Bressler Risk Blog

We’ve already looked a bit at news and commentary  about proposed changes to DC rules concerning OCGs. This recent article from two partners at partners at Harris Wiltshire & Grannis LLP caught my eye for highlighting several interesting provisions spotted in the OCG forests out there — particularly about the ownership of developed legal expertise/legal theories, which was a new one for me: “A Look At DC Proposals To Curb Outside Counsel Guidelines” —

• “In response, the committee issued proposed amendments to the D.C. rules on Nov. 12, 2020, making it the first jurisdiction in the nation to propose amendments to address issues raised by outside counsel guidelines. The committee is also seeking additional comments, which are due by Feb. 11.”
• “These changes would make it a violation of the D.C. rules for a lawyer to agree to outside counsel guidelines that define the “client” more broadly than the entity the lawyer actually represents, as well as alter egos or affiliates that believe the lawyer was representing them.[6] The committee explained, however, that it was “interested in receiving suggestions as to other, possibly less far-reaching, approaches” to limit conflicts of interest.[7]”
• “This revision is a significant change that will require lawyers and in-house counsel to reexamine their outside counsel guidelines. Previously, Comment 25 to Rule 1.7 presented an “open-ended invitation to corporate clients to designate the parent and all its affiliates as the ‘client.'”[8] That comment is now being significantly limited, as described above, with the stated goal to provide “free choice of counsel” by limiting the definition of who the client is.”
• “Comments noted that some outside counsel guidelines state that the client will own its lawyers’ work product, and some state that a lawyer may not even keep a copy of its own work product. Other outside counsel guidelines require that a lawyer not make any use of any information — including nonconfidential information such as legal theories — gained in connection with representation of a client when representing any future clients.”
• “The committee cited a consolidated comment from 26 large law firms noting that it is “standard practice for lawyers to retain a copy of the client file, including their work product, and to use that work product as a resource for other clients and matters (subject, of course, to their confidentiality obligations to current and former clients.”[15]”
• “The committee also recommended amending Comment 41 to Rule 1.6, Confidentiality of Information, to clarify that a lawyer is not only permitted, but ethically obligated, to use “growing knowledge of the law on behalf of each successive client.”[19]”
• “This recommendation would align with existing D.C. ethics opinions concluding that a legal theory is not a client secret, and that lawyers have an ethical obligation to use “growing expertise to represent clients to the best of their ability.”[20]”
• “This change cuts against what some outside counsel comments described as a belief by some clients that “if they pay for an outside lawyer’s creation of a document or acquisition of knowledge, that document or information should belong to them — just as a purchased machine, building, or vehicle belongs to them.”[21]”
• “Third, the committee did not propose any amendments to the D.C. rules addressing some clients’ requests to audit lawyers’ internal files, but cautioned both lawyers and clients that any such outside counsel guideline provisions must conform to the D.C. rules’ confidentiality requirements.[27]”

“Attorney’s Duty to Explain Retainer Agreement Arbitration Clause to Client: Here’s What the New Jersey Supreme Court Held” —

• “In a unanimous decision, the New Jersey Supreme Court upheld the Appellate Division’s view that for a retainer arbitration clause to be held valid, attorneys should fulfill their fiduciary duty to explain to their clients the advantages and disadvantages of agreeing to arbitrate a prospective dispute.”
• “The decision delivered by New Jersey Supreme Court Justice Barry Albin in Delaney v. Dickey, stated, ‘We now hold that, for an arbitration provision in a retainer agreement to be enforceable, an attorney must generally explain to a client the benefits and disadvantages of arbitrating a prospective dispute between the attorney and client.’ The court noted that in order to enable the client to make an informed decision, the client must be made aware of the fundamental differences between an arbitral forum and a judicial forum.”
• “As per the factual submissions made, plaintiff Brian Delany approached Sills to represent him in his ongoing lawsuit with his previous business partners in a real estate business. The Sills attorney who met Delany asked him to sign a four-page retainer agreement. The arbitration clause mentioned on the third page of the agreement stated, ‘In the event that we and you are unable to come to an amicable resolution with respect to any dispute (including, without limitation, any dispute with respect to the Firm’s legal services and/or payment by you of amounts to the Firm), we and you agree that such dispute will be submitted to and finally determined by arbitration in accordance with the provisions set forth on attachment 1 to this retainer letter.'”
• “As disputes arose between Delany and Sills, Delany terminated his retainer and also refused to pay certain outstanding fees he allegedly owed to the firm. Invoking the arbitration provision, Sills sent the matter to arbitration. However, Delany sued Sills before the Chancery Division for malpractice and asked for a stay on the arbitration proceedings, pending the result of the malpractice lawsuit. The Chancery Division upheld the arbitration clause and found it to be enforceable. Importantly, it noted that a law firm is not under an obligation to explain to its client the clearly written terms of a retainer which can be understood by a layperson. On appeal, the Appellate Division disagreed and found the arbitration clause to be unenforceable. It noted that Sills failed to provide all 33 pages of the JAMS arbitration rules to Delany and also failed to explain the related costs to Delany. It held that the clause is unenforceable under the Rules of Professional Conduct (RPC) and also found the fee-shifting provision to be impermissible under New Jersey law.”
• “Affirming the decision of the Appellate Division, the New Jersey Supreme Court stated, ‘We conclude, however, that an attorney’s fiduciary obligation mandates the disclosure of the essential pros and cons of the arbitration provision so that the client can make an informed decision whether arbitration is to the client’s advantage.’ It then held, ‘Delaney, therefore, must be allowed to proceed with this malpractice action in the Law Division.’ The court also held that the decision will be applied prospectively, except for Plaintiff Delany.”

For additional detail and commentary, see: “NJ Supreme Court: Attorney-Client arb agreements OK – BUT advantages and disadvantages must be explained” —

• “The State Bar – which fluctuates between its mission to preserve access to justice and its trade association function – expressed its ‘concern that the Appellate Division’s interpretation of RPC 1.4(c) will require lawyers to engage in ‘an in-depth review of legal services agreements with prospective clients” beyond the present requirement that lawyers provide ‘a reasonable explanation” about a retainer agreement sufficient for clients to make an informed decision about the representation.””
• “[The New Jersey Association for Justice] argued instead that ‘in light of the imbalance of power between a lawyer and client and the lawyer’s fiduciary obligation to the client, ‘mandatory arbitration clauses in attorney-client retainer agreements [are] inherently unfair and unreasonable.’ The plaintiffs lawyers organization urged the Court to ‘prohibit mandatory arbitration provisions in retainer agreements to protect against ‘unwitting and uninformed prospective waivers of significant rights’ by clients at the very moment they retain counsel.'”
• “The NJAJ position – which emphasizes the principle of access to justice – posed the risk that if embraced the decision might run afoul of the Federal Arbitration Act 9 USC 2 which declares arbitration provisions “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” In an ordinary “arms-length” commercial contract the Sills retainer would be enforceable, but the fiduciary duties of a lawyer are said to be more demanding.”
• “In this novel setting the Court was careful to limit its holding to attorney-client contracts and to firmly ground its decision in well established principles so as not to run afoul of the argument that it was particularly burdening and disfavoring arbitration agreements.”
• “The practical implications of the decision are many. Lawyers will want guidance in how to draft agreements. In recognition of these considerations, the court decided to ‘refer the issues raised in this opinion to the Advisory Committee on Professional Ethics. The Committee may make recommendations to this Court and propose further guidance on the scope of an attorney’s disclosure requirements.'”

Law firm PR risk has always been an interest of mine. We’ve seen a few examples of controversy surface in the legal and mainstream press throughout 2020. This example raises interesting questions in my mind about client selection, scope of engagement, and whether internal policies and practices around client intake and matter scope can be agile enough to give firms enough window to review such issues when things are moving quickly.

With that, see the following a kind reader brought to my attention: “Cleta Mitchell, who advised Trump on Saturday phone call, resigns from law firm” —

• “Republican lawyer Cleta Mitchell, who advised President Trump during his Saturday phone call with Georgia’s secretary of state in an effort to overturn the election, resigned on Tuesday as a partner in the Washington office of the law firm Foley & Lardner.”
• “The Washington Post on Sunday published audio and a transcript of the hour-long call in which Trump pressured Georgia Secretary of State Brad Raffensperger to overturn the election results. During the call, Mitchell complained that she had not been given access to certain information from Raffensperger’s office, and Trump relied on her to an extraordinary degree during the call.”
• “The Post on Monday published a story detailing Mitchell’s transition from being a liberal Democrat to a conservative Republican, culminating in her role advising Trump during the call.”
• “In the Saturday call, Trump told Raffensperger that he risked facing criminal consequences if he didn’t ‘find’ enough votes to declare that the president had won the state. Raffensperger responded that “the challenge that you have is the data you have is wrong.’ Trump then asked Mitchell, ‘Well, Cleta, how do you respond to that? Maybe you tell me?’ Mitchell complained to Raffensperger that ‘we have asked from your office for records that only you have’ but had not received them.”
• “Trump said, ‘All we have to do, Cleta, is find 11,000-plus votes.'”

The full text of the statement by the firm firm on January 4:

• “Foley & Lardner LLP is not representing any parties seeking to contest the results of the presidential election. In November, the firm made a policy decision not to take on any representation of any party in connection with matters related to the presidential election results. Our policy did allow our attorneys to participate in observing election recounts and similar actions on a voluntary basis in their individual capacity as private citizens so long as they did not act as legal advisers. We are aware of, and are concerned by, Ms. Mitchell’s participation in the January 2 conference call and are working to understand her involvement more thoroughly.”

For her part, Mitchell made the following statement:

• “As you are probably aware, there has been a massive pressure campaign in the last several days mounted by leftist groups via social media and other means against me, my law firm, and clients of the law firm, because of my personal involvement with President Trump, his campaign and the White House, related to the November 3 general election in Georgia. After discussions with my firm’s management, I have decided that it is in both of our interests that I leave the firm.”

See also: “Cleta Mitchell Out At Foley & Lardner After Troubling Donald Trump Call” —

• “After participating in a phone call where Donald Trump was captured on tape pressuring Georgia election officials to commit what election law experts identified as well within the statutory definition of election fraud, Cleta Mitchell is gone as a Foley & Lardner partner.”
• “Mitchell’s appearance on the call clearly shocked Foley & Lardner, who were quick to announce that the firm itself was not retained to represent Donald Trump, despite Mitchell’s rhetoric on the call where she spoke of reviewing evidence in the case and explaining allegations that ‘we’ made in Trump’s filings challenging election results.”
• “Given that attorneys in law firms cannot easily practice side gigs without inviting myriad ethical and insurance coverage issues, Foley & Lardner had reason to be deeply troubled.”

In a separate article: “Stephen Gillers, an ethics expert at New York University Law School, said the issue facing Mitchell is probably one relating to the law firm’s policy, adding, ‘I’m sure the firm is dismayed by the appearance of its lawyer on the transcript.'”

Happy New Year. May 2021 find us all facing a bit less risk and surprise. With that, let’s start off the new year with an old topic that’s a favorite of many, conflicts, OCGs and terms of engagement. Professional liability lawyer Brian Faughnan offers fresh food for thought on the DC Bar’s proposed changes in: “Protecting lawyers and law firms from themselves” —

• “And, if you know, then based on the post title you’ve guessed we are going to talk about the D.C. Bar Rules of Professional Conduct Review Committee’s draft Report on proposing changes to the ethics rules to address outside counsel guidelines and client-generated engagement letters.”
• “Now, to repeat myself on the overriding issue associated with proposed changes to RPC 5.6 and 1.7 that are designed to make it unethical for clients to propose certain approaches to conflicts under an engagement letter, I fail to see how any such effort is at all consistent with the idea that lawyers can also ask clients to waive situations that would otherwise be conflicts.”
• “It is very, very difficult to find a path where it seems fair to allow lawyers to ask clients to waive conflicts but also say that clients cannot ask lawyers to agree to very broad definitions of what constitutes a conflict in a matter.”
• “Having repeated myself on that, let me say that the D.C. report does a pretty admirable job of trying to find that path. I’ll let you go read the report for the full treatment of that issue, but the rationale offered is rooted in the notion of not allowing one client to improperly limit a lawyer from being available to represent other clients. I still don’t find it sufficiently persuasive, but they’ve laid it out as well as can be managed, I think.”
• “Agreements between lawyers/firms and clients involving indemnification. This again is wrapped within the mantle of provisions included by clients in engagement letters or outside counsel guidelines, but this one feels like a more appropriate topic for pushback through rulemaking, at least to me.”
• “Specifically, the D.C. report proposes revising D.C.’s current rules to add a provision to RPC 1.8 that would prohibit a lawyer from agreeing to any conditions that would impose liability on the lawyer under circumstances where liability wouldn’t flow from either existing common law or existing statutory law.”
• “Oh, also, there is one other topic that the report addresses on which I cannot control myself to avoid weighing in… The topic addressed is outside counsel guidelines that give the client the right to unilaterally change the guidelines/change the terms of engagement. This is another thing that lawyers could protect themselves against simply by refusing to agree to such a term.”
• “Now, if you absolutely believe there needs to be a rule revision to protect lawyers from this, why would you want to offer the protection only if a lawyer has already agreed that a client can make unilateral changes? Wouldn’t the better course of action simply be to have the rule say: ‘the client unilaterally makes a material change in the conditions of engagement or other terms of the representation to which the lawyer is unwilling to assent’?”

A few interesting odds and ends I’ve come across recently, spanning a few topics. Starting with: “Looking at Your Firm’s Balance Sheet: Law Firm Clients, and Lawyers, are Not Property” —

• “It has been almost two years since the California Supreme Court issued its decision in Heller Ehrman v. Davis Wright (2018) 4 Cal.5th 467, holding that a dissolved law firm has no property interest in fees generated after dissolution for hourly matters that were in progress when the firm dissolved. And earlier this year, on February 13, 2020, the District of Columbia Court of Appeals essentially made the same finding in Diamond v. Hogan Lovells US LLP (D.C. 2020) 18-SP-218. These cases put to bed – once and for all – the idea that a law firm is entitled to future profits from the firm’s clients as an ongoing property right.”
• “In a narrow sense, this means that a lawyer who leaves a dissolved law firm and takes clients to a new law firm does not have to give back profits earned on those matters at the new firm. But in a much broader sense, these courts reaffirmed something that should guide all lawyers and law firms managing partner or group departures: law firm clients are not property. This might sound obvious since clients have the right to choice of counsel and, in fact, this principle is part of what guided the court to reaffirm that law firms do not own clients.”
• “As the court made clear in Heller, revenue from any client, who can leave the firm at any time, is an expectation interest, but not a property interest. So law firms don’t own clients, although the revenue stream from clients is an asset of the firm, at least until it isn’t.”
• “On the other hand, law firms have the right to fair competition with departing lawyers for those clients, and should hold the lawyers to their fiduciary duties and their contractual obligations under the partnership agreement.”
• “For lawyers, the fact that the law firm doesn’t own the clients and doesn’t own the practices doesn’t mean that you have carte blanche to do as you wish when you are departing. You still owe fiduciary duties to your firm and you may have contractual obligations to the firm. Ultimately, you have the right to compete for the clients, just like the firm does, after you give notice of your departure. But you shouldn’t rig the system and compete for clients before the firm knows you are leaving. Also, if you are retiring or selling your interest in your firm, if you have not properly planned for that event, the value of your interest in the firm may be much different than you think.”

“A Taxonomy for Lawyer Technological Competence” —

• “…in October 2019, the Federation of Law Societies of Canada amended its Model Code rule on competence to include explicit reference to technological competence. Several provincial and territorial law societies have incorporated this amendment into their respective codes, and more will hopefully soon follow suit.”
• “The fact that there now exists a formal duty of technological competence raises the question of what, exactly, does this duty entail? What does this duty require from lawyers? In a strict sense, these questions will only be answered if and when Canadian law societies issue specific guidance or bring public disciplinary proceedings against lawyers for alleged breaches of the duty of technological competence.”
• “In the meantime, I’ve been thinking about how we might frame our understanding of a lawyer’s duty of technological competence. This column offers an initial, 6-part (alliterative!) taxonomy for thinking about technologically competent lawyering.”
• See the full article for more details

“The Paradigm Shift of Regulatory Sandboxes” —

• “Earlier this fall, the Law Society of British Columbia made headlines when it announced the creation of an “Innovation Sandbox” that would allow unauthorized providers of legal services to deliver those services in BC on a pilot-project basis while the regulator assesses their reliability and effectiveness.”
• “The LSBC Sandbox is modelled on a similar project recently launched by the State Bar of Utah, which has already received several applications from innovative legal services providers seeking to close the access-to-justice gap in that state. California has been considering a similar initiative for several months now.”
• “There are people (primarily lawyers) who think the law society has gone too far and is risking lawyers’ livelihoods by opening the market to non-lawyer providers. There are also people (primarily not lawyers) who think the law society has not gone far enough, that the Sandbox will suffer the same fate as authorized paralegal programs and will fail to really address the A2J crisis.”
• “The Sandboxes take a different and, I think, better approach. Rather than lawyers generously permitting ‘non-lawyers’ to fill legal needs they’re not interested in serving, the Sandbox opens its doors and says, ‘Anyone who wants to provide legal services, come in and show us what you’ve got.’ They’re offering a new approach to regulating the delivery of legal services — a demand approach (what the market needs), rather than a supply approach (what lawyers are willing to do and allow).”
• “So these Sandboxes might look, from outside the profession, like a very small step forward. But viewed from the inside, I think they’re something close to a paradigm shift, and their potential impact is significant. They represent the possibility of fundamental change for the better in the underlying premise of legal services regulation.”

“New Ethics Opinion Addresses Lawyers’ Obligations When Required To Return To Court In-Person During A Pandemic” —

• “Nine months ago the COVID-19 pandemic brought court operations in New York State to a near standstill. In the past few months, courts have slowly started to resume in-person appearances, but those plans were recently stalled owing to a spike in COVID-19 cases. Although the courts are understandably eager to resume in-person appearances, a lawyer may be hesitant to return in person owing to the associated health and safety risks.”
• “A recent ethics opinion from the New York City Bar Association Committee on Professional Ethics (Opinion 2020-5) addresses a lawyer’s ethical obligations when required to return to court in person during a public health crisis. In short, the Opinion concludes that a lawyer’s health and safety concerns may create a conflict of interest which, if the conflict cannot be waived, may require the lawyer to withdraw. As detailed below, the Opinion provides a helpful roadmap for lawyers to analyze the conflict of interest rules as well as other ethical obligations when facing a directive to return to court in person.”
• “The Opinion also provides some examples of situations where a lawyer’s health and safety concerns could compromise the lawyer’s professional judgment. For instance, a lawyer’s desire to request an adjournment or permission to appear remotely ‘could be in direct conflict’ with the client’s interests in having the lawyer appear in person.”
• “Because the Opinion concludes that a lawyer’s health and safety concerns could create a conflict of interest, the Opinion next analyzes whether such a conflict is waivable… Whether a conflict based on a lawyer’s health and safety concerns is waivable turns on whether the lawyer reasonably believes that he or she will be able to continue to meet the “minimum standards of competence and diligence” contained in Rules 1.1 and 1.3. If so, the client can waive the conflict in writing after the lawyer explains the conflict to the client including the potential risks and the reasonably available alternatives.”
• “The Opinion also concludes that if the conflict is not waivable, either because the client refuses to consent or because the conflict prohibits the lawyer from competently representing the client, then the lawyer would be obligated to withdraw under Rule 1.16(b)(1).”

“McGuireWoods DQ’d In Hartford’s Trade Secrets Case” —

• “U.S. Southern District of Indiana Judge Sarah Evans Barker on Wednesday adopted a magistrate judge’s recommendation that McGuireWoods couldn’t represent former employees of Hartford Steam Boiler Inspection and Insurance Co., which is suing them for allegedly sharing trade secrets with their current employer.”
• “‘The Magistrate Judge’s conclusion that McGuireWoods cannot litigate against its own client, which it plainly seeks to do, clearly aligns with the prohibitions set out in the rules of professional conduct,’ Judge Evans Barker said.”
  “McGuireWoods has, according to the order, been representing Hartford for over 10 years as outside counsel, advising on labor and employment issues. In June, the firm notified the company that it would be representing its direct adversaries: former Hartford employees Michael Campbell and Kiah Jacobs, and their new employer OneCIS Insurance Co.”
• “McGuireWoods said it could do this because Hartford consented to allowing the firm to represent clients that may be competitors or adversarial in some way when both companies signed a waiver that said McGuireWoods could do so as long as the legal matter was not closely related to the work the firm does for the company.”
• “However, Hartford argued in its motion to disqualify the firm that McGuireWoods was leaving out an important piece of this agreement. The retainer read: ‘McGuire Woods asks you to consent in advance to McGuireWoods accepting future matters for your adversaries where the matters are unrelated to the work we do for you and do not involve you as a party.'”
• “And while McGuireWoods argued that Judge McVicker Lynch was wrong to determine that Hartford hadn’t consented to the firm representing adversaries, Judge Evans Barker called that reading of the contract ‘plainly wrong and legally untenable.'”
• “The judge was also unmoved by McGuireWoods’ reliance on a case in which a judge cautioned that ‘a finding of conflict is not automatically grounds for dismissal.’ Judge Evans Barker pointed out that this case did not involve a firm that was representing a direct adversary to one of its current clients.”

“Law Firm Can’t Be Disqualified Based on Its Misstatement of Conflicting Representation” —

• “An attorney’s flub in saying that his law firm represented five employees of a company that was the firm’s client—where those employees, whom it didn’t represent, had interests that were potentially adverse to the client—was not a sufficient basis for disqualifying the firm from representing the company in a Private Attorneys General Act action against it, the Court of Appeal for this district has held.”
• “Acting Presiding Justice John L. Segal of Div. Seven wrote the opinion, filed Thursday. The opinion, which was not certified for publication, reverses an order by Los Angeles Superior Court Judge Gregory Keosian.”
• “The order stemmed from a response by a named partner of the firm, Ryan Saba, to Jamie Stein of the Simi Valley firm of Green Law, counsel for Cortez. Stein queried as to contact information for five specific employees, and Saba advised that his firm represented them and that he would make them available for depositions.”
• “‘I was mistaken when I stated ‘our firm represents these individuals.’ What I meant to say, is that our firm will coordinate with these individuals and any other LandCare employee so that the individuals will appear for a deposition, upon your request.'”
• “Keosian subsequently issued his disqualification order. Segal wrote:
  • ‘Rosen Saba’s statements that it represented the potentially aggrieved employees were unilateral statements showing, at most, that Rosen Saba believed, at least for a short period of time, it represented the employees. The statements were not substantial evidence of an attorney-client relationship….Rosen Saba’s statements did not show the aggrieved employees intended to retain Rosen Saba as their attorneys, that Rosen Saba obtained confidential information from the employees, or that Rosen Saba provided legal advice to the employees… That is not to say an attorney’s conduct is never evidence of an attorney-client relationship….Rosen Saba, however, did not make a court appearance or file anything on behalf of the aggrieved employees. Rosen Saba opposed Cortez’s request for a temporary restraining order on behalf of LandCare, not the employees. And, at the time LandCare filed the opposition, none of the aggrieved employees was a party to the action or subject to a subpoena or a notice to appear for deposition. Because Rosen Saba was not appearing on behalf of the employees, its statement that it represented the employees did not raise a presumption the employees knew of or had authorized Rosen Saba to make the statement. The trial court erred in ruling that the statements showed Rosen Saba represented the potentially aggrieved employees and that such representation required disqualification.'”

Karen Rubin writes: “No DQ for contacting represented party on a different subject, district court says” —

• “The scope of the ‘no-contact rule’ — barring a lawyer from communicating with represented persons — is spotlighted in a disqualification ruling that a Florida district court handed down earlier this month. The opinion is a reminder that the prohibition against contact (without permission of the person’s counsel) extends only to ‘the subject of the representation.”
• “The plaintiff sued the defendant collection agency in the Middle District of Florida for allegedly violating the federal Fair Debt Collection Practices Act; she was represented by the Agruss Law Firm. In early November, according to the collection agency, Agruss employees contacted it twice, even though the firm knew that the collection agency was represented by counsel in the plaintiff’s case.”
• “The law firm explained in its brief in opposition to disqualification that it frequently represents plaintiffs in FDCPA actions. It acknowledged that on one of the dates in question a paralegal of the firm had phoned the collection agency — but it submitted unrebutted affidavit evidence that the call did not relate to the plaintiff’s case in the Florida action. Rather, said the law firm, its paralegal had called the collection agency in order to investigate a potential FDCPA claim against the collection agency by a completely different person. The law firm later filed a separate complaint in the Northern District of Texas against the collection agency on that person’s behalf.”
• “A second call to the collection agency was made a few days later by a principal of the Agruss firm, who simply listened to the agency’s outgoing voicemail message, and who never spoke to anyone at the agency, according to a second affidavit.”
• “Although the evidence showed that the Agruss firm had contacted the defendant collection agency directly, the court said, it was about a completely different case. Therefore, the contact was not ‘about the subject of the representation,’ as would be necessary in order to demonstrate a violation of the rule, according to the court.”

For more on the “no contact” rule, see the complete post.

“ACC Launches Data Steward Program” —

• “The Association of Corporate Counsel (ACC) announced the formal launch of its new Data Steward Program (DSP) – the legal industry’s first and most comprehensive data security evaluation and accreditation program specifically designed for law firms and their corporate law department clients.”
• “‘ACC heard from our members that there was no standard approach to assess and compare law firms’ data security standards,’ said Veta T. Richardson, ACC president and CEO. ‘In the 2020 ACC CLO Survey, CLOs ranked data privacy and security among the top three most important issues facing their overall business. These are also key concerns of the law firms they work with, who handle and store significant amounts of sensitive client information. The ACC Data Steward Program enables quick assessments and comparisons of law firms’ data security protocols as our members and others vet which law firms will earn their business.'”
• “The program creates a standardized framework for assessing, scoring, benchmarking, validating, and accrediting a law firm’s posture toward client data security. The DSP also enables secure and easy sharing of this profile with the firm’s current or potential clients. The program, designed by working groups of law firm and in-house counsel, leverages controls from existing data security frameworks (e.g. NIST), but it customizes the control selection, available responses, arrangement, and compliance metrics to meet the specific needs of law firms, delivering both questions – and reports – in an easy, online platform. A set of charter law firms – ranging from AmLaw 50 to small boutique firms – are already signed up and completing their first Data Steward assessment, some working in partnership with key clients to do so.”
• “‘The ACC Data Steward Program is a clear win-win for law firms and their clients,’ said Jim Merklinger, president of the ACC Credentialing Institute, who was responsible for development of the accreditation.
  ‘Currently, law firms must spend considerable time and money completing individual data security evaluations for their clients. The ACC Data Steward Program provides both standardized, easily comparable evaluation, and, if desired, accreditation of law firms’ security practices – all at a fraction of the time and cost. While the DSP is thorough – assessing one hundred and sixty controls – early users have indicated that a well-prepared law firm can complete the entire process in a few hours. Review by in-house counsel is equally straightforward. ACC is confident that this new program will prove to be a valuable tool for our members and law firms alike.'”
• “‘Our firm, like many others, welcomes ACC’s Data Steward Program,’ said John Kuttler, CIO at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. ‘Now we can do a detailed assessment once, and potentially leverage that assessment many times over with multiple clients. We particularly like that the program focuses specifically on the security and governance of client legal information. This guides us in ensuring that we are maintaining the appropriate level of security.'”
• “‘Mac Murray & Shuster was the first law firm to participate in the ACC’s Data Steward Program,’ said Michele Shuster, Managing Partner, Mac Murray & Shuster. ‘The streamlined SaaS interface and industry-standard NIST security controls allow our firm to demonstrate, to current and future clients, the measures we take to protect their confidential data. M&S recognizes the competitive advantage this will give our firm: it will level the playing field so our clients will not have to worry about our firm’s technology expertise, but can focus instead on the caliber of our attorneys.'”

For more detail, see the Data Steward Program website: https://www.accdatasteward.com/

“Shell Unit’s Failed Atty DQ Bid Faulted For Lack Of Research” —

• “U.S. District Judge Nancy F. Atlas declined to sanction oil field technology company Enventure Global Technology Inc., a Royal Dutch Shell PLC subsidiary, for its bid to disqualify the attorneys for oil field equipment provider Weatherford International Ltd., but she did note that the sanctions bid was ‘not unfounded.'”
• “‘It appears that plaintiff’s unsuccessful attempt to disqualify opposing counsel was the result of a lack of sufficient factual and legal research and analysis, apparently due in part to the difficulty of obtaining complete records about an alleged attorney-client relationship many years ago,’ Judge Atlas said.”
• “In October, Enventure filed a bid, under seal, to disqualify Weatherford’s current in-house counsel, William Imwalle, claiming he previously served as counsel for Enventure. By extension, it argued that Weatherford’s other in-house counsel, Brian Welborn, and outside counsel Heim Payne & Chorush LLP should be disqualified as well.”
• “Enventure was created out of a joint venture between Shell Technology Venture Inc. and Halliburton Energy Services in July 1998. Imwalle served as legal counsel to Halliburton from July 1994 to January 2014 and, while there, occasionally interacted with Enventure in connection with various intellectual property matters.”
• “‘Enventure had its own in-house attorneys during this time, and Mr. Imwalle never signed an engagement letter or other representation agreement with Enventure,’ Judge Atlas said Friday. ‘Mr. Imwalle was not involved in the prosecution of any of the patents that Enventure asserts against Weatherford in this case.'”
• “Imwalle says his interaction with Enventure was “infrequent and limited,” which Judge Atlas said was backed up by exhibits submitted by Enventure itself, which show that he interacted with the company once every few years.”
• “Enventure’s claims that Imwalle “directed” the company in its patent prosecution is ‘directly contradicted by the record evidence,’ Judge Atlas found, noting that disqualification of Imwalle is ‘in no way warranted.'”

And here’s the latest from the eagle-eyed Bill Freivogel:

• “Cortez v. LandCare USA, LLC, No B298044 (Cal. App. 2d Dist. Unpub. Dec. 10, 2020). This is a class action against LandCare by employees for under-compensation. The case contains two separate conflict issues unrelated to class nature of case.
  • In the first, a lawyer from Law Firm 1 representing the LandCare claimed Law Firm 1 represented five other employees. She later corrected that, saying only that she would arrange to produce them for depositions. The trial court disqualified the Law Firm 1. In this unpublished opinion the appellate court reversed holding that the Law Firm 1 had, in fact, not represented the five employees, notwithstanding the partner’s earlier misstatement that it had.
  • The second issue relates to Law Firm 2, which showed up representing two of the aforementioned five employees. Defendant LandCare is paying Law Firm 2’s fees. Law Firm 2 had earlier represented LandCare on other matters. Law Firm 2 obtained the two client’s written consent to this arrangement. Nevertheless, the trial court disqualified Law Firm 2. In this opinion, the appellate court reversed. The court said the compensation arrangement and the earlier representation of LandCare were not enough to constitute a disqualifying conflict. The court was particularly moved by the potential harm to the two employees if Law Firm 2 were disqualified.”
• “Van Ryn v. Goland, No. 530037 (N.Y. App. Div. 3d Dep’t Dec. 3, 2020). In this divorce-related case H and W are contesting how H’s pension should be divided.
  • W’s lawyer had drafted an earlier settlement agreement on that point. It now appears that the agreement was somewhat ambiguous, resulting in this disagreement. H moved to disqualify W’s lawyer because the lawyer may be liable to W for malpractice, depending upon how the court finally rules on division of the pension.
  • The trial court denied the motion to disqualify. In this opinion the appellate court affirmed, finding that the possibility of the lawyer’s liability to W is, at this point, ‘entirely conjectural.'”

“Ex-Client Sues Am Law 200 Firm Over Its Catholic Church Representation, Alleging Conflict” —

• “A New Mexico woman is suing her former lawyers at Phoenix-based law firm Lewis Roca Rothgerber Christie for malpractice related to its representation of her in bringing allegations that she was sexually abused by a Catholic school teacher.”
• “Attorneys for the former client, referred to as “Jane Doe” in the suit to protect her identity, said Lewis Roca attorneys steered her away from filing a civil lawsuit against Rhode Island Catholic institution Portsmouth Abbey School for failing to protect her from a predatory teacher when she was a student from 2012 to 2014. It wasn’t until the middle of 2020 when “Doe” learned that she could have brought a civil case against the school had she done so before turning 21, according to the suit.”
• “The complaint also argues that Lewis Roca failed to disclose to “Doe” potential conflicts of interest in representing her due to the school’s payment of her case’s lawyer’s fees and the firm’s history of defending the Catholic Church against claims brought by survivors of clerical abuse.”
• “‘If you have such a clear conflict where you routinely represent the church in cases brought by victims of sexual abuse, you have an obligation to tell that to a prospective or new client who has a potential case against the church, because there’s an obvious conflict there,’ Neil Gehlawat, an attorney with Los Angeles firm Taylor & Ring who is representing the unnamed plaintiff, said in an interview.””The firm also failed to inform Doe that they routinely defended the Catholic Church in claims brought by abuse survivors, and had a potential conflict of interest when Portsmouth Abbey paid for plaintiff’s lawyers’ fees, the complaint alleged.”
• “Reached for comment Wednesday, a spokesperson for Lewis Roca said in an emailed statement that the claims in Doe’s suit are without merit. ‘The firm intends to respond to the complaint by showing that the written scope of the firm’s engagement was narrow and did not include the subjects alleged in the complaint, and that the firm did not have a conflict of interest. We know the true facts will come out, and the firm looks forward to its day in court,’ the firm statement said.”

“AG did not fully disclose campaign contributions from firm tapped to lead fight against JUUL” —

• “When Minnesota Attorney General Keith Ellison decided to sue a giant e-cigarette manufacturer last year, he called it his duty to take on the legal fight. On Thursday, he expanded the lawsuit against JUUL Labs, Inc. by adding tobacco company Altria to the list of defendants in the case. Altria bought a 35% stake in JUUL in 2018.”
• “Except, Ellison and his staff are not actually leading the court battle against those companies which are accused of deceptively advertising addictive products to youth. Instead, the attorney general picked two Minneapolis-based law firms to handle a case that could potentially lead to millions of dollars in legal fees if the state wins or settles out of court.”
• “Yet, when Ellison asked lawmakers to review the contract last year, he did not disclose that one of the firms, Robins Kaplan, had been a longtime supporter of his career in public office. The firm’s political action committee donated to his run for attorney general as well as his previous congressional campaigns, according to state and federal campaign finance records reviewed by 5 INVESTIGATES. Ellison also did not tell lawmakers that a partner at the firm, Richard Allyn, led Ellison’s transition team after he won the election in November 2018.”
• “But Richard Painter, an expert in legal ethics at the University of Minnesota, says Ellison’s failure to report even the appearance of a conflict raises serious ethical concerns. ‘The decision-makers shouldn’t have to prowl around on the internet looking for campaign contributions,” Painter said. “It should all be right there in the paperwork for the contract.'”
• “While both firms acknowledged having partners that supported Ellison’s campaign for attorney general, they claimed that support did not present ‘any factual or potential conflicts of interest,’ according to a memo provided to the Legislative Advisory Committee, which reviewed the contract.”