Risk Update

Confidentiality & Information Security — Proskauer Allegations Grow, Pot License Proves Problematic

Proskauer Goes Even Harder After Former Firm Executive With Amended Complaint” —

  • “The explosive lawsuit between Biglaw firm Proskauer and its former chief operating officer, Jonathan O’Brien, continues to be filled with eye-popping rancor.”
  • “You’ll recall, the firm alleged in its initial complaint, filed in December, that the now-former COO downloaded 34 gigabytes of internal data to a USB drive before announcing he was leaving the firm to work for a competitor. O’Brien was poised to join Paul Hastings, but that deal blew up when the lawsuit was filed.”
  • “Now Proskauer has filed an amended complaint, adding a lot more color to the dispute between the two parties. As reported by Bloomberg Law, the new complaint accuses O’Brien of a scheme to recruit a number of Proskauer executives to Paul Hastings:
    • Jonathan O’Brien conspired with “key executives,” including Proskauer’s former chief financial officer, Leigh Anne Whyte, in the effort to bring senior officials and staff with them in a move to Paul Hastings, Proskauer said Monday. The new allegations came in an amended complaint filed in a Manhattan federal court.
    • The firm also accused O’Brien of sharing recruiting information with the “chair of the competing law firm,” a reference to Frank Lopez, the Paul Hastings chair and a Proskauer alum. The two law firms are among the largest in the US, with each eclipsing over $1.2 billion in gross revenue in 2022.”
  • “Proskauer also notes in the amended complaint that, after the first complaint was filed, O’Brien deleted communications.”
  • “In a statement, Paul Hastings said the firm ‘neither solicited nor received any confidential or proprietary information,’ and that, ‘This continues to be another firm’s personnel dispute and we do not comment on other firms’ personnel matters.'”
  • “O’Brien’s attorney, Russell Beck, said in a statement the amended complaint was ‘drafted with an eye towards using the media.'”

Cannabis License Conflict Draws Sanction” —

  • “A conflict of interest and related violations drew a six-month suspension followed by eighteen months of probation from the Arkansas Committee on Professional Conduct Panel D.”
  • “The conflict involved a client who had retained Respondent regarding a medical marijuana cultivation license. The client had created an entity (“Courageous Ann”) to pursue a license to establish an Arkansas medical marijuana cultivation company.”
  • “Respondent had access to a client-created dropbox and maintained such access after leaving his firm. The firm and the Respondent continued as counsel after his departure. The Arkansas Democrat-Gazette reported on the sharing of dropbox documents:
    • “An Arkansas Democrat-Gazette review of public records found that large portions of Delta Medical Cannabis Co.’s successful cultivation license application had the same wording — verbatim in some cases and slightly tweaked in others — as the language used in 46th-ranked Courageous Ann’s application.”
    • “Electronic fingerprints on Delta Medical’s internal documents and company emails — provided by sources — show how the contents of Courageous Ann’s application funneled into Delta Medical’s hands through accounts linked to its previous attorney, Michael Langley.”
    • “Langley is the former director of the Arkansas Alcoholic Beverage Control Division, the agency that now oversees the state’s burgeoning medical marijuana industry. Langley was not involved with medical-marijuana issues during his time at the agency, having left several years before voters approved the constitutional amendment on the drug in 2016.”
  • “The order finds a violation of the duty of confidentiality as well as a conflict of interest by representing Delta in competition with Courageous Ann.”