Risk Update

Lawyer Departure Risk — Information Governance, Firm IP, KM, “Secret Downloads”

Posted Dan Bressler

“Treasure Trove On Thumb Drives: Remand Ordered In Dispute Over Conduct Of Departing Attorneys” —

  • “The Massachusetts Supreme Judicial Court has remanded in a suit brought concerning the conduct of departing law firm attorneys.”
  • “Over the course of more than two decades representing clients in asbestos litigation, the plaintiff Governo Law Firm LLC (GLF) systematically created the contents of a research library, a treasure trove of materials amassed from GLF’s own matters as well as other sources, that gave it a competitive edge in attracting and providing legal services to clients in this specialized field.GLF also built electronic databases to render the library readily searchable, facilitating retrieval of the information.”
  • “In the fall of 2016, these proprietary materials were taken by a group of nonequity employees at GLF (attorney defendants) as they prepared to start a new law firm, the defendant CMBG3 Law LLC (CMBG3), in case their planned purchase of GLF proved unfruitful.”
  • “The attorney defendants took turns secretly downloading the library and databases, as well as GLF’s employee handbook, other administrative materials, and client lists, onto high-capacity ‘thumb drives’; the attorneys then surreptitiously removed these materials from GLF’s offices.”
  • “They subsequently made an offer to GLF’s sole owner, David Governo, to buy GLF, stating that they would resign if the offer were not accepted that day. Governo rejected the offer that same day and locked the attorney defendants out of GLF’s computer systems. The next day, the attorney defendants opened for business under the previously incorporated CMBG3, where they used the stolen materials and derived profits therefrom.”
  • “The materials copied included three different types of information: a research library, databases, and administrative files. The research library contained over 100,000 documents relevant to asbestos litigation, including witness interviews, expert reports, and investigative reports… The library was developed by GLF over a period of twenty years, at a cost of more than $100,000. According to testimony by GLF’s expert, these materials were ‘extremely valuable’ and provided a competitive advantage to GLF over other law firms within the field of asbestos litigation.”