Bressler Risk Blog

“Troutman Pepper, Locke Lord Merger Conflicts Rattle Lawyers” —

• “Some Locke Lord affordable housing and energy lawyers may be unable to represent longtime clients after a merger with Troutman Pepper Hamilton Sanders, according to three people familiar with the matter.”
• “At least a trio of lawyers have left Locke Lord, citing such potential challenges post-merger, the people said. The firms in a statement declined to comment on client conflicts and said merger talks are ongoing.”
• “The conflicts snag, common in Big Law tie-ups, shows the complexity of patching together two large operations without having the combined firm represent many clients with adverse interests toward one another. Firms can seek conflict waivers, though clients often hesitate to approve them.”
• “Troutman Pepper in the past two years has represented large financial services companies and affiliated entities, including JP Morgan Chase & Co., Wells Fargo & Co., and Bank of America Corp., the firm disclosed June 20 in an application to represent a client in a bankruptcy case.”
• “Those banks have provided financing to Locke Lord clients for housing development and energy deals, according to press releases by the law firm. The firm represented Tampa Electric Co. in two short-term credit facility transactions with financing from JP Morgan and Bank of America, according to a Locke Lord press release in April 2023.”
• “A Troutman Pepper client, electric and gas company Ameren Illinois, challenged a request by Locke Lord for guidance on wind and solar generating equipment, a 2021 filing with the Federal Energy Regulatory Commission shows. The firm didn’t identify a client in the request.”
  Answering Concerns”
• “Locke Lord told lawyers concerned about losing clients due to the merger that work would be made up through new business from Troutman, according to two people familiar with the matter. Some lawyers found that explanation unsatisfactory, the two people said. They spoke on condition of anonymity to protect relationships at the firm.”

“‘Firms Fear the PR Hit, Not the Sanction’: Big Law on Edge After Simpson Thacher AML Prosecution” —

• “Earlier this week, Simpson Thacher & Bartlett became the latest major law firm to find itself on the sharp end of the Solicitors Regulation Authority’s push to ensure compliance with anti-money laundering rules.”
• “Dentons and Clyde & Co have previously come under the gaze of the SRA’s newfound hawkishness on AML frailties in law firms. But it is the news that the regulator has taken action against one of America’s most prestigious firms that has sent ripples across the wider industry.”]
• “Indeed, according to people at another major U.S.-headquartered law firm in London, the story has been widely discussed and set off fears about their own AML practices.”
• “But people with deep knowledge of the SRA and large law firms say that concerns are not so much for the sanction itself, but rather the bad press the news can generate, the effect it can have on Google search results and, consequently, the perception it creates among prospective clients.”
  Harder Line”
• “To briefly recap, the regulator has alleged that Simpson Thacher ‘failed to have in place fully compliant policies, controls or procedures’ relating to money laundering regulations between June 2017 and January 2023. It has referred the firm to the industry’s Solicitors Disciplinary Tribunal.”
• “One partner at a U.K.-based firm, who has deep knowledge of SRA procedures, suggested that the regulator may be choosing to pursue what it perceives as more ‘watertight’ cases, given the initial failure of its case against Dentons.”
• “The partner believes that firms live in fear of SRA action on AML rules—but not necessarily due to fear of financial penalties. “
• “‘It’s not so much the sanction, it’s the PR hit,’ they said. ‘Some of these firms do a lot of AML work themselves for other organisations. If you google the name of a law firm and ‘AML’, and you see stories about alleged breaches by that firm, rather than the firm’s own AML practice, that’s obviously a concern for management.”
• “‘Therefore any AML failure is bad news, and has the potential to be a problem commercially.'”
• “The news has rattled similarly prestigious U.S. law firms, with people at the London office of another large New York-headquartered law firm expressing concern over the Simpson Thacher news, indicating that many firms will have taken notice.”
• “In a statement following the SRA’s decision on Simpson Thacher earlier this week, a spokesperson from the firm said that the London office was ‘disappointed that the SRA has decided to bring proceedings in the SDT in relation to certain alleged historic AML compliance shortcomings concerning some of our written policies and procedures’, adding that ‘at no point did any money laundering occur nor was there any harm to clients or third parties in connection with the alleged shortcomings’. “

Retired litigator Marcel Strigberger opines: “Conflicts of interest: Are lawyers held to too high a standard? Let’s talk about baseball.” —

• “Former Blue Jays catcher Danny Janson made major league baseball history this week by being the only major”league player to play for both teams in the same ball game. Yes, you read right.”
• “Janson was up at bat in the second inning against the Boston Red Sox at Fenway Park in Boston back on June 26, 2024, when it started raining and officials decided to suspend the game and resume it on Aug. 26. Meanwhile, Janson got traded to the Red Sox, and on Aug. 26, he was in their lineup playing against his former team. As this game was officially a resumption of the June game, his name was listed on the Jays roster. However, when it came time for him to bat for the Jays, he would have had a bit of difficulty given that he was now wearing a Red Sox uniform. Another Jay, Daulton Varshow, did the official pinch hit for Janson, who now took up his position as the Rex Sox catcher.”
• “As a lawyer, the first thing that jumped into my mind was the issue of conflict of interest. Lawyers have no wiggle room at all in this area.”
• “Is it time for the law to be relaxed somewhat and soften this stringent prohibition? Looking at baseball, I would say the game has many helpful philosophical connotations. It can teach us many lessons. Oodles of baseball expressions have already found their way into the legal vernacular.”
• “Can we allow some conflict of interest in practice? It would certainly be interesting say if a lawyer is a Crown attorney prosecuting a criminal in the earlier stages of the case and this Crown leaves his prosecution job, becomes a defence counsel and meets up with the accused who then retains them to complete the case.”
• “The accused certainly might not have issues with this. Nor might the prosecution. The prosecutors are so busy, do they really care which defence counsel steps up to the plate? And the good thing is the switching lawyer, unlike Danny Janson, come trial time would not even have to get a new uniform. Same robe. Said lawyer would just have to make sure they only complete one counsel slip. Otherwise, they would look like pooh-bah.”
• “Will the system relax the rules a bit? The legal world is a bit conservative. Maybe it’ll think about it for now. Blue sky it. Take a rain check.”

“Revised ethics opinion: Judges should disclose prior prosecutions but assess recusal individually” —

• “A judge is not required to automatically recuse themselves from all cases involving defendants they previously prosecuted. Instead, the judge must assess each case individually to determine if recusal is necessary, taking into account the specific circumstances of the case, according to the [Florida] Judicial Ethics Advisory Committee.”
• “‘Additionally, if a judge is aware of his or her involvement in a prior prosecution, the judge must disclose the relevant facts to the defendant even if the facts do not require automatic recusal,’ the ethics panel said in Opinion Number 2024-12 (Amended).”
• “The amended opinion issued August 27, recedes from the original version issued August 2 that opined that judges must recuse from all cases involving defendants whom the judge previously prosecuted.”
• “‘The test for appearance of impropriety is whether the conduct would create in reasonable minds, with knowledge of all the relevant circumstances that a reasonable inquiry would disclose, a perception that the judge’s ability to carry out judicial responsibilities with integrity, impartiality, and competence is impaired,’ the ethics panel said citing commentary to Canon 2A. ‘Additionally, the Commentary to Canon 3(E)(1) states clearly that, ‘…a judge is disqualified whenever the judge’s impartiality might reasonably be questioned, regardless of whether any of the specific rules in Section 3E(1) apply.'”
• “The panel said the inquiring judge may need to recuse from a case but must evaluate each case individually…The rules require that the inquiring judge disqualify himself or herself where his or her impartiality might reasonably be questioned.”
• “The committee noted that one JEAC member expressed an opposing view and believes that a former prosecution by the judge would always call into question the judge’s impartiality. That committee member prefers the ‘bright line’ position that a judge must recuse from all cases involving a defendant who the judge previously prosecuted.”

Lucian Pera writes: “Explaining the Least-Known Ethics Rule” —

• “But even three years ago in 2021, 19 years after the ABA’s adoption, I published an article in this space on ABA Model Rule 1.18. I called it ‘The Least-Known Ethics Rule’ (March/April 2021). I observed then that it might be the most useful ethics rule you’ve never heard of.”
• “Even in 2021, with some 46 jurisdictions having a version on their books, we ethics lawyers continued to get calls from lawyer clients that demonstrated that lawyers had no idea the law touched by this Rule had changed. Remarkably, those calls continue today.”
• “And today, 22 years after the Rule’s adoption, the ABA Standing Committee on Ethics and Professional Responsibility has offered fresh guidance on this useful Rule in its new ABA Formal Opinion 510, Avoiding the Imputation of a Conflict of Interest When a Law Firm is Adverse to One of its Lawyer’s Prospective Clients (March 20, 2024).”
• “Prior to 2002, the law was simple: if a lawyer received any confidential information from a prospective client—one that consulted, but never hired, the lawyer—then that lawyer and her law firm were disqualified from representing any new client adverse to that prospective client on any matter related to the same subject.”
• “Now, under Rule 1.18, a lawyer who is consulted by, but not retained by, a possible client is only personally disqualified from being adverse to that person in a new matter where: 1. the new matter is the same or a substantially related matter (e.g., the prospective client consults the lawyer about a divorce, and the new matter would be to represent the prospective client’s spouse in that divorce), and 2. the lawyer received from the prospective client ‘disqualifying information’ (i.e., information that could be ‘significantly harmful’ to the prospective client in the matter).”
• “Note that the information the lawyer had received could well be confidential, but if it was not ‘significantly harmful,’ the same lawyer is permitted to take the new matter, and act directly adversely to the prospective client. That alone was an epic change in the law.”
• “For a nice primer on what ‘significantly harmful’ means, see ABA Formal Opinion 492, Obligations to Prospective Clients: Confidentiality, Conflicts and ‘Significantly Harmful’ Information (June 9, 2020). The Opinion, quoting a New Jersey opinion, said the question is ‘exquisitely fact-sensitive and -specific.’ Indeed.”
• “More importantly, Rule 1.18 significantly limits the imputation of any conflict to the lawyer’s firm in this situation—that is the Rule changes when the individual consulted the lawyer’s conflict; if the lawyer is disqualified, it means that the lawyer’s whole firm is also disqualified.”
• “It works this way. If the individual consulted lawyer is disqualified because she heard something ‘significantly harmful,’ the law firm may take on the new matter adverse to the prospective client if 1. the lawyer “took reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client,” and if 2. the firm screens the individual consulted lawyer and gives notice to the prospective client. “
• “Second, the hard part. And this is where the Opinion breaks a little new ground.”
• “To avoid imputation and allow the individual consulted lawyer’s firm to later take on the new matter, the information sought must be ‘reasonably necessary’ to allow the consulted lawyer to make that original determination. It’s very clear that the Committee thinks this is a quite different, and tougher, determination.”

Definitely worth reading Lucian’s analysis in full.

And for those looking for the deeper dive, see more detail on and analysis of the opinion he noted: “ABA Formal Opinion 492” —

• “The use of the phrase significantly harmful distinguishes the duties owed to prospective clients from those duties owed to current and former clients.”
• “Information viewed as significantly harmful typically includes information about settlement issues, personal accounts of relevant events, the prospective client’s thoughts about how to manage the matter, and discussions in which the lawyer outlined potential claims and addressed potential settlement options. Significantly harmful information is not information that is simply detrimental to the formerly prospective client; to give rise to a potential conflict of interest, the information must be ‘prejudicial to the former prospective client within the confines of the specific matter in which disqualification is sought.” O Builders Assocs., Inc. v. Yuna Corp. of N.J., 19 A.3d 966, 978 (N.J. 2011) (citations omitted).'”
• “Comparing the conflict-of-interest protections afforded to current and former clients under Model Rule 1.9 with those owed to a prospective client under Model Rule 1.18 demonstrates an important distinction between the impact on the lawyer’s current/former work and the impact on the lawyer’s future work.”
• “When the basic facts of a consultation are contested, a review by the court or disciplinary authority may help to determine the credibility of the person invoking Model Rule 1.18. However, such review may not be necessary; if conducted, though, it should avoid having the prospective client reveal confidential information.”
• “Evidence that the prospective client communicated information that could be significantly harmful does not require disclosure of the prospective client’s confidential information or the substance of the conversation. Rather, the evidence required is described as similar to a privilege log, including the date, duration, and manner of communication and a high-level description of the topics discussed. Fed. R. Civ. P. 26(b)(5) (requiring that privilege logs ‘describe the nature of the documents, communications, or tangible things not produced or disclosed—and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim [of privilege or other protection]’).”
• “A lawyer may avoid receiving significantly harmful information from a prospective client by warning prospective clients against disclosing detailed information. The caution to the prospective client is not meant to discourage lawyers from having a thorough discussion during the consultation; rather, it serves as a reminder that the more information disclosed to the lawyer while consulting with a prospective client, the more likely that the lawyer may be precluded from representation of other parties in a substantially related matter.”
• “There remains the possibility, as noted above, that the prospective client may give informed consent that no information disclosed during the consultation prohibits representation of a different client in the matter. Alternatively, the lawyer and prospective client can come to an agreement that ‘expressly so provides’ that the lawyer can subsequently use information received from the prospective client.”
• “Informed consent under Rule 1.18 may occur in different contexts. For example, informed consent may be obtained at the outset of a consultation via a condition that any information provided by the prospective client will not be disqualifying. Model Rules of Pro. Conduct r. 1.18 cmt. 5. Informed consent may allow a lawyer who has received significantly harmful information from a prospective client to represent an adverse party pursuant to Model Rule 1.18(d). (For the requirements of informed consent, see Model Rules of Pro. Conduct r. 1.0(e); Model Rules of Pro. Conduct r. 1.0 cmts. 6, 7.)”

“Foley Must Face Texas Claims From Former Client Turned Opponent” —

• “Foley & Lardner LLP must face claims in Texas that it took confidential information from a former client and sought to use it to seize funds in that client’s bankruptcy proceeding, a state appeals court said Tuesday.”
• “Reversing a Houston trial court, the appeals court said the judge shouldn’t have dismissed claims against Foley under the Texas Citizen’s Participation Act. The act is meant to dismiss harassing lawsuits that attack free speech protections, but it shouldn’t apply here because the claims against Foley relate to conduct, not communications, the unanimous opinion said.”
• “Foley was sued by partners in an oil and gas exploration and production company who the firm once represented. The partners, Stephen and David Dernick, say Foley used confidential information from their past representation of the Dernicks to try to seize funds the Dernicks obtained through a shareholder settlement.”
• “Foley argues it didn’t represent the Dernicks in their individual capacities as officers of the company. The Dernicks say otherwise, that there was ‘an explicit attorney-client relationship.’ Foley negotiated the Dernicks’ exit packages, valued at $25.8 million.”
• “On remand, the trial court is to determine whether Foley’s motion to dismiss was frivolous or solely intended to delay, the appeals court said.”

VIDEO from George Mason University: “Court Hearing on Motion to Disqualify” —

• “Under Rule 1.9 A, what factors determine whether a lawyer’s prior representation of a former client is substantially related to a potential new representation of another client in a matter that will be materially adverse to the former client in this context, what is the significance, if any, if the lead counsel and the prior representation are no longer associated with the law firm?”

“Ex-Holland & Knight Attorney Improperly Accessed Client File to Gain Upper Hand in Divorce Proceedings, Suit Alleges” —

• “Holland & Knight is being sued in Pennsylvania state court by a client for failing to flag a conflict of interest and safeguard confidential client information after one of the firm’s attorneys improperly accessed a client file to gain an advantage during his personal divorce proceedings.”
• “The suit, filed in Philadelphia’s Court of Common Pleas on Aug. 20, claims that as a result of Holland & Knight’s failure to detect a potential conflict of interest between then-partner Patrick McCabe and a new firm client, McCabe’s soon-to-be-ex-wife’s employer Philadelphia-based personal injury firm Fritz and Bianculli, McCabe and two other firm employees accessed Fritz and Bianculli’s confidential information multiple times from July 2022 to early 2024, violating client confidentiality protections.”
• “Fritz and Bianculli, the plaintiff in the action, alleges that Holland & Knight brought on the firm as a client around the same time as McCabe began his divorce proceedings in March 2022. The suit claims that during the divorce proceedings, McCabe accessed Fritz and Bianculli’s client file despite not being assigned to work on its matters and deduced his wife’s password and login information for her work computer, subsequently beginning to monitor and record communications between his wife and her employer.”
• “‘McCabe admitted such unlawful and unethical access by providing screenshots he took of the laptop during discovery in the divorce proceedings and certifying under oath that he had obtained this information by illegally accessing the Fritz and Bianculli email server,’ the suit alleges, suggesting that McCabe did so in an effort to substantiate his belief that his wife was having an affair with Brian Fritz, a leader at Fritz & Bianculli.”
• “In addition to monitoring Fritz and Bianculli’s confidential communications during his divorce, the suit claims that McCabe began to use information within those communications to harass his wife.”
• “‘on July 19, 2022, over four months after the filing of the divorce action, approached Kristy McCabe after an extended email monitoring session … and there informed Kristy McCabe that he … was going to kill her as a result of his unlawful access to these emails,’ the suit reads.”
• “After McCabe’s wife filed a second temporary restraining order in July 2023, the suit says Holland & Knight flagged the conflict between its representation of Fritz and Bianculli and McCabe, terminating the contract between the two firms and neglecting to inform Fritz and Bianculli of McCabe’s unauthorized file access. “
• “‘There was no explanation why the second restraining order triggered a conflict while the first restraining order did not,’ the suit alleges. ‘Holland and Knight intentionally omitted and failed to disclose that Defendant McCabe had routinely been accessing the confidential files at will[,] … failed to take any precautions to protect the confidential files from Defendant McCabe[,] … [and] failed to take any steps or employ any measures to limit which attorneys and/or staff could gain access to the confidential files.'”
• “After Holland & Knight disclosed the conflict and terminated its relationship with Fritz and Bianculli, the suit claims, McCabe continued to access the file and asked two of his colleagues, Donohue and Berg, to access the file on his behalf as well at the end of 2023 and beginning of 2024.”

“Worried your legal work could contribute to clients’ criminal conduct? New ABA ethics opinion shares guidelines” —

• “What are lawyers’ duties to assess the facts and the circumstances of every client’s or potential client’s situation—to ensure that the representation does not contribute or further the client’s criminal or fraudulent activity? This question is addressed in a new ethics opinion from the ABA’s Standing Committee on Ethics and Professional Responsibility.”
• “Formal Opinion 513, released Friday, centers on Model Rule 1.16(a) of the ABA Model Rules of Professional Conduct. The rule was amended in 2023 because some lawyers were unwittingly involved in clients’ criminal or fraudulent activity or failed to pay appropriate attention to helping clients in activities, such as money laundering and financing terrorist activities.”
• “If a lawyer has ‘actual knowledge’ that their services will further a client’s criminal or fraudulent activity, the lawyer must decline the representation, according to the opinion. Likewise, if the lawyer has knowledge that there is a high probability that their services will further client criminal or fraudulent activity, the lawyer’s conscious and deliberate choice not to inquire and assess further represents the ‘knowing assistance of criminal or fraudulent activity.'”
• “Also, the opinion explains that the lawyer’s investigation must be ‘reasonable,’ rather than ‘perfunctory.’ The lawyer does not have to undertake a ‘dragnet-style operation’ to uncover every single fact about a client, according to the opinion.”
• “In a series of comments, the opinion notes that lawyers’ duties to assess the situation will vary, depending on the situation. Also, it explains that lawyers should follow ‘a risk-based approach,’ which classifies potential risk as either high, medium-high, medium, medium-low or low.”

“Freshfields Scrutinised for Perceived Conflict Over Germany’s ‘Elbtower’ Skyscraper” —

• “A German politician has criticized Freshfields Bruckhaus Deringer over a perceived conflict of interest regarding the problematic construction of Hamburg’s 64-storey Elbtower.”
• “It is the firm’s role in acting at times for more than one party involved in the tower’s development that has drawn the attention of certain individuals, leading to suspicions of a conflict of interest.”
• “Freshfields had been advising the Elbtower’s planned main tenant, Hamburg Commercial Bank (HCOB) and has previously advised the property’s main developer, Signa. It has also acted for HafenCity Hamburg GmbH, the municipal company responsible for marketing the up-and-coming Hafencity district. Freshfields has previously announced these relationships.”
• “The city of Hamburg had initially stated that at least 30% of the building had to be rented out for the construction project to be approved, according to the regional government. Signa had to present rental agreements in order to be awarded the contract for the project by the city.”
• “The controversy turns on the fact that Freshfields has ties to both the developer Signa and a party that enabled the construction to go ahead, HCOB, and other parties.”
• “Heike Sudmann, deputy parliamentary group leader of the Left Party in the regional Hamburg parliament, told Law.com: ‘When I mentioned to the regional government in 2022 that Freshfields had represented HCOB and previously the project developer Signa as well as the city, most people’s faces fell apart. If the same lawyer from a law firm advises several parties involved in the project, this cannot be done neutrally.'”

“Attorney Who Tipped SEC About Client Loses Appeal Over Award” —

• “An attorney who blew the whistle on his client can’t collect an award from the Securities and Exchange Commission because the disclosure wasn’t permitted by state bar rules, a federal appeals court decided.”
• “Under rules for the SEC’s whistleblower program, an attorney can’t recover an award for disclosing information learned during the representation of a client unless the disclosure was allowed by state bar rules or SEC attorney conduct regulations.”
• “While Florida bar rules permit an attorney to disclose confidential information if they reasonably believe it’s necessary to ‘serve the client’s interest,’ the attorney in the case at hand blew the whistle intending to subject his own client to an investigation, the US Court of Appeals for the District of Columbia said.”
• “‘In reporting on the suspected wrongdoing, then, Doe was reporting on his own client,’ the court wrote in an opinion unsealed on Friday. ‘Common sense therefore dictates that Doe could not have reasonably believed that he was acting in his client’s best interest.'”
• “The appeal is connected to an enforcement action the SEC brought in 2018 against two individuals, alleging securities fraud. The SEC accused the individuals of misappropriating a large chunk of investor funds for their personal use.”
• “In a sworn declaration he made after tipping off the SEC to the suspected misconduct, the attorney acknowledged his goal was to prevent his client from committing a crime.”
• “On appeal, however, he argued such statements were made with the benefit of hindsight and should be ignored. His tip to the SEC, when read in isolation, supports the idea that he thought his client was a victim, not a perpetrator, when he blew the whistle, he said.”
• “Unconvinced, the D.C. Circuit said there was substantial evidence to suggest the attorney suspected that his employer was engaged in wrongdoing when he submitted the tip.”

Trusting that the fact that there’s a parallel IG staff survey closing this week won’t confuse people, I’m pleased to invite our law firm risk readers to participate in the 2024 Risk Staffing Compensation Survey!

Last year’s exercise, our second go, was a tremendous success. We saw participation from 125+ individuals, who contributed data on 515+ individual risk staff positions. (Let’s see if we can’t top that figure this year, shall we? Given the large number of report requests over the past year from folks who missed or skipped the 2023 exercise, I’m quite optimistic about 2024 numbers!)

Once again, after publishing the 2023 exercise I received many encouraging notes of feedback and input from risk staff, risk managers, and firm leaders. It’s gratifying to see mangers using this data to pursue adjustments for their team and to support recruiting processes. I’m also always happy to hear from individuals using this industry data to self advocate.

Based on input from several of you, I’ve made some changes and enhancements to the 2024 exercise. The two key being:

1. For the “risk lawyer” role several folks are curious to see what the data might say about lawyer “specialization.” So the survey form will now collect optional detail on this front. If you’re a risk lawyer self-reporting, or a manager sharing staff detail, there’s an optional field to note if the individual focuses solely (or primarily) on an area like conflicts or OCG management specifically.
2. For managers & directors, the survey now includes an optional section collecting qualitative feedback from managers on risk staff hiring, budget, challenges, goals, investment plans and wishes, and other related matters. (While participation in this section is not required, if you’d like visibility into the feedback your peers provide, please share your perspectives here as well!)

So if you’re an individual contribution looking to understand how your comp compares to your peers, or you’re a risk manager looking to keep your team (and potential new hires) on par with changing market standards, you don’t want to miss out.

SURVEY DETAILS:

• Participation open to law firm risk professionals only
• All responses will be treated confidentially
• Manager participants sharing data on themselves and their team’s roles and compensation will receive a report summarizing key findings and analysis relevant to their firm demographics
  • (The report may be shared internally within your firm, but not redistributed externally. So if you want the results, your best path is to participate!)
• Individual contributor participants sharing personal compensation data will be receive a personal benchmark compensation summary relevant to their specific role and firm demographics.

The survey will be open through September 30, and can be accessed here: 2024 Risk Staffing Compensation Survey.

Feel free to share the link with law firm peers and colleagues.

And if anyone has questions (or really needs more time), please do reach out to me directly. (Email readers can do that by just replying to this note — it’ll reach me. Others can use the contact form as well.)

Let’s see what we learn this round!

“He Regulated Medical Devices. His Wife Represented Their Makers” —

• “For 15 years, Dr. Jeffrey E. Shuren was the federal official charged with ensuring the safety of a vast array of medical devices including artificial knees, breast implants and Covid tests.”
• “One connection stood out: While Dr. Shuren regulated the booming medical device industry, his wife, Allison W. Shuren, represented the interests of device makers as the co-leader of a team of lawyers at Arnold & Porter, one of Washington’s most powerful law firms.”
• “Dr. Shuren signed ethics agreements obtained by The Times that were meant to wall him off from matters involving Arnold & Porter’s business. But it’s not clear how rigorously the ethics agreements were actually enforced.”
• “His wife’s law firm refused to provide a list of clients — and the agency had no legal authority to require it, said Michael Felberbaum, a spokesman for the F.D.A.”
• “In a review of thousands of pages of court documents and F.D.A. records and dozens of interviews with current and former agency staff members and advocates, The Times identified some clients and several instances in which the Shurens’ roles intersected.”
• “Her partner at the helm of the firm’s life sciences team began representing Theranos, the discredited blood testing company, in 2015, demanding that the F.D.A. halt an inspection at its sites in California. While Dr. Shuren said he was recused from the matter, court records suggested he remained involved.”
• “In another case, Ms. Shuren’s firm was working on a $63 billion acquisition of the company Allergan in 2019 when Dr. Shuren initially declined to urge a recall of the company’s breast implants tied to a rare cancer.”
• “The couple’s work overlapped again in 2022 when Dr. Shuren announced a proposal to strengthen warnings given to patients preparing for LASIK vision correction surgery. Two of Ms. Shuren’s clients opposed the plan; the recommendations have yet to be put in place.”
• “In a statement Friday, Shannon P. Hatch, an F.D.A. spokeswoman, said the agency had found that ‘it appears there were certain instances from about 10 years ago for which Dr. Shuren should have either recused himself or sought ethics authorization to participate to avoid any potential appearance of bias.'”
• “Ms. Hatch confirmed that the lapses occurred in the Theranos case as well as another one identified by The Times involving Alcon, an eye care drug and device company that was a client of Ms. Shuren’s.”
• “Ms. Hatch said the agency ‘has no indication that any F.D.A. regulatory decisions were impacted by Dr. Shuren’s wife’s employment nor that Dr. Shuren made any decisions in the interest of parties other than the public served by the F.D.A.'”
• “During the decade and a half of overlapping career trajectories, ‘Dr. Shuren has not requested, nor has he received any waiver or agency authorization to participate in any particular matter relating to his wife’s employment or any of her clients,’ Mr. Felberbaum said.”
• “Dr. Peter Lurie, a former F.D.A. associate commissioner, said he hoped the next division chief would shape a legacy that is more impartial toward device companies.”

“Egregious conflict of interest surfaces in Jannik Sinner escaping drugs ban despite failed tests as Italian’s lawyer has ITIA on client list” —

• “Jannik Sinner has landed in the eye of a major storm in the tennis world, as the World No. 1 escaped facing a suspension from the sport despite two failed drug tests in March during the Indian Wells Masters. The ITIA (International Tennis Integrity Agency) ruled that the Italian bore no fault for the positive tests and that he was simply the victim of an unintentional use of healing spray by his physio.”
• “As proved by Sinner’s lawyers, the spray used by the physio contained trace amounts of Clostebol, an anabolic steroid that has been banned by the WADA (World Anti-Doping Agency) for stimulating muscle growth. The findings were accepted by the expert team assembled by the ITIA, who let the 23-year-old off with a £250,000 prize money penalty.”
• “After the decision, the reigning Australian Open champion’s lawyer Jamie Singer addressed the press, stating his happiness at winning the verdict.”
• “Singer, it turns out, is the founding member of Onside Law, a UK-based law firm that specializes in sports law. The clients for the firm include, in addition to Sinner, the ECB (England Cricket Board), Real Madrid football star Jude Bellingham, Serie A side AC Milan, PL side West Ham, Football Australia, and Formula 1’s governing body FIA. Interestingly, the law firm also has the ATP (Association of Tennis Professionals) as one of its major clients.”
• “More concerning, Singer himself has the ITIA on his client list… leading to a rather questionable conflict of interest in the situation, wherein he is representing both the investigative agency and the very athlete the agency is investigating in the first place.”

“Bankruptcy Racketeering Lawsuit Against Law Firms, Ex-Judge Dismissed” —

• “A federal judge dismissed a civil racketeering complaint accusing law firms Kirkland & Ellis and Jackson Walker of conspiring with the nation’s former top bankruptcy judge to rig his Houston court.”
• “U.S. District Judge Alia Moses on Friday ruled that an unhappy litigant, Michael Van Deelen, had failed to show he was harmed by the alleged scheme. Moses said she dismissed the case ‘ with some consternation’ after finding that Van Deelen lacked standing to sue the two law firms, then-judge Jones and his longtime romantic partner, who worked as a bankruptcy lawyer on major chapter 11 cases they brought to his court.”
• “Jones became the nation’s busiest bankruptcy judge in recent years after Kirkland, the top U.S. firm for advising financially-troubled companies, began filing many of its largest chapter 11 cases to Houston, usually with Texas-based Jackson Walker as its co-counsel. Jones resigned in October after he confirmed to The Wall Street Journal that he had shared a home for years with Elizabeth Freeman, a Jackson Walker partner from 2018 to 2022.”
• “Van Deelen, who filed the lawsuit, is a former high school math teacher who had owned shares in McDermott International, an oil-and-gas drilling company that filed bankruptcy in Jones’s court with Kirkland and Jackson Walker as its lawyers.”
• “Moses, who sits in Del Rio, Texas, ruled that Van Deelen didn’t adequately show in his complaint that the alleged scheme to conceal Jones’s conflict of interest caused Van Deelen to take a greater loss on his investment in McDermott than he would have otherwise.”
• “Van Deelen’s shares in the company were wiped out when Jones in 2020 confirmed a chapter 11 plan drawn up by McDermott’s lawyers. As a result, he had no financial interest in the company by the time its lawyers received court approval to collect their fees, Moses said.”

“McKinsey Foe Alix Ends Bankruptcy Conflict-of-Interest Battle” —

• “Jay Alix, the founder of turnaround consulting firm AlixPartners, isn’t appealing a recent ruling dismissing his long-running racketeering lawsuit against McKinsey & Co., ending his six-year battle against the major consulting firm.”
• “In early July, a federal judge dismissed for a second time Alix’s lawsuit against McKinsey, which alleged the consulting firm concealed conflicts of interest from bankruptcy courts to help land lucrative contracts advising on corporate restructurings and causing AlixPartners to lose out on work and revenue. “
• “At the time of the ruling, Alix’s spokesperson said he intended to appeal the decision. But the deadline to appeal has now passed, and the case has been closed. “
• “A McKinsey spokesperson said Thursday that the consulting firm has maintained from the beginning that Alix’s accusations were legally meritless and his motives anticompetitive.”
• “Without admitting any wrongdoing, McKinsey in 2021 paid $18 million to resolve a government probe into its policies meant to prevent insider trading, and in 2019 $15 million to settle a separate investigation into the firm’s conflict-of-interest disclosures in bankruptcy court. “
• “Last year, The Wall Street Journal, citing people familiar with the matter, reported that the consulting firm was winding down its bankruptcy practice after numerous lawsuits and government probes into its recovery and transformation services division’s work.”
• “A McKinsey representative told the Journal the division wasn’t shutting down, while confirming the company didn’t have any chapter 11 engagements at that time. The firm’s spokesman said Thursday it will ‘continue to support our clients’ transformations with integrity, professionalism, and excellence.'”

Brian Faughnan asks: “Can you name all the ABA Model Rules that can never be violated?” —

• “No one can actually violate an ABA Model Rule as they don’t govern anyone on their own. They can only have sway if they are adopted into a specific jurisdiction as a relevant ethics rule. However, since I do not possess encyclopedic awareness of every single variation of the rules that have been adopted in all 51 U.S. jurisdictions, I’m keeping this post focused on the substantive concepts enshrined in the ABA Model Rule version of the ethics rules.”
• “The first is the one that likely springs to mind first for everyone: Model Rule 6.5 regarding pro bono public service. It is an entirely aspirational rule and so no one could ever get disciplined for a ‘violation” of it.'”
• “The second is another easy one. Model Rule 8.5 which simply addresses conflict of law issues and determines which jurisdiction’s ethics rules would apply in a particular circumstance. Thus, since it imposes no requirement on a lawyer, it cannot itself be violated.”
• “The third is also easy (I think). Model Rule 5.2. That rule only does two things: (1) it gives a limited defense to lawyers for what might otherwise be disciplinable conduct; and (2) makes clear that, absent that defense, a lawyer is responsible for their own conduct even if ordered by their boss to do it. You cannot violate Rule 5.2.”
• “The fourth is not as easy to remember as the first three but only because it simply isn’t an easy rule to remember even exists. If you remember it exists, then recognizing its lack of teeth is pretty well understood. Model Rule 6.5 on working with nonprofit and court annexed limited legal services programs. All it does is identify the limitations on the application of other rules when the circumstances are met. A lawyer participating with such a group could still violate those other rules within their limited application but cannot actually violate Rule 6.5.”
• “And that brings us to the fifth which essentially has the same structural set up as the fourth even though it isn’t quite written in the same straightforward fashion. That’s right, it’s Model Rule 5.7: Responsibilities Regarding Law Related Services.”
• “That rule only serves to provide a structure for when a lawyer can avoid the application of nearly all of the ethics rules to the provision of law-related services. Now it is written in a somewhat backwards sort of fashion — describing when all of the rules will apply to the provision of law-related services but, in the end, it still serves to just provide guidance (even if only indirectly) for how a lawyer can avoid that result.”
• “An attorney whose conduct doesn’t meet the standards set out by RPC 5.7, doesn’t violate the rule and no one can ever be non-frivolously charged with a violation of RPC 5.7.