Risk Update

Considerable Conflicts Clash — “Inadvertent” Conflicts Search Omission, Opposition Seeks Discovery

Posted Dan Bressler

“Wiley Rein admits ethics lapse but resists discovery bid in BDO case” —

  • “McDermott Will & Emery has asked a Washington, D.C., judge to let it scrutinize rival law firm Wiley Rein’s business practices after it admitted to breaching ethics rules by simultaneously representing opposing sides in an employment lawsuit earlier this year.”
  • “The discovery bid stems from a D.C. Superior Court lawsuit that McDermott client BDO USA LLP brought last May against a former BDO partner, Eric Jia-Sobota, for allegedly scheming to steal the accounting giant’s clients and employees.”
  • “Lawyers from Wiley Rein, working with Ari Wilkenfeld of Washington’s Wilkenfeld, Herendeen & Atkinson, are representing Jia-Sobota and his new company EverGlade Consulting. But in March 2021, an insurance carrier for BDO separately reached out to Wiley Rein to serve as coverage counsel for a counterclaim filed by Jia-Sobota, who has denied taking any steps contrary to his obligations to BDO.”
  • “A conflicts team at Wiley Rein ran a check for any matters adverse to BDO, but the review ‘inadvertently’ did not include EverGlade and Jia-Sobota, the firm stated in court filings. Wiley Rein represented a BDO insurance carrier and the defendants for a month, billing about 11 hours, until BDO first became aware of the conflict and alerted Wiley Rein. The firm apologized to BDO and stopped representing the insurance carrier in April.”
  • “Wiley Rein said no lawyer for EverGlade ever saw BDO-related documents during the month the firm represented the opposing sides.”
    “The dispute has teed up a potential disqualification bid by McDermott, and claims from Wiley Rein that its adversary is trying to exploit the ethics error to gain an advantage in the ongoing employment case.”
  • “McDermott is seeking documents from Wiley Rein including internal and external communication, conflict-check files and draft billing records. Judge Heidi Pasichow last week set a status hearing for October. The judge hasn’t yet ruled on whether to allow discovery.”
  • “‘Wiley must account for its engagement with precision and transparency, which can only be accomplished through the confirmatory discovery BDO seeks,’ McDermott lawyers told the court on June 28. The materials are needed to show ‘whether Wiley can ethically continue as counsel in this litigation,’ the firm said.”
  • “Wilkenfeld, a veteran labor and employment litigator, called McDermott’s bid for discovery a ‘continuation of what is, in my view, scorched-earth litigation tactics.'”