Risk Update

Conflicts News: Criminal Conflicts + Side Switching Accusations

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5th Circuit Tosses Conflict-of-Interest Claim Over Dallas Lawyer’s Source of Payment” —

  • “The U.S. Court of Appeals for the Fifth Circuit has denied a criminal defendant’s arguments that her defense attorney had a conflict of interest from who paid him to represent her. The Monday opinion in United States v. Palacios explained that defendant Gloria Ann Palacios pleaded guilty to conspiracy to possess with the intent to distribute methamphetamine. She argued that her attorney, Dallas criminal defense solo practitioner Mark Fernandez, gave ineffective assistance of counsel because of an alleged conflict of interest.”
  • “In October 2015, Palacios pleaded guilty in her case and said under oath that she was satisfied and had no complaints with Fernandez’s representation…Later, Palacios filed a motion that asserted ineffective assistance based on the alleged conflict, among other grounds. For example, she claimed Fernandez prohibited her from cooperating with the government by giving information about her cousin.”
  • “The U.S. District Court for the Northern District of Texas in Fort Worth denied all of the grounds for relief. The Fifth Circuit granted a certificate of appealability on her conflict-of-interest claim. The Fifth Circuit’s July 1 ruling denied her arguments. It said that when Palacios pleaded guilty in her case, she waived her conflict-of-interest claim. She had many opportunities to speak up about it before, and never did so.”

Carlton Fields Switched Sides In Transaction, Suit Says” —

  • “The trustee of a bankrupt title insurance company has filed a suit in Florida state court against Carlton Fields accusing the law firm of sending the company into insolvency by setting up a joint venture then jumping ship to represent the company’s partner.”
  • “…liquidating trustee Daniel Stermer accused Carlton Fields of breaching its fiduciary duty to ATIF Inc. by advising it to enter into a joint venture that ultimately resulted in Old Republic National Title Holding Company taking control of nearly all of its assets, then taking on Old Republic as a client without dropping ATIF.”
  • “‘Incredibly, after representing ATIF for the amended JV agreement, Carlton Fields switched sides and decided to represent Old Republic in connection with the master agreement while still concurrently representing ATIF,’ he said.”
    “Carlton Fields spokeswoman Kate Barth said the firm has acted within its ethical and fiduciary duties in a statement.”
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Risk Update

Disqualification News: Unwaivable Cannabis Conflicts + Conflicts Appealed

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Cozen O’Connor DQ’d Over Client Conflict In Cannabis Deal” —

  • “An Illinois state judge has disqualified Cozen O’Connor from representing a woman who is seeking to block several individuals from selling their majority stake in a medical marijuana dispensary to an outside company, as the firm has previously advised a parent company in Pennsylvania.”
  • “Because Cozen O’Connor PC has represented Jushi Inc. in connection to proposed transactions involving medical marijuana dispensaries in Pennsylvania, the firm cannot also represent Tanya Griffin, who is seeking to block the sale of the majority stake in TGS Illinois Holdings LLC to Frond Holdings LLC, according to an order on Monday by Judge Raymond W. Mitchell.”
  • “Griffin pointed to a conflict of interest waiver provision included in the engagement letter involving Cozen O’Connor and Jushi, arguing that the firm could represent her in the present case. She also asserted that Frond and Jushi are separate entities, and that the firm has never represented Frond, according to the order.”
  • “But Judge Mitchell noted that Jushi’s CEO is also Frond’s manager, and that Frond was created by Jushi to finalize the transaction involving TGS. The judge also emphasized that the language in the provision is insufficient to establish that Jushi had signed off on the firm potentially initiating litigation against it, according to Monday’s order.”

And Bill Freivogel notes a few disqualifications reverse on appeal:

  • “Sarkis v. Angels Gun Club, 2019 WL 2754767 (Cal. App. Unpub. July 2, 2019). Gun Club is a “nonprofit mutual benefit corporation” with 17 directors. Gun Club expelled Sarkis as a member. Sarkis, in turn, sued Gun Club and Director No. 1 directly for unlawful expulsion (“Direct Action”). Law Firm appeared for both defendants in the Direct Action. Sarkis then filed a derivative action against Gun Club and most of the board members, including Director No. 1 (“Derivative Action”). In the Derivative Action Law Firm appeared for Gun Club only, and another firm appeared for the director defendants (including Director No. 1). Sarkis moved to disqualify Law Firm in both actions. The trial court granted both motions. In this opinion the appellate court reversed as to the Direct Action, holding that Sarkis had no standing to bring the motion. As to the Derivative Action, the appellate court affirmed the trial court, holding that Law Firm should be disqualified. Put simply – perhaps too simply – the court could not see how Law Firm could look out for the interests of Gun Club in the Derivative Action when it was representing Director No. 1 as a defendant in the Direct Action. [Our note: This opinion contains an extensive discussion of conflicts in derivative actions. And, while we do not know enough to know whether the discussion is correct on all points, we are puzzled why it was deemed “Not to Be Published.”]”
  • “Goff v. Goff, 2019 WL 2607258 (Fla. App. June 26, 2019). Post-dissolution proceeding. W moved to disqualify H’s lawyer (“Lawyer”). Lawyer has known H since H was a child. Lawyer also became a friend to W after H and W married. Lawyer represented W once, in a dispute with W’s sister. The trial court granted the motion to disqualify. In this opinion the appellate court reversed. First, the court held that W’s dispute with her sister was not related to this post-dissolution proceeding. Second, the court noted that W’s financial affairs were fully disclosed in the dissolution proceedings, so nothing W might have disclosed to Lawyer earlier remained confidential.”
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Risk Update

Conflicts Allegation & Discipline Execution: Sanctions & Disbarment

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CSX Can’t DQ Atty Who Didn’t Disclose Past Sanctions” —

  • “A Tennessee federal judge has refused to disqualify an attorney from representing a couple in a personal injury suit against CSX Transportation, finding that the lawyer’s undisclosed record of sanctions does not amount to an ethical concern.”
  • “U.S. Magistrate Judge Joe B. Brown on Tuesday rejected CSX’s bid to disqualify Robert L. Pottroff because the lawyer had failed to disclose he had been sanctioned in one case and disqualified from serving in another, determining that the attorney’s actions in the prior cases did not arise to professional misconduct mandating disqualification, according to the order entered in the Middle District of Tennessee.”
  • “The District of Kansas sanctioned Pottroff in February 2018 in a case involving the derailment of a passenger train after the attorney engaged in ‘aggressive/abusive discovery tactics’ while representing several injured passengers who sought to intervene in the case, according to CSX’s memorandum. The Kansas court ordered Pottroff’s clients to pay attorney fees and costs related to the delays, according to the February 2018 order by U.S. Magistrate Judge Teresa J. James.”

And while not conflicts-related, some lawyers behaving badly, creating PR and search engine challenges for their firms, no doubt:

Ex-Skadden Associate Loses Law License for Lying in Mueller Probe” —

  • “The former Skadden, Arps, Slate, Meagher & Flom associate who was jailed last year for lying during a probe into the 2016 presidential election has had his license to practice law taken away by the U.K.’s Solicitors Disciplinary Tribunal (SDT) and was ordered to pay costs of $3,878.”
  • “In the U.S. in February 2018, Van der Zwaan pleaded guilty to a single charge brought by U.S. special counsel Robert Mueller. He was jailed for 30 days after he lied about his communications with former Trump campaign deputy Rick Gates and an unnamed Ukrainian associate of Paul Manafort, the former Trump campaign chairman, during the Federal Bureau of Investigation’s investigation into Russian collusion during the 2016 U.S. presidential election.”

BigLaw partner leaves firm after reprimand for DWI and alleged nose punch” —

  • “A partner at Husch Blackwell in Madison, Wisconsin, has left the law firm after receiving a reprimand for allegedly punching a bar manager and driving while intoxicated.”
  • “The law firm issued this statement Tuesday: ‘We were surprised and disappointed to learn of Jeff’s misconduct and the resulting Supreme Court reprimand. Obviously, our firm does not condone or tolerate his behavior. Jeff has withdrawn from the firm, and as of today, he is no longer affiliated with Husch Blackwell.'”
  • “McIntyre pleaded guilty to a misdemeanor battery charge in May 2018 under a deferred prosecution agreement that would erase the charge in nine months.”
  • “McIntyre pleaded guilty to a misdemeanor charge of operating a vehicle while intoxicated in October 2018. He was sentenced to 60 days in jail, with privileges that allow inmates to leave jail for work. He had two prior convictions for the same offense—in March 2003 and in August 2014.”
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Risk Update

Conflicts Continue: Hidden Conflicts, Appearances, Relationship Tests, a Sheriff, and a Fire

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Cooley Hid Conflict While Helping Launch Company, Suit Says” —

  • “Attorneys for Cooley LLP failed to tell a New Jersey chemist that the firm had previously worked with his partner, then represented the partner’s interests at the expense of the chemist’s while they launched a new company, according to a lawsuit filed Monday in Massachusetts state court.”
  • “But when Sun directed the Cooley attorneys to help him and Jernigan execute a Series A financing deal for Chengwei Capital to invest in the new company, Silicon Therapeutics, the lawyers allegedly didn’t tell Jernigan they were conflicted. Jernigan said it became clear in time that Sun ‘was issuing directions at the behest of [Chengwei] rather than for the benefit of [Silicon Therapeutics].'”
  • “The complaint cites emails between Sun and the Cooley attorneys in 2016 to suggest they were hashing out terms that benefited Chengwei Capital and left Jernigan behind. Sun told Cooley attorney Jacob Slesnick that Chengwei, not Silicon Therapeutics, would pay the legal costs associated with the deal, according to the suit. And Slesnick told Sun he would add a provision so that all other potential investors would need Chengwei’s consent before buying into Silicon.”
  • “‘Although Jernigan was copied on some of these emails, he did not understand the legal conflict of interest presented by these discussions, and he believed that agreeing to all of [Chengwei’s] terms, as dictated by Lanny Sun and the Cooley attorneys, was necessary to secure the financing and to achieve the success of [Silicon Therapeutics],’ the complaint says.”
  • “‘Instead of owning 10% of [Silicon], as he was told by Lanny Sun and Cooley, Jernigan was forced from the company he envisioned and co-founded with almost nothing,’ the suit says. Representatives for Cooley did not return requests for comment Tuesday.”

State Appeals Court OKs Disqualification of Lawyer Over Conflict of Interest” —

  • “A New Jersey appeals court has ruled that a lawyer who represents criminal defendants in Sussex County is disqualified from representing the sheriff in a civil suit against the county’s freeholder board.”
  • “The appeals court affirmed a trial judge’s ruling disqualifying attorney George Daggett from representing Sussex County Sheriff Michael Strada. The panel rejected Daggett’s reasoning that the Supreme Court’s elimination of the appearance of impropriety standard in 2003 should alter the application of R. 1:15, which sets limitations on the practices of attorneys.”
  • “The appearance of impropriety standard held that, even in the absence of actual conflict of interest, an attorney may be precluded from representing a particular client if the representation creates an appearance of impropriety.”
  • “Ballard disqualified Daggett based on R. 1:15-3(a), which says that an attorney who is a sheriff or county prosecutor, or an attorney who is in the employ or service of such an official, ‘shall not practice on behalf of any defendant in any criminal, quasi-criminal or penal matter, whether judicial or administrative in nature,’ and ‘an attorney who is a sheriff of any county or in the sheriff’s employ” shall not practice in any court in that county.”
  • “Daggett said he would seek state Supreme Court review of the decision. ‘I think the Supreme Court should have the final say. Since we don’t have the appearance of impropriety rule anymore, I think you have to go into the facts’ of the case.”

California Court Disqualifies Law Firm in Woolsey Fire Cases” —

  • “Douglas W. Richardson, et al. v. Southern California Edison Co., et al., Case No. JCCP 5000/19STCV10357 (Superior Ct. L.A. County May 31, 2019)”
  • “Upon motion by the defendant, Southern California Edison (‘defendant’), law firm Quinn Emmanuel Urquhart & Sullivan LLP (the ‘Firm’), was disqualified from representing victims (plaintiffs) of a deadly fire in California last fall (the ‘Woolsey Fire’). While defendant had not been represented by the Firm with respect to the fires, it had consulted with the Firm on related issues almost a year before the Woolsey Fire.”
  • The court concluded that under the ‘substantial relationship test,’ the issues that would have reasonably been discussed and the material confidential information provided during that consultation were ‘substantially related’ to the Firm’s current representation of victims of the Woolsey Fire. Consequently, disqualification was required. The Firm has filed a notice of appeal.”
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Risk Update

Disqualification News: Judges & Experts Edition

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Judge kicks himself off felon voting-rights case after defendant’s ‘deeply troubling’ legal maneuver” —

  • “A federal judge in Florida won’t be hearing a challenge to a restrictive Florida voting law because of a litigant’s choice of counsel.”
    “The consolidated cases before Walker challenged a Florida law creating hurdles for felons who want to vote. Lawmakers passed the law after voters approved a state constitutional amendment to restore voting rights to people convicted of most felonies.”
  • “Walker noted that one of the defendants, the Broward County supervisor of elections, had hired George Meros of Holland & Knight to represent him. Walker’s wife is a partner at Holland & Knight. Walker said the ‘conduct at issue is deeply troubling.’ In a footnote, he referred to a Florida ethics rule that says lawyers should not engage in conduct in connection with law practice that is prejudicial to the administration of justice.”
  • “A spokesperson for the Broward elections supervisor told the Sun-Sentinel and the Tampa Bay Times that Holland & Knight was not hired as a mechanism to get Walker removed from the case. The elections supervisor, Pete Antonacci, has known and worked with Meros since 1997, said spokesperson Steve Vancore.”

Bill Freivogel notes one expert and one judge-related matter of note:

  • Youngevity Int’l v. Smith, 2019 WL 2918161 (S.D. Cal. July 5, 2019). In this Lanham Act case Plaintiff moved to exclude expert testimony of Expert, primarily on Daubert grounds. One basis for the motion was that Expert was an owner of a related company. In denying the motion, the court said whether Expert has a conflict “goes to the weight and credibility” of his testimony, “rather than its admissibility.” [BF: Almost all expert disqualifications turn on the expert’s current or former relationship with the opposing party. In those cases admissibility is the test.]”
  • Abt v. Abt, 2019 ABQB 454 (CanLII)(Ct. Q.B. Alb. June 21, 2019). Matrimonial matter. Lawyer No. 1 represented W for 15 months until he became a judge. Lawyer 1’s legal assistant (“LA”) was with him that entire time. LA worked on that file and communicated with W. LA worked for H’s lawyer, Lawyer No. 2, for three weeks earlier this year and had “direct involvement” with H’s file. W moved to disqualify Lawyer No. 2. In this opinion the court denied the motion. LA swore she remembered nothing about the case from her time with Lawyer No. 1. Lawyer No. 2 declared that he learned nothing about the case from LA.”
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Risk Update

Varsity Blues: The Latest Conflicts and Conflict

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Varsity Blues can be a bit hard to keep up with. But there’s certainly plenty of attention focused on this dramatic story… Here’s the latest:

DOJ Urges ‘Rigorous’ Conflict Inquiry In ‘Varsity Blues’ Case” —

  • “Federal prosecutors have again urged a Boston federal judge overseeing the ‘Varsity Blues’ college admissions cheating case to hold a ‘rigorous inquiry’ into conflicts of interest at BigLaw firms representing parents and the University of Southern California.”
  • “In a Friday filing in Boston, prosecutors said defense lawyers at Ropes & Gray LLP, Nixon Peabody LLP and Latham & Watkins LLP have conceded that some conflict work-arounds would be necessary moving forward for their respective clients, including having co-counsels question any USC witnesses.”
  • “But the potential that serious adversity between the defendants and the school may arise in the case is likely serious enough to require disqualification, the government argued, or at least raise real concerns about lawyers being limited by what they can do for their clients.”
  • “‘Pursuit of such defenses will entail not only cross-examination of U.S.C. witnesses but likely also discovery aimed at U.S.C., and effective presentation of those defenses will necessarily extend beyond witness testimony to opening statements and closing arguments,’ according to the filing. ‘The use of conflict counsel to handle the cross-examination of U.S.C. witnesses does not even purport to address these manifestations of the conflict.'”

Latham & Watkins Fighting To Stay On Aunt Becky’s Case Amid Conflicts Concerns

  • “The Varsity Blues scandal has already sunk a Biglaw managing partner and may end up sinking a whole law firm’s role in the case based on the most recent flurry of documents in the Lori Loughlin and Mossimo Giannulli criminal case.”
  • “When you have over 2500 attorneys, there’s bound to be a conflict or two. That’s what prosecutors claim is afoot with Latham & Watkins, which are representing Loughlin and Giannulli in their admissions bribery case.”
  • “Regardless of whether or not USC had a reputation to compromise, the threat of a lawsuit has got prosecutors on the move because Latham & Watkins has also represented USC and the government smells a potential conflict.”
  • “Latham, for its part, doesn’t see a problem: ‘USC is not a party to this case, and its status as an alleged victim does not automatically trigger a conflict of interest requiring Latham’s withdrawal. Latham will avoid any direct adversity with USC by relying on co-counsel to handle any cross-examination of USC witnesses and any restitution proceeding in which USC’s financial interests are directly at stake.”

Hooper Lundy OK To Rep Husband & Wife In ‘Varsity Blues‘” —

  • “A California couple charged in the nationwide college admissions case known as “Varsity Blues” told a Massachusetts federal judge they are comfortable having Hooper Lundy & Bookman PC represent them both, despite several concerns raised by prosecutors during a hearing Friday.”
  • “Gregory and Amy Colburn told U.S. Magistrate Judge M. Page Kelley they would like to proceed in the case with the same attorneys, even after both the judge and the prosecutors warned them about some of the problems that might cause. The Colburns are among several potential conflicts the government flagged in the case, in which dozens of parents are charged with bribing their children’s way into elite colleges through fake academic or athletic credentials.”
  • “Defense attorneys want to split up the cases of more than a dozen parents currently charged in connection with the alleged scheme, which could resolve some of the conflicts posed by multiple representation. But Judge Kelley noted that would not help the married Colburns. ‘In your specific case, even if that motion is successful, you will almost certainly be tried together as being in the same conspiracy,’ “the judge said. ‘No matter what happens with that motion, you’re still in the same boat you are today.'”
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Risk Update

Future Risk: A Look at Emerging Issues (Part 2: Data Ownership, Data Governance ‘Weaponization’)

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Okay, we’ll get back to conflicts and disqualification news tomorrow, I promise. But here’s another 15 minutes into the future topic also worth noting. And it comes with a direct mapping to the legal sphere. Let’s talk about data. Data ownership, data privacy, data risk and the emerging landscape ahead.

Let’s start with the very interesting question about ownership of and access to client data. Sounds like a simple topic. But there are new twists noted by MyShingle: “Whose Legal Data Is It Anyway?” —

  • “Lawyer and legal business consultant Mark Cohen observes that the legal profession is essentially a data wasteland in the digital era , ranking behind all other private industries in utilizing big data and its uptown cousin, artificial intelligence to make decisions and serve clients. Still, both nature – and today’s clients – abhor a vacuum and more enterprising companies from outside legal are targeting the legal void.”
  • “Looking across its anonymized data set of contracts, Atrium can recommend the best clauses and most common set ups, like four-year vesting with one-year cliffs. You can see the status of the contracts every step of the way, from drafting and finalizing to getting employees to accept. [Kan says] that Atrium’s goal is to continue building on its archive of more than 100,000 legal documents to develop aggregated pools of data clients could opt into. If they’re willing to share their salary data, vendor contract pricing and more, they’ll get access to that of Atrium’s other clients.”
  • “Here’s the thing. We lawyers come into contact with lots of proprietary and personal data in the course of representing clients. In its role representing startups, Atrium is privy to an array of data from vendor costs, executive compensation, companies’ source and supply for different products and all kinds of other information.”
  • “To be clear, I’m not suggesting that Atrium is acting improperly or unethically by collecting and sharing client business data which is anonymized and shared only with their consent. What concerns me is that as attorneys and trusted advisors, we have the kind of special relationship with our clients that invites them to let down their guard and share proprietary and personal information because they know it will never be revealed. Sharing proprietary information gathered during the course of legal representation for purposes other than advising on the law and in a manner that can place clients at a disadvantage, or leveraging that information to market a law firm (“Unlike other firms, we have access to thousands of pieces of proprietary data on startups) makes me uncomfortable.”

As FTC cracks down, data ethics is now a strategic business weapon” —

  • “According to Deloitte, 80% of consumers are more loyal to companies they believe protect their data. Yet far fewer leaders at established, incumbent companies — the respondents of the same survey — believed this to be true. Customers care more about their data than the leaders at incumbent companies think.”
  • “Senior executives at major companies have been publicly interrogated for not taking data governance seriously. Some, like Facebook and Apple, are even claiming to lead with privacy. Ultimately, data privacy risks significantly rise in Third Wave industries where errors can alter access to key basic needs, such as healthcare, housing, and transportation.”

Clearly, this story is about the general business domain. But one might wonder in the world of tactical disqualification motions and aggressive lateral poaching if we’ll see firms more aggressively leveraging data governance and compliance capabilities as competitive weapons, as some of their corporate clients already are…

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Risk Update

Future Risk: A Look at Emerging Issues (Part 1: Phishing & Fake Phone Fears)

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We’ve covered a few stories about phishing and related financial risk. The classic is the email that appears to come from the Managing Partner, demanding a wire transfer. Sounds fishy, but in truth these sorts of scams have been successful with law firms.

With that in mind, this story in the tech press caught my eye and sparked some anxiety: “Fake voices ‘help cyber-crooks steal cash‘” —

  • “A security firm says deepfaked audio is being used to steal millions of pounds. Symantec said it had seen three cases of seemingly deepfaked audio of different chief executives used to trick senior financial controllers into transferring cash.”
  • “The AI system could be trained using the “huge amount” of audio the average chief executive would have innocently made available, Symantec said.”
  • “Dr Alexander Adam, a data scientist at AI specialist Faculty, said it would take a substantial investment of time and money to produce good audio fakes.”

With the implication that this is already happening, how long until we read about a law firm example? And here the risks are not just standard financial thievery, but also pursuing sensitive information, like details suitable for insider trading…

I may have read a bit too much sci-fi in my day, but Jeff-Goldblum-in-Jurrasic-Park like reactions aside, a quick search reveals William Gibson is right once again. He’s the one who said: “The future is already here—It’s just not very evenly distributed.” See: “This AI lets you deepfake your voice to speak like Barack Obama” —

  • “Advances in machine learning will soon make it possible to sound like yourself with a different age or gender—or impersonate someone else.”
  • “Modulate has a demonstration voice skin of Barack Obama on its site, and cofounder and CEO Mike Pappas said it would be possible to generate one for anyone, given enough training data. But he adds that the company won’t make a celebrity voice skin available without the owner’s permission. He also insists that deception isn’t the main point.”

Will we see a future in which all interactions are initiated first with a two-factor authentication handshake among participants communicating in any way other than in the flesh? Or am I getting a bit too creative, which I’ve done before

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Risk Update

IP Practice Risks are Everyone’s Risks (KYC, Engagement Terms, Docketing, Dabbling & Subject Matter Conflicts)

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Michael E. McCabe, Jr. does a great job summarizing key risk issues of note for IP practices. So many of his cautions have generally applicability. Highlights below but the full article is well worth a read: “Avoiding USPTO Discipline: Five Recommendations for IP Practitioners” —

  • Rule 1 – Know Your Client. This seems so self-evident. But it can be tricky when dealing with IP representation. This is because there can be different persons or entities who claim an interest in the intellectual property… Difficulties arise when IP practitioners fail to recognize who is, and who is not, their ‘client.’ Counsel would be wise to memorialize, preferably in the initial engagement agreement, who is the client so they know who they have a duty to communicate with.”
  • Rule 2 – Document the Scope and Duration of Your Representation… Some practitioners prefer to limit the scope of the representation to a discrete task, such as filing a provisional application only but not a non-provisional. Other practitioners wish to exclude from the scope of representation any post-issuance duties, like maintenance fee reminders… Practitioners ordinarily should get the client to agree to any such limitation in the scope of services at the outset of the engagement, preferably in the engagement agreement.”
  • Rule 3 – Implement a Reliable Docketing System… a blown filing date can literally cost a client their IP rights and may be grounds for malpractice as well as an ethics complaint… practitioners who use outdated modes of manual docketing run an exponentially greater risk of missing a date and causing harm to a client. If a bar complaint is filed in the USPTO, you can be sure OED will want to know all the details of the practitioner’s docketing system.”
  • Rule 4 – Check for Subject Matter and Other Conflicts… In addition, ‘subject matter’ conflicts can arise when a patent lawyer is asked to obtain patent rights in an area of technology that substantially overlaps with the claim scope of another client’s patent or pending application. The OED expects IP lawyers to have a ‘robust’ conflict checking system in place that includes checking not just for traditional adverse party type relationships but also for closely related technology subject matter conflicts.Moreover, conflicts may arise unexpectedly after the representation commences. For example, you may be representing a client that gets acquired by your adversary in a litigation. Or you may learn about new relationships that you were not aware of at the start of the representation and that could be potentially adverse to a client. IP practitioners need to maintain an organized system for collecting that new information and renewing conflicts checks during the course of a representation.”
  • Fifth – Don’t Dabble. IP law is complicated and constantly evolving. A non-IP lawyer who occasionally ‘dabbles’ in providing IP services runs the risk of getting in over their head, potentially causing harm to a client.”

On the topic of subject management conflicts, one of the organizations I work with has previously shared its insights on the practical details of using technology to tackle subject matter conflict management.

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Risk Update

Event: ABA National Legal Malpractice Conference (September 11-13)

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A colleague sent word of the ABA National Legal Malpractice Conference, set for September 11-13 in San Diego, California. I’m told that this even attracts about 400 risk leaders and insurers, offering: “the profession’s best programming on legal malpractice issues, developments and trending topics. We also have unparalleled networking opportunities with legal practitioners from across the United States.”

Event details on their conference web site, with a breakout of their full program agenda now available, highlights:

  • Cutting Edge Conflicts: Recent Developments in Perilous Times (Ethics)
    This session will examine recent developments, breaking issues, and recurring challenges posed by conflicts of interest in the context of lawyers’ professional liability, including the difficulties that conflicts present when defending LPL claims. A conflict allegation can turn a simple malpractice case into a serious matter, aggravating compensatory damage exposure and potentially implicating punitive damages. In addition to discussing several common sources of conflicts, our panel of ethics experts will consider the defensive options that are available when a conflict arguably exists, and loss prevention strategies for avoiding or mitigating conflicts in the first place. This session will include a discussion of relevant Model Rules of Professional Conduct relating to conflicts of interest, including Rules 1.7, 1.8, 1.9, and 1.10.
  • Planning for the Unexpected Firm Crisis (Ethics)
    An unexpected crisis within a law firm, such as illness, accident or death, the sudden departure of key attorneys and personnel, a malpractice claim or data breach, or other adverse event can cause massive disruption to the everyday life within a law firm. This session will explore ways law firms can prepare for the unexpected and create a plan of action to follow in the midst of chaos to help guide firms through a tumultuous time without leaving clients in the lurch. This session will address succession planning issues, ethical considerations, and relevant Model Rules of Professional Conduct, including Rule 1.1 (competency); Rule 1.1, comment [8] (technological competency); Rule 1.3, comment [5] (diligence in the event of death or disability); Rule 1.4 (client communication); and Rule 1.6 (confidentiality).
  • To Arbitrate or Not: From Arbitration Provisions in Engagement Letters to Arbitrating a Legal Malpractice Case
    As the costs and publicity of defending legal malpractice claims in court continue to mount, law firms and carriers are increasingly considering arbitrating such claims. Should you include an arbitration provision in your engagement letter? Will it be enforceable? This program will discuss the potential benefits and pitfalls of arbitration, tips for drafting arbitration provisions in view of recent case law developments, and the ins and outs of litigating malpractice cases in arbitration.
  • Evolving Risks and Coverages (Ethics)
    Major cybersecurity attacks are increasingly common and sophisticated, affecting large and small firms alike. Law firms are particularly prized targets for cybercriminals. The potential impact of a coordinated attack on a firm, its brand, and its clients’ trust is significant, regardless of whether an attack results in data breaches or data theft. Cybersecurity against today’s threats requires full attention and engagement across the firm, including its affiliates, suppliers/ vendors, and professional companies, such as law firms, extending well beyond the realm of IT. This panel will address key cyber risks for law firms; how cyber insurance coverage is emerging to cover those risks; and the attorneys’ duties to control these risks pursuant to Rule 1.1 (competency), Rule 1.6 (confidentiality), and Rule 1.4 (communication). The ABA LPL Publication, Protecting Against Cyber Threats, A Lawyers’ Guide to Choosing a Cyber Liability Insurance Policy, updated to address the fast-paced changes in cyber liability coverage for law firms, can be purchased in tandem with this session.


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