Risk Update

Client Risk — Engagement Letters, DQ Deferred

A Privilege Lesson from Elizabeth Holmes: Have a Look at Your Engagement Letter. At the Very Least, Have One.” —

  • “The Theranos founder last week lost out on her bid to keep a batch of emails between her and the company’s former lawyers at Boies Schiller Flexner out of her upcoming criminal trial. One thing that weighed against her: The lack of any sort of engagement letter between the firm and the company.”
  • “A federal magistrate judge in San Jose, California, last week opened the door to the possibility that a trove of emails between lawyers at Boies Schiller Flexner and officials at Theranos could be submitted as evidence in the upcoming criminal trial of the defunct blood-testing company’s founder Elizabeth Holmes. While exactly what is contained in those emails will have to wait to be seen, one nugget from the decision over whether the communications were privileged jumped out: Boies Schiller didn’t have an engagement letter with Theranos or Holmes.”
  • “That lack of documentation is especially surprising considering Boies Schiller’s wide-ranging relationship with Theranos, which covered everything from advising on the company’s patent portfolio to consulting on interactions with the press to dealing with inquiries from government agencies to handling litigation matters over the course of a half-decade.”

Legal Recruiter Can’t DQ Old Co.’s Atty In Trade Theft Suit” —

  • “A federal magistrate judge has denied a legal recruiter’s bid to disqualify his former company’s counsel in a trade secrets suit, ruling that while the attorney may have to now be a witness at the trial, disqualifying him from pretrial proceedings would be premature.”
  • “Evan P. Jowers is accused of trade secret theft and breach of contract by his former company, MWK Recruiting Inc. He had attempted to disqualify Robert Kinney, head of MWK subsidiary Kinney Recruiting LP, from working on the case because he will likely be a necessary witness at trial.”
  • “U.S. Magistrate Judge Andrew Austin said Thursday the court should wait until pending summary judgment motions are decided before determining if disqualifying Kinney is necessary. ‘It is possible — indeed, likely — that the resolution of those motions will narrow the issues for trial, which will directly impact how ‘necessary’ Kinney’s trial testimony might be,’ making disqualification at this stage premature, Judge Austin said in the ruling.”
  • “MWK sued Jowers in 2018. Jowers, who started at MWK in 2006, allegedly used information he obtained through MWK to start placing candidates through his own recruiting firm before leaving MWK in 2016, violating a noncompete agreement he signed when he started work.”
  • “Thursday’s order marks the latest turn after the close of bitter discovery, marathon depositions and what Judge Austin has described as a ‘downward spiral … into absurdity.'”
  • “In December, Judge Austin nearly sanctioned Jowers’ California-based counsel, Robert Tauler of Tauler Smith LLP, for using ‘scorched earth discovery tactics.’ In April 2020, Judge Austin told Kirkland & Ellis LLP, which is not a party in the case, that it should be ashamed for its ‘petty, technical, overly argumentative’ response to a request for information in the case.”