Risk Update

Law Firm Risk Reading — Ex-Partner’s Hacking Allegations, Joint Representation Client File Transfer/Confidentiality Rules

New York says presumption for sharing confidential information in joint representations does not apply retroactively” —

  • “Joint representations can present a host of ethical issues for lawyers to navigate including what to do with the clients’ file upon termination of the representation. The NYSBA’s Committee on Professional Ethics recently issued Opinion 1249 which explains that in a joint representation, the presumption is that the lawyer will share confidential information received from one client with the other co-client(s).”
  • “That presumption, however, does not extend to confidential information the lawyer received from a client prior to the start of the joint representation. In general, when the joint representation terminates, the clients are entitled to receive copies of the confidential information exchanged with the lawyer during the joint representation but are not entitled to confidential information shared by one client prior to inception of the joint representation.”
  • “The inquiry in the Opinion came from a lawyer whose longtime client requested the lawyer then also represent his Wife in their joint estate planning matters. The lawyer agreed and had them sign a joint engagement letter that included language explaining that, because the representation was a joint representation, no communication that either co-client had with the lawyer could be kept confidential from the other co-client.”
  • “…Accordingly, the Wife’s communications and documents in the file was to be turned over to the Husband. But as to the Husband, the file produced to the Wife should only include communications and documents from the period after the joint representation commenced. There is no presumption of sharing regarding communications made or documents provided by the Husband prior to the joint representation.”
  • “As the inquiry in Opinion 1249 illustrates, circumstances amongst joint clients can change and there may be confusion about what to do with the file upon termination. It is crucial to include in your joint engagement letter which types of communications will be disclosed to each co-client, including how conflicts could arise, and what would happen in the event of a dispute between the co-clients. Your client needs to know what they are signing up for before they agree to a joint engagement—and so do you. Before agreeing to take on any type of joint representation, you must familiarize yourself with how your jurisdiction views confidentiality in the joint representation context.”

Dechert Ex-Partner Leak, Hack Allegations Threaten Firm Damage” —

  • “Dechert will soon start to find out how much damage the law firm faces from an onslaught of accusations against former UK partner Neil Gerrard, including that he leaked information about a client to authorities and aided a hacking operation.”
  • “A British court March 6 will begin a trial to decide how much Dechert owes a former client that operated mines in Kazakhstan. A judge has found Gerrard breached his duty by giving information about the client, a subsidiary of Luxembourg-based Eurasian Resources Group, to UK fraud investigators.”]
  • “Dechert separately faces two more UK trials next year, and two US lawsuits, stemming from Gerrard-led representation for one of the United Arab Emirates. The firm is accused of aiding a hacking operation that targeted perceived enemies of the emirate, Ras Al Khaimah.”
  • “The spate of allegations has ensnared other lawyers at the firm, two of whom have exited in recent months, while raising questions about how many dollars in damages and reputational costs Dechert will rack up before litigation tied to Gerrard is finished.”
  • “‘Law firms have brands just like anybody else,’ said James Jones, a senior fellow at Georgetown University Law Center and former Arnold & Porter managing partner. ‘It can certainly take a toll.'”
  • “Dechert has denied allegations of impropriety and is aggressively defending itself in the UK trials and against the US lawsuits. Dechert has also distanced itself from Gerrard, a one-time star lawyer the firm recruited in 2011 who retired nine years later. Counsel for the firm last year stopped representing Gerrard as an individual in the lawsuits.”
  • “Eurasian had hired Gerrard to aid an internal probe after an anonymous whistleblower alleged corruption in its Kazakhstan operation. The company later alleged Gerrard ended up working against Eurasian by leaking information to UK investigators and the media in an effort to expand the probe—all in a bid to increase his fees.”
  • “The UK opened a criminal investigation of the mining conglomerate’s activities in Kazakhastan and Africa in 2013, and that probe is ongoing, according to court documents.”
  • “But a London judge last year found Gerrard acted in ‘reckless breach of duty’ by giving up information on his client to the UK investigators. The judge also concluded that Gerrard instigated leaks to the news media and gave wrong advice to his client about potential criminal liability.”
  • “A US aviation executive, Farhad Azima, who said he had been working with Massaad to publicize human rights abuses in the UAE, claimed that as part of Gerrard’s work his emails were stolen and posted online.”
  • “Separately, he filed suit in the US, saying a hacking enterprise involving several parties, as well as a cover up that he claims Gerrard led and Dechert aided, violated the RICO Act.”
  • “Jay Solomon, a former Wall Street Journal foreign affairs reporter, filed a similar lawsuit, alleging the leak of his correspondence with Azima cost him his job.”