details.”
• “Are you ready to authenticate your client’s identification? What technology will you be using?”

The SRA has several February relevant risk webinars in the works, see their events page for registration details: “Events and speakers” —

• Completing your firm-wide risk assessment (7 February 2024)
• Speakers: Mandeep Sandhu, Head of Proactive AML Supervision, SRA, Kati Kalia-Hona, AML Proactive Supervision Team Leader, SRA, Susannah Eaton, AML Team Manager, SRA
• Having a firm-wide risk assessment in place is not only the foundation on which all your anti-money laundering processes are built, it’s also a legal requirement.
• We published updated guidance on preparing and completing your firm-wide risk assessment in September, and also published an updated template which may help you in devising your own assessment.
• In this free webinar, we will discuss:
  • Provide tips and information on completing a firm-wide risk assessment
  • Work through examples of how you might use/adapt the template we have published
• We recommend you have your firm-wide risk assessment with you during the webinar, so you can review it alongside the session.
• You will also get the chance to put your questions to our expert panel, in particular on any queries you may have about devising and completing your own assessment. Questions for our panel can be submitted in advance when you book your place, or you can submit them live during the webinar.

• Completing client/matter risk assessment – A practical guide (12 February 2024| YouTube)
• Speakers: Mandeep Sandhu, Head of Proactive AML Supervision, SRA, Declan Brown, AML Regulatory Manager, SRA, Michelle Clement, AML Regulatory Manager, SRA
• Our recent thematic review of client/matter risk assessments found that less than half of those produced within firms were compliant with the rules. This led to us issuing a warning notice on the issue.
• In this free webinar, we will discuss:
  • Why it is important that you have compliant client/matter risk assessments
  • Common areas of non-compliance
  • Hints and tips on completing your own assessments
• We will also illustrate how you might use and personalise the client/matter risk assessment templates we published in October 2023.
• You will also get the chance to put your questions to our expert panel, in particular on any queries you may have about devising and completing your own assessment. Questions for our panel can be submitted in advance when you book your place, or you can submit them live during the webinar.

“Judge Declines to Disqualify Attorney Accused of Paying Client’s Living Expenses, Matter Referred to Disciplinary Committee” —

• “A federal judge declined to disqualify an attorney accused of paying for his client’s living expenses, an alleged violation that will be referred to the Disciplinary Committee for further evaluation.”
• “U.S. District Judge Wendy Beetlestone of the Eastern District of Pennsylvania held that the issue of counsel paying for their client’s living expenses didn’t warrant disqualifying the attorney, concluding a potential ethical violation didn’t require disqualification.”
• “In a Jan. 10 opinion, the court denied defendant Tasty Baking Co.’s motion to disqualify plaintiff Jose Ayala Sr.’s counsel, who is alleged to have been paying for the plaintiff’s living expenses, referring the matter to the disciplinary committee to investigate the potential ethics violation.”
• “…[Pennsylvania] Rule 1.8(e) provides that, “A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: 1. a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and, 2. a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client,” the opinion said.”
• “‘The ethical considerations underlying rules on attorneys’ paying their clients’ living expenses aim to prevent financial entanglements that incentivize frivolous litigation (or at least that may monetarily incentivize litigants to make litigation decisions they might not otherwise make),’ Beetlestone noted. However, she ruled that given the factual record, disqualification wasn’t currently warranted.”
• “The court cited its 1999 ruling in Shade v. Great Lakes Dredge & Dock Co., which addressed Pennsylvania Rule 1.8(e) in the context of a client’s living expenses, noting the decision’s key principle that disqualification wasn’t warranted, ‘even if an ethical rule was violated—when it ‘is not necessary to effectuate the purposes of the rule or protect the integrity of the legal process’ in a particular case.'”

“Avoiding Conflicts With a Joint Defense Member Who Flips” —

• “A decision last week from the U.S. District Court for the Southern District of Florida, United States v. Vuteff, illustrates a benefit of utilizing a written joint defense agreement properly tailored to limit future conflicts, rather than relying on the oral agreements that are common among many practitioners.”
• “The court in Vuteff disqualified a lawyer whose former client was in an oral joint defense agreement with another individual who later ‘flipped’ to cooperate with the government. It held that the agreement imposed a duty of confidentiality on the lawyer, which would be violated by the lawyer’s use of information obtained through the joint defense to attack the cooperator’s credibility.”
• “This unfortunate scenario likely was avoidable. Applicable ethical guidance and case law indicate that such a disqualifying conflict can be obviated by a written joint defense agreement that expressly permits such use.”
• “United States v. Vuteff, 22 Cr. 20306, Dkt. No. 119 (S.D. Fla. Dec. 6, 2023), affirming 2023 WL 4202644 (S.D. Fla. June 27, 2023), a recent case out of the Southern District of Florida, serves as a cautionary reminder that, in some circumstances, courts may deem obligations to a non-client arising from a prior JDA to pose a conflict of interest for future representations.”
• “The case concerns an alleged bribery and money laundering conspiracy whereby individuals allegedly paid Venezuelan officials in return for the diversion of hundreds of millions of dollars from the Venezuelan state-owned oil company Petroleos de Venezuela S.A. (PDVSA). Several individuals employed by European financial institutions then allegedly helped launder the PDVSA funds using the international banking system.”
• “In the original criminal complaint filed in July 2018, two brothers were anonymously identified as part of the conspiracy but not named as defendants: Adolfo Ledo Nass and Alvaro Ledo Nass. After being identified in the complaint, each brother retained separate defense counsel, and Adolfo retained an experienced Miami-based criminal defense lawyer (hereinafter, Lawyer-1). Adolfo and Alvaro decided to work together to pursue a common defense strategy; accordingly, the brothers and their counsel entered into an oral JDA in August 2018.”
• “Over the next six months, the brothers and their counsel—including Lawyer-1—had several in-person meetings and conference calls where both brothers’ involvement in the alleged conspiracy was discussed. In early 2019, Adolfo discharged Lawyer-1 and retained new defense counsel.”
• “Over three years later, Lawyer-1 became involved in the PDVSA case once again—only this time representing a different alleged conspirator. On July 12, 2022, Luis Fernando Vuteff was indicted in the Southern District of Florida for conspiring to launder money as part of the PDVSA bribery scheme, and he retained Lawyer-1 as his defense counsel.”
• “As it happened, at some point after Adolfo discharged Lawyer-1, Alvaro agreed to cooperate with the government. As part of his cooperation agreement, Alvaro agreed to testify at any hearings or trials in the several cases relating to the PDVSA conspiracy—including Vuteff’s case.”
• “After it became clear that Alvaro would serve as a government witness against Vuteff, the government moved to disqualify Lawyer-1 and his firm from representing Vuteff.”
• “The government argued that, even though Lawyer-1 had not previously represented Alvaro, Lawyer-1’s previous participation in the JDA between Adolfo and Alvaro—and the fact Alvaro shared confidential information with Lawyer-1 as part of that JDA—created a conflict of interest precluding Lawyer-1 from representing Vuteff in a case involving the same criminal conspiracy. The government further emphasized that Alvaro refused to waive any conflicts of interest posed by the previous JDA.”
• “The court agreed with Lawyer-1 that he did not ‘owe an ethical obligation’ to Alvaro because he never represented Alvaro directly at the time he represented Adolfo. Vuteff, 2023 WL 4202644, at *6. Nonetheless, referencing ABA Formal Opinion 95-395, the court concluded that Lawyer-1 did owe Alvaro a fiduciary duty of confidentiality.”
• “Thus, because it was undisputed that Lawyer-1 learned confidential information from Alvaro as part of the JDA, and because Lawyer-1 sought to represent a co-defendant in the same case who was undoubtedly now adverse to the interests of Alvaro, this created a conflict of interest that precluded Lawyer-1 from representing Vuteff.”
• “Practitioners who commonly rely on oral JDAs may point to the time and energy required to negotiate the precise terms of a written JDA, and counsel’s ability to limit information sharing in situations where they perceive risk that a joint defense member may desert the group. The significant likely benefit of such express waiver language, however, provides a forceful counterargument in favor of a written JDA.”

“Appellate Court Rejects Attempt to Disqualify Law Firm Representing Plaintiffs in Separate Matters With Care One Management” —

• “‘Inference and innuendo’ are not enough to disqualify law firm Castronovo & McKinney from representing a plaintiff in a suit against Care One, while the firm also represents a former employee fired by the company over documents related to discovery in the case, according to the Appellate Division.”
• “In an unpublished opinion, the appeals court upheld a trial court ruling denying the senior care provider’s motion to disqualify law firm Castronovo & McKinney from representing the plaintiff in McCarthy v. Care One Management after the firm was retained by another former Care One employee to represent him in negotiating his severance package.”
• “Howard Tepper, Care One’s former senior vice president, also retained Castronovo & McKinney to negotiate his severance package after Care One allegedly fired him. Care One argued that Castronovo & McKinney violated 4.4(a) of the Rules of Professional Conduct by obtaining information on the company’s privileged litigation strategy in the punitive damages retrial and their confidential financial documents. The company asserted the Tepper emailed those documents to himself and then shared them with Castronovo & McKinney, according to the opinion.”
• “Counsel for Care One, Bruce H. Nagel of Nagel Rice, called the opinion ‘illogical and disturbing.’ … ‘The panel now permits a firm who is seeking financial information to establish punitive damages to also represent the very person at the defendant who was the highest ranking financial officer who was charged with litigation strategy and the production of the financial documents,’ Nagel said in an email to the Law Journal. ‘And to make matters worse, secretly emailed himself the same financial information that plaintiffs counsel has been seeking in the underlying case. The decision is simply inexplicable.'”
• “Nagel also stated that the panel rejected multiple emails from both in-house and outside counsel, which included Tepper in the litigation strategy decisions. The attorney said despite the fact the record was disputed, the court accepted Tepper’s certification that he was not privy to privileged information.”
• “Counsel for Rebecca McCarthy, Paul R. Castronovo of Castronovo & McKinney, did not immediately respond to a request for comment.”
• “‘To the extent Castronovo & McKinney might consider using documents related to Care One’s financial condition which were not produced by Care One’s counsel, unless the documents were otherwise publicly available, the potential consequences to the law firm could be far more severe than disqualification,’ stated the per curiam opinion.”

“Motion To Disqualify Denied” —

• “The United States District Court for the District of Columbia (Judge Nichols) has denied a motion to disqualify counsel (and for injunctive relief) to a party in an employment dispute in which the party (Shrensky) claimed wrongful discharge from the company ‘he helped found a half a century ago'”
• From the decision:
  • “A final issue remains: Shrensky’s motion to disqualify. ‘A motion to disqualify counsel is committed to the sound discretion of the district court.’ Ambush v. Engelberg, 282 F. Supp. 3d 58, 61 (D.D.C. 2017) (citation omitted). Disqualification of an attorney ‘is highly disfavored,’ and any motion to disqualify ‘is therefore examined with a skeptical eye.’ United States v. Crowder, 313 F. Supp. 3d 135, 141 (D.D.C. 2018). That is because disqualification “negates a client’s right to freely choose his counsel’ and can be sought ‘to advance purely tactical purposes.’ Ambush, 282 F. Supp. 3d at 62 (citations omitted).”
  • “Shrensky’s motion to disqualify Connie Bertram and Bertram LLC is based on his theory that Bertram and her firm are or were simultaneously representing Fort Meyer and some of the company’s ‘directors, officers, employees, members, [and] shareholders’—specifically, Rodriguez and his daughter. Mot. to Disqualify at 6 (citation omitted). But Fort Myer has persuasively represented that neither Bertram nor her firm have engaged in any such concurrent representation. Mem. in Opp. to Mot. to Disqualify at 2–3, 5–6, ECF 10. Rather, ‘Bertram LLP ceased representing Mr. Rodriguez and Ms. Rodrigues before being retained by [Fort Myer]’ and ‘[n]either Ms. Bertram nor Bertram LLP represent either Mr. Rodriguez or Ms. Rodrigues in connection with this litigation.’ Id. at 6. Shrensky has not adduced any evidence that convinces the Court otherwise.”
  • “In any event, Shrensky is not impacted by any potential conflict of interest. He was never a client of Bertram or Bertram LLC, so neither would have any information obtained from him via an attorney-client relationship that could harm him in this litigation. Thus, any concurrent representation would risk harm only to the company or Rodriguez and his daughter. It is not Shrensky’s place to step in and assert their rights. See Colyer v. Smith, 50 F. Supp 2d 966, 968 (C.D. Cal. 1999). Regardless, the Court perceives no ‘serious question as to counsel’s ability to act as a zealous and effective advocate for the client, nor a substantial possibility of an unfair advantage to the current client because of [a] prior representation of the opposing party.’ Koller v. Richardson-Merrell Inc., 737 F.2d 1038, 1056 (D.C. Cir. 1984) (citations omitted), vacated on other grounds, 472 U.S. 424 (1985). Thus, Shrensky’s concerns do not justify disqualification.”

With thanks to Cooley Conflicts Attorney George Bremner, and risk superstar Bill Frievogel, comes this from the New York City Bar: “Formal Opinion 2024-1: Ethical Issues Arising from the Representation of Two or More Bidders Competing for the Same Asset” —

• “The Professional Ethics Committee issued a formal ethics opinion analyzing a lawyer’s and a law firm’s ethical obligations when they consider representing two or more bidders competing for the same asset. The applicable New York Rules of Professional Conduct include Rules 1.4, 1.6, 1.7, 1.9, and 1.10(a).”
• “The opinion finds that, under these rules, in most situations, the lawyer and/or law firm would have a conflict of interest; however, again in most situations, the conflict is likely to be waivable in the law firm setting.”
• “Part I of the opinion concludes that a conflict of interest arises where a lawyer or law firm represents two or more bidders competing for the same asset.”
• “Part II presents a permutation of this situation in which the lawyer or law firm represents one bidder for the asset, but becomes aware that another client (which the lawyer is representing in an unrelated matter) is also bidding for the asset. (This permutation is unlikely to result in a conflict of interest unless the lawyer is asked to analyze or critique the other client’s bid.)”
• “Part III concludes that a multiple-bidder conflict is often waivable with consent from the affected competing bidder clients.”
• “And Part IV addresses other related ethics issues, including the lawyer’s duty to maintain the confidentiality of the work the lawyer (or the lawyer’s associates) performs for each of the competing bidder clients, and the possibility of using advance waivers to manage possible competing bidder conflicts ahead of time.”
• See the full opinion for all the details and discussion.

“Clyde & Co fined £500,000 after admitting due diligence failure” —

• “Top-50 firm Clyde & Co has been fined half a million pounds after admitting failing to carry out due diligence on a corporate client for more than four years.”
• “The firm’s former partner Edward Henry Mills-Webb was also fined £11,900 by the Solicitors Disciplinary Tribunal after admitting that he ‘materially contributed’ to the failure to check more than a dozen transactions as required by anti-money laundering regulations. There was no evidence that the client or its principals were involved in money laundering or financial crime.”
• “It is the second sanction levied on Clyde & Co in the past seven years. The international firm was previously fined £50,000 and three partners £10,000 each for accounting failures and breaches of AML rules.”
• “The tribunal heard earlier this week that both Clyde and Mills-Webb admitted that they should have obtained more complete documents for the former client, a shipping company incorporated in Liberia. The only documents obtained when the client was taken on in 2014 were six years old, and the firm and Mills-Webb accepted that they should have done more to understand the nature and structure of the business.”
• “Clyde blamed Mills-Webb for failing to identify what due diligence was required when the client was taken on and for failing to pay attention to emails from the firm’s business acceptance unit about steps that needed to be taken.”
• “For Clyde, Ben Hubble KC said: ‘The firm apologises for and very much regrets its failings. The firm has acknowledged the need to, and has worked to, strengthen its systems and processes.’”
• “Matter opening forms must now be signed off by the relevant fee-earner, who must expressly confirm that the information on the form is correct. Clyde said it had also increased the level of scrutiny that it applies to work classed as high risk.”
• “Helen Evans KC, for shipping expert Mills-Webb, said her client had not been ‘acting blindly and in a vacuum’ and believed his team had checked the client’s status.”
• “Mills-Webb accepted he had been ‘too detached’ from the due diligence process but stressed that his misconduct was an error and inadvertent, she said. Evans added: ‘He has done nothing inappropriate and always submitted there should be shared responsibility.’”
• “In a statement, the firm said it ‘sincerely regrets any compliance failings’ which it identified in 2018. It said: ‘Having reported the issue to the SRA, we fully assisted with its investigation and have sought to learn appropriate lessons.”
• “‘Under the firm’s current leadership, we have significantly enhanced our risk management and regulatory compliance. We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them. This SDT determination is a reminder that regulatory compliance and risk management requires continuous, diligent attention.’”

“Conflicts of Interest under Conditional Fee Agreements” —

• “Two recent cases reveal that conflicts of interest can arise at the settlement stage of a claim, particularly where a Conditional Fee Agreement (‘CFA’) applies. This reiterates the age-old lesson that solicitors must not prioritise their own interest (or the interests of one client at the expense of another) otherwise they risk incurring liability for negligence and breach of fiduciary duty, as well as possible regulatory exposure.”
• “In Forster v Reynolds Porter Chamberlain [2023] EWHC 1150 (Ch) the High Court found that the duties solicitors owed to the client, even when acting under a CFA agreed on a ‘no win no fee’ basis, remain unaltered.”
• “RPC acted for the client in litigation and following an agreed settlement with the opponent. Under the terms of the CFA all sums recovered from the opponent were payable to RPC and counsel in priority to the client. The client also had the benefit of an after the event (ATE) insurance policy, which covered repayment of a loan to fund expert fees, which was recommended by RPC.”
• “The Court held that RPC had a clear conflict of interest in advising the client to borrow money and then advising and acting for the lender in preventing the client from enforcing the settlement. RPC could not properly have advised or acted for borrower and lender without the informed consent of both.”
• “It was found that RPC was in breach of its duty to the client when it declined to act on her instructions to enforce the settlement. Whilst RPC had a greater financial interest in successful enforcement than the client did, as a consequence of the CFA, that did not entitle RPC to decide what to do. As a result of the enormous costs incurred on the client’s claim and the modest settlement in her favour, there was an intractable conflict of interest and duty on RPC once the opponent defaulted.”
• “In Michael Partridge Suzette Partridge v Healys LLP [2023] EWHC 2340 (KB) , a professional negligence action against the Defendant firm of solicitors, one of several allegations raised by the Claimants was that Healys had put themselves in a position of conflict under the terms of the CFA they were engaged under by advising the Claimants to settle at a mediation.”
• “The specifics of the conflict, or why the advice was not in the Claimants’ best interest was not pleaded nor was there a pleading that the advice to accept the offer was negligent. Healys applied to strike out the claim on the basis the pleaded claim had no real prospect of success.”
• “The Court held that in the absence of any pleaded allegation that the advice at mediation was negligent, simply giving non-negligent advice that led to a termination of the retainer was not an actionable conflict. Rather, it was a situation expressly provided for in the CFA agreement.”

In New York: “Judicial Ethics Opinion 23-44” —

• “(1) For two years after the representation is completely terminated and all fees are paid, a judge is disqualified, subject to remittal, from all matters in which an attorney who personally represented the judge appears before the judge, and the judge must disclose the former representation when other attorneys from the same law firm appear before the judge.”
• “(2) Where the judge serves in a court with appellate jurisdiction, and their former counsel seeks leave to participate as amicus curiae in a case during that two-year period, the judge may not vote on their ex-counsel’s application. If the application is granted by the judge’s colleagues, the judge thereafter must not participate in the appeal unless it is practicable in the judge’s court to make full disclosure on the record or, where applicable, offer an opportunity for remittal of the judge’s disqualification.”
• “(3) On a motion to submit an amicus brief, a judge without conflict may vote to approve or to deny the motion based on the merits of the brief and the value of its submission, in accordance with any applicable law or rules that govern such decisions. However, the judge should not consider potential practical impacts from other judges’ anticipated disqualification unless applicable law, rules, or administrative orders permit the judge to do so.”
• “We have previously advised that a judge’s obligations with respect to a former client remain the same whether that former client appears as a party or as an amicus curiae (see Opinion 18-46 [noting it “does not change the analysis”]).”
• “Here, the same principles apply. The inquiring judge serves in a court with appellate jurisdiction, and the judge’s former counsel seeks leave to participate as amicus curiae in a case during that two-year period. Under such circumstances, we conclude that the judge may not vote on their former counsel’s application.”
• “If the application is granted by the judge’s colleagues, the judge thereafter must not participate in the appeal, unless it is practicable in the judge’s court to make full disclosure on the record or, where appropriate, offer an opportunity for remittal of the judge’s disqualification.”
• “The judge’s second question envisions a scenario where one or more other judges on the same appellate court or appellate panel have a conflict involving a particular proposed amicus curiae. In essence, the judge asks if it is ethically permissible, when deciding an application for leave to participate as amicus curiae, to consider another judge’s likely disqualification if it is granted.”
• “In our view, it could potentially create an appearance of impropriety and undermine the court’s appearance of neutrality and independence if a judge were to consider whether granting the application would require certain colleagues to disqualify from the matter. Accordingly, the judge should not consider potential procedural or staffing impacts from other judges’ anticipated disqualification unless applicable law, rules, or administrative orders permit the judge to do so.”

In Rhode Island: “Attorneys – Disqualification – Probate matter” —

• “Where an attorney who represented a client in a probate matter following the death of the client’s mother has joined a law firm that represented the decedent’s estate, the attorney is disqualified from working on remaining trust-related matters unless the former client removes the disqualification by giving written informed consent.”
• ““It is the Panel’s opinion that: (1) the inquiring attorney is disqualified from working on the remaining matters related to the trust; (2) however, the former client may remove the disqualification by giving his or her written informed consent to the representation; and (3) if the former client does not provide such consent, no lawyer in the inquiring attorney’s new law firm may work on the remaining matters related to the trust unless the inquiring attorney is screened from the matter, and the former client is informed in writing of the nature of the former representation and is given a description of the screening procedures emplaced.”
• “…The former client’s interests are materially adverse to those of the decedent’s estate because the former client had a beneficiary interest in the estate that was subsequently extinguished by an amended estate plan executed by the decedent. Based on these facts, the Panel finds that the inquiring attorney is disqualified from representing the decedent’s estate pursuant to Rule 1.9(a).”
• “…Relevant here is Rule 1.10(c), which applies because the inquiring attorney has moved to a new law firm. … Under this Rule, no lawyer of the new law firm may represent a person in a matter in which the inquiring attorney is disqualified under Rule 1.9, unless two (2) conditions are met. Therefore, should the former client not consent to the inquiring attorney’s representation of the decedent’s estate, the Panel finds that no lawyer in the inquiring attorney’s new law firm may represent the decedent’s estate unless the following occurs.”
• “First, the inquiring attorney must be ‘timely screened from any participation in the matter and … apportioned no part of the fee therefrom.’ Rule 1.10(c)(1). Rule 1.0(k) defines ‘screened’ to mean ‘the isolation of a lawyer from any participation in a matter through the timely imposition of procedures within a firm that are reasonably adequate under the circumstances to protect information that the isolated lawyer is obligated to protect under these Rules or other law.'”
• “Second, the former client must be given prompt written notice enabling him or her to determine the firm’s compliance with Rule 1.10(c)… Comment [8] to Rule 1.10 clarifies that such notice should contain ‘a description of the screened lawyer’s prior representation and of the screening procedures employed[, and] generally should be given as soon as practicable after the need for screening becomes apparent.'”

“Law Firms Wrestle With How Much to Tell Clients About AI Use” —

• “Generative artificial intelligence promises to make legal work faster and more efficient, but it also poses a quandary for law firms: Should they tell clients they’re using the technology?”
• “Cleary Gottlieb Steen & Hamilton hasn’t reached a definite conclusion on disclosure and will follow what clients want, managing partner Michael Gerstenzang said. But ‘there’s no circumstance in which I could imagine using it on a not fully-disclosed basis,’ he added.”
• “The disclosure question is starting to come up in law firm conversations with clients. It raises other questions for in-house and outside counsel—including whether certain uses of AI need to be disclosed, but not others, and whether an engagement letter is the best place for a firm to make disclosures.”
• “State bar associations are weighing in. Earlier this month, the California Bar adopted guidance advising lawyers to consider disclosing AI’s use. The Florida Bar in a draft ethics opinion recommended lawyers get clients’ informed consent before using generative AI ‘if the utilization would involve the disclosure of any confidential information.'”
• “Lawyers’ existing duties of confidentiality and competence sufficiently cover obligations while using AI tools, said Katherine Forrest, a partner at Paul Weiss, a former US District Court judge, and the author of two books about AI and the law.”
• “But disclosing AI use isn’t ‘necessarily a bad thing, and it may in fact be prudent during this interim phase, while we’re all getting used to this new transformed world with new tools,’ Forrest said.”
• “Generative AI is increasingly baked into the technology lawyers touch every day, such as Microsoft Corp.’s AI Copilot, which is available in Word, and many common legal research tools.”
• “AI disclosure will most likely appear in engagement letters, but firms are watching for clients to take the lead.”
• “Gerstenzang, the Cleary managing partner, said he expects client expectations on disclosure to dictate conversations about AI’s use and whether disclosure appears in engagement letters. The firm is already talking to clients about AI, he said.”
• “Use of generative AI isn’t currently part of Paul Weiss’ standard engagement letter, Forrest said. The firm has clients who have asked it not to use generative AI without communicating with them, she said.”

Fresh detail on this one: “Law firm that handles data breaches was hit by data breach” —

• “An international law firm that works with companies affected by security incidents has experienced its own cyberattack that exposed the sensitive health information of hundreds of thousands of data breach victims.”
• “San Francisco-based Orrick, Herrington & Sutcliffe said last week that hackers stole the personal information and sensitive health data of more than 637,000 data breach victims from a file share on its network during an intrusion in March 2023.”
• “Orrick works with companies that are hit by security incidents, including data breaches, to handle regulatory requirements, such as obtaining victims’ information in order to notify state authorities and the individuals affected.”
• “In a series of data breach notification letters sent to affected individuals, Orrick said the hackers stole reams of data from its systems that pertain to security incidents at other companies, during which Orrick served as legal counsel.”
• “Orrick said the stolen data includes consumer names, dates of birth, postal address and email addresses, and government-issued identification numbers, such as Social Security numbers, passport and driver license numbers, and tax identification numbers. The data also includes medical treatment and diagnosis information, insurance claims information — such as the date and costs of services — and healthcare insurance numbers and provider details.”
• “Orrick said that the breach includes online account credentials and credit or debit card numbers.”
• “The number of individuals known to be affected by this data breach has risen by threefold since Orrick first disclosed the incident. Orrick said in its most recent data breach notice that it “does not anticipate providing notifications on behalf of additional businesses,” but did not say how it came to this conclusion.”
• “It’s not clear how the hackers initially broke into Orrick’s network, or whether the hackers demanded a financial ransom from the law firm.”
• “In December, Orrick told a San Francisco federal court that it had reached an agreement in principle to resolve four class action lawsuits, which accused Orrick of failing to inform victims of the breach until months after the incident.”

“CMS’ Spanish Arm Becomes Latest Victim of LockBit Cyber Attack” —

• “CMS has become the latest law firm to fall victim to a cyber attack, with its Spanish arm suffering a data breach of its storage servers.”
• “According to a post on social media platform X, behind the attack is ransomware group LockBit, which made headlines last month when it breached Allen & Overy’s servers, holding to ransom potentially highly sensitive client and firm data.”
• “CMS confirmed in a statement that ‘other member firms of the CMS organisation’ are not affected by the incident. In addition, its Spanish office has engaged external forensic specialists, who are collaborating with its cyber security response team, to ‘isolate and control the incident.'”
• “Commenting on the attack, the firm said: ‘We are still doing thorough cyber forensic work to examine and resolve the incident. Our focus is to determine what data has been affected. The firm’s priority is its clients and therefore we will maintain our security protocols and have implemented additional procedures.'”
• “A&O appeared on LockBit’s list of targets on its website on November 9, with the hackers demanding a ransom and threatening to publish its confidential data. However, the firm was removed from the victim list one day before the November 28 ransom deadline. It is as yet unclear whether A&O paid a ransom following what experts said would have been prolonged negotiations.”