Risk Update

Insurance & Malpractice Matters (Spoiler Alert: Conflicts Count & Cost)

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The folks at Ames & Gough have published their annual “Lawyers Professional Liability Insurers 9th Annual Claims Survey” —

  • “In it’s ninth annual survey of lawyers professional liability claims, Ames & Gough examined the trend by polling 11 of the leading lawyers’ professional liability insurance companies that on a combined basis provide insurance to approximately 80 percent of the AmLaw 200 firms.”
  • “The survey found the number of claims resulting in larger multimillion dollar payouts – as well as the dollar amounts involved – has surged in the past year; 2018 became the first year ever in which the majority of insurers surveyed had a claim payout of over $150 million. Furthermore, at least two settlements exceeded $250 million.”
  • Conflicts remain the biggest malpractice error. Year after year, the insurers surveyed have singled out conflict of interest (including perceived conflicts) as the most common alleged legal malpractice error. This year, seven of the 11 insurers surveyed cited conflicts either as the first or second leading cause of legal malpractice claims.”
  • “Conflicts are especially problematic as more law firms seize opportunities for growth and expansion either through mergers or by bringing in lateral hires. According to the survey, there are times when a lawyer who changed firms can contaminate the new firm with what he or she learned at the old firm.”
  • “‘To get control of this risk more firms are centralizing their conflicts of interest screening and managing the client intake process,’ Ms. Garczynski noted. ‘While that’s a step in the right direction, law firms still need to do a better job of flagging potential conflicts early and training their legal professionals on this issue. Firms unsure of how to properly screen a lawyer might consider working with an attorney who specializes in professional responsibility.'”

And for those who prefer to live on the edge: “Washington State Bar Decides Against Malpractice Insurance Mandate” —

  • “The Washington State Bar Association’s board recently rejected a recommendation that it require the state’s licensed lawyers to obtain malpractice insurance.”
  • “Washington’s decision last week came not long after the State Bar of California’s board also decided against moving forward with a malpractice mandate.”
  • “Oregon and Idaho remain the only two states with a malpractice requirement for attorneys.”
  • “While some board members agreed with mandate supporters that the percentage of uninsured lawyers was a consumer-protection issue, they suggested there were other ways of addressing the matter. One proposal was to examine the “South Dakota model.” In that state, lawyers who do not carry a minimum of $100,000 in insurance must disclose that information at the formation of the attorney-client relationship.”

It appears these issue are in the air, including in Georgia, where John Watkins from Thomson Hine opines on a proposed rule: “Malpractice Insurance Proposal May Require Changes in Current Insurance” —

  • “Proposed Rule 210(a) states: ‘All active members of the State Bar of Georgia engaged in the private practice of law in Georgia must be covered by a policy of professional liability insurance, in an amount no less than $100,000 per occurrence and $300,000 in the aggregate, the limits of which are not reduced by payment of attorney’s fees or claims expenses incurred by the insurer for the investigation, adjustment, defense, or appeal of a claim.'”
  • “There are many views pro and con about the State Bar’s proposed rule requiring lawyers have malpractice insurance. But there is a bigger problem with the proposed rule as written—if you have malpractice insurance, it almost certainly does not comply with the proposed rule and you probably cannot buy insurance that does.”
  • “Thus if a large law firm has a professional liability policy underwritten by Lloyd’s syndicates on a typical policy form with $100 million per claim/$100 million aggregate policy limits, it would not comply with the proposed rule because the limits are not “per occurrence” and defense costs erode limits. I am quite certain that this is not what the State Bar had in mind when it proposed the rule, but the law firm with the hypothetical policy (and its lawyers) would technically be in breach if the proposed language is adopted.”
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Risk Update

Technology and Ethics Conflicts (Hey, Alexa… Hey, Google… And One More Alleged Judicial Conflict)

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A few interesting technology-related risk and compliance stories of note.

I confess I’m personally waiting for the first report of Outside Counsel Guidelines that establish rules preventing any matter discussion within earshot of a smart device (including a phone). I suspect it’s only a matter of time, though my science-fiction forecasting sometimes leans a little dark.

But I’m not the only one thinking along these lines, as stories have surfaced of “accidental” monitoring by big tech (and just the general ethics and implications of the how these are designed and used). For lawyer specific analysis, see: “Lawyers’ Digital Assistants Raise Ethics, Privacy Concerns” —

  • “Is my Amazon Echo spying on me? Recent years have witnessed the growth and proliferation of voice-activated virtual assistants like the Echo, Google Home and Apple Home Pod, which have picked up where Apple’s Siri left off: streaming music, scheduling appointments, sending texts, checking weather and preparing grocery lists, all without so much as the flip of a switch.”
  • “Amazon’s Alexa, once activated by voice command, digitally records the owner’s instructions, which are then stored in the cloud until erased by future use. This has raised privacy issues, prompting at least one commentator to refer to digital assistants ‘as Trojan horses in the age of digital surveillance.'”
  • “But there are ethical concerns for lawyers as well. The ethics rules require lawyers to preserve and maintain the confidentiality of client information, particularly in digital format… The risks associated with transmission of client confidential information electronically include disclosure through hacking or technological inadvertence. A lawyer’s duty of technological competence may include having the requisite technological knowledge to reduce the risk of disclosure of client information through hacking or errors in technology where the practice requires the use of technology to competently represent the client.”
  • Attorneys who do use digital assistants may find it prudent to unplug or disable the microphones during client meetings or phone calls, and may seek to restrict their linkage to other sensitive databases. For example, attorneys might decide not to sync up their client databases with their digital assistants. The Amazon Alexa app has privacy functions which permit users to block the transmission of recorded messages to Amazon employees.”
  • “One thing is for certain: Lawyers must continue to keep abreast of new developments in professional responsibility in addition to keeping up with evolving technology and the security risks that accompany new technology.”

On another technology note, a few readers noted this development, covered nicely by Karen Rubin: “Military prosecutor sent “bugged” e-mail to defense lawyers, says motion” —

  • “But first, how does ‘web-bugging’ work? It involves placing a tiny image with a unique website address on an Internet server, and dropping a link to that image into the bugged e-mail. The image might be invisible or it might be disguised as a part of the document. It works by transmitting specified information to the sending party when the recipient opens the ‘bugged’ document.”
  • “Three jurisdictions (Alaska, New York and, most recently, Illinois) have issued opinions pointing to the ethics issues that can arise when lawyers use such tracking devices surreptitiously to get a leg up on an opposing party.”
  • “The latest web-bug development comes not in a staid ethics opinion, but in military proceedings in which a Navy lieutenant is charged with conduct unbecoming an officer, with connections to a high-profile war crimes court-martial involving a Navy SEAL and an Islamic State prisoner. The circumstances sound straight out of a thriller.”
  • “As reported in the ABA Journal, earlier this month defense lawyers for Lt. Jacob Portier filed a motion accusing a military prosecutor of sending “bugged” e-mails to thirteen lawyers and paralegals, plus a reporter with the Navy Times. According to reporting by the Navy Times, Portier is accused of holding a reenlistment ceremony for a Navy SEAL next to the corpse of an Islamic State prisoner allegedly stabbed to death by the SEAL.”
  • “The SEAL has pleaded not guilty to a charge of murder in the stabbing death, which occurred in Iraq in 2017, and the military case has drawn much attention, including from President Donald Trump, said the Navy Times.”

I confess that if you’re reading this by email, and click “download images,” your client will load an image from my mailing list provider, who will generate an aggregate report telling me that folks out there are reading these. (This is recommended and encouraged, as that knowledge is what’s keeping me going here.)

Next, noting Karen’s apt “straight out of a thriller” characterization. See also: “Judge in war crimes case against Navy SEAL weighs dismissal motion” —

  • “The judge in the court-martial of a Navy SEAL platoon leader accused of war crimes in Iraq is weighing defense motions to dismiss the charges or otherwise remove the lead prosecutor and possibly the judge himself from the case.”
  • “The hearing comes 11 days before Special Operations Chief Edward Gallagher is due to go on trial charged with killing a helpless, wounded Islamic State fighter in his custody and of shooting two unarmed civilians, a schoolgirl and an elderly man.”
  • “The defense specifically has accused Navy lawyers of conducting illegal surveillance of defense attorneys and news media by way of electronic tracking software secretly embedded in emails sent to the defense.”
  • “In court, prosecutors have said the email “auditing tools” they used were designed merely to detect the flow of emails without revealing their content, and were aimed at pinpointing the source of leaks from case files sealed by the judge.”
  • “Timothy Parlatore, a civilian lawyer leading Gallagher’s defense, also said the Navy’s Judge Advocate General’s Office undermined fairness of the proceedings by issuing a statement last week saying the government was acting ‘as part of a lawful, authorized and legitimate investigation.'”
  • “The case, being conducted at U.S. Naval Base San Diego, has attracted the attention of President Donald Trump… Trump said he was considering pardons for two or three American servicemen charged with war crimes, but might wait until they stood trial before deciding.”
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Risk Update

Judicial Conflicts (Part 2) — Docket Clerk Imputation and Other Relations

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Continuing our miniseries on judicial conflicts with a hat tip to the Legal Profession Blog for noting a few recent opinions, first from the South Carolina Advisory Committee on Standards of Judicial Conduct: “Docket Clerk’s Relationship Not Imputed To Judge” —

  • “A municipal court judge’s docket clerk is in a relationship with a law enforcement officer for the same municipality. The docket clerk is responsible for scheduling cases and documenting events that occur in cases while in open court. The docket clerk is also responsible for case management, including recording final dispositions in Municipal Court cases and following instructions from the municipal judge(s). The docket clerk appears in court regularly and may be present at the same time that the law enforcement officer the clerk is dating appears to prosecute traffic cases. The municipal court judge inquires as to whether he or she must disclose to all parties the relationship between the docket clerk and the law enforcement officer, or if the docket clerk should be recused from handling those cases.”
  • “In this case, the judge is not actually involved in a relationship with the law enforcement officer, and there is no cause to question the judge’s impartiality. Furthermore, the docket clerk merely performs ministerial duties regarding case scheduling and management. Thus, there is no need to recuse the docket clerk from cases in which the law enforcement officer appears. Likewise, there is no need for the judge to disclose the relationship of the docket clerk and the law enforcement officer to all parties.”
  • Full text of opinion.

Next from the Florida Judicial Ethics Advisory Committee: “A Judge’s (Ap)parent Conflicts” —

  • 1. Whether a judge whose lawyer-parent is no longer associated with former law firm must continue recusing from the law firm’s cases. ANSWER: No.
  • 2. Whether judge whose parent owns building leased to a law firm must enter automatic recusal when the firm has a case before the judge. ANSWER: Yes, unless the parent’s interest can be classified as de minimis.
  • Full text of opinion.
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Risk Update

Judicial Conflicts (Part 1) — Insurance Recusal, Homeless Advocacy

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Several interesting stories and updates touching judges and courts have caught my eye recently. Thought readers would find them interesting as well. First up something you don’t see every day: “Judge rips insurance company for ‘immoral, barbaric’ cancer denials” —

  • “A federal judge blasted UnitedHealthcare last month for its ‘immoral and barbaric’ denials of treatment for cancer patients. He made the comments in recusing himself from hearing a class-action lawsuit because of his own cancer battle — and in so doing thrust himself into a heated debate in the oncology world.”
  • “The case that came before US District Judge Robert N. Scola was brought by a prostate cancer survivor who alleged that UnitedHealthcare wrongfully denied him and thousands of others coverage of proton beam therapy.”
  • “In his recusal, Scola cited his own battle with prostate cancer and how he consulted ‘with top medical experts around the country’ about treatment options. Scola said that he ultimately opted for surgery but that ‘all the experts opined that if I opted for radiation treatment, proton radiation was by far the wiser course of action.'”

Calif. Cities Say Judge In Homelessness Case An ‘Advocate‘” —

  • “Three cities in Orange County, California, on Friday asked a federal judge overseeing a case about their treatment of homeless residents to step aside, saying that the judge took on the role of an “advocate” in a similar case, calling his impartiality into question.”
  • “[Saying] Judge David O. Carter had taken steps in resolving a lawsuit against other Orange County cities that called into question his ability to be fair in the current dispute, including touring a homeless tent city multiple times, taking ex parte meetings with city officials and generally pushing the parties towards the resolution he preferred.”
  • “The motion said that the judge’s actions were not unethical in the prior case since he was acting with the blessing of the parties, but did not reflect well on his ability to be unbiased against the cities in the new suit.”
  • “In addition to his repeated visits to homeless encampments in the county and his efforts to work directly with the cities in the Catholic Worker suit, the motion to disqualify said, Judge Carter had criticized the cities that had not attended a meeting he organized, including the cities filing the motion. Moreover, at a recent hearing he had acted as though an injunction in the case were a foregone conclusion, before he’d had a chance to hear any legal arguments, the motion said.”
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Risk Update

(Security Week) Lawyer Edition — Safeguarding Standards and Breach Response Responsibilities

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David G. Ries, of counsel at Clark Hill reminds all: “Safeguarding Client Data: An Attorney’s Duty to Provide ‘Reasonable’ Security” —

  • “Confidential data in computers and information systems, including those used by attorneys and law firms, faces greater security threats today than ever before… Attorneys have ethical and common law duties to take competent and reasonable measures to safeguard information relating to clients and also often have contractual and regulatory duties to protect confidential information.”
  • “The ABA has issued two formal ethics opinions on security topics since the 2012 rules amendments. ABA Formal Opinion 477, “Securing Communication of Protected Client Information” (May 2017), while focusing on electronic communications, also explores the general duties to safeguard information relating to clients in light of current threats.”
  • “In October, the ABA published Formal Opinion 483, ‘Lawyers’ Obligations After an Electronic Data Breach or Cyberattack.’ It reviews lawyers’ duties to safeguard data and concludes ‘[w]hen a data breach occurs involving, or having a substantial likelihood of involving, material client information, lawyers have a duty to notify clients of the breach and to take other reasonable steps consistent with their obligations under these model rules.'”
  • “Law firms are increasingly obtaining cyberinsurance to transfer some of the risks of confidentiality, integrity and availability of data in their computers and information systems. This emerging form of insurance can cover gaps in more traditional forms of insurance, covering areas like restoration of data, incident response costs, and liability for data breaches.”

ABA issues new guidance on lawyer obligations after a cyber breach or attack” —

  • “‘How a lawyer does so in any particular circumstance is beyond the scope of this opinion. As a matter of preparation and best practices, however, lawyers should consider proactively developing an incident response plan with specific plans and procedures for responding to a data breach. The decision whether to adopt a plan, the content of any plan and actions taken to train and prepare for implementation of the plan should be made before a lawyer is swept up in an actual breach.'”
  • “In addition, lawyers should recognize that in the event of a data breach involving former client information, data privacy laws, common law duties of care, or contractual arrangements with the former client relating to records retention, may mandate notice to former clients of a data breach. A prudent lawyer will consider such issues in evaluating the response to the data breach in relation to former clients.”
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Risk Update

(Security Week) Breach Edition — Anatomy of One, Fading Law Firm Cloud Concerns

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Ending yesterday’s update with a note about an actual breach, today we pull back to get a quite interesting big picture perspective published by the ABA: “The Anatomy of a Data Breach: An overview of the actors, roles and impacts of a cybersecurity breach” —

  • “Breaches come in many variants, far too many to cover in a single article. But there is a general flow to a breach. Since we make a living investigating breaches and remediating the vulnerabilities that caused them, let us take you on an anatomical tour of the common elements of a typical breach.”
  • “To make the reading more fun, we have offered up ‘quotes’ from the players typically involved in a breach. Many are taken from real life incidents.”
  • “If the point of the breach is to purloin data, hackers will use their malware to move laterally across your network and ‘pwn’—hackerspeak for ‘own’—everything they can. Imagine the value of data in a mergers and acquisition law firm. The hackers could sell the data to others or use it themselves to get rich in the stock market. State-sponsored hackers can give their countries a competitive advantage against the U.S.”
  • “If the law firm has an Incident Response Plan, it’s the first resource for those in charge of handling the breach. They begin by picking up the phone to call the regional office of the FBI; then their insurance company, data breach lawyer, digital forensics company and bank; and the list goes on. All 50 states have data breach notification laws, so carefully determine if a report (or reports) must be filed, and by when.”
  • “Rarely, if ever, does a law firm notify clients at this early juncture. In most breaches, it isn’t immediately known what data was compromised, and there is natural reluctance to tell clients anything until the investigation is well underway. When the breach goes public, however, there’s little choice but to talk to clients.”
  • “The cyber insurance world remains the Wild, Wild West… Buffett’s views are reflected in more and more cyber insurance policies, which often include requirements for security audits and include language about conforming to industry cybersecurity standards. The quintessential ‘we don’t cover stupid’ case is Columbia Casualty Co. v. Cottage Health System. There are now more cases where insurers are saying that the insured did not take the reasonable security steps required by the policy.”

With a complex threat landscape, and more of a track record to rely on, law firms are increasingly looking to shift some of the responsibility and risk for information security to their vendors in the cloud: “Lawyers And Cloud Computing: It’s Not So Complicated Anymore” —

  • “Cloud computing is a concept that most lawyers are familiar with in 2019. But it wasn’t always that way.”
  • “[b]eginning in 2010, cloud ethics opinions were issued quite frequently, with as many as three or four being handed down by various jurisdictions in some years. But beginning in early 2017, after the Illinois opinion listed above (Opinion No. 16-06), there was a noticeable lull, with no opinions being issued to the best of my knowledge until Texas addressed the issue a full year and a half after the Illinois opinion.”
  • “I would suggest that the reason for this is simple: cloud computing is now an accepted, trusted technology. As a result lawyers are comfortable using it, and thus don’t feel the need to submit inquiries to their bar associations’ ethics committees regarding whether it’s ethical to do so. In fact, according to the latest ABA Legal Technology Survey report, the majority of lawyers (55 percent) have used cloud computing software tools for law-related tasks.”

For example, several firms have cited security as a key driver in adopting cloud based document management solutions. Here’s a recent one from Anthony Garza Sr. Director of IT at Dickinson Wright, quoted: “What really changed the game for us was NetDocuments’ commitment to security and their willingness to help the firm navigate our cloud-based security challenges.”

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Risk Update

(Security Week) Malware Edition — Potential Catastrophes and Actual “Panics”

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Why Hidden Malware May Be Potential National Catastrophe” —

  • “Another class of company being targeted aggressively by these super stealthy offerings are law firms. Speculation is–given these are mostly very large firms that do lots of M&A–that the effort is to get insider trading information. This is less of a global threat, but it would potentially be a firm killer, because the Securities and Exchange Commission typically takes a very dim view of anyone who participates in insider trading.”
  • “The SEC clearly could source the compromised law firm that was the cause of an identified insider trading event. Thinking more broadly, what will the clients of that firm do if/when they find that all their confidential information on that firm’s servers was now public?”
  • “This not only could kill the law firm, but it could do massive damage to the firm’s clients. Since we are talking about some of the largest law firms in the U.S., that devastation could be massive.”

Also making news recently is the malware attack on Wolters Kluwer, which provides software (and houses data) for accountants, lawyers and other professionals. Vendors matter: “A malware attack against accounting software giant Wolters Kluwer is causing a ‘quiet panic’ at accounting firms” —

  • “A malware attack on Wolters Kluwer, a popular tax and accounting software platform, has left many in the accounting world unable to work this week and sparked concerns about the security of the tax return and financial information stored on the company’s cloud servers.”
  • “Wolters Kluwer provides software and services to all of the top 100 accounting firms in the U.S., 90% of top global banks and 93% of Fortune 500 companies, according to its web site.”
  • “A cybersecurity professional at one Big Four accounting firm said she had received reassurances from Wolters Kluwer that account information had not been accessed. But she also said her firm took additional precautions to ‘limit any possible exposure’ to the malware attack through the accounting giant’s technology connections to the software company.”
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Risk Update

(Security Week) Email Edition — Spoofed Law Firms, Cyber Scams & New Tools

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I’m always grateful to receive word from readers (don’t be shy & remember to tell your risk friends to sign up). Even more so when those notes include interesting updates. So a tip of the hat to Simon Chester at Gowling WLG for sending in this interesting story “about” Linklaters … which sparked a good amount of additional reading, lead up to: Security Week.

Linklaters Impersonated in Fake Job Posting Cyber Scam” —

  • “A scammer has been posing as Linklaters’ director of human resources in an attempt to con job seekers out of $1,500, in the latest example of a cyber scam affecting a top law firm.
    A report released by the Solicitors Regulation Authority (SRA) reveals that documentation misusing the ‘Linklaters LLP’ name is being used to advertise a fake ad to become a “Data entry professional” at the firm.”
  • “A Linklaters spokesperson said the firm alerted the SRA to this issue as soon as it became aware of it and also alerted clients with a note on its website. The Magic Circle firm’s name, as well as a fake partner, have now been used in three scams this year – also reported by the SRA.”
  • “Earlier this month, the SRA issued a warning after fake emails claiming to be from Michael Bates, the U.K. managing partner of Clifford Chance, were sent to members of the public. Last year, Herbert Smith Freehills had scam emails falsely attributed to it… And Simmons & Simmons had a similar situation, with emails claiming to be from corporate partner David Parkes that talked of unclaimed inheritance.”

A difficult risk question — How to prevent bad actors from attempting to fool with a bit of fraud? Particularly when recipients aren’t paying close attention to email domains (or domains are spoofed)?

I was not aware of some technology that firms are employing (or being asked to) to combat this type of thing, at least when a common standard is established with clients. The latest edition of The Orange Rag offered some timely education: “Clients demand DMARC is set to reject” —

  • “Clients are increasingly demanding that law firms have fully implemented email authentication protocol DMARC before they send them instructions.DMARC is a protective barrier for a firm’s email correspondence, sheltering staff and clients from the most common form of cyberattack, phishing.”
    “While no cyber solution is a silver bullet, DMARC is a global industry standard widely recognised as essential to protecting an organisation’s email, brand and reputation. It does this by preventing third parties from impersonating email domains.”
  • “Government bodies in both the UK and US, as well as a number of financial institutions and major corporates, understood to include Lloyds, are ramping up the pressure, however, by telling law firms they must reach ‘reject’ or risk losing their business.”

Thematically related and also interesting: “Nearly all 2020 presidential candidates aren’t using a basic email security feature” —

  • “Three years after Russian hackers targeted and breached the email accounts of Hillary Clinton’s presidential campaign, nearly all of the upcoming 2020 presidential candidates are still lagging in email security.”
  • “New data out by Agari confirms just one presidential hopeful — Democratic candidate Elizabeth Warren — uses domain-based message authentication, reporting, and conformance policy — or DMARC.”
  • “Agari said only 16 percent of the 500 world’s richest companies reject or quarantine unvalidated email — up from two years ago when just eight percent of the Fortune 500 were using DMARC.”
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Risk Update

Law Firm Ethics Updates — Ethical Ethics Consultation, Conveyancing Conflicts, Pleading Plagiarism & Technology Implied

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New California Ethics Opinion Addresses Whether There is a Duty to Disclose Ethics Consultation to Clients” —

  • California State Bar Formal Opinion No. 2019-197
  • “The Committee determined that when attorneys have questions regarding their ethical obligations, they should seek advice and counsel, and doing so does not create an ethical conflict with a client. If, through the advice and counsel, an attorney learns of an ethical conflict with the client, that conflict must be disclosed.”
  • “However, the fact that the attorney may have learned that information from a consultation with another attorney does not always need to be disclosed and depends on whether the facts cause such consultation to be a material development requiring disclosure under California Rule of Professional Conduct (“Rule”) 1.4(a)(3). This same rule applies to in-house counsel at a law firm.”
  • ” This opinion provides an in-depth analysis of California’s new Rules of Professional Conduct related to communication with and loyalty to clients. It confirms that attorneys can—and should—seek ethical guidance from outside counsel and in-house counsel, to investigate concerns or potential errors and learn how to best proceed. The opinion also provides an endorsement of law firm in-house counsel and their ability to provide ethical advice to law firm attorneys without creating a conflict of interest with firm clients.”

Advisory Opinions From Ohio Board Of Professional Conduct”

  • Advisory Opinion 2019-02 replaces a 2002 advisory opinion and provides further guidance to lawyers considering the transfer of his or her interests or shares in a law firm to a revocable trust. The board concludes that a lawyer may not title his or her interests or shares as transfer-on-death to a trust due to rules that prohibit a lawyer from practicing in a law firm if a non-lawyer has an ownership interest in the firm. Because a transfer-on-death of shares in a law firm to a trust may eventually lead to an heir of a non-lawyer holding an ownership interest, remaining lawyers in the firm would be unable to maintain compliance with either rule. This opinion withdraws Adv. Op. 2002-12.

The Law Society’s Conveyancing Quality Scheme Is Changing” —

  • “Practices will now be required to have a set process on the handling of conflicts. This must include steps to follow when a conflict has been identified; or a policy for an assessment of a potential risk of conflict, when representing both sides of a transaction. The scope of this requirement reaches much further, however. It also seeks an assurance that any information, which may affect the lending decision, will be brought to the lender’s attention, provided consent to disclose it has been obtained from the client. In the absence of such consent from the client, the lender must be advised that a conflict of interest has arisen preventing the firm from continuing to act for the lender.”

State bar opinion guides lawyers on technology” —

  • “Now the Louisiana State Bar Association has weighed in, releasing a public ethics opinion in February that highlights state rules of professional conduct implicated in incorporating technology and adopting innovations in the practice of law.”
  • Louisiana’s rules do not include a technology component, but Grodsky [LSBA president] says that ‘technological competence is implicit’ in its competent representation rule and another that lawyers ‘should act with reasonable diligence and promptness’ when representing clients.”
  • “They include duties to not disclose information related to a client inadvertently or without authorization and to reasonably safeguard client information, as well as a rule that managing lawyers adopt measures and make reasonable efforts to ensure that other lawyers and non-lawyers, including vendors, are conducting themselves in ways compatible with legal professional conduct.”

And a fascinating one sent in by risk consultant Patrice Kennard: “Copying in Brief Writing: Where Is the Line?” — 

  • “Are the rules about copying different in brief writing than elsewhere? To some extent, yes. But litigators should not mistake that for a license to copy freely. The accepted practices may be different, but there are limits.”
  • “But copying in brief writing can go too far. Because courts have found that legal briefs are subject to copyright protection, large scale copying of another lawyer’s brief may be actionable as infringement. See Newegg v. Ezra Sutton, P.A., 2016 WL 6747629 (C.D. Cal. Sept. 13, 2016); accord White v. West Publishing, 29 F. Supp.3d 396 (S.D.N.Y. 2014) (upholding a fair use defense). Moreover, plagiarism in legal briefs can lead to sanctions.”
  • “It appears, however, that to be truly sanctionable plagiarism in a legal brief must be not only extensive, but also accompanied by something more. In Lohan, the offending submission was so heavily copied that it failed to address the “salient points” in the case, and the copying was aggravated by other misrepresentations to the court.”
  • “Exactly where is the line? The New York City Bar Association’s Committee on Professional Ethics grappled with this issue last summer in Formal Opinion Number 2018-3… At first blush, the Committee’s conclusion—that copying someone else’s work without attribution does not in itself appear to violate the ethics rules, but that its view on this might change and that such copying might meanwhile subject lawyers to sanctions—seems unsatisfying”
  • “The Committee’s conclusion is, in essence, that copying someone else’s work without attribution probably does not violate the rules if that is all the lawyer does (that is, if the conduct is not accompanied by other misdeeds such as an attempt to charge for work the lawyer did not actually do, or a failure to ‘tailor the brief to the situation before the court’), but it should be avoided.”
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Risk Update

(OCG Week) Outside Counsel Guidelines — Turning to Technology

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In Part Three of our OCG update we’ll turn to content on coping, from Toby Brown, Chief Practice Management Officer at Perkins Coie: “Advancements in Outside Counsel Guidelines Compliance Technology” —

  • “Given the recent trends around Outside Counsel Guidelines (OCGs) becoming more common while also becoming more complex and demanding, you would think there would be a bevy of providers bringing new technology to the market to help firms address this issue. For now, that seems to not be the case, with limited exceptions. This is forcing too many law firms to cobble together their own solutions, utilizing basic tools (e.g. spreadsheets), alongside generic tools and home-grown options.”
  • “When a client OCG comes in to a firm (and this can happen in many ways), the firm should have a defined, consistent process for managing them. Since OCGs have a variety of clauses, numerous departments at a firm need to weigh in, therefore the first requirement is for a workflow management capability to handle the review and approval process. This workflow needs to manage multiple, simultaneous threads in parallel, and then bring each thread back into a final sign off. The workflow also needs to manage exceptions and document edits to OCGs. The review can no longer be limited to the Finance or Billing departments.”
  • “From a moderately advanced perspective, it would be a nice to leverage some level of artificial intelligence (AI) to determine the terms contained within each OCG. That functionality would allow firms to parse out clauses for review and to identify which clauses may need to be negotiated, reducing the amount of manual review needed. One frequent example is that of Most Favored Nation clauses; another example is security requirements. Sometimes these requests are not feasible or run counter to a firm’s policies and need to be negotiated and revised. And these revisions need to be tracked.”
  • “Of course, capturing all of these guideline documents means firms will need a repository of them. Integration with a document management system (DMS) is one option, with the bonus value that having a single, searchable repository will provide.”
  • “Beyond determining the contents of a single OCG, it would be helpful if the tools had data analytics components to understand the requirements across all client OCGs so firms can create processes and policies to better comply across all clients. Determining commonalities and trends in the clauses being included would be useful for firms as they prioritize their technology and systems.”
  • “There is a definite need for technology to support the review and management of OCGs. E-billing compliance has been largely tackled with solutions like eBILLINGHUB and it may be possible to leverage document analysis tools (employing AI) to assist in the review of new OCGs, identifying common components within an OCG that the firm has already identified how to address, as well as more easily identify new or “outlier” components that may be unreasonable or difficult to enforce compliance with. This could assist with initial review and negotiation but may not help in terms of compliance once an agreement has been reached.”


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