Bressler Risk Blog

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

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

New Business Intake (and Outtake)

• The Aon Client Intake Survey, by Matthew K. Corbin
• What Lawyers Can Say in Motions to Withdraw, by Matthew K. Corbin
• Dishonest or Unworthy Clients: Pink Flags, by Douglas R. Richmond
• Risk-Related Thoughts on the Corporate Transparency Act, by Matthew K. Corbin
• Core Concepts for Evaluating Concurrent Conflicts of Interest, by Matthew K. Corbin

Client Risk

• Avoiding Professional Liability and Responsibility Traps in Transactional Practice
• Taking a Closer Look at Scope of Representation and Related Issues, by Matthew K. Corbin

Lateral Hiring

• Looking Again at Lateral Hiring Risk, by Douglas R. Richmond
• Lateral Hiring Red Flags, by Douglas R. Richmond
• A Departing Lawyer Checklist, by Douglas R. Richmond

Personnel and Partner Risk

• “Partner Problems” PowerPoint Presentation
• The Right to Suspend Law Firm Partners Pending Internal Investigations, by Mark A. Webster
• Expelling Law Firm Partners

International/UK Practice

• [Slides] How Global Law Firms Navigate the Increasingly Complex Regulatory Environment in the U.K. and the Effect on International Offices
• Useful Links to Additional Resources

Law Firm General Counsels Discussion

• Session Slides
• The Aon General Counsel Survey, by Matthew K. Corbin
• Touring Deposition Conflicts by Rail, by Douglas R. Richmond
• Essential Principles for Law Firm General Counsel, by Douglas R. Richmond

Insurance

• A Review of the Most Recent Aon LPL Claims Data, by Mark A. Webster
• How Underwriters Evaluate and Price Law Firm Risk

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

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

“Bar Cybersecurity Panel Considers Data Privacy Certification Course” —

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

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

• “‘When not to use email?’ is a relatively recent ethical inquiry, barely 20 years old. Do you remember the practice of law before email? (Depending on the size of the law firm, email use became prevalent at various stages during the 1990s.) Back then, the only ethics issue was whether information about a client’s matter could EVER be sent by unencrypted e-mail without violating the ethics rules.”
• “It was not until 1999 that the ABA ethics committee acknowledged that a lawyer may transmit some information relating to the representation of a client by unencrypted email over the internet without violating the Model Rules of Professional Conduct. ABA Formal Opinion No. 99-413, May 10, 1999, (citing at footnote 40 an impressive full-page string cite of numerous state opinions and commentary to the same effect in 1996 – 1998). “
• “Today, however, email is so commonplace, so easy to use, that emailing reflexively — without even thinking about it — has become the new default. This can be a serious problem. Precisely because email is the default, lawyers are all too complacent about best practices for using email effectively and proficiently. Email can be a great communication tool, but it can also be dangerous. ”
  “Avoid email when:
  • The message is extremely important or confidential and you cannot risk it falling into the wrong hands.
  • The message is emotional or sensitive or in nature.
  • When a back-and-forth conversation will be required, or when the receiver deserves the opportunity to give immediate feedback or response.”
• “Consider this real-life scenario from the Ethical Emergencies column:
  • Sally Associate has just realized that she has made a serious and possibly damaging mistake in one of her client’s cases. [Think missing a mandatory deadline — a statute of limitations or an expert witness disclosure order.] Sally is very concerned that there may be ethics or malpractice issues, and she needs to talk with someone at the firm immediately about the mistake, about what to do now, about whether disclosure or other action is required, etc.
  • Before we get to the email issue, think about this: To whom at the firm should Sally report this emergency? Her supervising partner on the case? Her mentor? The firm’s managing partner? The firm’s ethics partner?
  • The only correct answer on these facts is the ethics partner.”
• “Accordingly, Sally should call or meet with the ethics partner immediately. But she should not use email. Not to report the incident, or to describe or explain the problem, or to give the details, or to answer the inevitable ‘how did this happen?’ questions, etc.”
• “But nothing in writing until then. No email. Always remember what the ‘e’ in email stands for (‘Exhibit’). The sender should imagine that the transmitted message or document has an exhibit sticker on the bottom right.”

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

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

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

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

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

A note on distribution: 

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

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

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

Thanks!

“Paul Weiss Stays on Google Suit After Surviving Yelp Motion” —

• “The law firm Paul Weiss Rifkind Wharton & Garrison can continue representing Alphabet Inc.‘s Google in the Justice Department’s advertising technology monopoly case against the company, a federal judge ruled.”
• “In a Friday bench ruling in the US District Court for the Eastern District of Virginia, Judge Leonie M. Brinkema denied a motion by Yelp Inc. and the News/Media Alliance trade group to disqualify the firm over previous work it did for the two groups. The motion—based on allegations that Paul Weiss was conflicted between its current work representing Google and prior work for Yelp and NMA—fails to show any real risk of prejudice, Brinkema said.”
• “Friday’s ruling shows the high bar for alleging ethics violations for lawyers from the same firm who may represent opposing sides in similar cases.”
• “‘Under this approach most large law firms would be disqualified from similar matters,’ Brinkema noted on Friday. As a result, there can’t be a finding of prejudice against either Yelp or NMA, she said.”
• “Most states’ ethics rules for lawyers bar them from switching sides in a case without permission from their prior clients. But the situation in the Google case is less straightforward. Paul Weiss had presented Yelp and the News/Media Alliance—a trade group for 200 newspapers in the US and Canada—in prior antitrust work involving the tech giant.”
• “It’s not enough for parties to be ‘potentially’ affected by the outcome of the ad tech case to show that they’re adverse to Google—an important hurdle in the ethics claim, Brinkema said.”
• “Google may not submit any evidence pertaining to the two groups going forward, however. And an attorney who previously represented NMA and Yelp for Paul Weiss and has advised on the Google case can’t be involved in the future, Brinkema said. If any details from the firm’s previous work for NMA and Yelp ‘leak over’ to the attorneys working for Google, the leak must stop immediately and be reported to the court, she said.”

“Houston bankruptcy judge David Jones resigns after misconduct complaint regarding his relationship with an attorney” —

• “A prominent Houston bankruptcy judge resigned Monday amidst allegations he did not disclose a years-long romantic relationship with an attorney whose law firm regularly appeared in his court, even after he was asked to recuse himself from a case over the relationship.”
• “The New Orleans-based appellate court is investigating the allegations and filed a formal misconduct complaint against Jones on Friday, citing multiple potential violations of the code of conduct for federal judges.”
  “The allegations against Jones surfaced in a federal civil rights lawsuit filed against him earlier this month, by a shareholder for a company that had a bankruptcy case in Jones’ court, and stem from his relationship with a former attorney for Jackson Walker LLP. The Texas law firm said in a statement that the attorney in question joined the firm as a partner in 2018 and left in December of last year.”
• “Richman wrote in the formal complaint that the lawyer began living with Jones before 2018 and, although she did not personally appear in Jones’ court after that point or serve as the attorney of record for any cases in his court, she worked on some of those cases and was paid accordingly, with Jones approving those attorney fees. Richman wrote that the fees in question were ‘substantial.'”
• “She also wrote that Jones’ relationship with the attorney was the subject of a motion to recuse the judge from a case involving Jackson Walker, but Jones allegedly did not disclose the relationship to two other judges who subsequently denied the motion for recusal. Jones ended up presiding over the case and approved Jackson Walker’s attorney fees, Richman wrote.”
• “‘There is a reasonable probability that if Judge Jones had disclosed the facts concerning his relationship … the motion to recuse would have been granted,’ Richman wrote.”
• “Jim Wilkinson, a spokesperson for Jackson Walker, said it learned of the attorney’s ‘potential relationship’ with Jones in March 2021 and subsequently instructed her to “stop working and billing on any case that had been assigned to Judge Jones.” Wilkinson said the law firm also sought guidance about the matter from outside ethics counsel. ‘We are confident that we acted responsibly,’ Wilkinson said.”

“California lawyers must report ‘treason’ under newly-signed law” —

• “California Gov. Gavin Newsom has signed into law a bill requiring attorneys to inform the state bar if they suspect other lawyers of treason. Newsom signed Senate Bill 40 into law on Tuesday [October 11]. A spokesperson for the governor said his ‘signature speaks for itself.'”
• “The new rule requires lawyers to inform the bar if they know of attorneys in the state who engaged or conspired to engage in seditious conspiracy, treason, rebellion or insurrection, as defined by federal law.”
• “The rule would not apply to information protected by attorney-client privilege, and it would be considered professional misconduct for a lawyer to use the provision to harass others.”
• “Senate Bill 40 also places more legislative oversight on the State Bar. The California Senate will now have to sign off on the appointment of the State Bar of California’s executive director and general counsel.”
• “In August the California Supreme Court began requiring lawyers to report fraud, misappropriation of funds and other criminal acts or conduct that raise ‘a substantial question’ about another lawyer’s ‘honesty, trustworthiness, or fitness as a lawyer.'”

“Holding Client Money Could Face Increased Regulatory Scrutiny” —

• “Law firms holding client money could come under increased scrutiny from U.K. regulator the Solicitors Regulation Authority given the cash that could now be earned from higher interest rates, one lawyer has warned.”
• “With the base interest rate in the U.K. rising from 0.1% in 2021 to 5.25% as of August 2023, law firms handling any client money could be set to earn substantial sums of interest. If they don’t account for that to clients in a ‘fair manner’, they could be likely to face increased scrutiny from the SRA, according to RPC partner Graham Reid.”
• “As it stands, firms are bound by the SRA to pay a ‘fair’ sum of interest on client funds, meaning that they don’t have to pay the full value of interest earned. But, with some law firms paying out less than 1% of interest on client accounts, the extra may be significantly boosting profits, says Reid.”
• “Reid continued: ‘With new enhanced powers to fine firms and a vigorous approach to rule enforcement, the SRA can be expected to take a very dim view of those that do not pay fair interest and thereby cause client detriment. The key messages are: Is it fair? Is it properly explained? Can you fully justify your decision-making to the regulator?'”
• “In recent years, handling client payments has become rarer and rarer for law firms. Last year, Travers Smith managing partner Edmund Reed explained that the service had been ‘going out of fashion’ for many years, with the pandemic accelerating the move away from client accounts.”

“Legal profession proactively mitigating money laundering risks” —

• “A new report released today shows the Australian legal profession is proactively working to mitigate the risk of being a party to money laundering and that where vulnerabilities exist, those not already being addressed can be addressed through augmentation of existing controls to which the profession is already subject.”
• “‘The Government is currently considering how best to achieve the existing anti money laundering and terrorism financing (AML/CTF) regime objectives in relation to the legal profession,’ Law Council of Australia President, Mr Luke Murphy said.”
• “‘The Law Council has always believed that due to the strict rules and regulations under which the Australian profession operates, the potential for lawyers being used to facilitate AML/CTF is small. To test the validity of that belief, we engaged Russ + Associates to undertake an independent review of the profession’s vulnerability to being an unwitting party to money laundering and terrorism financing. Russ + Associates is a specialist tax and AML law practice who are recognised experts in AML/CTF advice.'”
• “‘To our knowledge, the examination of vulnerabilities Russ + Associates were engaged to undertake is a world first. We believe this highlights the commitment the Australian legal profession brings to understanding and minimising AML/CTF risks and provides a strong evidence base upon which effective decisions and changes can be made.'”
• “‘What the report found is that beyond the regulations and professional requirements lawyers are subject to, they have taken additional steps to reduce risks. These include limited receipt of cash, particularly when it comes to funds from overseas, not holding assets for clients, and ensuring they meet all reporting obligations.'”
• “‘That is not to say that no vulnerabilities exist, and we thank the firms who participated in this study for being frank about the risks they have identified in their practices.'”
• “Vulnerabilities identified included lawyers not routinely making enquiries about a client’s source of wealth and difficulty in confirming the provenance of funds, with differences in risk between jurisdictions.”
• “‘The report highlights the positive attitudes and behaviours among the legal profession towards integrity, risk awareness and aversion, and to fulfilling statutory and professional obligations. It shows vulnerabilities are present, but they can be managed through augmentation of existing controls.'”

“Cautionary tale: Defrauded law firm loses insurance suit” —

• “A Boston law firm’s business policy did not cover losses stemming from its processing of a fake cashier’s check that it received from a “new client” who had retained the firm under a false identity, a U.S. District Court judge has ruled in dismissing a lawsuit against the insurance carrier.”
• “Wells Fargo notified Brooks & DeRensis on Nov. 4, 2021, that the bank had dishonored a cashier’s check for nearly $90,000 that the law firm had deposited into its IOLTA account just days earlier.”
• “The firm had accepted the check as settlement of an employment matter brought by a new client claiming to be ‘Brian Rodriguez.’ The firm promptly wired $88,385 of the deposited amount to the bank account of the client, but it turned out later that the ‘client’ was using a false identity.”
• “‘Taking the factual allegations in the complaint as true, B&D received a forged cashier’s check from a third-party purporting to be Rodriguez’s employer,’ Casper wrote. ‘As a cashier’s check, it was purportedly made or drawn by and drawn upon Wells Fargo, N.A. B&D was the payee or the bearer in this circumstance, not the maker, drawer or drawee.'”
• “While Casper found coverage existed under an endorsement providing ‘Counterfeit Currency and Money Orders Coverage,’ the judge went on to conclude the insurance contract’s ‘false pretenses’ exclusion applied. ‘This exclusion addresses a scenario where the insured willingly transfers funds to a third-party based on some false representation or receipt of a false check,’ Casper wrote.”
• “Nina E. Kallen, an insurance coverage litigator in Roslindale, said she has had colleagues who have been taken in by similar scams. That includes lawyers who thought they were taking adequate precautions.”

“Many Businesses Blindsided by New Anti-Money-Laundering Law” —

• “A new law aimed at ending the United States’ notorious reputation as a haven for ‘shell’ companies created to obscure crimes will require tens of millions of businesses to report ownership information for the first time, starting Jan. 1.”
• “But there’s a big problem, according to a newly released survey: Awareness among businesses that will have to comply, and even advisers such as certified public accountants and lawyers, is extremely low, raising the specter that business owners will be hammered with hefty fines, potentially even prison time.”
• “The information services company Wolters Kluwer surveyed 700 business, half of which will have to comply with the law. Of that half, 74% were oblivious to it.”
• “The requirements will apply to 32.6 million businesses, including the vast majority of private businesses and many small businesses. Generally excluded are heavily regulated businesses and large operating companies. (Find details on who must comply here.)”
• “Aronowitz said many businesses may not be able to count on their professional advisers to assist. In the Wolters Kluwers survey, just 54% of law firms and CPAs were aware of the CTA.”

The ABA notes: “The Corporate Transparency Act: Deniers Beware” —

• “The Corporate Transparency Act (“CTA”), effective January 1, 2024, requires certain businesses to report certain information to the Financial Crimes Enforcement Network for persons with “substantial control” over the business or 25 percent or more of the equity in the business.”
• “The CTA’s intent is to end the position of the U.S. as a haven for “shell” companies used in the commission of certain crimes. There are steep, escalating fines and possible jail time for noncompliance with the CTA’s requirements.”
• “Many people are CTA deniers, saying they’ve never heard of it, it doesn’t apply to small businesses, their lobby wouldn’t allow it, it can’t be constitutional, they won’t report, they’ll just pay the fine, or fiduciary duties are not implicated.”
• “Whether you like it, hate it, or are indifferent, the CTA has been thoroughly vetted and is here to stay. Compliance is both mandatory and advisable.”
• “The CTA marks a seismic shift in the legal landscape for businesses operating in the United States. Prior to the CTA, entity beneficial owner disclosure was solely (if at all) the purview of state or tribal law. Now it is a focus and purview of federal law enforcement agencies.”
• “Many professional advisers and business professionals have been caught off guard by this fundamental change in business entity law, now taking on a federal facet for the first time. Those that are aware have, by and large, taken a wait-and-see approach to either advising their clients and business associates or evaluating their own compliance profile. This is because much of the mechanics of compliance remains elusive. The ability for businesses to begin directly interfacing with FinCEN on filing and compliance continues to be in the future, giving those persons “in the know” little to offer as current action items—causing many to defer sounding the alarm bell until more is known from FinCEN. However, the wait must end, as there is limited and dwindling time remaining to take action before the window of opportunity closes at the end of 2023.”

“Law firm Paul Weiss fights to remain on Google’s ad tech antitrust defense” —

• “Law firm Paul, Weiss, Rifkind, Wharton & Garrison has asked a U.S. judge to deny a bid from Yelp (YELP.N) and another former client to bar the law firm from representing Alphabet’s Google (GOOGL.O) in litigation over its digital advertising business practices.”
• “Attorneys for Paul Weiss in a filing in Alexandria, Virginia, federal court accused Yelp and News/Media Alliance on Friday of ‘gamesmanship’ in their effort to disqualify the firm from serving as Google’s lead defense counsel.”
• “The U.S. Justice Department and a group of states sued Google in January. Yelp and the news media coalition are not parties, but they claimed in a filing that Paul Weiss was ‘switching sides’ to represent Google on matters that the firm had once counseled them on.”
• “Paul Weiss’s lawyers at Wilmer Cutler Pickering Hale and Dorr denied that the Justice Department’s case was ‘substantially related’ to any of the work that the firm provided to Yelp and the news alliance.”
• “In its filing, Paul Weiss said it has provided no legal work to Yelp or the news alliance since late 2020. The two clients left the firm then when their former Paul Weiss attorneys, Jonathan Kanter and Brandon Kressin, departed and opened a boutique law firm.”
• “The disqualification of Paul Weiss ‘at this late date would cause severe prejudice to Google,’ WilmerHale attorneys told the court. Paul Weiss said it has spent more than 10,000 hours so far on Google’s defense.”
• “Google tried unsuccessfully in September to force Kanter off the ad tech case, based on his prior work in private practice for critics of Google.”

“New Disclosure Site Slow to Post Judicial Stock Trading Reports” —

• “Delays in posting stock transactions and other financial disclosures by US judges to a new database are limiting the utility of a tool designed to improve public transparency of the court system, watchdogs said.”
• “The most recent mandatory securities transaction report available was submitted by a judge in April, according to an analysis by the nonpartisan judicial watchdog Fix the Court and a review of postings through Oct. 9 by Bloomberg Law.”
• “Annual disclosures are due to be published within 90 days of submission, while interim reports must be filed within 45 days of the transaction, under a law that took effect last year.”
• “The information is coming in, but the judiciary’s administrative arm tasked with operating the searchable database has struggled to process and post the annual and periodic disclosures by an estimated 2,500 judges. Things are moving far more slowly than a similar database maintained by Congress.”
• “A backlogged database ‘defeats the purpose of transparency’ as financial interest information ‘loses relevance’ the more time has passed, said Kedric Payne, senior director of ethics at the Campaign Legal Center and former deputy chief counsel of the Office of Congressional Ethics.”
• “The Courthouse Ethics and Transparency Act (P.L. 117-125), signed into law in May 2022, required the judiciary to establish an online database of publicly accessible financial disclosures submitted by life-tenured judges, including Supreme Court justices, as well as bankruptcy and magistrate judges. The law also made those judges subject to a 2012 law requiring federal officials to disclose periodic securities transactions worth more than $1,000 (PL-112-105).”
• “Sen. John Cornyn (R-Texas), a member of the Judiciary Committee and sponsor of the bill, said after passage that the measure ‘will help bring potential conflicts of interest to light and bolster public trust in our judicial system.'”

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

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

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

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

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

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

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

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