A few weeks ago I had the pleasure of moderating a webinar featuring a panel comprising Michael Misiewicz, assistant general counsel in the legal department at JPMorgan Chase, and two risk consultants from Wilson Allen. Those consultants, Patrice Kennard and Mike Madden, have published an excellent summary of the exchange: “Evolving Law Firm Risk: Inside the Minds of Clients and Firm Management” —

• “What do law firm management and client leaders consider to be the most effective conflicts and risk policies, practices, and priorities? We sought to answer that question during a recent panel session Wilson Allen hosted that brought together conflicts and risk experts from both sides of the client and law firm equation.”
• “Misiewicz shared that, with conflicts waiver requests being only one of many things on his plate on any given day, he’s looking for law firms to make his client experience as easy as possible. How? Consistency – especially in the procedural aspects of waiver requests:
  • Designated Contacts – less is more; your client’s work is easier with a regular point of contact
  • Communications – it is helpful for your client to be speaking with someone fluent in conflicts
  • Format – follow the terms enumerated in your client’s services agreement”
• “A centralized model is the best way to protect a law firm from such risks because it employs an established, consistent methodology using firm-wide checks and balances. Centralization streamlines conflicts, and the benefits extend to conflicts subprocesses such as the firm’s client waiver requests.”
• “With centralization, staff members perform analysis that keeps the big picture in mind. As the panel agreed, from a law firm perspective, a centralized conflicts team becomes the subject-matter expert on conflicts clearance, unlike a lawyer who may need to clear conflicts only periodically.”
• “Staffing under this model is a gift that keeps on giving. Centralized conflicts career paths offer job satisfaction and professional development opportunities that can encourage longevity. It’s to a firm’s advantage to retain institutional knowledge and develop people armed to help the firm transition through changes, like adding new conflicts procedures for new practice areas.”
• “Making a case for investment is about bringing the benefits to the attention of senior management. In a partner-driven firm, it isn’t easy to justify a significant expenditure that erodes into partners’ capital. From an equity partner’s point of view, it’s about return on investment. Thus, making a case requires being able to demonstrate what kinds of benefits a product can offer.”

For more detail on the “making the case for investment in risk” thread of the discussion, see the complete summary.

Next up, not a conflicts matter, per se. But the latest from the reputation risk category, via the New York Times: “Berkshire Hathaway Says Blue Chip Law Firm Aided Fraud” —

• “Berkshire Hathaway may have found a way to get back some of the hundreds of millions of dollars it lost after buying a seemingly solid German pipe maker that turned out to be on the verge of going bust.”
• “The conglomerate, led by Warren E. Buffett, is suing Jones Day, the law firm that represented the owners of the pipe maker when it was sold to a Berkshire Hathaway subsidiary in 2017. The lawsuit, filed late last month, accuses Jones Day of helping to trick Berkshire Hathaway into paying five times what the German company was worth.”
• “‘The fraudulent transaction would never have occurred without Jones Day’s substantial assistance,’ according to the lawsuit, filed in U.S. District Court in Houston on behalf of Precision Castparts, a Berkshire Hathaway subsidiary that makes components for aircraft. The lawsuit accuses Jones Day of withholding documents that would have exposed Wilhelm Schulz’s perilous financial state and calls the firm a ‘co-conspirator’ in a ‘massive fraud.'”
• “The [NY arbitration] panel found in April that Mr. Schulz and other managers had used false sales invoices, computer hacks and phantom customers to make Wilhelm Schulz look healthier than it was and hoodwink Precision Castparts into paying a grossly inflated price. The deal was a rare misstep for the organization run by Mr. Buffett, who is considered one of the savviest investors in the world.”
• “Normally a law firm’s communications with clients would be considered privileged, offering a degree of protection to Jones Day. The firm has asked a Texas court to seal the case on those grounds. But Precision Castparts argues that lawyer-client confidentiality cannot be used to cover up fraud under German or United States law.”
• “In addition, the claims against Jones Day are based on files discovered in Wilhelm Schulz offices after the acquisition, according to the lawsuit. Finders keepers, in other words.”
• “Jones Day also did not disclose a report by the consulting firm KPMG, commissioned by Schulz, which concluded that the company faced an “imminent liquidity crisis,” according to the lawsuit. Nor, the suit says, did Jones Day inform Precision Castparts that a German lawyer had warned Wilhelm Schulz managers that they were legally obligated to declare bankruptcy.”