Bressler Risk Blog

“Charles Oakley wants Deputy Mayor Randy Mastro off MSG ejection case, claims ‘conflict of interest’” —

• “Knicks legend Charles Oakley wants First Deputy Mayor Randy Mastro bounced from his legal spat over his infamous 2017 ejection from Madison Square Garden – claiming the lawyer’s bid to stay on the case is a ‘conflict of interest.'”
• “The veteran litigator would be breaching Big Apple ethics rules by continuing to rep the arena, which receives lucrative city tax breaks, while serving as a top honcho in the mayor’s office, Oakley’s lawyer alleges.”
• “‘Courts have consistently doubted that any public servant – let alone a high-ranking official – can simultaneously serve the public while running a private law practice,’ reads a letter filed Wednesday in Manhattan federal court.”
• “Mastro has withdrawn in recent days from matters relevant to the city, like his work on New Jersey’s bid to kill New York’s congestion pricing plan, court records show. But the attorney, who has represented the arena and its billionaire chairman James Dolan in various matters for two decades, is still helping his long-time clients defend Oakley’s suit.”
• “Mastro has agreed to rep the Midtown arena for free, will appear in court in his personal capacity and not as a representative of the city, and has vowed to recuse himself from MSG-related matters while serving as first deputy mayor, a City Hall spokesperson said.”
• “The city’s independent ethics board approved the unusual setup, according to the mayor’s office, after Mastro said that he has very little work left on the case – a claim that Oakley’s lawyer contests – and that he’d request further advice if that situation changed.”
• “But Mastro has not been granted a ‘waiver’ that city employees are required to obtain before moonlighting in private jobs, Oakley attorney Valdi Licul wrote to the court on Wednesday.”
• “The mayor’s office maintains that the board found that, for now, no waiver was needed.”
• “‘New York City’s independent Conflicts of Interest Board evaluated the circumstances of First Deputy Mayor Mastro’s limited continued involvement in the Oakley litigation and advised he could stay on the case during this dispositive phase so long as he recuses himself from any issue involving his client during his city government tenure,’ spokesperson Kayla Mamelak Altus told The Post.”
• “Mayor Eric Adams announced plans to tap Mastro, formerly first deputy mayor under Mayor Rudy Giuliani, to the lofty post in his administration last month.”
• “An earlier bid to appoint him as the city’s Corporation Counsel, or top lawyer, failed after City Counsel members blasted his work representing landlords, anti-congestion pricing groups and other parties during his decades-long legal career.”

“Bar seeks comment on amendment to conflict of interest rule” —

• The Virginia State Bar is seeking public comment on a proposed amendment to Rule 1.9(c) of the Virginia Rules of Professional Conduct.”
• “The proposed amendment to the rule, which governs conflict of interest, would allow a lawyer to use information gained while representing a former client to that former client’s disadvantage ‘when the information consists solely of criminal history information that can be obtained from law enforcement databases or court records.'”
• “In a March 27 release from the VSB, the bar states that the proposal would ‘reduce the number of conflicts faced by criminal defense lawyers,’ as under the current rule, an attorney who learned of a former client’s criminal history during representation would have a conflict when representing a new client if that former client were an adverse witness.”
• “The VSB release also states that the information covered by the amendment is ‘typically provided by the prosecution to any lawyer representing the defendant,’ negating any special advantage for the attorney.”
• “Comments on the proposed amendment to Rule 1.9(c) can be submitted via email to VSB Executive Director Cameron M. Rountree at publiccomment@vsb.org. Comments must be submitted by May 7.”
• “The proposed amendment can be viewed here.”

“Hedge Funds, Private Equity Quietly Invest in Litigation Finance” —

• “Davidson Kempner Capital Management was identified as the funder behind patent cases against Amazon’s Audible Inc. last month, the first time the $35 billion hedge fund was publicly outed as a player in litigation finance.”
• “It’s a rare spotlight on hedge funds’ role in the outside backing of lawsuits, a now $16.1 billion industry that private equity firms and multi-strategy investment managers have been cashing in on for years. Funders dedicated to the sector actively market their services to law firms, but some asset managers choose to remain below the fray with their presence only revealed in court documents or regulatory filings, if at all. “
• “‘The market for capital and litigation finance is much larger than just the traditional litigation funders that advertise,’ said Rebecca Berrebi, a litigation finance broker.”
• “Asset managers often operate as limited partners investing in dedicated litigation finance funds, but they also directly back law firms and cases. Hedge funds co-invest with funders on deals to bankroll mass tort law firms or use insurance policies as collateral for loans. Berrebi says the private credit space is well suited to invest in litigation finance transactions, particularly portfolios.”
• “BlackRock, Ellington Capital, Cliffwater, and Gramercy Funds Management also invest in court fights and the lawyers behind them.”
• “BlackRock didn’t respond to a request for comment. Davidson Kempner, Ellington Capital, Cliffwater, and Gramercy Funds declined to comment.”
• “Funds’ preference to remain in the background could be because financing litigation is overall a small portion of their portfolios. Or because some funders could be backing litigation against companies in which they separately invest. Davidson Kempner last year added a stake in Audible owner Amazon.com, according to a public filing.”
• “Davidson Kempner is financing Audio Pod IP LLC’s suits against Audible Inc. through an LLC, according to the court filing. Lawyers for Audible outed the company in a countersuit filed in a federal court in Manhattan.”
• “‘Audio Pod deliberately reached out beyond its state of formation in Virginia to exploit New York’s robust financial market and obtain funding for its patent-assertion campaign against Audible,’ they said.”

Matthew Marrone at Goldberg Segalla writes: “Lawyers Beware: Litigation Funding Leads to Malpractice” —

• “As recently reported by Law360, a Pennsylvania lawyer and a litigation funder are facing racketeering and malpractice claims. A Pennsylvania federal judge recently declined to dismiss claims brought by a client accusing his former lawyer of engaging in a conspiracy to improperly charge him inflated legal fees to cover high-interest litigation loans.”
• “In the underlying matter, the client/plaintiff retained the lawyer to represent him in a lawsuit claiming he suffered neurological issues stemming from a titanium medical implant after installing a pole with a cell phone antenna near a train station. The client asserts that the lawyer promised him that he would receive a ‘life-changing amount’ of money from the injury suit and encouraged him not to return to work. The lawyer also allegedly encouraged the client to sign a $33,000 litigation funding agreement with a litigation funder, which came with a two-year repayment plan with a 25-percent interest rate.”
• “The suit dragged on, the client alleged, before the lawyer supposedly pushed him to accept a $475,000 settlement. Out of that settlement, the client received only $141,469 after costs and fees were taken out, despite experts stating he was owed nearly $3 million in damages. The final settlement was so small, because the lawyer allegedly took out his own litigation funding with the same funder and then tacked it, with interest, to the client’s bill, the suit claims.”
• “The litigation funder argued the RICO claim must fail, because providing funding as described in the complaint is its ‘precise business’ model. The judge noted that the client alleged ‘unauthorized, secret funding agreements that the enterprise used to defraud him,’ which is enough to support a racketeering claim as ‘facially plausible.'”
• “The judge found further that, because the client alleged that his lawyer ‘made multiple false misrepresentations and withheld material information from him,’ his claims for fraudulent inducement, malpractice, breach of fiduciary duty and civil conspiracy may survive at this stage.”
• “The lesson here? Litigation funding is fraught with peril for lawyers. If your client chooses to use litigation funding, make all efforts to do the following:”
  • “Confirm the client understands the terms of the funding agreement”
  • “Have the client – not you – sign the agreement with the funder”
  • “Avoid signing the agreement on behalf of yourself or your client”
  • “Ensure the client understands that the decision to sign the agreement is his/hers alone, without influence from you”
  • “Advise the client of the option to consult with other professionals (e.g., other counsel, an accountant, or a financial advisor) about the decision to sign the agreement”
  • “Obtain written/signed acknowledgement from the client of the foregoing”

“Key Amendments to the New York Rules of Professional Conduct” —

• “Earlier this year the presiding justices of the four Appellate Divisions issued a Joint Order approving amendments to the New York Rules of Professional Conduct. The amendments, which were proposed last year by the New York State Bar Association Committee on Standards of Attorney Conduct (COSAC) significantly alter Rule 1.10, which deals with the imputation of conflicts of interest, and Rule 3.4 regarding fairness to opposing parties and counsel.”
• “Rule 1.10(a) and the Imputation of Personal Interest Conflicts. Prior to its amendment, Rule 1.10(a) stated: ‘While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rule 1.7 [concurrent representation conflicts], 1.8 [special conflicts of interest] or 1.9 [successive representation conflicts], except as otherwise provided therein. ‘What this meant was that, as a general rule, if one lawyer in a firm was conflicted from representing a client, regardless of the reason, then every other lawyer in the firm would be similarly prohibited from undertaking the representation, regardless of the degree of separation between the conflicted lawyer and the other lawyers in the firm.”
• “Suppose, for example, that Lawyer A is approached about taking on a litigation adverse to a company in which Lawyer A’s spouse owns shares. Lawyer A may be prohibited from taking on the representation if there is a significant risk that Lawyer A’s judgment on behalf of the potential client would be limited by Lawyer A’s financial interest in the company (either directly or indirectly). See NY Rule 1.7(a)(2) (prohibiting representation where ‘there is a significant risk that the lawyer’s professional judgment on behalf of a client will be adversely affected by the lawyer’s own financial, business, property or other personal interests.’)”
• “Under the old version of Rule 1.10, Lawyer A’s conflict would be imputed to the rest of Lawyer A’s firm, regardless of its size or the impact that Lawyer A’s conflict actually had on the other lawyers in the firm.In other words, if there was a significant risk that Lawyer A’s judgment could be impaired by the conflict then that significant risk was imputed to the rest of the firm.”
• “The amendments to Rule 1.10(a) make clear that these type of personal interest conflicts generally will not be imputed to the rest of the firm so long as (1) the conflict is ‘based on a lawyer’s own financial, business, property or other personal interests within the meaning of Rule 1.7(a)(2)’ and (2) a reasonable lawyer would conclude that there is no significant risk that the representation by the other lawyers in the firm would be materially limited or that the independent judgment of those lawyers would be adversely effected. See NY Rule 1.10(a)(1)-(2).This amendment gives law firms more flexibility to assess personal interest conflicts on a case-by-case basis and determine whether a conflict as to the remainder of the firm is actually present.”
• “Rule 1.10(b) and a Law Firm’s Retention of Former Client Information. The courts also updated Rule 1.10(b) to clarify that when all of the lawyers who previously worked on a matter have left the firm, a law firm will not be disqualified from a representation simply because the firm is still in possession of files related to the former client.”
• “While the prior version of Rule 1.10(b) prohibited a representation if ‘the firm’ had confidential information belonging to the former client, the amended version of Rule 1.10(b) only mandates disqualification if ‘any lawyer remaining at the firm has actual knowledge or, or has accessed’ the former client’s confidential information.”
• “Rule 1.10(c) and Screening of Lateral Lawyers. The courts amended Rule 1.10(c) to expressly permit screening of lateral lawyers in certain instances. This is a major development. Before the amendment, Rule 1.10 would impute a lateral lawyer’s conflicts to the new firm in all instances except where the lateral lawyer did not acquire confidential information that was material to the matter at issue.”
• “In practice, this meant that, absent the narrow exception described above, if a lateral lawyer was conflicted from a representation because of the lawyer’s affiliation with their prior firm, the lateral lawyer’s conflict would be imputed to the remainder of the new firm and could be used as a basis to disqualify the new firm.”
• “The recent amendments to Rule 1.10(c) bring the rule closer to Model Rule 1.10(a)(2), which allows screening for lateral lawyers to avoid imputation of conflicts caused by the lawyer’s decision to join a new firm.”
• “While Model Rule 1.10(a)(2) permits screening of lateral lawyers under all circumstances, the amended version of New York Rule 1.10(c) permits screening of lateral lawyers except ‘where the matter is a litigation, arbitration, or other adjudicative proceeding and the newly associated lawyer, while associated with the prior firm, either (i) substantially participated in the management and direction of the matter, or (ii) had substantial decision-making responsibility in the matter on a continuous day-to-day basis.'”
• “In other words, while the new Rule 1.10(c) allows a screen to prevent the imputation of conflicts brought over by lateral lawyers in many circumstances, it will not prevent imputation of conflicts from a lateral lawyer who was a lead lawyer in a litigation matter and has decided to join the firm on the other side of the matter.”
  However, notwithstanding this limitation in the rules, it remains to be seen whether courts, which have generally approved screening, will draw the same distinction when evaluating motions to disqualify. Accord Hempstead Video, Inc. v. Incorporated Village of Valley Stream, 409 F.3d 127, 132 (2d Cir. 2005); Maricultura del Norte, S. de R.L. de C.V. v. Worldbusiness Capital, Inc., 2015 WL 1062167 (S.D.N.Y. March 9, 2015).”
• “As noted, this is a significant development in the New York Rules. Law firms and lawyers looking to move firms regularly struggle to navigate the complicated web of conflicts. How best to do that is the subject of another article, however, the change to allow screening to cure many of the run-of-the-mill conflicts that come up in lateral transitions is a significant step forward.”

“ORDER GRANTING MOTION TO DISQUALIFY DEFENDANT JUMIO’S COUNSEL PERKINS COIE” —

• “The Asserted Patents claim a priority date of July 2015. Perkins represented FaceTec on general corporate and intellectual property mattersduring FaceTec’s infancy, mostly in 2014 and 2015. At the time, FaceTec’s only product was ZoOm. During the course of its representation, Perkins’attorneys served as FaceTec’s outside general counsel and corporate secretary, and worked on FaceTec’s patent prosecution strategy to protect ZoOm. Through an affiliated entity, Perkins took an equity stake in FaceTec as part of its compensation. FaceTec contends thatit gave Perkins confidential information in this era that is nowmaterial to the current litigation.”
• “Inassessing whether the Asserted Patents were obvious as of the claimed July 2015priority date, a potentially key issue will be whether ZoOm’s commercial success at that time was attributable to theinnovative nature of thepatented features,rather than other differentiators. FaceTec’s CEO, Kevin Tussy,attests thatin 2014 and 2015,he provided Perkinswith confidential information about what FaceTec believed made ZoOm innovative. For example, in August 2015, Tussy sent a slide deck to Perkins, which identifiedZoOm’skey differentiators over competing products.Moreover, Tussy attests thatduring that time period,he discussed FaceTec’sstrategies for public relations, investments, marketing, and patent protection of the ZoOm technologywith Perkins’ attorneys. Perkins does not deny it received this information.”
• “It is understandable that Perkins concluded there was no conflict of interestbecause the firmdidnot prosecute the Asserted Patentsor other applications to which the Asserted Patents claim priority, and its patent prosecution work did not relate to the patented technology at issue. Nonetheless,there is a substantial risk that the information acquired by Perkins through its prior representation of FaceTec will become material to the current lawsuit. Therefore,the motion to disqualify Perkins as counselfor Jumio in this litigationis GRANTED.”
• “Perkins’ representation of FaceTec began in early 2014. In February of that year, Lowell Ness—a corporate partner at Perkins—executed a retainer agreement with FaceTec on behalf of the law firm.”
• “Based on the information in the record, it does not appear that Perkins’ patent prosecution work was substantially related to the litigation currently before the Court, nor does FaceTec provide evidence to support that inference.Thus, Perkins’ specific patent prosecution workdoes not provide a basis for disqualification.”
• “By contrast, Perkins’ corporate work and intellectual property counseling is substantially related to the pending litigation. A substantial risk exists that, through its representation of FaceTec, Perkins learned of confidential information that could be material to the resolution of issues in this case.”
• “Finally, Perkins’ implementation of a cautionary screen to wall off any attorney who had previously performed work for FaceTec cannotcure the problem. Ness remains at the firm, and Becker was still associated with the firm at the time Perkins began representing Jumio in this case.”
• “Rule 1.10would allow a cautionary screen to be used to cure disqualification if (1) Perkins was being disqualified based on one of their attorneys’work for a prior firm or work in which that attorney did not substantially participate, and written notice of the screen was provided to the former client FaceTec, or (2)none of the attorneys that receivedthe confidential information at issue wasstill associated with Perkins. Neither of those situations applies here. Accordingly, under Rule 1.10(c), disqualification can only be avoided if the conflict is waived by the former client, FaceTec, whichhas not occurred.”
• “Perkins implemented its internal screen without informing FaceTec of the conflict,and has provided no explanation for that failure. Such notice to the former client is critical to make ‘the interested party aware of the potential threat to its confidential information and the measures taken to prevent the improper use or disclosure of such information’ and to provide ‘an enforcement mechanism, in that the interested party will be able to suggest measures to strengthen the wall, and to challenge any apparent breaches.’ Kirk v. First Am.Title Ins. Co., 108 Cal. Rptr. 3d 620, 648(Ct. App. 2010). No such notice was provided here.”
• For more background on this matter and dispute, see this earlier update.

“Adams Case, Big Law Deals Launch Era Rife With Ethical Conflicts” —

• “Albany Law School’s Ray Brescia says judges must probe whether counsel from one of the Big Law firms that made deals with the president can effectively represent defendants in government cases—as the executive order threat still hangs over those firms’ heads.”
• “Almost at the same time that US District Judge Dale Ho was dismissing the prosecution of New York City Mayor Eric Adams on April 2, another major law firm agreed to provide volunteer time on causes preferred by President Donald Trump with the understanding that he will go easy on them.”
• “But these events are connected by more than just time. The apparent quid pro quo that doomed the Adams prosecution, and led Ho to rule that the Trump administration shouldn’t be able to hold the threat of continued prosecution of Adams ‘like the proverbial Sword of Damocles’ over the mayor, is precisely the kind of deal these law firms have struck to avoid executive orders damaging their business. Could Big Law’s wheeling and dealing cause greater havoc in the courts than Adams’s case did?”
• “Ho found he had to dismiss the prosecution of Adams in part because there was credible evidence that the Trump administration had dangled the prospect of abandoning the prosecution of the mayor before him to exact future policy concessions from him. Such an abuse of legal process is illegitimate and undermines a criminal defendant’s rights. Ho determined it was appropriate to not just dismiss the case, but to dismiss it ‘with prejudice’: that is, the Department of Justice couldn’t reinstate it at a later time should it determine Adams wasn’t acceding to the administration’s policy preferences.”
• “The prosecution—and the promise to abandon it—had all the hallmarks of an inappropriate quid pro quo and created a clear conflict that delegitimized the Adams prosecution. When law firms enter into agreements to accede to the demands of the Trump administration, they are creating similar conflicts of interest that threaten the legitimacy of criminal proceedings when they represent defendants in cases brought by the government.”
• “In order to protect the integrity of their proceedings, when judges know or have reason to know that a potential for a conflict exists, they have an affirmative duty to ensure lawyers appearing before them can provide conflict-free representation.”
• “The fact that law firms have struck agreements with the Trump administration raises serious questions about whether they can provide effective assistance of counsel in cases against the government.”
• “What happens if the Trump administration doesn’t like the way in which a particular case is being litigated by one of these firms? What’s to stop the administration from going back to those firms and telling them they should pull their punches, to not be so aggressive in their representation of a particular client that gets under the president’s skin? These agreements don’t provide any assurances that Trump won’t demand more concessions from the law firms.”
• “To ensure that both federal and state courts across the country are protecting the constitutional rights of the defendants before them, judges now must inquire whether any criminal defense attorney from one of these firms that has cut a deal with the Trump administration is operating under a conflict similar to the one that doomed the Adams prosecution.”
• “The outcome in the Adams case is a stain on the DOJ, and the profession as a whole. But it is just one case. As more firms agree to enter into deals with the administration, the potential mischief such agreements can cause in the courts is exponentially greater than the Adams affair and goes beyond just one case. It’s every case in which lawyers from these firms represent the defendants. As more firms take this path, it will create a significant drain not just on the courts that must conduct this review but also on clients themselves should they have to bear the burden of finding new counsel.”
• “There is one way to prevent this chaos though. Courts should start these inquiries immediately. Should judges find the lawyers operating under real constraints, they should disqualify those lawyers where appropriate.”
• “As firms—and their clients—realize that they can’t enter such agreements without it exacting a real cost, perhaps other firms considering whether they should also cut a deal with the Trump administration will think twice before they do so.”

“Kirkland & Ellis in talks with White House to avoid executive order, WSJ reports” —

• “Kirkland & Ellis, the largest U.S. law firm by revenue, is in talks with the White House to avoid an executive order similar to those levied against several of its rivals, the Wall Street Journal reported on Thursday.”
• “The news comes as President Donald Trump wages a pressure campaign against his perceived enemies in the legal profession, leading some major law firms to strike deals with the White House to avoid executive orders seeking to curtail their business with the federal government.”
• “Kirkland has been ranked for years as the top-grossing U.S. law firm by American Lawyer, with a reported $8.8 billion in revenues in 2024, and is known for its work on deals for private equity firms and for litigation.”

“Trump Announces Deal With Doug Emhoff’s Law Firm” —

• “President Trump announced Tuesday another deal with a law firm he had targeted for potential punishment, this time the one that employs Doug Emhoff, former Vice President Kamala Harris’s husband.”
• “Mr. Trump did not say why he targeted the firm. Along with its connection to Mr. Trump’s defeated opponent in the November election, the firm also employs a top investigator for the congressional committee that documented President Trump’s role in the Jan. 6, 2021, attack on the U.S. Capitol, and a litigator who spearheaded a lawsuit that two Georgia election workers brought against Rudolph W. Giuliani in which he was ordered to pay the women $148 million.”
• “Willkie, Mr. Trump said in a Truth Social post, committed to representing clients, no matter their political leanings, and pledged $100 million in pro bono legal work to causes Mr. Trump has championed. The firm, Mr. Trump said, would ‘not engage in illegal DEI discrimination and preferences,’ Mr. Trump announced in a Truth Social post.”

ABA Formal Opinion 516 April 2, 2025: “Terminating a Client Representation Under MRPC 1.16(b)(1): What ‘Material Adverse Effects’ Prevent Permissive Withdrawal?” —

• “ABA Model Rule of Professional Conduct 1.16(b)(1) permits a lawyer to voluntarily end, or seek to end, an ongoing representation if ‘withdrawal can be accomplished without material adverse effect on the interests of the client.’ A lawyer’s withdrawal would have a ‘material adverse effect on the interests of the client’ if it would result in significant harm to the forward progress of the client’s matter, significant increase in the cost of the matter, or significant harm to the client’s ability to achieve the legal objectives that the lawyer previously agreed to pursue in the representation.”
• “A lawyer may be able to remediate these adverse effects and withdraw in a manner that avoids or mitigates the harm that the Rule seeks to prevent. The lawyer’s motivation for withdrawal is not relevant under Model Rule 1.16(b)(1).”
• “Therefore, under the Model Rules, if the lawyer’s withdrawal does not cause ‘material adverse effect’ to the client’s interests in the matter in which the lawyer represents the client, a lawyer may withdraw to be able to accept the representation of a different client, including to avoid the conflict of interest that might otherwise result.”
• “The opinion addresses the meaning of the Rule’s phrase ‘material adverse effect on the interests of the client’ and provides a framework for analyzing when and whether such an effect prevents a lawyer from permissive unilateral withdrawal. The opinion concludes that a material adverse effect is one which, despite a lawyer’s efforts to remediate negative consequences, will significantly impede the forward progress of the matter, significantly increase the cost of the matter and/or significantly jeopardize the client’s ability to accomplish the objectives of the representation.4 In other words, the material adverse effect must relate to the client’s interests in the matter in which the lawyer represents the client.”
• “In the context of litigation, some courts have held that without the client’s consent, a lawyer may not withdraw from a representation to litigate against the now-former client.24 Lawyers who end a representation for this reason have sometimes been disqualified from representing the new client. The so-called ‘hot potato’ rule or doctrine comes from Picker International, Inc. v. Varian Associates, Inc., 670 F. Supp. 1363, 1365 (N.D. Ohio 1987), aff’d, 869 F.2d 578 (Fed. Cir.1989), where the court concluded, ‘a firm may not drop a client like a hot potato, especially if it is in order to keep happy a far more lucrative client.’ “
• “The implication of these decisions is that, even if the lawyer’s withdrawal would otherwise be permissible, the lawyer may not withdraw to litigate against the client whose representation is terminated. But some courts recognize that the principle is not absolute and that it should not necessarily apply when the lawyer’s withdrawal is not significantly prejudicial because, for example, ‘a lawyer’s representation is sporadic, non-litigious and unrelated to the issues involved in the newer case.'”
• “Rule 1.16(b)(1) and other Rules of Professional Conduct do not incorporate the ‘hot potato’ concept for the reason discussed above, namely, that a lawyer’s motivation for invoking Rule 1.16(b)(1) is irrelevant. Even if the lawyer’s reason for invoking Rule 1.16(b)(1) may be perceived as disloyal, the lawyer’s motivation is not relevant. The salient question under Rule 1.16(b)(1) is whether, by withdrawing from a representation, the lawyer will materially adversely affect the client’s interests in the matter in which the lawyer represented the client, not whether the lawyer will be adverse to the client in an unrelated matter after the representation is over.”
• “Courts are, of course, free to exercise their supervisory authority over trial lawyers by disqualifying those who drop a client ‘like a hot potato’ to advocate against that client in another case. Courts may elect to do so as a sanction or remedy for the lawyer’s perceived disloyalty or to remove the incentive for lawyers to end representations for what courts regard as inappropriate reasons. But it does not necessarily follow that the lawyer’s withdrawal, for a purpose of which courts may disapprove, constitutes a violation of the Rules of Professional Conduct for which a lawyer could be professionally sanctioned.”

“Narrow AML rules allow lawyers to act for ‘lawful but awful’ clients” —

• “The narrow focus of the anti-money laundering (AML) regime on criminality leaves solicitors ‘free to facilitate and legitimise the flow of corrupt capital while staying within the bounds of the law’, a major report has warned.”
• “Campaign group Spotlight on Corruption also found ‘surprisingly little visibility’ in Solicitors Regulation Authority (SRA) guidance, as well as individual law firms’ own codes, of ‘the overriding ethical commitment to safeguard the public interest’.”
• “‘Given the regulatory gap in the AML regime, there is an urgent need for guidance about how the SRA’s high-level principles should shape ethical decision-making by lawyers and law firms around kleptocratic wealth,’ it said.”
• “The report, Gatekeepers, Enablers or Technicians?, presents the findings of academic research exploring the role of solicitors in England and Wales in relation to kleptocracy, state capture (where illicit activities are legalised by a ruling elite) and ‘grand corruption’, and the question of whether lawyers should take on work which is ‘lawful but awful’.”
• “The AML regime was a ‘vital safeguard’ against illicit finance, ‘but its narrow focus on criminal activity means it does not adequately capture the proceeds of kleptocracy, state capture and grand corruption’, it said.”
• “It was perfectly possible, for example, that a solicitor doing comprehensive AML checks on a foreign politically exposed person (PEP) seeking to buy a luxury London property using the profits from a lucrative state contract in a kleptocratic regime would find no evidence of criminality and no grounds to suspect money laundering.”
• “Indeed, the PEP may well offer documentary evidence showing the contract was lawfully awarded through an official process that included sign-off at the highest levels of state power. ‘Their kleptocratic wealth is illicit, but not necessarily illegal.'”
• “This gap was even more obvious on the reputational side of enabling, where lawyers provided reputation laundering tactics, from online reputation management, setting up philanthropic foundations and donating to political parties, to ‘lawfare tactics which aim to silence critics’.”
• “This all meant ‘a major regulatory gap in the UK’s defences against dirty money, currently filled by the choices that lawyers and law firms make in accepting or refusing this work.'”
• “But the report found a tendency among solicitors towards ‘ethical minimalism’, or viewing legality as the primary benchmark for professional conduct rather than broader moral considerations.”
• “‘This position has come under challenge from both those within the profession and those outside it, sparked by a range of ethical concerns relating to kleptocratic wealth, environmental harms and human rights issues.'”
• “Many lawyers defended decisions to act for clients with kleptocratic wealth by pointing out that if they turned it down, another firm would simply pick up that business, the report observed. This meant ‘systemic change requires a shift in professional norms’.”
• “In the absence of a clear regulatory or ethical framework, firm culture, geopolitical developments and reputations concerns drove decision-making around client selection.”
• “Spotlight’s review of 20 unnamed firms showed that their statements on responsible business practices addressed environmental, social and governance issues in broad terms, but had nothing on kleptocracy or grand corruption.”
• “Interviews carried out for the research suggested that, in practice, the ‘ethics’ of client selection tended to be conflated with AML compliance.”
• “‘As one lawyer described it, the compliance department is the ‘ethical conscience’ of the firm. This also illustrates how compliance can easily be treated as separate layer of red tape rather than embedded processes which shape firm culture.”
• “‘Given the pecking order within hierarchical firm structures, concerns raised by compliance officers or junior lawyers can easily be disregarded or downplayed by senior partners who manage client relationships and bring in their business.'”
• “Without client selection being based on a coherent ethical framework, it went on, there was ‘a lack of clarity and consistency’ in how lines are drawn on kleptocratic wealth.”
• “One senior lawyer commented: ‘We all dropped our Russian clients overnight – but no one asked us about the Gulf states.'”
• “The interviews also revealed that reputation was often used ‘as a proxy for ethics’, shifting the focus from ethical complexities to a reputational challenge of justifying work for a particular client to the public – ‘or opportunistically marketing this high-risk appetite to prospective clients’.”

“Solicitor suspended after client’s millions pass through bank account” —

• “The first solicitor ever prosecuted for ‘tipping off’ a client about a money laundering investigation has now been suspended from practice for allowing a client to use his firm’s account as a banking facility. The Solicitors Disciplinary Tribunal (SDT) also fined Osmond Solicitors’ compliance officer.”
• “The Solicitors Regulation Authority’s (SRA) investigation was triggered by William Osmond’s arrest by the Serious Fraud Office (SFO) in 2019.”
• “The SRA alleged that the London firm received and paid out £388m in multiple currencies on behalf of an overseas businessman, ‘Person A’, and charged him nearly £1.2m in fees. From 2003 to 2019, the firm acted for Person A, or a company owned or controlled by him, on approximately 132 matters and he accounted for about 10% of its turnover.”
• “William Osmond, who qualified in 1979, was the owner and manager of the firm, and Person A’s main point of contact. He admitted breaching the SRA accounts rules and also contributing to the firm’s anti- money laundering failures by failing to conduct ongoing monitoring of its business relationships or applying enhanced customer due diligence.”
• “In mitigation, Mr Osmond pointed out that none of the transactions had resulted in loss to any client or third party and he had not profited from them. Once he became aware of the banking facility rules, he added, he stopped making payments and returned all the funds held by the firm to Person A. The SDT said allowing use of client account in this way, ‘for no other reason than the convenience of a client’, was a very serious breach of the rules.”
• “It said: ‘Aside from the firm’s own written anti-money laundering policies, controls and procedures, there was clear guidance from the Law Society and the SRA warning of the need to mitigate the risks of the firm’s services being used for money laundering, which [Mr Osmond] should have been aware of.’ Despite the mitigation, the SDT considered that the misconduct was serious enough to consider striking off Mr Osmond.”

“Lawyers worried by over-reliance on SRA discretion post Dentons” —

• “Specialist regulatory lawyers have expressed concern that the High Court ruling in the Dentons case places too much reliance on the Solicitors Regulation Authority’s (SRA) view of the seriousness of rule breaches.”
• “On Tuesday [3/11], Mrs Justice Lang said there was ‘no universal requirement’ that breaches of SRA rules could only amount to professional misconduct if they were serious, culpable and reprehensible.”
• “‘Such requirements only arise where they are inherent in the rule in question,’ she said. This was not the case when it came to anti-money laundering (AML) rules and so she quashed the decision of the Solicitors Disciplinary Tribunal (SDT) to clear Dentons.”
• “The judge said SRA guidance that only serious breaches of the AML legislation would progress to disciplinary proceedings was ‘a safeguard against over-zealous enforcement’; it meant that ‘trivial breaches will not be prosecuted’.”
• “Jayne Willetts – who runs her specialist eponymous firm in Birmingham – said the effect of the ruling was to remove from the SDT the ability to determine whether a breach was so minor that it did not represent professional misconduct.”
• “‘The tribunal is best placed to make these decisions with its experience and independence and to make these decisions to protect the public.”
• “‘Not all breaches represent a risk to the public. Not all breaches warrant a sanction. The notion as advanced by the judge that the SRA can be relied upon to make that distinction is not borne out by experience to date.'”
• “Former SRA adviser Paul Wightman, a barrister and consultant at strategic and compliance consultancy DG Legal, described the decision as ‘overly legalistic’.”
• “‘Punishing firms with otherwise exemplary systems and controls for breaches that are acknowledged to be inadvertent and committed in good faith seems to me to be regulation for regulation’s sake.'”
• “Mr Wightman said few people would be reassured by the SRA guidance, arguing that giving the SDT discretion to find minor breaches were not misconduct was ‘a much greater protection against over-zealous enforcement’.”
• “Michelle Garlick, a partner at Weightmans and head of its Compli service, said: ‘Whilst it is an understandable decision legally, it will be interesting to see what happens next, whether it be a further appeal, another full SDT hearing or an agreed outcome.”
• “‘The SRA will be encouraged by the decision but I hope it reviews carefully it’s enforcement strategy and internal application of it to be clearer about what serious actually looks like in practice and only pursues disciplinary proceedings in circumstances which properly fit that criteria.'”
  “Paul Bennett, a partner at Bennett Briegal, said he was not surprised by the decision but his concern was that it enhanced the SRA’s enforcement discretion beyond AML.”

Law Society Online Class: “Compliance with the LOCS:23 UK GDPR Certification Standard (Monday 28 April 2025)” —

• “On 1 February 2024, the UK Information Commissioner’s Office (ICO) approved a UK GDPR certification scheme for legal service providers, enabling them to demonstrate that they comply with UK data protection law. “
• “The Legal Services Operational Privacy Certification Scheme (LOCS:23) defines how legal service providers can best manage clients’ personal data in compliance with the UK GDPR. “
• “Join us for this online classroom, where our expert speakers, Stephanie Pritchett and Ben Wootton, will explain what the LOCS:23 scheme entails and who and what it applies to. They will also explain the difference in becoming LOCS:23 Ready or LOCS:23 Certified, as well as the benefits of achieving and risks of not achieving compliance with LOCS:23 or the UK GDPR more generally. Organisations will also benefit from their insights and tips on managing LOCS:23 audit processes, and in meeting the LOCS:23 controls. “
• “There will be an opportunity for Q&A, and Stephanie and Ben will then open the floor to gather feedback from attendees on their LOCS:23 and/or wider UK GDPR compliance journey. They look forward to answering delegate questions. “
• “This online classroom will be held on Monday 28 April 2025 from 12:30pm to 14:00pm. “

Law Society Book: “Essential Q&A guidance for all compliance officers” —

• “Conflicts of interest are rarely easy to assess for law firms. It is the classic judgement issue: professional obligations and case law are fact-specific. Any black-and-white conflict issue, the office dog will avoid. But more complex conflict queries require in-depth knowledge of the rules and facts, thinking time, and outstanding recording-keeping to justify withdrawal or continuing, if the perceived conflict does not exist.”
• “This book is written in a question-and-answer format to tackle the practical challenges of conflicts of interest, confidentiality and disclosure for solicitors and compliance officers for legal practice. This layout is incredibly helpful in practice and I have continued to refer to this book when advising client law firms.”
• “The areas covered include the regulatory starting point in respect of overviewing the rules, and dealing with conflicts of interest both in terms of a solicitor and client conflict (known as an ‘own interest’ conflict or a conflict between two clients), confidentiality and duty of disclosure.”
• “The common conflict of interest scenarios are a little basic for my personal preference, though these are the sometimes basic questions asked by my law firm clients. In the next edition, I would like to see more complex examples, an exploration of how confidentiality should be central to conflict analysis, and some additional case law, including SRA and SDT disciplinary cases so that firms can see how the rules are utilised. But this is a minor quibble.”
• “The Risk Management Discussions and Solutions chapter is particularly useful from a COLP’s perspective and probably justifies the purchase price on its own. This book should be available to all COLPs because the issues permeate both contentious and non-contentious work. It is also a very useful additional resource for considering regulatory and ethical duties arising in an area with which the profession has struggled for some years. Given the SRA’s ever-increasing, proactive investigation and fining powers, this is a sensible risk management area to look at.”

“After probing fund managers’ approach to valuations, the FCA shifts its focus to conflicts more generally” —

• “Key takeaways”
  • “In its review of private market valuations, the FCA found that firms need to improve processes for identification and documentation of potential conflicts of interest.”
  • “The FCA found weakness in governance, identifying, documenting and addressing conflicts of interest, and having defined processes for carrying out ad hoc valuations.”
  • “Following this review and the publication of its findings, the FCA launched a wider review into conflicts of interest.”
    “In anticipation of the FCA’s increased focus on this area, firms should ensure that their conflicts of interest policies are implemented with appropriate rigor, taking account of the FCA’s findings.”
• “On 5 March 2025, the UK Financial Conduct Authority (FCA) published a report outlining its findings from an earlier review conducted on private market valuations (Valuations Review).”
• “One of the main outcomes of its Valuations Review was that firms need to improve processes for the identification and documentation of potential conflicts of interest in their valuations process to increase the independence of their valuation functions.”
• “Shortly before publishing its findings in connection with the Valuations Review, the FCA announced on 26 February 2025 in a Dear CEO letter addressed to asset managers that it will be conducting a multi-firm review of conflicts of interest at firms managing private assets (Conflicts Review). In addition to a review of conflicts practices, the Dear CEO letter also announced:”
  • “(i) A multi-firm review of the application of the Consumer Duty in model portfolio services,”
  • “(ii) Review of private funds’ financial crime systems and controls,”
  • “(iii) Continued focus on liquidity risk, and”
  • “(iv) Engagement with firms that offer sustainability-related products in connection with sustainability disclosure and anti-greenwashing rules.”
• “This alert focusses on the conflicts aspects and provides an overview of the current conflicts rules, the reasons for the Conflicts Review and the potential implications on businesses that hold private assets. It will be relevant to institutional investors and managers of private assets including private credit and private asset funds.”
• “The key principles applicable to alternative investment funds (AIF) in the UK are set out in Chapter 10 (Conflicts of Interest) of the FCA’s Senior Management Arrangements, Systems and Controls sourcebook (SYSC). By way of summary, the key requirements with which AIF managers need to comply include:”
• “Taking all reasonable steps to avoid conflicts of interest, including those arising between the AIF manager and the AIF, among AIFs, and between clients of the AIF manager; Maintaining and operating effective organisational and administrative arrangements to identify and prevent or manage conflicts of interest; and Disclosing any conflicts of interest to investors where the AIF manager does not have reasonable confidence that any risk of damage to the interests of the client will be prevented.”
• “The FCA is concerned about the impact poorly managed conflicts of interest may have on asset valuations. In its Valuations Review, the FCA found that valuation-related conflicts were often documented generically rather than identifying specific conflicts in respect of particular products or transactions (Section 21.2.2).”
• “The FCA is focussed on firms that operate multiple intersecting business lines, continuation funds, co-investment opportunities or that partner with other financial institutions, thereby creating an increased likelihood that a conflict of interest could arise.”
• “As stated above, the FCA is concerned with the implications of inaccurate price valuations and the impact this has on investor decision-making. Obscuring price transparency is detrimental to informed decision-making by investors, which increases investor risk across the market both in terms of the severity and likelihood of adverse consequences.”
• “In particular, the FCA states that the Conflicts Review will focus on the use of governance bodies and reviews by the ‘three lines of defence’ to ensure policies are effectively implemented. In its letter, the FCA emphasises its expectation that conflicts policies must evolve to meet requirements of increasingly complex private markets.”
• “When conducting its Conflicts Review, the FCA is likely to select firms that operate intersecting business lines which may give rise to conflicts of interest including firms that have in-house valuation functions and make use of continuation funds.”
• “The precise implications of the Conflicts Review will depend on the FCA’s findings. Potential outcomes could include the issuance of fresh guidance on conflicts or a consultation on amendments to the conflict rules.”
• “Mangers of funds should act now to review and evaluate conflict-of-interest risks to improve their current governance and control processes in line with the FCA’s Valuations Review recommendations.”
• “The FCA has put firms on notice that it will be following up with firms where senior investment professionals were voting members in valuation committees, to understand how their position as voting members is consistent with the independence of the decisions made and whether their role compromises independent oversight and challenge.”
• “Any firms currently operating in ways that are inconsistent with the FCA’s expectations, including in particular those that were subject to the Valuations Review and have performed poorly in relation to their peers, should take action to ensure that they take steps to improve performance in this area. Firms may find the following questions helpful when considering how they manage the conflicts risks that they face:”

Already this year, I’ve had several stimulating conversations with risk and HR leaders who have provided suggestions and inputs for the 2025 compensation survey exercise. Each year, we try to do better!

Today’s post is just a brief commercial for the 204 report, and a targeted offer of aid to a specific segment of risk staffers who might want some data in support of their career paths. More below.

The Report

When people (who didn’t participate directly and receive their complimentary copy) reach out looking to secure a copy of the report, it’s typically one of two scenarios:

• A manager looking for comprehensive data across roles, geographies and firm demographics, in order to inform hiring budgets and/or staff compensation adjustments
• An individual looking for specific information regarding their particular role and compensation level (typically to benchmark their current comp or inform job hunting negotiation)

That’s why I offer a few paths to and forms of comp data:

1. Firms can pay a fee to secure an internal use only copy of the survey directly from me. (Copyright registration on file, sharing would be risky, folks!)
2. This year, firms can alternatively reach out to my 2024 report sponsor, who secured limited redistribution rights, which can enable you to bypass the fee if you want to talk to those nice folks.
3. Individuals can pay a much lower fee to receive a personalized benchmark. This provides a select view of compensation data, based on their particular role, geography, and firm size band.

The Select Offer

If you’re a risk management professional, working at a law firm that has made public, disappointing decisions in response to recent executive demands, and you’re exploring pursuing new employment, I want to help.

To do that, I’m offering individuals in this particular segment a complimentary personal salary benchmark report. (Those high-power partners, with books of business and lateral prospects, have plenty of options and support, if they want it. For the risk crew, this isn’t much, but it’s something I can do.)

Feel free to get in touch with me (you can respond to this email, message me on LinkedIn, or reach out via your personal email).

I’m also always happy to connect with any individual who didn’t participate in the survey but wants a personal benchmark. That fee isn’t designed to be onerous, more to encourage future participation.

But the free offer is for this particular group, which hopefully doesn’t grow. And it’s for a limited (undetermined) time.

As always, with thanks, the latest from Bill Freivogel:

• Sheldon-Lee v. Birch Horton Bittner, Inc., No. S-18214 (Alaska March 21, 2025).
  • “Legal malpractice case. The trial court granted summary judgment for the defendant law firm on statute of limitations grounds. In this opinion the Alaska Supreme Court reversed. The only issue of possible interest to this audience is the court noted the failure of a law firm to tell a client about the law firm’s conflict of interest could toll the running of the statute.”
• Salerno v. Family Heritage Life Ins. Co., 2025 WL 843387 (N.D. Ohio March 18, 2025).
  • “Plaintiff is suing Defendant for compensation. Defendant offered the opinion of its own vice president (‘Expert’) to opine on the present value of Plaintiff’s earnings. Plaintiff moved to disqualify Expert.”
  • “In this opinion the court denied the motion. Expert was not involved in the periodic review of Plaintiff’s work or in Defendant’s decision regarding denial of Plaintiff’s compensation. Thus, Expert’s relationship with Defendant goes to the weight of his testimony and is grist for cross-examination.”
• Gross v. Scottsdale Ins. Co., 2025 WL 885853 (N.D. Cal. March 21, 2025).
  • “This is a discovery dispute involving privilege and work-product. In the opinion the court acknowledged in California the insurer, absent a conflict, has two clients.”
• Lukoil Pan Ams. LLC v. Phoeninca Invs. LLC, No. 653336/2024 (N.Y. Sup. Ct. N.Y. County March 17, 2024).
  • “A global law firm (‘Law Firm’) represents Plaintiff. Defendant moved to disqualify Law Firm, claiming Law Firm represented Defendant in 2016-17.”
  • “In this opinion the court denied the motion. First, the court noted Law Firm never represented Defendant; it represented one of the companies that formed Defendant (‘Other Client’).”
  • “Second, in the earlier matter, Other Client agreed to Law Firm’s engagement terms, which provided only Other Client was a client. The engagement terms also included an advance waiver, which the court said applied here.”
  • “Last, because the conduct complained of in this case occurred after the completion of Law Firm’s earlier work for Other Client, the matters were not related.”
• Johnson v. Dep’t of Transp., 2025 WL 829714 (Cal. App. 3d Dist. March 17, 2025).
  • At some point, in this employment-related case, Defendant’s lawyer sent to Plaintiff’s supervisor at Defendant (“Supervisor”) an email about the case. The opinion does not say what was in the email or why Defendant’s lawyer sent it to Supervisor. Supervisor sent an image of the email to Plaintiff (the enemy, no less). Plaintiff gave it to his lawyer (“Lawyer”). Lawyer dutifully notified Defendant about receipt of the image. Lawyer then showed the email around to others, including three of Plaintiff’s experts. When the smoke cleared, Defendant moved to disqualify Lawyer and Plaintiff’s experts. The trial court granted the motion. In this opinion the appellate court affirmed. Among other things, the appellate court said that upon receipt of the email, Lawyer had a duty to ascertain whether it was privileged before disseminating it. [Our note: This is an exhaustive opinion on whether the email was privileged, whether the privilege was waived, the receiving lawyer’s duties, and so forth. The appellate court’s cites are numerous and almost all California cases. However, the reasoning would seem valid in any U.S. jurisdiction where authorities are relatively scarce.]

“International Lawyers Headed to the US Advised to Take More Precautions” —

• “Getting ready to head to New York for the legal industry conference LegalWeek, Toronto lawyer Monica Goyal was paranoid that U.S. border authorities were going to search her phone.”
• “As a technology lawyer who has been widely recognized by the legal industry, Goyal’s standard travel procedure is to keep minimal things on her phone. For instance, she has no social media apps. Despite that, stories of detentions, questioning, and refusals of entry at the U.S. border had her spooked.”
• “Lawyers say her concerns aren’t misplaced, as the Trump regime is not only laser-focused on the legal profession but is implementing what one lawyer called ‘extreme vetting,’ both at border crossings and ‘integrity-based stops.'”
• ‘The Trump administration is reaching to, and exploring, the limits of its authority to search phones, laptops, tablets, and other similar devices,’ said Bo Cooper, a Washington, D.C.-based partner and head of Fragomen, Del Rey, Bernsen & Loewy’s government strategies and compliance group.”
• “Regardless of the current environment, privacy lawyer David Fraser said anybody crossing a border has a reduced expectation of privacy so they should proactively take steps to guard personal information, and in the case of lawyers, particularly, any privileged material on electronic devices.”
• “Similar warnings have been issued to U.S. citizens traveling to China for years. But heightened concerns about what could happen at U.S. border crossings are recent.”
• “‘The best step that any lawyer can take in traveling internationally is essentially to remove all privileged material from your laptop, from your tablet, and from your smartphone. If you need access to those materials while you’re traveling, use a cloud-based service,’ Fraser said.”
• “Asserting solicitor-client privilege may have worked to protect lawyers’ devices from searches in the past, but the reality is border officials in the U.S. can search electronic devices without any grounds whatsoever, said Robert Currie, a professor at Dalhousie University’s Schulich School of Law in Nova Scotia.”
• “Once your device is open, border officials may review what’s on it, copy files, and analyze the data.”
• “Currie said the law around border searches in the U.S. is ‘fractured’ with opinions from various appellate courts saying different things.”
  ‘But generally speaking, [U.S.] border search law has essentially said they can mostly do arbitrary searches of things people have with them at the border,’ Currie said.”
• “The best advice is to cross the border with clean devices. But even if you’ve scrubbed your phone of social media apps, Fraser noted that at the border, you are obliged to answer questions honestly. So, if border guards ask for your account passwords, you have to give them up or face potential detention.”
• ‘That may be something that lawyers and others want to turn their mind to in terms of what’s out there in their digital footprint,’ said Fraser.”

“Standing Up to Trump Is Good for Big Law’s Business. No, Really” —

• “Albany Law professor Ray Brescia says Paul Weiss’s agreement with President Donald Trump may send a message that the law firm won’t zealously advocate for their clients against the US government.”
• “Critics inside and out of the legal profession have derided Paul Weiss’ decision to reach an agreement so President Donald Trump would revoke an executive order punishing the firm for its past political actions and hobbling its ability to represent clients.”
• “Some begrudgingly have accepted the firm’s justification—that the potential to lose business was far too great. But no one should welcome a situation in which lawyers can be cowed by the US government. In fact, a client should seek out lawyers who will fight for their interests and rights without fear that doing so could anger the government.”
• “In the high-priced world of Big Law, lawyers often are recruited from government agencies precisely because of their relationships with the government lawyers who might appear on the other side of client disputes. This can take the form of a white-collar criminal defense case before the Department of Justice, an application for a business merger before the Federal Trade Commission, or an energy company looking for regulatory approval for a new power plant from the Environmental Protection Agency.”
• “Clients want lawyers who can handle such cases competently and probably would prefer those who have effective relationships with regulators on the other side of the table.”
• “But no client should want a lawyer whose very claim to fame is that they will capitulate to this administration—or any administration—when the chips are down.”
• “If a government adversary knows the law firm on the other side of the table is more concerned about maintaining its reputation for having a good relationship with the government than winning, what won’t the other side ask for? When will the demands imposed on those lawyers’ clients end? What negotiating power will a lawyer with such a reputation, and for maintaining that reputation, have?”
• “In any negotiation, a lawyer always must present at least a credible threat that they will turn down an offer, go to the mat for a client, take a case to trial, or break off the negotiations. A lawyer who wants to stay in the good graces of the government can’t mount such a credible threat.”
• “It’s fine for a lawyer to have a reputation as an honest broker or a straight shooter. But an advocate who cares more about their reputation and relationships with the powerful than representing their client is antithetical to our adversarial system and inconsistent with legal professional values.”
• “A go-along-to-get-along attitude won’t serve many—if any—clients well. And when push comes to shove, a lawyer concerned with maintaining a reputation as an administration-cowing lawyer isn’t likely to fight for a client’s interests.”
• “It is for this reason that any firm trying to justify capitulation to the government pressure over possibly losing clients should ring so hollow. Knowing what’s at stake, informed consumers of legal services should recognize the risks associated with capitulating to governmental overreach, even in the business context, far outweigh their perceived benefits.”
• “Clients should send market signals of their own, showing they prefer lawyers who will fight for them when they need them to, and not care more about remaining in the good graces of the government.”
• “Not many private lawyers or advocates would look forward to having Paul Weiss attorneys on the other side of the negotiating table. But for the first time in its 150-year history, lawyers for the federal government might be all too happy to sit down with them.”

“Indictment Of Partner Does Not Disqualify Firm” —

• “The New Jersey Appellate Court affirmed the denial of a motion to disqualify a law firm based on the indictment of a partner who withdrew after the criminal charges were brought:
  • ‘Plaintiff Penelope Mauer appeals from the trial court’s July 31, 2024 order denying her motion to disqualify the law firm of Brown & Connery LLC (B&C) as counsel for defendants. The primary issue on appeal is whether the indictment of William Tambussi, Esq. (Tambussi), a law partner at B&C, creates a conflict of interest requiring the disqualification of the entire law firm from representing defendants in this action. We conclude no conflict of interest exists under the circumstances presented and therefore affirm the trial court’s decision.’
  • ‘In June 2024, the State indicted Tambussi, alleging that he participated with George Norcross in crimes related to the development of the Camden waterfront. The indictment states Tambussi ‘is an attorney and partner’ at B&C and ‘the long-time personal attorney to’ Norcross. It alleged Norcross and his associates extorted and coerced others to acquire property and development rights and that Tambussi ‘was an active participant in the Norcross Enterprise’s plot to use . . . Camden’s government to bring a condemnation action’ against a developer.’
• “Tambussi then withdrew and was replaced by other counsel from his firm:
  • ‘Against the backdrop of Tambussi’s indictment and B&C’s continued representation of defendants, plaintiff filed a motion to disqualify the law firm. Specifically, she contended B&C had an unwaivable conflict of interest due to the Attorney General’s indictment of Tambussi. Relying on Rule of Professional Conduct (RPC) 1.7(a)(2), plaintiff argued Tambussi’s indictment created a ‘significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client, or a third person, or by a personal interest of the lawyer.’ She asserted this conflict was imputed to the other lawyers associated with B&C under RPC 1.10.’
  • ‘Contrary to plaintiff’s arguments, the indictment of Tambussi does not create a positional conflict requiring B&C’s disqualification. Notably, the DOL has not determined a positional conflict exists, as required by the AG Guidelines. Id. at 3. Indeed, Cohen, who is fully aware of the underlying litigation and plaintiff’s motion to disqualify, certified the DOL has not terminated B&C’s representation of defendants or requested their withdrawal. Defendants also certified they desired the continued representation by B&C. ‘
  • ‘Moreover, the indictment named Tambussi individually as a defendant. Tambussi did not perform any substantive work in this case prior to the indictment. Additionally, the allegations against Tambussi regarding certain real estate transactions in Camden are far afield from plaintiff’s underlying CEPA and breach of contract claims in this consolidated matter.’
  • ‘Thus, in defending against plaintiff’s employment-based claims, B&C will not be required to advocate a position that is inconsistent with or prejudicial to the State’s interest in prosecuting unrelated criminal charges against Tambussi.’
  • ‘Plaintiff’s argument presupposes Tambussi in fact had a conflict based on his indictment. However, we need not reach that issue because even if we assume, for the purposes of this appeal, he had a conflict under RPC 1.7(a)(2) based on ‘there [being] a substantial risk that the representation of one or more clients will be materially limited . . . by a personal interest of the lawyer,’ that does not end the inquiry. A finding that Tambussi had a conflict based on his ‘personal interest,’ in turn, requires us to consider whether his purported conflict under RPC 1.7 is imputed to B&C under RPC 1.10. Assuming a conflict exists for Tambussi under RPC 1.7(a)(2) because of a personal interest as a result of the indictment, there would be no imputed conflict to B&C under RPC 1.10 because no conflict is imputed when the purported conflict is ‘based on a personal interest of the prohibited lawyer,’ provided the personal interest ‘does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.’ Plaintiff has made no such showing here.’

“Judges cannot provide analysis on executive orders, MD ethics panel says” —

• “Maryland judges cannot provide bar association members with information or legal analysis on White House executive orders, the Maryland Judicial Ethics Committee found in an opinion published on Tuesday.”
• “The opinion, published in response to a judge and a Maryland State Bar Association section council member’s inquiry, states that a judge’s participation in providing legal analysis on the White House executive orders ‘might reasonably raise a question of impropriety,’ contrary to the Maryland Code of Judicial Conduct.”
• “‘Although judges appropriately participate in general educational activities through the MSBA and other bar organizations, in our view, for the current and recalled/senior judges who serve on these MSBA committees, the evaluation and analysis of White House Executive Orders is so specific that it would constitute the practice of law and, moreover, can be seen as indirectly advising the members’ clients themselves,’ the Maryland Judicial Ethics Committee wrote.”
• “The ethics committee added that providing legal analysis on executive orders could also be viewed as engaging in ‘partisan political activity,’ which is prohibited by the judicial conduct code.”
• “In the opinion, the ethics committee also recognized that the executive orders have spawned numerous lawsuits nationwide, mostly in federal courts, but noted that similar lawsuits could be filed in Maryland courts—a fact that could potentially call into question a judge’s independence, integrity and impartiality.”
• “Raphael Santini, president of the MSBA, said the ethics committee’s opinion addresses a limited issue and has a narrow application.”
• “‘We respect the opinion of the Judicial Ethics Committee, and it should be observed in this narrow application by all members of our profession,’ Santini said in a statement on behalf of the MSBA. ‘We will continue to welcome judicial participation in a wide variety of MSBA activities, including continuing legal education, events, leadership and more as allowed under this opinion and prior opinions.'”

“Big Law’s Peril From Trump Orders Is Shown in Court Filings” —

• “WilmerHale and Jenner & Block laid bare the existential risks Donald Trump’s orders pose as the law firms rushed into court to stop the president. Trump’s directive to cut companies’ federal contracts for which WilmerHale has done work could affect 21 of the firm’s top 25 clients, the firm said in its March 28 lawsuit. The order threatens ‘the very viability of the firm’s business model,’ WilmerHale said.”
• “WilmerHale’s loss of clients who are contractors ‘would be a devastating blow,’ US District Judge Richard Leon said late on March 28. ‘This says nothing of the potential clients who may not even consider hiring’ the firm because of contract worries, he said.”
• “Leon temporarily blocked Trump’s order against WilmerHale in part, while in a separate courtroom US District Judge John Bates for now halted the directive against Jenner & Block. The blocking actions late on March 28 follow Perkins Coie’s March 12 win of a temporary order stopping part of Trump’s directive against that firm.”
• “Despite the temporary wins, details about the orders in the March 28 lawsuits filed by WilmerHale and Jenner & Block show the devastation the directives threaten for the firms’ bottom lines. Together the two firms collected more than $2 billion in revenue in 2023, according to the American Lawyer.”
• “More than 40% of Jenner & Block’s revenue last year came from clients who are US contractors, subcontractors, or affiliates, the firm said in its lawsuit. ‘If we lost that business, or even a portion of it, it would be a serious threat to the firm’s financial health,’ firm chair Thomas Perrelli said in a court filing.”
• “The devastating effects spelled out in the firms’ lawsuits show why big law operations have been so quick to fight Trump’s orders. They also help explain why Paul Weiss and Skadden moved so fast to strike deals with the president.”
• “A key question going forward for law firms facing Trump’s ire is what clients prefer they do—and whether those customers will stand by them in a fight with the president.”
• “‘The critical question is how will the clients respond,’ said Jeffrey Gordon, a professor at Columbia Law School. ‘It’s up to them in a certain way.'”
• “Trump’s orders targeting law firms cut to the heart of their operations by limiting lawyers’ access to federal buildings—access they need to do their jobs—and by discouraging companies with US contracts from using the firms’ services.”
• “WilmerHale showed how much is at stake by the lawyer it hired to battle Trump—Paul Clement, a conservative who is one of the top US Supreme Court litigators of this era.”
• “Jenner & Block said the portion of Trump’s order that restricts firm lawyers from accessing government buildings is particularly painful.”
• “Unlike many other law firms, nearly 90% of Jenner’s attorneys focus on litigation, the firm said in a court filing. It currently has around 540 active matters pending before US courts and agencies that require access to federal buildings and officials, Perrelli said.”
• “Part of the order barring Jenner’s lawyers from federal spaces is already being enforced, the firm said. The Justice Department told a firm client not to bring Jenner to an April 3 meeting.”
• “Clients are already asking about how the order will hurt the firm’s ability to attend future meetings with other government agencies, according to Jenner’s filing.”
• “‘Partners at the firm have spent hundreds of hours, collectively, speaking with clients about the order and its implications,’ said the firm, which is being represented by Cooley’s former litigation chair Michael Attanasio.”
• “Like WilmerHale, Jenner expressed concern over preserving the confidentiality of attorney-client relationships.”
• “‘I can understand the short-term capitulation,’ said Adam Badawi, law professor at the University of California at Berkeley. ‘But you’re putting yourself under the thumb of this administration for the next four years.'”

“Appellate Standards: Inspiring Better Lawyering” —

• “Cynthia Feathers and Tammy Feman address five areas—client communications, conflicts of interests, issues and risks, appellate briefs, and oral arguments—in which the New York State Office of Indigent Legal Services Revised Appellate Standards and Best Practices can help Family Court counsel bring their appellate practice to the next level.”
• “Appellate Standard 6 prioritizes the need for assigned appellate counsel to ensure that no conflict of interest exists and to move to be relieved when there is a possibility of a conflict. The Standard speaks about the need for offices to have a system in place to properly check conflicts (see Rule 1.10 [3] of the Rules of Prof. Conduct [‘A law firm shall *** maintain a system by which proposed engagements are checked against current and previous engagements…’]).”
• “However, even with an appropriate system in place, sometimes conflicts are not immediately discernible, especially in Family Court appeals. For example, in a mixed provider office, appellate counsel might first realize that a conflict exists upon reading the trial transcripts months after assignment on appeal.”
• “If the conflict involves a possible claim of ineffective assistance resulting from an error made by trial counsel from appellate counsel’s own office, rather than navigating a sticky situation as to whether appellate counsel may keep the case, making a motion to be relieved and for the assignment of new appellate counsel may be the safer course, Standard 6 observes.”
• “The presence of possible conflicts may be unclear in other situations as well. An actual conflict exists where an attorney has ‘divided and incompatible loyalties within the same matter necessarily preclusive of single-minded advocacy,’ whereas a potential conflict is one that may never be realized (People v Cortez, 22 NY3d 1061, 1068 [2014]). A conflict is often difficult to discern in a mixed provider office that previously handled a criminal or juvenile case involving one of the parties.”
• “If information from the prior proceeding is unknown to the appellate attorney, and the conflict is not immediately clear from the record, it might be appropriate for appellate counsel to keep the case. Similarly, where an attorney represented one sibling as an attorney for the child in a prior proceeding and represents multiple siblings on appeal, if the best interests of all the children are the same, appellate counsel is not necessarily conflicted.”
• “However, even in these uncertain circumstances, the client must receive conflict-free appellate representation. The conflict Standard suggests that the better approach in such situations is the safer route.”
• “When in doubt, to protect the client, file a motion to be relieved as assigned appellate counsel and for the assignment of new appellate counsel. The Standards are an excellent starting point in navigating these thorny conflict situations.”

“Does the prosecutor have an obligation to report defense counsel’s conflict of interest?” —

• “An AZ criminal defense counsel had a conflict of interest because he represented one of the defendants and, apparently unbeknownst to the defendants, also represented a government witness.”
• “The defendants moved to disqualify the prosecutor on the grounds that he knew about the conflict but didn’t insist on defense counsel’s withdrawal and also that he helped conceal the conflict from the court.”
• “The Court agreed with a Magistrate Report that the prosecutor violated various ‘ethical’ duties, but held that he didn’t have a ‘legal’ duty to report defense counsel’s conflict. The Court also found that the defendants had “blown [the issue] out of proportion” even though there was no prejudice. Motion to disqualify denied.”
• Read the decision: here.

And for those tracking the continued developments relating to recent Executive actions:

“Law firms refuse to represent Trump opponents in the wake of his attacks” —

• “The president issued a new order Tuesday [3/25] sanctioning yet another law firm, Jenner & Block. The result overall has been called an extraordinary threat to the constitutional rights of due process and legal representation, as well as a far weaker effort to challenge Trump’s actions in court than during his first term.”
• “President Donald Trump’s crackdown on lawyers is having a chilling effect on his opponents’ ability to defend themselves or challenge his actions in court, according to people who say they are struggling to find legal representation as a result of his challenges.”
• “Biden-era officials said they’re having trouble finding lawyers willing to defend them. The volunteers and small nonprofits forming the ground troops of the legal resistance to Trump administration actions say that the well-resourced law firms that once would have backed them are now steering clear. The result is an extraordinary threat to the fundamental constitutional rights of due process and legal representation, they said — and a far weaker effort to challenge Trump’s actions in court than during his first term.”
• “Legal scholars say no previous U.S. administration has taken such concerted action against the legal establishment, with Trump’s predecessors in both parties typically respecting the constitutionally enshrined tenet that everyone deserves effective representation in court and that lawyers cannot be targeted simply for the cases and clients they take on.”
• “In a statement, Jenner & Block noted the similarity to an order that ‘has already been declared unconstitutional by a federal court’ and that they ‘will pursue all appropriate remedies.'”
  “Trump on Friday ordered Attorney General Pam Bondi to expand the campaign beyond individual law firms by sanctioning lawyers who ‘engage in frivolous, unreasonable, and vexatious litigation’ against his administration.”
• “Legal scholars say there is little precedent in modern U.S. history for Trump’s actions. But the president is following a playbook from other countries whose leaders have sought to undermine democratic systems and the rule of law, including Russia, Turkey and Hungary. Leaders in those countries have similarly attacked lawyers with the effect of hollowing out a pillar of justice systems to expand their power without violating existing laws. They have successfully used the strategy to blast away their political opposition and any effort to counter their actions through courts.”
• “‘It’s scary,’ said a former official in the administration of Joe Biden who has been pulled into Trump-era litigation and needed a lawyer as a result. The former official had lined up a pro bono lawyer from a major law firm that, the day after an executive order this month against the heavyweight law firm Perkins Coie, said that it had discovered a conflict of interest and dropped the person as a client.”
• “Five other firms said they had conflicts, the former official said, including one where ‘the partner called me livid, furious, saying that he’s not sure how much longer he’s going to stay there,’ the former official said, ‘because the leadership didn’t want to take the risk.'”
• “The person spoke on the condition of anonymity to avoid further difficulties obtaining a lawyer.”
• “‘I don’t know how many people are going to end up having to pay a significant amount of money out of pocket to defend themselves for faithfully and ethically executing their public service jobs,’ the person said. ‘It’s really a wild situation to be in.'”
• “‘You need the legitimacy of law on your side at some level,’ said Scott Cummings, a law professor at the UCLA School of Law who has studied challenges to the legal establishment. ‘This is the autocratic legal idea of claiming a democratic mandate to attack the rule of law by using law to really erode institutional pillars that are supposed to check executive power.'”
• “Trump’s actions toward lawyers, Cummings said, have been ‘about disabling effective representation of anyone that Trump doesn’t like, and that is the beginning of the end of the adversarial system,’ in which both sides of a legal case have equal access to present their views in front of a judge.”

Former GC at Airbnb and former Justice Department prosecutor writes: “GCs Face Tough Choices When Trump Targets Their Outside Law Firm” —

• “There’s fear in Big Law right now over Trump’s moves against the legal profession, and indecision over how to respond. Capitulate, as Paul Weiss did just days after being targeted? Or fire back with a lawsuit, as Perkins Coie did. As an in-house lawyer or general counsel, you aren’t simply a spectator—you have your own significant decisions to make about how your legal department will get involved in the looming legal showdown.”
• “First, we increasingly will see law firms choose a side—there will be firms that actively seek to benefit from their ties to the Trump administration, those who intentionally shy away from the conflict, such as Paul Weiss, and those who fight.”
• “The answer to that question depends on your values, and your company’s values, and it requires a bigger discussion with your executive team and board. You have an obligation to your shareholders and other stakeholders, and supporting a firm that actively challenges the administration, or is targeted by the administration, carries risk.”
• “If your business depends on federal contracts or cultivating relationships with the federal government, your choice of counsel increasingly may take on great significance. How much risk are you willing to take to stand with a law firm you want to work with? Can your firm be effective if they can’t enter a federal building, or even engage with federal employees?”
• “You may respect the firm’s courage and detest the idea of working with another firm whose values aren’t aligned with your personal beliefs. But you also must consider how much pain your business will endure to do what feels like the right thing, and whether your first-choice counsel can get the work done in this environment—you should get internal alignment when making this kind of call.”
• “And there’s a bigger set of questions around your voice. Do you use your position as a legal leader to speak up about what you’re seeing? Do you work through associations, or form them, to express your views on what’s happening to the rule of law—there’s some level of safety in numbers, and the opportunity to have greater impact with a larger group, a louder chorus.”
• “Trump’s efforts to intimidate lawyers become more challenging with each additional lawyer who speaks up. Again, this is a discussion that in-house legal leaders should have with the rest of the executive team—they should understand that as an attorney, you have a higher obligation to uphold the Constitution and support the rule of law. There may be consequences to taking a public stand, and not every company will be supportive. But silence has a price too.”
• “There always will be lawyers willing to step up and take on the administration. Trump’s biggest challenge in his war on the law are the judges, who have the power and independence to at least slow down his agenda—and Trump doesn’t like it.”
• “We’re headed for a series of showdowns around the power of the president, and the forum will likely be the US Supreme Court for many of them… Martin Luther King, Jr. said it best: ‘In the end, we will remember not the words of our enemies, but the silence of our friends.’ There’s a bigger picture here, a long-term view, and the world will have a long memory about how each company, each law firm, each attorney responded when it was hard to do the right thing.”

Stacie Rosenzweig of the Ethicking blog writes: “Lawyering in a Time of Lawlessness (And Also Probably Cholera)” —

• “I write a snark blog. Snark blogs are better suited to schadenfreude-type grimness and not existential grimness. Things have taken an existentially grim turn, folks. But here we are. It’s a multi-alarm fire this time.”
• “Since I last wrote about this subject, my nerd association put out a statement condemning the current administration’s attack on lawyers., in response to executive orders purporting to revoke security clearances and restrict lawyers’ ability to practice, against Covington & Burling, but Perkins Coie. After the APRL statement, the administration issued a similar order against Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul, Weiss). “
• “Today, however, the administration announced that Paul, Weiss has capitulated to its demands. As reported by The Hill:”
• “I am not prone to hyperbole or overreaction, so when I say ~this is an existential threat to law practice~ I mean what I say. And this is an existential threat to law practice. And democracy. “
• “In a democracy, the government should not be dictating what clients or causes private law firms work for. It should not be shaking down these firms, or the clients of these firms, for political gain (or any other reason). If an administration has a problem with a particular lawyer or law firm based on actual conduct or misconduct, there are processes in place to address that. It should not be doing any of this.”
• “This is also not the time for law firms to be buckling. These orders are likely unconstitutional. Perkins Coie has already won an injunction. How is any client going to trust that a firm that agrees to these terms is going to be working for their best interests and not the administration’s? How is any client going to trust that their confidences are being kept, if the administration seeks proof of compliance? How is Paul, Weiss exercising its professional independence, as required? Are associates going to be conscripted into furthering an agenda they find repugnant? Being willing to work many, many hours a week on pharmaceutical mergers or whatever does not mean being willing to work on criminalizing gender transitions or disappearing people because they’re fans of Real Madrid who happen to be brown. “
• “This is deeply, deeply personal to me. As you may know, when I do not have my Ethicking hat on (and sometimes, even when I do) I have my Election Law hat on. I’ve tried to not let that part of my practice bleed into this blog, but now it’s inevitable. When I represent lawyers and others, I represent a broad spectrum of clients, without regard to political affiliation. When I have my Election Law hat on (or, for those of you who know me on Facebook, my Election Lawyer Barbie profile picture up), I represent Democrats. I co-counseled with Perkins Coie for a solid year, and they are some of the smartest, most dedicated lawyers I know. I make no secret of any of this (except what I need to keep secret, of course). “
• “I don’t wish to represent Republicans in election matters, and it would be a conflict of interest for me to do so—in many cases, a concurrent conflict. Beyond that, lawyers are allowed to decline representation if our personal interests would materially limit our ability to work with their client—in fact, we are required to do so if we don’t think we could do the work adequately or if our clients won’t give informed consent to waive the conflict. I sure as hell do not believe I could appropriately represent a candidate whose views and policies I strenuously oppose, in an election setting, where the fruits of my labor would be electing a candidate whose views and policies I strenuously oppose. ”
  “Does the president expect us to violate our own oaths, our professional independence, our personal morals, our First Amendment rights so…we don’t hurt his feelings? Is this where we are? “

“Trump Targets Jenner & Block Via Clients, Widening Big Law Fight” —

• “President Donald Trump’s new executive order against Jenner & Block threatens the firm’s relationship with a top client, aerospace and defense company General Dynamics.”
• “Trump on Tuesday [3/25] made Jenner the fourth major law firm hit for ties to lawyers he considers enemies. The president ordered agencies to restrict firm employees from accessing US buildings, strip lawyers’ security clearances, and investigate diversity hiring practices. He also directed agencies to terminate government contracts with Jenner clients.”
• “General Dynamics has received $102.8 billion in unclassified federal contracts since start of fiscal year 2021, according to a Bloomberg Government database. The company, whose ties to Jenner span more than half a century, this year won a contract worth more than $43 million from the Health and Human Services Department.”
• “The new order against Jenner singles out former firm partner Andrew Weissmann. The ex-Justice Department official was a top member of Robert Mueller’s special counsel team who had a lead role in securing the convictions of Trump campaign officials Paul Manafort and Rick Gates.”
• “In a March 14 speech at the Justice Department, Trump called Weissmann ‘scum.'”
• “Jenner and Block said in a statement Tuesday: ‘We remain focused on serving and safeguarding our clients’ interests with the dedication, integrity, and expertise that has defined our firm for more than one hundred years and will pursue all appropriate remedies.'”
• “Weissmann on Monday criticized the Paul Weiss deal with Trump, in which the firm agreed to spend $40 million in pro bono legal services to support administration goals.”
  “‘The right response is not appeasement or silence,’ Weissmann wrote in a social media post. ‘Capitulation serves as a clarion call to further such improper action by this administration.'”
  Clients Threatened”
• “Jenner & Block is one of the 100 highest-grossing law firms in the country with $582 million in revenue in 2023, according to the American Lawyer.”
• “Trump’s order states that Jenner & Block ‘is yet another law firm that has abandoned the profession’s highest ideals, condoned partisan ‘lawfare,’ and abused its pro bono practice to engage in activities that undermine justice and the interests of the United States.'”

“Paul Weiss Alumni Call Trump Agreement ‘Craven Surrender’” —

• “About 90 Paul Weiss former associates signed their names to a letter Monday [3/24] criticizing chairman Brad Karp’s deal with the Trump administration.”
• “‘Instead of a ringing defense of the values of democracy, we witnessed a craven surrender to, and thus complicity in, what is perhaps the gravest threat to the independence of the legal profession since at least the days of Senator Joseph McCarthy,’ the associates said.”
• “A representative for Paul Weiss said the firm has more than 4,100 living alumni. Karp, in a firmwide letter over the weekend, said it was ‘very likely’ Paul Weiss couldn’t survive a protracted dispute with the Trump presidency.”
• “The associates in their letter called on the firm to issue an ‘unambiguous statement’ that it adheres to principles essential to its mission and that it rejects the administration’s attacks on courts and the rule of law.”
• “Trump, when asked at the White House on Monday about his law firm executive orders, said others want to settle. ‘I just think that the law firms have to behave themselves,’ he said.”

“New York Times: To the Editor” —

• “My grandfather Louis S. Weiss was a founding partner of Paul, Weiss. My father, Louis H. Pollak (who President Trump would have classified as a “radical left lunatic”), was a federal judge, civil rights advocate and constitutional law expert who worked briefly at that firm. Both of these lawyers would have been horrified by Brad Karp’s capitulation to the Trump administration. They might even have called the $40 million deal a payoff — and a spineless one at that. — Sally Pollak,Burlington, Vt.”

“Paul Weiss Associates, It’s Time to Reflect on Why You’re Lawyers” —

• “UW School of Law’s Eric Schnapper says Paul Weiss’ early-career lawyers must decide whether the firm’s deal with the Trump administration is compatible with their reasons for entering the profession. Now would be a good time to try to remember why you went to law school in the first place.”
• “Perhaps your goal was always to work for a premier corporate law firm. In that case, things are going well—Paul Weiss is one of the nation’s great firms. You have a chance to represent some of the bluest blue-chip corporations, to work on deals of astounding financial importance, and to bask in the well-deserved prestige of your office. The hours may be long—OK, very long—but the pay is lavish.”
• “If that was the only reason you went to law school, you can stop reading this letter and get back to running up those billable hours.”
• “But maybe you were hoping that by going to law school, you would have a chance to work for a conservative president, at the Department of Justice, getting the opportunity to use the power of the federal government to reduce regulation and eliminate the deep state. If you graduated from law school when there was a Democrat in the White House, that timing was inopportune.”
• “If so, the firm’s leaders have saved the day by making a deal with the administration that would rescind the order in exchange for legal services to help advance the administration’s goals—which included allowing an audit of the firm’s diversity, equity, and inclusion practices.”
• “You could be among the many associates assigned to do legal work in support of the Trump administration. Perhaps you can do something on behalf of veterans (though you likely won’t be helping reinstate the more than 1,000 laid-off employees at the Department of Veterans Affairs). Or you might have an opportunity to write a brief in support of the deportation of people with whose views you (and quite possibly I) strongly disagree. You’re in the right place at the right time.”
• “Of course, there’s a third possibility. You might have gone to law school because you believed in the rule of law and were confident that it applied to everyone, from immigrants to the US president. You might have thought that you could use your legal training to help those less fortunate than yourself.”
• “You may also have hoped that if a day ever came when government power was being gravely abused, you would be able to defend—and have the courage to represent—the victims of that governmental misconduct. At least you were sure that you wouldn’t work for a firm which, if push came to shove, would put profit ahead of principle.”
• “If that is why you went to law school, you may be in the wrong place at the wrong time. Push indeed came to shove, and Paul Weiss decided not to stand up, alongside Perkins Coie and Covington & Burling, to reprisals from Trump. The regime Paul Weiss is now attempting to placate will demand more tribute, obeisance, and self-censorship.”
• “There will come a day when you are at a law school reunion, talking with your former classmates about what each of you did with your careers and your lives. Some will boast about how they ascended to partnerships at prominent firms, describing their lovely co-ops or houses, and their vacations on Nantucket. Most of your classmates will at least be able to say they didn’t work at a firm that acquiesced to threats and retribution by the Trump administration, smoothing the path to retaliation against others.”
• “There might be a few former classmates who will tell a far different story—of the federal worker whose job they saved, of the agency or program whose dismantlement they helped prevent, of the hospital still open—because of the manner in which they used their legal education.”
• “Now would be a good time to decide who you want to be at that reunion.”

“Trump targeted 20 of the biggest law firms over their diversity programs. A GOP favorite is missing from the list” —

• “In the latest salvo, Andrea Lucas, the newly minted acting chair of the US Equal Employment Opportunity Commission, sent letters to 20 of the country’s most prominent big law firms with detailed questions about their diversity programs.”
• “One law firm absent from the target list is Jones Day. Jones Day has been closely intertwined with Trump’s White House. The firm represented Donald Trump’s 2016 and 2020 presidential campaigns and the Republican National Committee in 2024.”
• “Jones Day also appears to have many of the same diversity programs as the 20 law firms Lucas contacted.”
• “Under the header of ‘Diversity, Equity, and Inclusion,’ a 2024 Jones Day brochure on the firm’s diversity touts how it ‘aggressively pursues’ hiring and career development of lawyers from ‘historically underrepresented backgrounds.'”
• “Every year, Jones Day hosts a ‘Diversity Conference’ for first-year law students. This year’s is scheduled to take place in April in Atlanta, Georgia, according to its website.”
  “The firm also has affinity groups that ‘celebrate diversity within our organization,’ including chapters for Black, Hispanic, and LGBTQ+ lawyers.”
• “A Jones Day representative didn’t respond to requests for comment.”
• “The rank-and-file of Jones Day predominantly supports Democrats. In the 2024 election, its employees donated five times as much money to Kamala Harris’ presidential campaign compared to Trump’s, according to Federal Elections Committee data compiled by Open Secrets.”
• “Don McGahn, a prominent Jones Day lawyer, served as White House counsel during Trump’s first term, leading the selection of federal court appointments. And the firm’s attorneys have continued to find their way to powerful positions in the second Trump administration.”
• “Other elite Trump-friendly firms, like Sullivan & Cromwell, which agreed to appeal his Manhattan criminal conviction, and Troutman Pepper Locke, which represented Trump family members in the New York Attorney General’s civil fraud trial against the Trump Organization, are also missing from the EEOC list.”
• “Earlier this month, the president of the American Bar Association criticized ‘a clear and disconcerting pattern’ where Trump targeted lawyers representing ‘parties the administration does not like’ to intimidate critics.”
• “‘Clients have the right to have access to their lawyer without interference by the government,’ William R. Bay said in a statement. ‘Lawyers must be free to represent clients and perform their ethical duty without fear of retribution.'”

“This Law Firm Stood Up to Government Intimidation — and Came Out on Top” —

• “One afternoon in the early 1950s, the lawyer Paul Porter was walking through his private club in Washington when a fellow member accosted him. Porter’s firm, Arnold, Fortas & Porter, was only a few years old, but it was already well known around the capital for representing federal employees accused of disloyalty by the Truman administration — as many as 200 a year, almost all pro bono. It was a risk that few other firms were willing to take at the height of the Red Scare.”
• “‘Paul, I understand your firm is engaged in defending communists and homosexuals,’ the man sneered.”
• “‘That’s right,’ Porter shot back, then deadpanned: ‘What can I do for you?'”
• “In later years, this encounter, or some version of it, became part of the lore around Arnold, Fortas & Porter. It spoke to the firm’s eager embrace of civil-liberties cases in the face of mounting government intrusion into the private lives of millions of its employees, as well as a legal community that overwhelmingly shrank from the moment, lest it lose clients and gain the unwanted attention of Sen. Joseph McCarthy.”
• “Despite the risks, taking on loyalty cases did not doom Arnold, Fortas & Porter. It grew steadily, and today, under the official name of Arnold & Porter Kaye Scholer, it is one of the largest firms in the world, with over 1,000 lawyers based in six countries. If anything, standing up to the Red Scare earned it a reputation for fearlessness, while costing little in the way of lost business — though at least one client, Sun Oil, is said to have dropped the firm because of its civil-liberties activism.”
• “For that reason, some have questioned the purity of Arnold, Porter, & Fortas’s motives. Perhaps it was in part a marketing gimmick. But if so, it was a huge risk, one that the three highly regarded founders did not need to take. And if it was such a great gimmick, why was Arnold, Fortas & Porter the only one to try it?”
• “It may be unfair to hold up the Red Scare experience of Arnold, Fortas & Porter as a model for today’s firms, which may face penalties worse than lost clients. But it is also worth recognizing that the fledgling firm, confronted with a choice between following the crowd and speaking up, took the difficult route. And it paid off in a reputation that outlasted the government’s witch hunt.”
• “‘We were scared,’ Fortas said, years later. ‘But on the other hand, what was there to be done?'”

“Bankruptcy Court Can Convert a Case Due to a Conflict of Interest, Even in a Subchapter V” —

• “In In re Ghatanfard, No. 24-CV-2858 (CS), 1 (S.D.N.Y. Nov. 7, 2024), the U.S. District Court for the Southern District of New York affirmed a decision by the U.S. Bankruptcy Court for the Southern District of New York converting a debtor’s Subchapter V case to a Chapter 7 case. In particular, the district court found that the bankruptcy court’s decision to convert was not an abuse of discretion, especially in light of the serious conflicts of interest that existed between the debtor and the potential target of significant fraudulent transfer claims held by the debtor’s estate.”
• “In 2017, former restaurant worker Pavle Zivkovic, on behalf of himself and his fellow employees (the class action creditors), sued his former employer, Laura Christy Midtown LLC (Laura Christy) and its owner, David Ghatanfard (Ghatanfard). On June 22, 2022, Zivkovic was awarded $650,000 in punitive and compensatory damages for his individual claims and the class action creditors were awarded $4.5 million in damages.”
• “In their post-judgment collection efforts, the class action creditors discovered that Ghatanfard had rendered himself insolvent as a result of various transactions and transfers to his ‘life partner,’ Rosey Kalayjian, with whom he lived and shared a bank account, and who has worked in several restaurants owned by him. In particular, the class action creditors discovered that Ghatanfard transferred to Kalayjian the sum of: $1.2 million from the sale of a home he owned; $675,000 he had received from Laura Christy; $600,000 from the sale of another restaurant; and $1.4 million from the refinancing of another one of his houses located in Southampton, New York. In addition, Ghatanfard also recorded a deed transferring title to the Southampton home from his individual ownership to a joint ownership with Kalayjian. Furthermore, right before the class action judgment was entered, Ghatanfard transferred to Kalayjian 90% of his ownership in a limited liability company called Oak Grove Road LLC that owned a 50% stake in Valbella at the Park LLC.”
• “On Feb. 12, 2024, Ghatanfard filed his Subchapter V plan of reorganization, in which he proposed to fund the plan by paying $1,700 monthly payments along with a lump sum payment of $500,000 to be obtained from Kalayjian in settlement of any and all claims against her, including, without limitation, the fraudulent transfer claims.”
• “On April 11, 2024, after oral argument on the motion to convert, the bankruptcy court entered an order converting the case, stating that it had found cause for dismissal or conversion, including the Ghatanfard’s conflicts of interest in pursuing potential fraudulent transfer claims and other claims of the estate to his ‘life partner’ Kalayjian. Given the class action creditors’ opposition to expanding the powers of the Subchapter V trustee, a decision in which the bankruptcy court expressed disappointment in since with their consent, the Subchapter V trustee would have had the power to pursue avoidance actions, the bankruptcy court concluded that conversion to Chapter 7 was the only appropriate remedy. Ghatanfard filed a notice of appeal on April 12, 2024.”
• “Initially, the district court found that it had standing to hear the appeal in light of a Chapter 7 trustee having already been appointed in the bankruptcy case during the pendency of the appeal. The district court denied Ghatanfard’s argument that he was an ‘aggrieved’ person because he has stage IV cancer, had been denied confirmation of his Subchapter V plan, and was forced to spend ‘what could be his final days’ in bankruptcy and litigation involving his longtime partner. However, rather than directly addressing whether the debtor had standing, the district court turned to the merits of the case.”
• “Upon review, the district court’s standard of review was under an abuse of discretion standard and, as such, found that the bankruptcy court’s decision to convert the case due to the significant conflicts of interest was not a reversible error, despite the fact that the bankruptcy court did not list any of the additional factors under Section 1104 of the Bankruptcy Code for converting the case. In point of fact, the district court found that there clearly was cause for conversion due to the ‘irreconcilable conflict of interest in terms of assessing where various assets had gone and whether they were appropriately transferred from Ghatanfard to other parties,’ and that conversion to Chapter 7 would allow for a trustee with ‘both the ability to investigate and the ability to act’ as opposed to the limited powers of a Subchapter V trustee.”
• “The district court also rejected Ghatanfard’s argument that it was reversible error for the bankruptcy court to convert the case rather than expand the powers of the Subchapter V trustee. In particular, Ghatanfard argued that the bankruptcy court committed reversible error in converting his case instead of expanding the Subchapter V trustee’s powers. As noted by the district court, under Section 1112(b) of the Bankruptcy Code, a court is not required to expand the Subchapter V trustee’s powers. Furthermore, expansion of the Subchapter V trustee’s powers, in this case, would have only permitted the Subchapter V trustee to investigate and report on the debtor’s pre-petition actions and transfers, but, absent creditor consent, the Subchapter V trustee (unlike a Chapter 7 trustee) lacked standing to bring the requisite avoidance actions against Kalayjian.”
• “As a consequence, the district court found that the bankruptcy court’s decision that the expansion of the Subchapter V trustee’s powers would be insufficient in light of the facts and circumstances of the case was not an abuse of discretion.”

“Law firm Simpson Thacher agrees to UK fine over money laundering rule breaches” —

• “U.S. law firm Simpson Thacher & Bartlett was fined 300,000 pounds ($389,069) on Wednesday over breaches of anti-money laundering rules at its London office.”
  The firm agreed to a settlement with the Solicitors Regulation Authority (SRA), which regulates solicitors in England and Wales, under which Simpson Thacher will also pay 62,000 pounds towards the SRA’s legal costs.”
• “Simpson Thacher admitted failing to have a firm-wide risk assessment between June 2017 and March 2020, as required by British money laundering regulations.”
  It also accepted not having a fully-compliant firm-wide risk assessment from March 2020 until February 2023, after the SRA announced it was bringing a regulatory case in August.”
  The SRA did not allege Simpson Thacher’s admitted breaches led to any money laundering, but the regulator said in court filings that they created ‘an increased risk of money laundering’.”
• “A spokesperson for Simpson Thacher said in a statement that the firm’s London office ‘acknowledges and regrets certain historic shortcomings in some of our UK AML (anti-money laundering) written policies’.”
• “An SRA spokesperson said in a statement: ‘Money laundering is not a victimless crime and can have detrimental effects on many, many people. Solicitors have an important role to play in keeping the profits of crime out of the profession and the wider UK economy.'”
• “Simpson Thacher is the latest major law firm to face disciplinary action over alleged breaches of money laundering regulations.”
  “Global law firm Clyde & Co was last year fined 500,000 pounds after admitting multiple breaches of money laundering regulations relating to a long-standing client.”
• “The SRA’s prosecution of fellow global firm Dentons was dismissed by the Solicitors Disciplinary Tribunal in March. But that decision was overturned on appeal on Tuesday and the SRA’s case was sent back to the tribunal.”

“SXSW Privacy Discussion: The Rising Risks Lawyers Can’t Ignore” —

• “On Friday afternoon at SXSW, Meredith Whittaker, CEO of Signal, painted a sobering and downright alarming picture of the modern privacy landscape. Whittaker argued that the world today is more surveilled than ever before, with a handful of corporations and governments wielding unprecedented access to our personal data. Her comments highlighted the risks that everyone — but especially lawyers, given our duty of confidentiality — need to take seriously.”
• “Whittaker noted that privacy is not a luxury; it is a fundamental condition for free thought, secure relationships, and democratic engagement. Yet, we live in an era where every message, search query, and interaction is recorded, stored, and could potentially be weaponized against us. The sheer volume of data collected by companies like Google, Meta, and telecommunications providers creates vast vulnerabilities. Whether through government subpoenas, corporate data sales, or hacking incidents, this information is accessible in ways many of us just don’t fully appreciate.”
• “To illustrate her point, Whittaker posed a chilling hypothetical that quieted the room: Every single message you’ve ever sent in your life is suddenly on a database and a link just got sent to everyone you know. That’s your boss, that’s your best friend, that’s your dad’s best friend, that’s the weird guy who comes to your Thanksgiving. That’s everyone you know, and they click on that link, and they can access that database. And there’s a little AI bot that’s like appended onto that database so they can quickly summarize everything in that database, search their name. Search that one time you told that weird lie because you hadn’t had coffee, searched that time you taught shit on your best friend because you were in a weird place…Search that message to your doctor? Search that thing you sent to your colleague that was really mean about your other colleagues, search your prescription information. Search the time you talk to a union organizer, search the time you reported corruption at your workplace with journalists, all of that is on there.”
• “As large language models and AI become more powerful, it will become even easier for an AI bot to summarize and search everything, exposing your personal, professional, and even legal conversations. Whittaker says this is not science fiction; it reflects today’s reality.”
• “Why Lawyers Should Care. For lawyers, the implications of these privacy risks are particularly critical. Attorney-client privilege and confidentiality are not just ethical obligations, they form the very basis of attorney client relationships. Lawyers need to be aware of and comply with their ethical duty to protect “information relating to the representation of a client.” They also need to understand and satisfy the ethical obligation to understand the risks and benefits of technology under the rules of professional responsibility. At a minimum, these duties require lawyers to be informed of the threats technology poses to client confidentiality.”
• “Moreover, both lawyers and clients need to be secure in the knowledge that their conversations are protected and not easily accessible to others. Lawyers also need to be prepared to advise clients on privacy risks and how to mitigate them.”
• “Metadata Matters: Even when message content is encrypted, metadata — who you talk to, when, and how often — can reveal critical details. As Whittaker noted, metadata to can be used to track relationships, map influence networks, and uncover confidential activities. In legal matters, this could expose privileged consultations, witness communications, or legal strategies.”
• “Given these risks, lawyers and legal professionals should think through their approach to digital communications. Steps to consider include:
  • Limiting the Use of Commercial Messaging Apps: Mainstream platforms like WhatsApp, iMessage, and Telegram may offer some encryption, but they still collect metadata and, in some cases, retain message content. Lawyers should avoid discussing sensitive matters on these apps.
  • Implementing Secure Communication Protocols: Law firms and legal departments should prioritize end-to-end encryption tools that minimize data collection and do not store metadata.
  • Educating Clients on Privacy Risks: Confidentiality doesn’t just depend on lawyers; clients also need to understand the risks of discussing legal matters on insecure channels both when talking to their lawyers and in their day-to-day business activities.
  • Challenging Data Retention Policies: Many tech companies store years’ worth of messages, call logs, and search history. Lawyers should advocate for stricter data retention limits and ensure their own firms do not store unnecessary digital records that could later be subpoenaed or hacked.”