Risk Update

Cost, Conflicts & Risk — Arbitration Teams Navigating Costly Conflicts, SRA Publishes New AML Advice and Business Intake Templates

Posted on

Why Arbitration Spinoffs Are ‘Part Push, Part Pull’ for Big Law” —

  • “For Yas Banifatemi, practicing international arbitration at a large law firm had stopped making sense.”
  • “She and her colleagues had for years operated ‘a firm within a firm’ that had become Shearman & Sterling’s ‘crown jewel,’ she said, but as the firm expanded its U.S. presence the global arbitration practice was feeling some unfortunate side effects. As Shearman grew its focus on the energy sector by adding dozens of partners in Texas, Banifatemi and the arbitration team found themselves increasingly conflicted out of matters for longstanding clients.”
  • “‘Shearman had a very expanded view of what a conflict is,’ Banifatemi said.””When the firm’s finance team represented a bank as an underwriter, for example, its arbitration practice had to bow out of disputes in which the bank had been involved as a lender but was no longer a party.”
  • “‘We lost extremely interesting, prestigious matters to that view of conflict of interest,’ Banifatemi said. ‘That ended up being very annoying. You cannot expand your work and the work you have is losing ground because you have so many conflicts.'”
  • “Conflict concerns coupled with the desire to be free of the bureaucracy of Big Law—all those meetings and red tape—led Banifatemi and Emmanuel Gaillard, co-heads of Shearman’s practice, to leave with a 38-lawyer team to start GBS Disputes in 2021.”
  • “Their exit was perhaps the loudest and most notable in recent years, but the past decade has seen a growing trend of international arbitration practitioners ditching large firms to branch out on their own. As the arbitration market has matured, small-scale specialist and boutique firms have found clients receptive to the streamlined service they can offer, and many attorneys are finding that the grass truly is greener outside of Big Law.”
  • “But in fact, the recent spate of arbitration exits from large firms is ‘part push, part pull,’ according to the head of an international arbitration practice at a global firm. The race toward maximum profitability has become particularly pronounced, and as that’s happened arbitration has lost some of its luster, given its nature as a long-term play with limited margins compared with more lucrative and reliable practices. At certain large firms, the practice leader said, ‘arbitration is no longer the shining star in the firm.’ Those circumstances can open the door to a firm accepting an arbitrator’s exit or even offering a gentle push.”
  • “More significant, though, is the pull that arbitrators are feeling, the practice leader said. As the arbitration market has matured and the club of prestigious practitioners has grown, many have seen the proof of concept offered by firms like GBS and Three Crowns and determined that they have better options.”
  • “The pressure to maintain profitability in large firms presents itself in other ways, too, according to Weijia Rao, assistant professor at the Antonin Scalia Law School at George Mason University, who previously practiced international law at Sidley Austin and worked at the International Centre for Settlement of Investment Disputes (ICSID). Representing a country in investor-state arbitration often involves a capped fee, she said, which means it isn’t usually as profitable as representing investors or companies. For some arbitration practitioners, that creates an unwelcome tension.”
  • “For international arbitrators who have left big firms in recent years, freedom and flexibility were among the most important factors. From avoiding conflicts to selecting clients and even choosing how to hire and train, exiting Big Law allows practitioners a sense of clarity that can be hard to find as part of a full-scale enterprise.”

Colette Best, Director of Anti-Money Laundering at Solicitors Regulation Authority, introduced several new resource:

  • “We have recently published a suite of information to help firms put in place good client/matter risk assessments. These are an essential block of your AML controls to decide what level of customer due diligence is needed to mitigate the risk.”
  • We have published a report setting out the findings of our thematic review: “Client and matter risk assessments
  • We have also published a template for client/matter risk assessments for those firms which wish to use it: “Completing the client and matter risk template
  • And a warning notice setting out what firms are getting wrong and what good practice looks like: “Warning notice: Client and matter risk assessments
Risk Update

Conflicts News — Expert Witness Disqualified, Judges’ Former Firm Work Doesn’t Demand Recusal

Posted on

Va. Judge Nixes Defense’s Expert Witness, Finding Previous Work With Opposing Counsel Created ‘Serious’ Conflict of Interest” —

  • “A federal court in Virginia has ruled that an expert witness for the defense is conflicted out of a personal injury lawsuit because she previously discussed serving as an expert in a Pennsylvania case with plaintiffs counsel, who shared privileged communications and attorney work product about the Virginia matter.”
  • “According to the Oct. 10 opinion by U.S. District Judge Thomas T. Cullen of the Western District of Virginia, the John Doe plaintiff was as student at Turner Ashby High School when then-principal Phil Judd and school guidance counselor Sandy King allegedly failed to protect him from sexual abuse at the hands of former drama teacher Wesley Dunlap, according to the opinion.”
  • “Before the court was Doe’s motion to disqualify Dr. Charol Shakeshaft from serving as an expert witness for the defendants, Judd, King, Dunlap and the Rockingham County School Board, about sexual-assault prevention and training.”
  • “Doe argued his counsel had previously engaged Shakeshaft to serve as an expert witness for the plaintiffs in the case, disclosing privileged communications and attorney work product to her, and therefore the court should bar Shakeshaft from testifying.”
  • “According to the court, Doe’s counsel contacted Shakeshaft to gauge her interest in serving as Doe’s expert witness… Shakeshaft and Doe’s counsel went on to speak over the phone, where Doe’s counsel argued they revealed ‘a trove of confidential information about this case,’ including privileged attorney-client communications and attorney work product, according to the opinion.”
  • “Doe contended that, during the call, Shakeshaft confirmed she didn’t have any conflicts that would preclude her from serving as an expert in either of the litigations, leading counsel to explain both cases in detail, including confidential and privileged information, the opinion said.”
  • “Shakeshaft claimed that little-to-no substantive information about the Virginia case was shared, including no privileged or protected material, with defendants arguing ‘scant details’ were provided about the Virginia case, including no confidential or privileged information, according to the opinion.”
  • “But the court held it was undisputed that Doe’s counsel worked with Shakeshaft on the Pennsylvania case, with counsel claiming it occasionally discussed the Virginia matter during this time. Doe’s counsel went on to pay Shakeshaft for the Pennsylvania expert report.”
  • “Defense counsel went on to execute a written agreement with Shakeshaft for her to serve as their expert, paying her a $2,500 retainer. Shakeshaft billed defendants for 58 hours spent reviewing documents and drafting the report, the court said.”
  • “After learning that the defendants had retained Shakeshaft and intended to use her as an expert, Doe’s counsel filed a motion to disqualify her. The court granted the motion, concluding that a confidential relationship existed and confidential information had been shared.”
  • “‘In support of her representation to the court to this effect, Plaintiff’s counsel provided an affidavit and six-page in camera letter that describes, in detail, the nature and extent of the information shared. This included the substance of two key, privileged communications with her client about a determinative issue in the case,’ the court said. ‘Plaintiff’s counsel also attests that she shared with Dr. Shakeshaft details of her litigation strategy.'”

Judge’s Recusal Isn’t Needed After Ex-Firm’s Deepwater Cases” —

  • “A US judge did not need to recuse himself from cases over the Deepwater Horizon oil spill despite his former law firm’s previous work on the case, a US Court of Appeals for the Fifth Circuit panel ruled.”
  • “The New Orleans-based appeals court on Friday affirmed the decision by US District Judge Barry Ashe of the Eastern District of Louisiana to not step away from the cases. The appellate panel said there was ‘no evidence’ that Ashe previously worked on the litigation when New Orleans law firm Stone Pigman represented a decade earlier Cameron International, the manufacturer of a blowout preventer that failed ahead of the oil spill.”
  • “The appeals court on Friday said that while Cameron International was ‘directly adverse’ to the plaintiffs in a 2013 liability trial, it is not involved in the ongoing litigation. It also said that Ashe’s longtime partnership at the law firm was well known, but that the parties did not move to disqualify him from the cases until he rejected the inclusion of an expert report in the litigation.”
  • “‘Nonetheless, as the arguments on this appeal support, potential conflicts of interest must be taken seriously by every member of the judiciary,’ the court wrote. ‘The litigants and the public need to be confident in the impartiality of those who will decide legal disputes. This appeal is fair warning to each of us of the importance of assuring the reality and appearance of that impartiality.'”
Risk Update

Risk Resources — Conference Materials on Conflicts, Client Risk, Lateral Hiring, Partner Risk, General Counsel Concerns & More

Posted on

Hat tip to the folks at AON, who just hosted their Law Firm Symposium and were kind enough to post an extensive set of speaking slides, materials, and references for those of us not in the room where it all happened. Those are all available on this overview page.

There are several risk related resources relevant to readers I’ll highlight below for those who don’t want to parse the entire page. And while several are a few years old (to be generous), I suspect folks will still be interested as I am:

New Business Intake (and Outtake)

Client Risk

Lateral Hiring

Personnel and Partner Risk

International/UK Practice

Law Firm General Counsels Discussion

Insurance

Risk Update

Technology Risk — Actual AI Conflict of Interest Alleged, State Bar Proposes Lawyer Cybersecurity Certification, Lawyer Email Risk

Posted on

Pras Michel of Fugees seeks new trial, contends former attorney used AI for closing argument” —

  • “Fugees star Pras Michel, who was convicted in April on charges of conspiring to make straw campaign donations, witness tampering and acting as an unregistered foreign agent for China, appears to be breaking new legal ground by calling for a new trial by claiming his defense attorneys allegedly relied on artificial intelligence to compile their final argument for the jury.”
  • “In a withering motion filed Monday night with a federal judge in Washington, Michel’s new attorneys argued that his Los Angeles-based lawyer David Kenner relied on the fledgling technology at critical points in Michel’s trial, contributing to ‘prejudicial ineffective assistance of counsel.'”
  • “Kenner ‘used an experimental artificial intelligence (AI) program to draft the closing argument, ignoring the best arguments and conflating the charged schemes, and he then publicly boasted that the AI program ‘turned hours or days of legal work into seconds,’’ Michel’s new defense team from D.C.-based ArentFox Schiff wrote.”
  • “‘It is now apparent that Kenner and his co-counsel appear to have had an undisclosed financial stake in the AI program, and they experimented with it during Michel’s trial so they could issue a press release afterward promoting the program — a clear conflict of interest.'”
  • “Zeidenberg pointed to a press release a firm called Eyelevel appears to have issued in May, which included a photo of Michel and boasted that the company’s technology ‘made history last week, becoming the first use of generative AI in a federal trial.’ The release quotes Kenner calling the AI tool ‘absolute game changer for complex litigation.'”
  • “Beyond the claims related to AI, the motion also makes a slew of other arguments criticizing Kenner’s handling of the case. Michel’s new attorneys argue that Kenner had a conflict of interest due to potential contempt of court citation over claims the defense leaked stamped grand jury exhibits to a Bloomberg reporter just prior to the start of the trial.”

Bar Cybersecurity Panel Considers Data Privacy Certification Course” —

  • “The Cybersecurity & Privacy Law Committee has agreed to sponsor an intensive, two-day training seminar that would help Florida lawyers become internationally certified in data privacy.”
  • “‘I think we should be thinking about making as many Florida Bar members IAPP certified as possible,’ said Co-Chair Franklin Zemel, referring to the International Association of Privacy Professionals. ‘I’ve been through the training in the past. They’re top-notch in every way.'”
  • “Although no agreement has been reached, the proposal would have Privacy Pro offer Florida Bar members a two-day, in-person training seminar at the Hilton Orlando Bonnet Creek, two days before the Bar convenes its Annual Convention there on June 19.”
    “Some committee members expressed a concern that the test, which requires 40 hours of preparation, might be too rigorous for lawyers who aren’t tech proficient.”

Blog reader and former chair of the Minnesota Lawyers Board Chuck Lundberg has published: “Quandaries & Quagmires: It’s important to know when not to use email” —

  • “‘When not to use email?’ is a relatively recent ethical inquiry, barely 20 years old. Do you remember the practice of law before email? (Depending on the size of the law firm, email use became prevalent at various stages during the 1990s.) Back then, the only ethics issue was whether information about a client’s matter could EVER be sent by unencrypted e-mail without violating the ethics rules.”
  • “It was not until 1999 that the ABA ethics committee acknowledged that a lawyer may transmit some information relating to the representation of a client by unencrypted email over the internet without violating the Model Rules of Professional Conduct. ABA Formal Opinion No. 99-413, May 10, 1999, (citing at footnote 40 an impressive full-page string cite of numerous state opinions and commentary to the same effect in 1996 – 1998). “
  • “Today, however, email is so commonplace, so easy to use, that emailing reflexively — without even thinking about it — has become the new default. This can be a serious problem. Precisely because email is the default, lawyers are all too complacent about best practices for using email effectively and proficiently. Email can be a great communication tool, but it can also be dangerous. ”
    “Avoid email when:

    • The message is extremely important or confidential and you cannot risk it falling into the wrong hands.
    • The message is emotional or sensitive or in nature.
    • When a back-and-forth conversation will be required, or when the receiver deserves the opportunity to give immediate feedback or response.”
  • “Consider this real-life scenario from the Ethical Emergencies column:
    • Sally Associate has just realized that she has made a serious and possibly damaging mistake in one of her client’s cases. [Think missing a mandatory deadline — a statute of limitations or an expert witness disclosure order.] Sally is very concerned that there may be ethics or malpractice issues, and she needs to talk with someone at the firm immediately about the mistake, about what to do now, about whether disclosure or other action is required, etc.
    • Before we get to the email issue, think about this: To whom at the firm should Sally report this emergency? Her supervising partner on the case? Her mentor? The firm’s managing partner? The firm’s ethics partner?
    • The only correct answer on these facts is the ethics partner.”
  • “Accordingly, Sally should call or meet with the ethics partner immediately. But she should not use email. Not to report the incident, or to describe or explain the problem, or to give the details, or to answer the inevitable ‘how did this happen?’ questions, etc.”
  • “But nothing in writing until then. No email. Always remember what the ‘e’ in email stands for (‘Exhibit’). The sender should imagine that the transmitted message or document has an exhibit sticker on the bottom right.”
Risk Update

SURVEY REPORT — 2023 Law Firm Risk Staffing Compensation Survey Report (Now Available)

Posted on

Quite excited to announce that the 2023 Law Firm Risk Staffing Compensation Survey report is now fresh off the presses! (And now on file with the US Copyright Office.) Coming in at 15 pages, this year’s exercise builds on last year’s success in several ways:

  • As hoped, we saw strong participation from “director-level” risk leaders, and have included a section on those salary details.
  • What’s more, overall participation shot up from last year. In 2022, we saw 80+ participants contribute data on 375+ individual risk staff positions. In 2023, we saw 126 participants share data on 517 risk positions. (That’s a 50% jump in participation and a 37% increase in data — for those of us who have putting everything into Excel over the past few weeks.)

I’d like to thank everyone who participated. I hope the results and analysis provide fresh insight and support to those looking for greater clarity on industry compensation practices and trends.

As many readers have shared over the past year, this project is creating value, insight, and opportunity on several fronts:

  • Risk and operational leaders are using this data to advocate for and ensure that their teams’ compensation is kept in line with industry averages.
  • HR and hiring managers are using this data to inform their staff recruiting and review policies.
  • Individual contributors are using this data to self benchmark and support their personal career efforts and growth.

A note on distribution: 

  • If you’re a “manager” participant, providing data on your team/multiple positions, you’ll be receiving the report in your inbox today (if you haven’t already).
  • If you’re an “individual” participant, providing data on your position, you’ll be receiving your personal benchmark shortly as well.
  • Finally, if you/your law firm did not participate in the survey, we’re making copies available for a fee. Please get in touch for details. 

As more than one risk leader shared with me, several of you are looking to this data to benchmark your existing team’s compensation, inform potential adjustments (it’s budget season for many), and support future recruitment efforts. I hope the report doesn’t disappoint.

I’m quite interested in community response and feedback — particularly if there’s appetite and interest in a 2024 follow up exercise. (I already have notes and thoughts on where we might go from here…)

Thanks!

jobs (listed)

BRB Risk Jobs Board — Conflicts Attorney (Williams & Connolly)

Posted on

In this BRB jobs update, I’m pleased to highlight an open role at Williams & Connolly: “Conflicts Attorney” —

  • Williams & Connolly LLP and its Office of General Counsel has an immediate opening for a full-time Conflicts Attorney.
  • This non-practicing attorney works across several key functional areas at the firm, including new business conflicts and intake processes, resolution of conflict-related issues for lateral attorney and professional staff candidates, conflict waiver drafting, review, negotiation and maintenance of client agreements, coordination of ethical screening and litigation holds, and supervision of the firm’s client files processes and procedures.

Responsibilities include:

  • Guide the conflicts staff with addressing conflict search findings and issues encountered on new business intake requests, such as providing research on corporate affiliations, and making determinations based on conflicts information presented;
  • Analyze potential conflicts issues, including for new case matters and hiring of new legal professionals; initiate discussions with attorneys, the Professional Responsibility and Risk Management Counsel and General Counsel when necessary; provide recommendations for resolution and ensure clear documentation of resolutions; draft and review conflict waiver requests and perform necessary follow-up for conflict resolution;
  • Assist attorneys with proposed engagement letters and outside counsel guidelines, etc. to ensure that agreements align with firm policies;
  • Manage the ethical wall process, including identification of individuals to be screened from clients and matters, implementation of ethical walls, and periodic reviews to determine the need for ongoing or updated restrictions;
  • Evaluate and support the implementation of compliance procedures including technical upgrades and new technologies;
  • Work with internal departments to organize and document client files, including receiving and filing engagement letters, ensuring engagement terms are properly input and tracked in our systems; and overseeing the electronic and paper document archiving process, including notification, collection, and disposition of client files;
  • Monitor changes to the ethical standards governing the legal profession, including by maintaining up-to-date knowledge of the Rules of Professional Conduct of both the District of Columbia and the American Bar Association, and evaluate firm policy for compliance;
  • Work with Risk Management Counsel and/or General Counsel on requests related to privacy laws; and
  • Work on special projects as requested by the Professional Responsibility and Risk Management Counsel and General Counsel.

Requirements include:

  • Juris Doctorate (J.D.) is required. License to practice law in the United States is required;
  • Minimum five (5) years of experience practicing law or experience in a similar conflicts, professional liability or compliance role in a large law firm setting strongly preferred.
  • This position has a hybrid work schedule with a minimum of two days per week in the office.

See the complete job posting for more detail on job and to apply for this position.

Learn more about working at Williams and Connolly on their careers page:

  • “The firm offers competitive compensation, outstanding benefits and professional growth opportunities with the sincere anticipation that Williams & Connolly will be a place for our staff to enjoy a challenging career for many years to come.”
  • “Washingtonian magazine again selected the firm as one of the Washington D.C. area’s 50 “Great Places to Work.” Our interesting cases, opportunity to work with the most talented lawyers in the world, team spirit, excellent professional rewards, and other notable perks landed us among the featured companies.”


And if you’re interested in seeing your firm’s listings here, please feel free to reach out

jobs (listed)

BRB Risk Jobs Board — Risk and Compliance Attorney (Wiley)

Posted on

Our latest sponsored risk job listing comes from Wiley. The firm is looking for a: “Risk and Compliance Attorney” —

  • Wiley, a leading DC law firm, is seeking a Risk and Compliance Attorney to join the Risk Management Department. This role supports the department’s leadership with managing the overall integrity and quality of the firm’s potential new business process, lateral hiring procedures, legal matter milestones, and firmwide loss prevention strategies.
  • The Risk and Compliance Attorney is responsible for conducting research and providing analysis and implementation steps relating to the firm’s ethical responsibilities in accordance with applicable rules of professional conduct, recommended professional liability practices, and firm policies.This non-practicing attorney position reports to the Director of Risk Management and works across several key functional areas. These include, but are not limited to, the new business intake process, lateral hire questionnaires and conflict assessments reviews, resolution of conflict related issues for lateral attorney and professional staff candidates, conflict waiver drafting and follow-up, review and negotiation of client agreements, coordination of ethical screening, issuance and management of litigation holds, and compliance with firm policies and objectives in these areas.

RESPONSIBILITIES/ESSENTIAL FUNCTIONS INCLUDE:

  • Provide guidance to attorneys and staff regarding interpretation of potential conflicts of interest and jurisdictional rules and regulations
  • Guide the new business intake and conflicts staff with handling issues and other complexities encountered on new business intake requests and navigating conflict search findings, such as evaluating whether adversities to particular corporate entities present conflicts, providing research on corporate affiliations, and making determinations based on information presented
  • Identify and analyze potential conflicts issues; initiate discussions with attorneys, Risk Management team and General Counsel when necessary; provide recommendations for resolution and ensure clear documentation of resolutions for Risk Management team members; draft and review conflict waiver requests and perform necessary follow up for conflict resolution
  • Manage the ethical wall process, including identification of individuals to be screened from clients and matters, creation of ethical wall memoranda, implementation of ethical walls, and periodic reviews to determine the need for ongoing or updated restrictions
  • Evaluate and support the implementation of compliance procedures including technical upgrades and new technologies for new business intake and other ethics and compliance related activities
  • Review and provide advice and guidance related to client-tendered requirements and agreements, including proposed engagement letters, outside counsel guidelines, etc. and work with firm attorneys to prepare responses that align with recommendations and firm policies
  • Supervise the review of professional staff and lateral attorney candidate conflicts assessments and questionnaires and all search results prepared by the conflicts team
  • Identify and analyze potential conflicts of interest regarding professional staff and lateral attorney candidates including specialized conflict rules applicable to former government employees; implement all necessary screening; evaluate any applicable rules of the government agency
  • Assist with attorney orientation presentations, training and integration related questions pertaining to conflicts, ethics and professional responsibility
  • Engage in performing legal research on ethical obligations and professional liability issues
  • Work on special projects and support new initiatives as requested by the Director of Risk Management, General Counsel, or Chief Financial Officer
  • Maintain up-to-date knowledge of the District of Columbia Rules of Professional Conduct and American Bar Association Model Rules of Professional
  • Conduct, monitor jurisdictional rules for changes, and evaluate firm policy for compliance

EDUCATION AND EXPERIENCE:

  • Juris Doctorate (J.D.) is required. License to practice law in the United States required.
  • Minimum five (5) years of experience practicing law or experience in a similar conflicts, professional liability or compliance role in a large law firm setting strongly preferred

For additional detail:

You can read more and apply by visiting their job posting here.

You can read more about the firm on their careers page.


And if you’re interested in seeing your firm’s listings here (and reading some kind BRB job board endorsements), please feel free to reach out!

Risk Update

Waiver & DQ News — Ex-client’s Conflicts Waiver Leads to Lawsuit, Update on Opioid Special Master “Reply All” Disqualification Motion

Posted on

Ex-ArentFox client claims law firm secretly prepared to sue it on rival’s behalf” —

  • “A government contractor has sued its former counsel at U.S. law firm ArentFox Schiff, alleging the firm failed to disclose that it was preparing a lawsuit against it on behalf of one of the contractor’s business rivals.”
  • “Peraton, a contractor owned by private-equity firm Veritas Capital, alleged that ArentFox secretly fed information about it to CACI International, another ArentFox client. ArentFox used that information to help prepare a lawsuit against Peraton on behalf of CACI, Peraton alleged.”
  • “The law firm shot back against Peraton’s claims in a statement, saying the government contractor ‘knowingly consented to the firm pursuing litigation against it.'”
  • “It added, ‘Peraton is a sophisticated company whose own general counsel signed the consent on its behalf.'”
  • “ArentFox and Brand represented Peraton in licensing and sponsorship deals, netting the firm nearly $500,000 fees. Meanwhile, ArentFox was representing CACI in a trade secrets lawsuit in Virginia state court against two of CACI’s former employees, the Peraton lawsuit alleged.”
  • “Peraton alleged that ArentFox came to it with a conflict waiver under the pretense that the law firm was being served with a subpoena.”
  • “‘Had Peraton known that Arent Fox wanted permission to investigate legal claims against Peraton, sue Peraton, disclose its confidential information to CACI, or participate in a government inquiry against Peraton, then Peraton never would have consented to such a waiver,’ the lawsuit said.”
  • “Peraton signed off on the waiver in July 2022 and obtained a protective order that would limit the disclosure of its sensitive business information to ArentFox lawyers, not CACI. The lawsuit alleged that ArentFox had the order modified so that a pair of CACI executives could see the information from Peraton. ArentFox in its statement said it ‘certainly did not misuse any confidential Peraton information.'”

Follow up on this story: “Opioid Special Master Who Hit ‘Reply All’ Protected by Judicial Deliberative Privilege, Judge Rules” —

  • “A federal judge, invoking a judicial privilege to freely deliberate on matters, refused to disqualify the special master in the opioid multidistrict litigation.”
  • “In a Tuesday order, U.S. District Judge Dan Polster rejected a motion filed last month by two pharmacy benefit managers to disqualify David Cohen after the special master inadvertently sent an email to lawyers in the case. Cohen, who meant to send the email to himself, has been a special master in the opioid multidistrict litigation since 2018.”
  • “Polster sided with the plaintiffs’ executive committee in concluding that the email falls under the judicial deliberative privilege, which protects confidential communications among judges and their staff.”
  • “‘Special Master Cohen’s email, which consisted entirely of his own mental impressions, personal notes, and private musings about the submitted status reports, was unquestionably a privileged judicial deliberative memorandum to himself,’ Polster, who sits in the Northern District of Ohio, ruled.”
  • “He added, ‘For the judicial system to function, judges must view the arguments presented to them with an appropriate degree of skepticism. If judges were subject to accusations of bias and potential disqualification based solely on private, skeptical thought about a party’s position, there could be no judges.'”
  • “Polster questioned the motivations behind the disqualification motion, in which the pharmacy benefit managers ‘repeatedly and misleadingly attempt to convert the Special Master’s private thoughts into public comments.’ Such actions, he wrote, did not follow the standards of professional conduct outlined in his protective order.”
  • “In a footnote, he added: ‘The court also notes that, were the email from opposing counsel rather than the Special Master, and the PBMs responded that not only would they not allow counsel to claw back their inadvertent disclosure but intended to use it to attempt to gain some tactical advantage in litigation, such conduct could be the subject of a motion for sanctions.'”
Risk Update

Risk Updates — Merger-driven Conflicts Move, Auditor Engagement Letter Practice Earns SEC Lawsuit

Posted on

Citing Conflicts as Merger Looms, Former SDNY Judge Leaves Stroock for Boies Schiller” —

  • “While Stroock & Stroock & Lavan plots a potential merger with Pillsbury Winthrop Shaw Pittman, a former New York federal judge of 22 years isn’t hanging around to find out how the tie-up might affect her practice.”
  • “Boies Schiller Flexner on Friday morning announced the hiring of former U.S. District Court Judge Shira Scheindlin, who arrives at the firm’s New York office as of counsel after seven years at Stroock.”
  • “Since moving to private practice, Scheindlin has practiced as a neutral in mediations and arbitrations as well as a court-appointed special master, mock trial and appellate judge, and expert witness.”
  • “In an interview, Scheindlin said she had been ‘very happy’ at Stroock, but was already having to decline nearly a third of incoming inquiries due to conflicts with the Big Law firm’s numerous institutional clients. “I know their intention is to merge with a bigger firm, so that would just increase the number of institutional clients and the number of conflicts, which would not be good for me,” she said.”
  • “In contrast, Boies Schiller’s exclusive focus on litigation presented fewer conflicts and an opportunity to contribute to investigations, mock trial work and criminal defense work, Scheindlin said. ‘It was an opportunity that couldn’t be missed,’ said Scheindlin. ‘That means this is the right firm for me at the right time.'”
  • ‘The pandemic has only accelerated the growth of alternative dispute resolution, Scheindlin said. ‘Parties often put arbitration clauses in their agreements, in those clauses they have to mediate before they arbitrate,’ she said. ‘I know it’s an expanding field at all times, especially in the commercial context, and I do mostly commercial arbitrations and mediations.'”

US SEC sues auditor Prager Metis over alleged independence violations” —

  • “The U.S. Securities and Exchange Commission on Friday sued accounting firm Prager Metis for alleged auditor independence violations related to a template it used when signing on clients.”
  • “Between December 2017 and October 2020, Prager Metis improperly added indemnification provisions to engagement letters to clients for more than 200 audits and other work, the SEC said. This prevented the firm from having the independence required by law, it said.”
  • “‘These allegations arise solely from template indemnification language used several years ago that was never enforced or sought to be enforced, and the SEC does not allege this language affected the quality of our audits,’ the [Prager] statement said. ‘Prager takes its independence obligations seriously.'”
  • “Prager Metis continued to sign engagement letters with those provisions even after firm staff were aware of the issue, the SEC said.”
  • “Prager Metis was one of the auditors for the FTX Group, according to a court filing. The SEC’s allegations do not relate to the FTX matter”
Risk Update

Costly Conflicts — Failure to Follow Conflicts Order Contributes to $481m+ Award, Rio Vista Counsel Refuses Conflicts Waiver

Posted on

Judge Boosts Damages, Sanctions Quinn Emanuel In Patent Case” —

  • “NortonLifeLock Inc. must pay Columbia University $481 million and cover some of the university’s attorneys’ fees after a Virginia federal judge more than doubled a jury’s award for patent infringement damages and held in civil contempt Norton’s lawyers at Quinn Emanuel Urquhart & Sullivan LLP.”
  • “Judge M. Hannah Lauck of the US District Court for the Eastern District of Virginia ordered the attorneys’ fees as a sanction after the law firm allegedly failed to follow her order regarding a perceived conflict of interest in the firm’s representation of both Norton and a key witness.”
  • “Lauck sealed opinions explaining her orders until Oct. 12 to give both sides a chance to redact confidential information. She also gave them 30 days to reach a stipulation on the attorneys’ fees award.”
  • “In May 2022, a jury determined that NortonLifeLock—formerly known as Symantec Corp. and currently doing business as Gen Digital Inc.—willfully infringed patented technology involving computer security and intrusion detection software developed by researchers at Columbia University in New York City.”
  • “Before trial, Lauck ordered Quinn Emanuel to provide written descriptions of information it obtained from French researcher Marc Dacier, a former top Symantec executive, during the time the law firm represented both Dacier and Norton from 2017 through 2020, according to court documents.”
  • “In court filings, the lawyers explained they arranged for Dacier to give a deposition in Europe that wouldn’t have otherwise taken place because he’d already left the company. But Norton and its lawyers stressed they didn’t control Dacier, who they claimed was unwilling to travel from his current home in Saudi Arabia to testify at the US trial.”
  • “Quinn Emanuel initially cited attorney-client privilege in refusing to comply with Lauck’s order to disclose Dacier’s communications. But the firm subsequently provided a summary of information Dacier shared, and jurors were shown Dacier’s videotaped deposition.”
  • “Columbia accused Norton and Quinn Emanuel of preventing Dacier from testifying live and lying that he was ‘unavailable,’ arguing they knew his views hurt Norton’s case, according to a filing by the university. Lauck agreed and called Quinn Emanuel’s simultaneous representation of Norton and a key adverse witness an ‘appalling’ conflict of interest, according to court records. She gave jurors a ‘missing witness’ instruction, which let them assume Dacier’s testimony would’ve harmed Norton’s defense.”
  • “‘Quinn Emanuel respectfully disagrees with the district court’s finding and will be making our legal response in due course,’ the firm said in a statement.”

Rio Vista council rejects city law firm representing Flannery Associates” —

  • “Rio Vista’s [California] City Council voted against consenting to the law firm who represents the city also working for Flannery Associates LLC, the company buying thousands of acres of land in Solano County to build a new city.”
  • “The decision comes after the law firm Kronick, Moskovitz, Tiedemann and Girard has worked with the city for a decade, but asked city leaders to also work with Flannery Associates to help arrange and document the water supply for the project.”
  • “The controversial group secretly bought up over 50,000 acres of land since 2017 to build a new city in Solano County. The land is mostly in and around Rio Vista and Travis Air Force Base, making Flannery Associates the largest land owner in the county.”
  • “Rio Vista residents opposed any sort of arrangements because of the conflict of interest, and not seeing any benefit of giving Flannery Associates influence over the local water supply.”
  • “A representative with a law firm says they brought this to city leaders because of conflict of interest in the future. But added this would be a benefit for the city as they have a familiar face to work with when speaking with Flannery Associates.”

For more general background on this one, see: “Who is behind Flannery Associates, the mystery California land buyers?