Risk Update

Conflicts & OCGs — FIFA DQ Fight, OCG D&I Trends

Robbins Geller Wants To Fight FIFA Suit DQ At 2nd Circ.” —

  • “The law firm urged U.S. District Judge Louis L. Stanton on Tuesday to extend the case’s current stay by two months so it can seek so-called mandamus review of his May 19 decision to boot it from representing Grupo Televisa SAB investors, who say their shares tumbled following revelations that the Mexican media company bribed international soccer officials to secure broadcasting rights to the FIFA World Cup.”
  • “Judge Stanton removed Robbins Geller from the lead counsel spot it had held since 2018 as punishment for hiding that former class representative Colleges of Applied Arts & Technology Pension Plan, which claimed to have lost $968,000 when the stock dropped, also earned $11 million from shares it held in a Canadian investment fund that had shorted Grupo Televisa.”
  • “But the firm said Tuesday that the Second Circuit should weigh in on whether it was required under the Private Securities Litigation Reform Act, or PSLRA, to disclose the short position. It said that without an appeal, the precedent set by Judge Stanton’s order could muddy securities litigation with limitless claims involving third-party traders.”
  • “‘No identified PSLRA plan of allocation has required the disclosure or accounting of trades other than a claimant’s own transactions in the subject security,’ Robbins Geller wrote. ‘The injection of third-party trading into PSLRA actions would make it impracticable to administer them, as overlapping claims would be virtually impossible to identify, and disputes over who has legal right to them would spawn endless litigation.'”
  • “‘Not only is the challenge to this court’s disqualification order not ‘clear and indisputable,’ that order is manifestly correct,’ Grupo Televisa wrote. ‘What is clear and indisputable is that Robbins Geller was not entitled to falsely represent and conceal the existence of CAAT’s massive short position from the court and defendants alike at every turn during the first eighteen months of this action.'”

Corporate Legal Departments Seek Increasingly Rigorous D&I Goals, Expectations for Outside Counsel” —

  • “While diversity and inclusion has increasingly topped the priority lists of corporations over the last several years, corporate legal departments are calling upon their outside counsel to keep up.”
  • “‘There’s got to be accountability on both sides,’ said Ed Blakemore, assistant general counsel at Rockwell Automation. ‘So corporate counsel have to hold themselves accountable to actually review their bills and know who’s doing their work. That’s a non-negotiable. And then outside counsel have to actually staff your matters with diverse folks.'”
  • “Markel Insurance, for example, in surveying the law firms representing 80% of their legal spend, broadened the scope to include questions about socioeconomic status, asking whether individuals are the first generation in their family to graduate from college or the first generation in their family to be an American citizen. The team is also considering including age, on both ends of the spectrum.”
  • “‘We’re trying to define diversity as broadly as we can, because we hire lawyers all over the country and all over the world. And I don’t think we can have the same expectations of a firm in Detroit as we would of a firm in Boise, so we’re trying to be very broad about it,’ said Shannon Stevens, Markel’s legal audit claims manager.”
  • “While D&I data collection and analysis can become about as complex and expensive as you’d like it to be, it doesn’t necessarily have to be.”
  • “‘For the corporations that may just be getting started on this journey, you can actually just call your representative outside counsel … and ask them to send you a report broken down, maybe over the last two years by gender, race, maybe looking at some other factors,’ Blakemore said. ‘Most firms, unless they’re grossly incompetent, can get you that report in less than two weeks, and then you’ll have your data that at least gives you a baseline.'”
  • “When it comes to enforcing D&I expectations with outside counsel, the jury’s still out on the “correct” approach. Some corporations penalize their firms for not meeting their D&I goals, while others reward firms with bonuses or more work when they do.”
  • “Regardless of whether the department chooses to use the carrot or the stick approach to hold their outside counsel accountable, the panelists all noted the importance of setting quantifiable goals and expectations for the firms they work with and clearly communicating these goals with their outside counsel.”