Risk Update

Conflicts and AI Updates — Multiple Representations Draw Conflicts Scrutiny, AI Model Adversity in the Future? Law Clerk AI Duties, $25m Malpractice Verdict Against Firm that “Kind of” Lost its Way

‘They Kind of Lost Their Way’: Cooley Must Pay $25M for Legal Malpractice” —

  • “A New Jersey judge has entered a $25.4 million judgment against Cooley in a legal malpractice suit over a failed pharmaceutical deal.”
  • “The order, issued Monday by Douglas H. Hurd, presiding civil judge in Mercer County Superior Court, includes $3 million in attorney fees, $1.1 million in expenses and $5.6 million in prejudgment interest on a $15 million malpractice verdict that was returned in the case in October 2025.”
  • “The judgment represents a victory for John Gregg, who filed the suit in 2017, alleging that Cooley failed to disclose a conflict of interest while negotiating financing for his startup drug company, Symbiomix Therapeutics. He alleged he lost control of the company after faulty advice from Cooley about a multimillion dollar investment in the company by two venture capital firms.”
  • “Gregg alleged Cooley had a relationship with one of the companies at the time the firm was advising him.”
  • “The Cooley statement said, ‘We strongly disagree with the verdict and will be pursuing an appeal. The evidence presented throughout this matter demonstrated that our attorneys acted with professionalism, diligence and integrity. We stand firmly behind their conduct and look forward to a fair and thorough review by the appellate court.'”
  • “Gregg, a drug industry veteran, established Symbiomix in 2008. He saw an opportunity to obtain U.S. government approval for Secnidazole, a drug available in Europe for treatment of vaginal infections.”
  • “After looking over the two venture capital firms’ proposal to invest tens of millions of dollars in his endeavor, Cooley attorneys exchanged emails with each other stating that the terms were ‘terribly abusive’ and that he was ‘getting absolutely hosed.’ But they did not share those observations with Gregg, the suit alleged.”
  • “Some Cooley attorneys allegedly had client relationships with at least one of the venture capital firms but other attorneys at the firm who were advising Gregg allegedly said they were unaware of this.”
  • “Speaking of Cooley, Freeman claimed, ‘This is kind of their bread and butter, trying to help startup guys like John Gregg. But you know, they kind of lost their way. I think they really forgot whose interests they were they were trying to protect.'”

One law firm represents over half of Stanislaus County’s cities. Are people concerned?” —

  • “One law firm charges millions of dollars to represent over half the cities in Stanislaus County. Some residents and former clients have raised questions about potential overcharging, erroneous billing or potential conflict of interest.”
  • “The Sacramento-based law firm White Brenner represents at least 30 to 55 cities and special districts throughout California at any given time, including Newman, Oakdale, Patterson, Ceres and Riverbank. The majority of cities within Stanislaus County have been represented by White Brenner either currently or in the past.”
  • “In 2015, White Brenner touted on its website a $1 million lawsuit it won for Patterson. But in a subsequent lawsuit it lost in 2026, it billed the city approximately $2 million.”
  • “Kandace Weyhrauch, a community organizer and volunteer in Patterson, claimed that White Brenner has led the city astray. She’s concerned because the law firm benefits monetarily when it is in litigation.”
  • “‘They’re making millions of dollars off of us,’ she said, adding she felt the city has been overcharged.”
  • “As of April, Patterson was $1.6 million over its budget for legal services.”
  • “Carlos Roque, mayor pro tem of Patterson, said he tried for two months to get on the City Council agenda a discussion about exploring other options for legal services. He was blocked by White Brenner’s City Attorney Nubia Goldstein for a potential Brown Act violation in March 2026, but it was eventually agendized in May.”
  • “On May 19, the Patterson City Council approved issuing a request for proposal for a feasibility study on replacing the law firm with in-house counsel.”
  • “Goldstein said that no one from the firm assisted with, worked on, or otherwise provided input or review of the feasibility agenda item. During the May 19 meeting, she stepped off the dais during staff’s presentation to avoid potential conflict of interest.”
  • “At the June 2 City Council meeting, former Patterson mayor Pat Maisetti called for a Stanislaus County Civil Grand Jury inquiry into the law firm.”
  • “‘Personally, I don’t think [a feasibility study] is enough,’ Maisetti said at the meeting. ‘What I think you need to do is have somebody come in from the Stanislaus County Grand Jury and do a full assessment of exactly what’s been going on with the city and how much money is being spent.'”
  • “Beougher also wrote a letter to the editor in the Ceres Courier in November 2025, calling out White Brenner for alleged conflicts of interest for providing legal advice to a city and then representing that same city in the resulting litigation.”
  • “Douglas L. White, the co-founder of White Brenner, is listed as deputy city attorney for Oakdale, Patterson, Ceres and Riverbank within Stanislaus County. Originally from Modesto, White has his primary residence in Sacramento. His family lives in Spain, so he splits time between the two places.”
  • “White denied that the firm has been overcharging cities. He explained that counting developer‑funded cost‑recovery work as if it were taxpayer‑funded city spending inflates the numbers. Those cost‑recovery charges — the firm’s highest rate tier — are passed through the city but paid by developers or bond proceeds rather than the city’s general fund.”

David Kluft asks: “What are a law clerk’s duties when using AI?” —

  • “The Iowa Supreme Court has adopted a new Chapter of the Iowa Court Rules entitled ‘Judicial Use of Artificial Intelligence Tools.’ It outlines the duties of judges and their staffs when using AI.”
  • “The judge’s duties, as you would expect, include (1) not handing over decision-making responsibility to AI; (2) verification of accuracy and (3) oversight of staff use. “
  • “The clerk’s duties include (1) getting permission before using it; (2) letting the judge know AI is being used, and (3) telling the judge whether all factual and legal sources have been independently verified.”
  • Rules: here.

AI-Run Company Gamble Tests the Limits of Delaware Corporate Law” —

  • “Delaware’s plan to create a new type of standalone legal entity, the artificial intelligence company, is raising fundamental questions about AI capabilities, business governance, human accountability, and the political economy of America’s corporate capital.”
  • “The legislative proposal is short on the specifics that make up a fully formed regulatory apparatus. But its architects have laid out the AIC’s core features, including funding minimums, the ability to own assets, litigation rights, and limited liability for their owners.”
  • “A 30-month ‘sandbox’ phase — starting as soon as next year — is designed to let a small number of AICs learn to follow the law while legal institutions simultaneously figure out how to tame the unruly technology reshaping global markets. The public experiment may determine if the AIC gambit represents a novel solution or a hasty misstep.”
  • “There’s no consensus about how close autonomous commerce is to a reality, with forecasts ranging from next month to never. That wider uncertainty masks discrete questions about AI’s operational capacities, the psychopathic tendencies of rogue models, and the legal system’s prospects for bringing them to heel.”
  • “Other unknowns include how much recognition the entities would receive beyond Delaware — a question likely to be litigated — and how AICs would be governed within the state, where they’d be subject to oversight and potential dissolution by Delaware’s Chancery Court.”