Risk Update

Law Firm Reputation Risk Management — Best Practices from a Lawyer/Crisis Communications Expert

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Interesting commentary and advice on law firm PR risk from a lawyer/crisis communications specialist: “Lessons in Law Firm Reputation Management: How Firm Leaders Should Prepare for Public Scrutiny When Representing Political Clients” —

  • “For BigLaw, especially those that represent political administrations, now is the time to prepare for public attacks regarding who your firms represent and what your lawyers stand for.”
  • “There have been situations where law firms have chosen not to represent clients in controversial matters due to the enormous backlash. In 2011, King & Spalding chose not to represent the U.S. House of Representatives as it sought to uphold the Defense of Marriage Act (DOMA) outlawing same-sex marriages. The firm determined that, due to its support for gay rights, it would not take on the case.”
  • “Many BigLaw and midsized law firms handle government matters and high-profile government individuals. Keeping this in mind, as well as each firm’s fiduciary duty to protect all employees’ and clients’ best interests, every firm should consider protocols to avoid getting on a boycott list.”
  • “To prepare for potential public scrutiny and reputation management, consider the following questions:
  1. “Is our firm a potential target for negative public scrutiny?
  2. Should anyone from the firm be a public voice in media while controversial lawsuits are ongoing?
  3. What is the internal impact if the firm is mentioned about its representation of XYZ client?
  4. What protocols, if any, should we put in place to review prospective clients – for example, political figures – for conflicts and cultural fit?
    • While law firms should not overly regulate their attorneys, it is in the best interest of every law firm and its clients to implement best practices and protocols for bringing on high-profile political clients. The protocols should include:
      • Conflict check
      • Financial competence check
      • Merit review of claims (Rule 11 of Federal Rules of Civil Procedure)
      • Cultural fit with firm
      • Consequences for client base
  5. Should we revisit our firm’s media policy?
  6. What should we be monitoring during a public outcry (and how)?
  7. If clients question attorneys’ representation of other clients, how should the attorneys respond?
  8. Should attorneys be permitted to espouse their individual political beliefs on social media, especially during divisive times?”

For those interested in the nitty gritty details and recommendations for each numbered matter, and additional commentary on recent news, see the complete article.

Risk Update

OCG & Engagement Letters — Proposed DC Bar Changes Invite Commentary

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My thanks to the folks at the DC Bar for sending word: “Committee Invites Comment on Proposed Rules Changes Relating to Client-Generated Engagement Letters and Outside Counsel Guidelines” —

  • “The District of Columbia Bar’s Rules of Professional Conduct Review Committee is seeking comments from D.C. Bar members, other lawyers, law firms, corporate legal departments, and non-lawyers about a group of proposed amendments to the D.C. Rules of Professional Conduct that would address issues arising from client-generated engagement letters and outside counsel guidelines. Comments are due by close of business on February 11, 2021.”
  • “Specifically, the proposed amendments would:
    • Amend Rules 1.7 and 5.6 to remove the existing open-ended permission for a lawyer and client to expand the scope of what constitutes a conflict of interest under the D.C. Rules, except where broader coverage is required by other law
    • Amend Rule 1.8 to prohibit a lawyer from proposing or accepting conditions that impose liability on a lawyer that is broader than the liability imposed by statute or common law
    • Amend Rule 1.16 to make clear that a lawyer may retain copies of client files, including the lawyer’s work product, but may not use that work product in other matters if the Rules’ confidentiality provisions prohibit such use
    • Amend Rule 1.6 to make clear that a lawyer is not only permitted, but obligated, to use general (i.e., not client-specific) knowledge gained in the course of a representation for the benefit of subsequent clients; an
    • Amend Rule 1.16 to provide that where a lawyer has agreed that her client may make unilateral changes in the terms of a representation, the lawyer may withdraw if the client makes a material change to which the lawyer is unwilling to assent.”
  • “The Committee’s “Draft Report on Proposed Changes to the D.C. Rules of Professional Conduct Relating to Client-Generated Engagement Letters and Outside Counsel Guidelines (November 2020)” can be found here.”
  • “Commenters also are invited to address the proposed amendments regarding conflicts of interest, and specifically whether there are other, less far-reaching approaches that would appropriately limit the current open-ended ability of lawyers and clients to set the limits of what constitutes a conflict of interest.”
  • Details on how to provide comments on the DC Bar website.
Risk Update

Representation, Reputation & Risk — Developments and News of Note

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Today, I’ve consolidate several relevant and interesting news items and third-party commentary on unfolding election matters into an unusually a large but interesting update:

Another law firm bails out on Trump campaign” —

  • “Another law firm has moved to drop its representation of President Donald Trump’s campaign in its flurry of lawsuits challenging the results of last week’s presidential election.”
  • “Late Thursday night, Columbus-based firm Porter Wright Morris & Arthur notified a federal judge hearing a Trump-filed suit over the election tallies in Pennsylvania that the firm is seeking to pull out of the case.”
  • “Some Trump critics including Republicans affiliated with the Lincoln Project have indicated they planned to pressure the commercial clients of law firms representing the campaign to drop the firms if they continued with the court fight on behalf of the president.”
  • “‘Plaintiffs and Porter Wright have reached a mutual agreement that Plaintiffs will be best served if Porter Wright withdraws, and current co-counsel and such other counsel as Plaintiffs may choose to engage represent Plaintiffs in this case,’ the filing said.”
  • “‘Cancel Culture has finally reached the courtroom,’ said Trump campaign communications director Tim Murtaugh in a statement. ‘Leftist mobs descended upon some of the lawyers representing the President’s campaign and they buckled…The President’s team is undeterred and will move forward with rock-solid attorneys to ensure free and fair elections for all Americans.'”

Stephen L. Carter is a Bloomberg Opinion columnist. He is a professor of law at Yale University: “Trump’s Lawyers Are Just Doing Their Jobs” —

  • “President Donald Trump’s lawyers are under siege. The New York Times reports that mega-firm Jones Day is facing pressure from its own attorneys to withdraw from representing him in lawsuits claiming voter fraud. Piling on, the Lincoln Project plans to spend half a million dollars in a public relations campaign attacking the firm. Firms in Arizona and Pennsylvania have changed their minds about taking up the president’s cause. In four decades of teaching law, I’ve never seen anything quite like this.”
  • “So why am I frightened? Because we go down a dangerous path when we pressure lawyers to reject as clients those we revile. The representation of the unpopular has long been a core component of the integrity of the profession. The moments in our history when lawyers have lost that focus have not been happy ones.”
  • “Certainly, I do not argue that every lawyer need take on every client. Rule 6.2(1) of the Model Code of Professional Conduct is clear: ‘A lawyer ordinarily is not obliged to accept a client whose character or cause the lawyer regards as repugnant.’ True, the rule goes on to require each attorney to take on ‘a fair share of unpopular matters or indigent or unpopular clients,’ but there are plenty of ways to fulfill that mandate without representing Trump. And more important, the rule says nothing about lawyers rejecting clients whose character or cause others find repugnant.”

New York Times News: “Growing Discomfort at Law Firms Representing Trump in Election Lawsuits” —

  • “Some lawyers at Jones Day and Porter Wright, which have filed suits about the 2020 vote, said they were worried about undermining the electoral system.”
  • “Some senior lawyers at Jones Day, one of the country’s largest law firms, are worried that it is advancing arguments that lack evidence and may be helping Mr. Trump and his allies undermine the integrity of American elections, according to interviews with nine partners and associates, who spoke on the condition of anonymity to protect their jobs.”
  • “At another large firm, Porter Wright Morris & Arthur, based in Columbus, Ohio, lawyers have held internal meetings to voice similar concerns about their firm’s election-related work for Mr. Trump and the Republican Party, according to people at the firm. At least one lawyer quit in protest.”

Two other lawyers weigh in: “No Self-Respecting Lawyer Should Touch Trump’s Election-Fraud Claims” —

  • “The president may not have to worry about keeping a job after January 20, 2021, but the attorneys doing his bidding at the moment certainly do.”
  • “Some of the lawyers at the firms handling the litigation work for President Donald Trump’s campaign or related Republican Party organizations are now raising concerns internally about the legitimacy and purpose of the legal claims they are currently being asked to advance.”
  • “These concerns have merit: Lawyers have ongoing obligations to adhere to the ethical requirements of the state bars through which they are licensed, as well as the relevant rules of the court(s) before which they are practicing.”
  • “Rule 3.1 of the American Bar Association’s Model Rules of Professional Conduct—upon which most state bars rely at least in part—stipulates that a lawyer shall not bring an action unless a basis exists in law and fact for doing so. This rule implies that lawyers must do due diligence to inform themselves of the facts of the case and reasonably determine that a good-faith argument can be made in defense of the client’s legal claim.”
  • “Rule 11(b) of the Federal Rules of Civil Procedure—many of which are designed to serve as “gatekeepers” against frivolous lawsuits—requires lawyers to ensure that their arguments are not frivolous, and that factual contentions either have or are reasonably likely to have evidentiary support. Although the courts do not often exercise their discretion to enforce it, Rule 11(c) provides judges with the authority to impose sanctions against lawyers who have violated Rule 11(b).”
  • “These due-diligence obligations are of particular importance in the cases Trump and his team are now litigating. Rule 9(b) of the Federal Rules identifies certain “special matters” that must be pled with greater specificity and are thus subject to what courts call ‘heightened scrutiny.’ One of these matters is fraud: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake” (italics added). More than one court has held that the “heightened scrutiny” Rule 9(b) requires also applies to claims of election fraud.”

Washington Post Editorial: “Yes, going after Trump’s law firms is fair game” —

  • “As a general rule, we don’t want to discourage attorneys from representing unpopular clients. But facts matter, and there are some important distinctions to draw when deciding whether public criticism of attorneys is out of bounds.”
  • “The first distinction is criminal cases vs. civil litigation. An individual being criminally prosecuted has a constitutional right to legal representation. Defending the accused can be an ethical and professional obligation for a lawyer. A defense lawyer should not be shamed for representing an unpopular client confronting the awesome power of a government that could deprive him of his liberty or even his life. Conservatives have criticized attorneys defending terrorism suspects; liberals have criticized attorneys representing sexual predators such as Jeffrey Epstein. Both were wrong. But that principle does not come into play here. In the current situation, Trump is not being criminally investigated or prosecuted.”
  • “The Trump campaign and Republican groups in these cases are playing offense, not defense. They have filed lawsuits that appear to contain baseless allegations of fraud and that seek to have lawful votes rejected. For the attorneys, agreeing to bring such cases represents a choice, not a professional obligation. It’s fair for the public to hold accountable any lawyers who make that choice.”
  • “Clearly feeling the heat, Jones Day issued a statement saying it is not involved in suits alleging voter fraud or contesting the results of the election. The firm represents Pennsylvania Republicans in a Supreme Court case involving a court-ordered extension of the deadline for mail-in ballots. This claim has more legal basis than some of the other election-related litigation. Yet it is still a lawsuit seeking to reject thousands of votes cast in reliance on a ruling that sought to make voting easier during the pandemic. And although we now know there were not enough such votes to change the result in Pennsylvania, at the time the suit was filed it had the potential to affect the outcome of the election by disenfranchising thousands of voters.”
  • “A court may impose sanctions against a lawyer and firm for bringing a frivolous suit. But there’s no guarantee that will happen, and no reason that needs to be the only possible consequence for baseless or harmful lawsuits. Firm clients may choose to take their legal business elsewhere. Law students and lawyers looking for jobs may bypass the firms or may press them about this work when interviewing. Other lawyers already at the firms may choose to leave, as one Porter Wright attorney reportedly has already done. And members of the public may voice their disapproval, as many are doing now.”
Risk Update

Nano Tech, Larger Conflicts Allegations — Malpractice Suit, Advanced Waiver, Engagement Terms & More

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Malpractice Suit Against K&L Gates Heads Back to Texas Trial Court” —

  • “A conflict-of-interest suit against K&L Gates is likely headed back to a Texas trial court after the state Supreme Court on Friday declined to take an interlocutory appeal.”
  • “Quantum Materials Corp. of San Marcus sued K&L Gates in 2018 in Hays County district court, alleging the firm engaged in a conflict of interest by representing the business and its lenders in a dispute over a loan. That dispute led to Quantum Materials being sued in three states.”
  • “Quantum Materials, which makes tetrapod quantum dots for use in lighting applications, said in its petition that it engaged K&L Gates as counsel in 2016 to do corporate work, including drafting documents for a prospective lender. The company later shifted that legal work in-house, but maintains in the petition that K&L Gates never formally resigned from the representation and still remains as legal counsel to Quantum.”

Previously (March): “K&L Gates Loses Appeal In $100M Nanotech Malpractice Suit” —

  • “A ‘rational mind’ could look at a set of uncontested facts in a suit filed by nanotechnology company Quantum Materials Corp. and infer that K&L Gates LLP used the company’s information against it when it sued Quantum, a onetime firm client, on behalf of lenders, a Texas appeals court said Friday.”
  • “Backing Quantum in the firm’s bid to fight a denied dismissal, a three-judge Court of Appeals panel said the company made a prima facie case that K&L Gates violated its fiduciary duty to Quantum and engaged in a conflict of interest.”
  • “The panel also sided with Quantum on whether K&L Gates’ alleged misconduct was ‘unconscionable’ under the state Deceptive Trade Practices Act, allowing that claim to continue as well.”
  • “According to the suit, Quantum hired K&L Gates in 2016 for ‘non-adverse’ corporate advice, which included helping the company go public and the drafting lending agreements with two investor entities. The engagement letter included an advance conflict waiver allowing K&L Gates to represent adverse parties in matters not substantially related to the corporate work, which included attendance by a K&L Gates attorney at Quantum board meetings.”
  • “Quantum ultimately sued a transfer agent involved in the dispute. During that case, K&L Gates lawyers filed an intervention petition on behalf of the lenders alleging Quantum Materials had breached its contracts with the lenders. That spurred a Quantum Materials bid to disqualify the firm and accusations that the firm had used Quantum’s confidential information to benefit the lenders and itself. K&L Gates maintained that the advance waiver applied and that the matters were not substantially related.”
Risk Update

Conflicts — Romantic Conflicts, Relationship Conflicts

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Attorneys’ workplace romance could impact 300 Marysville court cases” —

  • “A Marysville prosecutor and a public defender could have compromised more than 300 cases by having a secret workplace relationship.”
  • “Sources confirm former city prosecutor Al Treacy and former public defender Marne Whitney were often on opposite sides of the same case, creating an obvious conflict of interest that was never divulged to co-workers or clients.”
  • “An internal investigation by city administrators recommended Treacy be fired. But in June, he resigned before that could happen. He was with the prosecutor’s office for 12 years.”
  • “A spokesperson for the firm told KING 5, ‘As soon as we learned of the inappropriate relationship between our employee and the Marysville City Prosecutor, we immediately terminated her employment and also reported her actions to the Washington State Bar Association.'”
  • “The pair worked on more than 300 misdemeanor cases together in Marysville. Those cases have all been reviewed to determine if any of them should be overturned.”
  • “Ken Kagan, an attorney representing Whitney, said there is no evidence that her clients were harmed in any way. In fact, Kagan said, ‘As a result of Ms. Whitney’s efforts in negotiating outcomes for her clients with Mr. Treacy, her clients actually did much better than they might have if they were represented by other lawyers.'”

A Fresh Look at Personal Interest Conflicts Involving Lawyers’ Relationships With Other Lawyers” —

  • “A recent ethics opinion from the ABA Standing Committee on Ethics and Professional Responsibility, Formal Opinion 494 (Opinion 494) examines the meaning and scope of personal interest conflicts specifically in connection with lawyers’ relationships with opposing counsel, a hitherto often overlooked component of Rule of Professional Conduct (RPC) 1.7. In this article we will discuss the principal conclusions in the opinion, and the lessons it holds for New York lawyers.”
  • “When lawyers representing different clients in the same matter or in substantially related matters are closely related, there may be a significant risk that client confidences will be revealed and that the lawyer’s family relationship will interfere with both loyalty and professional judgment.”
  • “As a result, each client is entitled to know of the existence and implications of the relationship between the lawyers, before the lawyer agrees to undertake the representation. Thus, a lawyer who has a significant intimate or close family relationship with another lawyer ordinarily may not represent a client in a matter where that other lawyer is representing another party, unless each client gives informed consent, as defined in Rule 1.0(j).”
  • “The opinion next deals with imputation. Here the ABA Model Rule materially differs from the current New York Rule, in that the Model Rule provides that personal interest conflicts are not imputed. There is no such exception in place in New York. However, a proposal to change the New York Rule to remove imputation of personal interest conflicts has been proposed by the House of Delegates of the New York State Bar Association on the recommendation of the Committee on Standards of Attorney Conduct, and is now before the Administrative Board…”
  • “While Opinion 494 is helpful in raising awareness of what constitutes a personal interest conflict in the context of relationships with other lawyers, it does not set out a clear process that lawyers may use to detect and resolve this (or any) kind of personal interest conflicts.”
Risk Update

Conflicts & DQ News — “Tit-for-Tat” Disqualification Battle, Casino Clashes

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Insurer Seeks Do-Over On Greenberg DQ Bid In Hartford Case” —

  • “An Indiana magistrate who let Greenberg Traurig stay in a trade secrets case for a Hartford insurance unit made “clear errors” when she decided the BigLaw firm never represented its current adversary, defendant OneCIS Insurance Co. said Thursday.”
  • “The filing is an outgrowth of tit-for-tat disqualifications bids in Hartford’s suit accusing two former employees and OneCIS — their current employer — of stealing trade secrets and customer information.”
  • “Earlier this month, U.S. District Judge Debra McVicker Lynch granted Hartford Steam Boiler Inspection and Insurance Co.’s bid to disqualify OneCIS’ counsel at McGuireWoods because the firm also has a long history representing Hartford on labor and employment issues, creating an unwaivable conflict in the current case.”
  • “In a separate order, Judge Lynch also denied OneCIS’ call for Greenberg’s removal, saying there was ‘no evidence’ the firm had ever represented OneCIS. She also said OneCIS had conceded the current case was unrelated ‘to any matter for which Greenberg Traurig has ever provided legal advice to any company related to OneCIS.'”
  • “In Thursday’s filing, OneCIS took sharp issue with both those assertions, saying it had “expressly” argued to the contrary in its motion and submitted declarations.”

Borgata, Ocean Casino’s Law Firms Start Battle Within The Battle” —

  • “The core of the lawsuit filed in August by Borgata in Nevada federal court against Atlantic City rival Ocean Resort Casino and two key casino executives is based on whether the executives violated employment contracts and improperly provided Ocean with proprietary trade secrets.”
  • “Last week, powerful Philadelphia-based law firm Blank Rome — which represents Ocean — augmented its claim that Jackson Lewis, Borgata’s counsel, be disqualified.”
  • “The charge is based on the fact that Jackson Lewis, itself a powerful law firm with hundreds of attorneys, has both Borgata and Blank Rome — its adversary in this case — as ongoing clients, so it thereby ‘violated the duty of loyalty’ to Blank Rome in participating in the lawsuit.”
  • “Borgata already had sought to oust Blank Rome from the case because of allegedly unethical conduct — as claimed by Jackson Lewis — in contacting a high-ranking Borgata employee in mid-September without Borgata’s permission.”
  • “‘The basis of Blank Rome’s Motion is very simple and straightforward: Jackson Lewis has moved to disqualify and seeks other sanctions against its client, Blank Rome, in its representation of another client, and is therefore taking a directly adverse position to its client,’ an attorney for Blank Rome stated in a 14-page filing early last week. ‘This is not, as Jackson Lewis would have this Court believe, a ‘no harm, no foul’ situation. To the contrary, Jackson Lewis committed a foul, and Blank Rome has been significantly harmed as a result.'”
  • “Attorneys for Jackson Lewis have told the court that its work for Blank Rome was minimal — just ‘a handful of visa applications, one or two a year.’ But the volume of work does not erase an obligation for Jackson Lewis to seek permission to serve as an adversary in another case, according to Blank Rome.”
Risk Update

Outside Counsel Guidelines — Latest Industry Insight, News and Discussion on OCGs

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Last week I heard talk of outside counsel guidelines in the wild in excess of 300 pages in length. (I guess this could have been timed as a Halloween update with that metric…)

On that theme, it’s always interesting to keep an eye on how law departments and those who advise and influence them think about key matters like OCG creation and management. Here are a few recent stories on that theme, starting with: “3 Can’t-Miss Best Practices for Outside Counsel Guidelines”  —

  • “Since that time, CLDs and law firms alike have grown exponentially, creating an opportunity for in-house counsel to manage OCGs in a way that can generate a level of compliance and savings that is anything but boring. In addition to saving millions, OCGs are a way to improve both law firm billing practices and the underlying behavior they represent.”
  • Ensure the guidelines are received and understood by the right person at the law firm. It may seem obvious to say billing guidelines must actually be read in order to be followed, but the reality is they often go unread. To remedy this problem, organizations must first figure out who at the law firm is in the best position to receive, understand, and implement the guidelines in question.”
  • “In addition to sending the guidelines to the right person, you should document that they were received and agreed to, ideally using e-signature. But even then, you’re not done because e-signature does nothing to guarantee actual comprehension occurred.”
  • Make the guidelines simple and unambiguous. Stylistic questions aside, organizations still have to decide what requirements belong in the guidelines vs. what ones are not practical to comply with or unlikely to be enforced.”
  • Enforce the guidelines. If you don’t take your guidelines seriously, nobody else will, either. With this document, you are drawing a line in the sand, but that doesn’t mean law firms won’t cross it. No matter how clear your guidelines are, law firms will violate them—sometimes knowingly, but usually by accident because the task gets deemphasized in favor of other priorities. Without monitoring and enforcement, there is no motivation to read these hideously boring guidelines and put in the effort to comply.”
    “Enforcing guidelines is easier with advances in technology like AI-assisted invoice review, which increases the ROI of the bill review process. Additionally, legal spend and matter management platforms can help with everything from smarter staffing to streamlined communications.”

Legal Department Challenge: E-Billing Can’t Fully Automate Guideline Compliance” —

  • “Using e-billing tools to help manage expenses and track outside counsel’s adherence to guidelines is now pretty much par for the course inside corporate legal departments. But technology alone may not be enough catch errors in law firm billing, a reality that may lead more departments to supplement e-billing solutions with a review by an alternative legal service provider.”
  • “From a technology perspective, some of those challenges often have their root in the set of uniform activity codes that law firms enter for different services, such as e-discovery, for instance, and an e-billing system that flags for potential violations of a company’s billing guidelines. Those codes are developed by the Legal Electronic Data Exchange Standard, and are updated to reflect tasks centered around emerging practice areas such as privacy.”
  • “‘Some GCs may be more welcoming of ‘Our law firms are our partners and yes, we’re absolutely going to pay for first-year associates because we want them to develop.’ Other people may say ‘I’m not paying for training and development,’’ Clem said.”
  • “Clem also doesn’t think there’s much of a chance that a more universal and uniform set of billing guidelines would emerge, especially as businesses adapt to the individual hardships caused by the COVD-19 pandemic. Still, not all billing policy violations are strictly accidents.”
Risk Update

Conflicts Updates — Side Switching Allegation, Canadian Conflict Considered

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Snell & Willner Won’t Be DQ’d From EB-5 Project Fight

  • “A Colorado federal judge has declined to disqualify Snell & Wilmer LLP from a suit in which Chinese investors seek to recoup the millions they sunk into a condo project under the EB-5 visa program, finding that the firm adequately handled potential conflict of interest issues.”
  • “Investors effectively created the conflict for the firm after they amended their complaint against Colorado Regional Center Project Solaris LLLP, its former general partner Colorado Regional Center I LLC and other defendants, changing their claims from being direct to being derivative, according to Tuesday’s order by U.S. District Judge Raymond P. Moore.”
  • “The change led Snell & Wilmer’s two clients — Project Solaris and Colorado Regional Center I — to have competing interests, as the investors, led by Jun Li, went from directly suing the defendants to suing various defendants on behalf of Project Solaris, according to Tuesday’s order.”
  • “To avoid a conflict in response to the legal maneuverings, Snell & Wilmer stopped representing Project Solaris, which is now representing itself. That the firm continued to represent Colorado Regional Center I does not warrant a disqualification, the judge held.”
  • “‘The court finds Snell & Wilmer did not ‘switch sides’ or drop [Project Solaris] in favor of pursuing the interest of another client, CRC 1,’ the order reads. ‘Instead, when Li plaintiffs’ actions created the conflict, Snell & Wilmer recognized the conflict and withdrew from representing [Project Solaris.] They were required to do no more.'”
  • “‘Li plaintiffs fail to identify any information Snell & Wilmer would have obtained that would be confidential to [Project Solaris] in light of the relationship between [Project Solaris] and CRC I or how any such unidentified information could be used to the detriment of [Project Solaris,]’ the order reads.”

Same counsel can’t work for insurer on both priority dispute and AB claim: Court” —

  • “An Ontario auto insurer involved in a priority dispute with another insurer should have used a different counsel in that dispute than the one used for the main accident benefits claim with the insureds, the Ontario Superior Court has ruled.”
  • “The issue came up in the case of The Personal Insurance Company v. Jia, in which the same counsel represented the insurer in both the priority dispute and in the accident benefits dispute.””The accident benefits claimants raised the issue of a conflict before the Ontario Licensing Appeal Tribunal (LAT). They argued that the insurance company’s counsel, in support of the insurer’s denial of their claim, had misused information that had been compelled from them in an examination under oath during the insurer’s priority dispute with another insurer.”
  • “‘[SLASTO] found that there is a conflict in counsel for the insurer acting in both the priority dispute and the benefits dispute,’ the Ontario Superior Court of Justice found. ‘[SLASTO] found that breach of the statutory scheme was improper and prejudicial to the respondents, defeating the carefully balanced process prescribed by law.'”
  • “Even if theoretically there may not have been any inherent conflict of interest in the same lawyer representing The Personal in both the priority dispute and the accident benefits actions, how the information was used made a difference in this case, the Ontario Superior Court ruled.”
Risk Update

Risk Webinar — Virtual Risk Round Table (Focus on OCGs: Policy, Process, Technology & More)

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My friends at InOutsource are hosting the fourth webinar in their virtual risk round table series. These have sparked good interest and discussion from the community, and I’ll be a fly on the wall again at: “VIRTUAL ROUND TABLE: Navigating Today’s Pressing Risk Challenges” —

  • DATE: November 19th at 1 pm Eastern.
  • “Because we didn’t leave enough time to discuss them and our survey said you wanted more, we’re going to devote the entire hour of our next roundtable to…Outside Counsel Guidelines!”
  • “Fortunately for your family, we’re scheduling this one for the Thursday before Thanksgiving, thereby providing you with lots of OCG conversation starters to drop during your virtual Thanksgiving dinners. Talking points like:
    • Hot take from Max Welsh: OCGs aren’t worth your time! Just stick them in a drawer!
    • What are your operating procedures for reviewing and negotiating terms?
    • How have you leveraged technology to make tracking and complying with OCGs more efficient?

Registration link.

Risk Update

Political Conflicts — Election Looms, Law Firm Conflict/PR Risk Mitigation in the News

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Doug Emhoff paused his career for his wife Kamala Harris’s aspirations” —

  • “If his wife [Kamela Harris] and her running mate, Joe Biden, are elected, Harris would accumulate several firsts: first female vice president, first Black veep, first No. 2 born to Indian American and Jamaican American parents.”
  • “He’s the high-powered professional who has sidelined his career to support his wife’s sky-high aspirations — even as his work life is creating a prickly conundrum over possible conflicts of interest if Harris takes office.”
  • “In August, Emhoff announced a leave of absence from his law practice. He had continued working as an attorney while Harris was California’s attorney general, and during her campaigns for U.S. senator and the Democratic presidential nomination. This time it was different.”
  • “Emhoff presents a more complex set of questions. Over the years, alongside the boilerplate corporate and real estate work, he has sometimes represented heavily regulated companies or firms that might be frowned upon on the left.”
  • “He represented Merck in cases involving allegations that the drug Fosamax caused bone disease, an entanglement that could cause appearance problems given Democrats’ criticism of the drug industry. Even more touchy, his clients have included Abbott Laboratories in an OxyContin fraud case, and the arms dealer Dolarian Capital in a dispute related to a contract to transfer weapons from Romania to the Afghan military.”
  • “The problem for Emhoff is that his current firm, DLA Piper, has a Washington lobbying presence. Even if he could figure out a way to build a firewall between his legal work and the firm’s lobbying and government work, it’s likely that real or perceived conflicts of interest would be alleged by his wife’s political opponents.”
  • “DLA Piper may be uncomfortable with Emhoff returning to the firm, according to two people familiar with its culture who spoke on the condition of anonymity to discuss private conversations. DLA Piper declined to answer questions about Emhoff’s future.”
  • “There isn’t a clear-cut conflict-of-interest rule governing vice-presidential spouses, said Larry Noble, a government ethics expert who served as general counsel for the Federal Election Commission in Republican and Democratic administrations. But that won’t be Emhoff’s biggest problem, he said. ‘The problem with appearances of conflicts of interest is that they undermine the public’s confidence in their government,’ he said.”