Bressler Risk Blog

“Breyer, Alito Say ‘No Way’ to Know About Conflict They Missed” —

• “Two U.S. Supreme Court justices said there was ‘no way’ to know about a conflict of interest they missed in January when the court turned away an appeal involving a United Technologies Corp. unit.”

• “Justices Stephen Breyer and Samuel Alito both owned stock in the company as of December 2017, according to their most recent financial disclosure reports, but neither disqualified himself as required under federal law.”

• “‘Because the respondents waived the right to respond to the petition, there was no requirement based on the rules to provide a corporate statement,’ Breyer and Alito said in a statement issued by the court Monday. ‘The court has a diligent conflict-checking process but without a response there would be no way to find out there was a conflict.'”

• “The statement responded to a report by Fix the Court, the watchdog group that discovered the missed recusal.” Fix the Court’s executive director stated: “Supreme Court justices, like any judges ruling on publicly traded companies, should be cognizant of potential conflicts at all times, and that includes an awareness of M&A activity of the companies in their stock portfolios. Better yet: the three justices who own individual stocks should divest from these holdings and invest solely in blended funds and retirement accounts like the rest of their colleagues.”

Not something you read every day: “PwC Seeks To Depose NY Atty In Conflict-Of-Interest Query” —

• “PricewaterhouseCoopers told a California judge Tuesday it wants to depose a New York class action lawyer about possible conflicts of interest over his representation of both the city of Los Angeles and utility customers in separate lawsuits over PwC’s overhaul of LA’s billing system.”

• “PwC wants to question him about allegations he worked as special counsel for the city while also representing the lead plaintiff in a class action against the city on behalf of LA Department of Water and Power customers…”

• “After LADWP’s new billing system in 2013 sent out ludicrously inaccurate bills and overcharged tens of thousands of customers, Paradis represented Antwon Jones in his 2015 class action complaint against the city alleging PwC’s system led thousands of utility customers to be overbilled, according to a brief PwC filed Feb. 28. Los Angeles reached a $70 million settlement with the customers in 2016, with customers receiving a full credit to their account or a refund if their accounts were closed.”

• “Around the same time, however, Paradis agreed to represent LADWP with regard to any potential claims against PwC, the brief said, but never told Jones that he would no longer be representing him in the class action.”

• “PwC alleged in court filings that Paradis has a conflict of interest that was part of a larger scheme to work with the city to choose the lead plaintiff, Jones, and the attorney, Jack Landskroner of Landskroner Grieco Merriman LLC, to handle the class action lawsuit in an effort to get an agreeable settlement for LADWP.”

“Madoff Victims May Proceed With Suit Against Attorney” —

• “Victims of Bernie Madoff’s Ponzi scheme convinced a federal magistrate judge April 11 that their class action against the attorney who represented them belongs in federal court. The investors sued Becker & Poliakoff LLP and Chaitman LLP alleging attorney Helen Chaitman improperly represented clients with competing interests while at the two firms.”

• “‘The more money collected from some of her clients (the net winners), the more available to be distributed to her other clients (the net losers),’ the suit alleges. The two firms moved to dismiss, arguing the court lacks jurisdiction. But the court agreed with the investors that CAFA applies.”

• See the decision here.

Bill Freivogel notes ” In Re Earl Gaudio & Son, Inc., 2019 WL 1429978 (C.D. Ill. March 29, 2019)” —

• “We have written often of Section 327 of the Bankruptcy Act. It sets forth standards for the employment of professionals in bankruptcy proceedings. We have mentioned less frequently Rule 2014 of the Bankruptcy Rules, which sets forth disclosure requirements in connection with Section 327 applications. This includes disclosure of ‘all of the person’s connections with the debtor, creditors,’ and other parties ‘in interest.‘”

• “In this opinion the bankruptcy judge denied large chunks of compensation for Debtor’s counsel (‘Law Firm’) and a corporate custodian (‘Bank’) for repeatedly failing to make required disclosures. They failed to disclose their work on trusts for Debtor’s owners and involvement in state court proceedings directly involving Debtor and its property. The court also found Law Firm’s accounting and billing accuracy woefully deficient. We see little point in providing further details here. We just wanted to re-emphasize the importance of Rule 2014 to bankruptcy practitioners.”

A bit of everything has caught my eye recently. First, an interesting reminder about financial risk and professional responsibility with regard to managing client funds: “What Lawyers Must Know Before Acting As Escrow Agents” —

• “There is a strong case to be made that the moment an attorney agrees to serve as an escrow agent for a client, the attorney assumes some of the most important obligations attorneys are charged with in the legal profession. All too often, however, an attorney who serves as an escrow agent for a client is unaware of these obligations.”
• “All too often, attorneys readily agree to serve as an escrow agent for a client without giving it a second thought, in order to facilitate the client’s payment of outstanding legal fees from the escrowed funds — entirely unaware of their potential obligations to third parties under the rules. Before taking on this role, attorneys should first evaluate whether or not any third persons who are not clients can claim or have claimed an ownership interest in the funds to be escrowed (for instance, any secured or contractual creditors that the client might have may have priority to the escrowed funds), and the duties that the attorney could owe to such third persons as an escrow agent.”
• “Before agreeing to serve as an escrow agent for a client, attorneys should also consider that if, and to the extent that, such third persons exist, an attorney might be required to act contrary to the client’s interests, and his or her law firm’s interests, with respect to the escrowed funds.”

Next, an interesting story about the evolution of conflicts standards in other industries in the general news. In this case, consulting: “McKinsey Broke the Rules, Now It Wants to Rewrite Them” —

• “A federal bankruptcy judge has authorized McKinsey & Co. to devise industry conflict-of-interest guidelines, even as the firm recently has paid $32.5 million to settle allegations that its undisclosed conflicts tainted its own bankruptcy work.”
• “The surprising move by Judge David Jones of Houston will allow the big consulting firm to craft a conflicts protocol that will be used in a current chapter 11 case, Colorado coal miner Westmoreland Coal Co., and could serve as a model for all bankruptcy practitioners, including law firms and financial advisers.”
• “In court papers, Judge Jones approved McKinsey’s request to develop new disclosure guidelines, saying: ‘The court hopes that the protocol to be developed by McKinsey will lead to a comprehensive national standard for all professionals.”

Finally, not the sort of title you read every day (and perhaps best accompanied by a certain sitcom’s theme music, or questions about who will own the movie rights to this story): “$1 Million Sanction Over Wilmette Condo Lawsuits Ordered By Judge” —

• “A Cook County judge ordered a Wilmette man and his attorney to pay more than $1 million in sanctions amid years of legal wrangling among residents at a lakefront condominium.”

• “Marshall Spiegel, a resident of the condo, and his attorney John Xydakis engaged ‘simply obscene’ and ‘egregious conduct’ by filing a serious of frivolous or false lawsuits during a legal battle over the condo association’s boards and its rules, according to Circuit Judge Margaret Brennan, who granted four sanctions orders on March 29.”

• “Xydakis, of River Forest, said the ruling was retaliation against him for seeking to disqualify Brennan over a series of private conversations between the judge, her clerk and one of the opposing party’s attorneys. He said the judge’s phone records he obtained through a Freedom of Information Act request and the billing records of attorney Eugene Murphy show improper private conversations.”

Hat tip to Simon Chester at Gowling WLG for pointing out: “Email fraudsters impersonate Clifford Chance UK managing partner” — 

• “The Solicitors Regulation Authority (SRA) confirmed that a number of emails have been sent misusing the name of Clifford Chance and Michael Bates, the magic circle player’s UK managing partner. The phishing-style emails invite recipients to review an attachment, which isn’t attached, regarding a client matter, according to the regulator’s alert.”

These security topics are timely. Last week, watching a webinar on integrating client OCG compliance into time entry software, jogged my memory on the topic of time and technology risk, and I thought I would share a few items of note.

First, on the topic of billing compliance see also: “Block Billing Gets Attorney Suspended” — 

• “Ronald D. Hassan is a lawyer who admittedly engaged in “value billing” and “block billing” to calculate the amounts owed to him by the Public Defender Services (PDS) for his court-appointed representation of criminal defendants. Mr. Hassan’s billing practices resulted in impractical absurdities such as billing thirty or more hours on multiple days. He was charged with violating two separate provisions of the West Virginia Rules of Professional Conduct.”

Another interesting story about law firm time software risk caught my eye a few months ago, and I found myself exploring a chain of articles and reading a malpractice complaint.

As is widely reported, targeted spear phishing attacks are a known and growing problem for the entire industry. And according to an ABA survey published last year, one in five law firms experience a “cyber incident.” It’s actually noted that 20% of firms reported being the object of a cyber attack. The actual number may be higher.

And, as reported this week in the Texas Lawbook: “Four out of five corporate law firms operating in Texas have experienced a “cyber incident” or an actual data breach during the past two years, according to an exclusive new Texas Lawbook survey.”

The ABA also noted this fascinating incident: “Law Firm Cybersecurity Breach Opens Door to Lawsuit,” which notes this case Shore et al v. Johnson & Bell, Ltd (described here, but you have to scroll):

• “The class action against Chicago firm Johnson & Bell is understood to be the first in which a law firm has been accused of exposing client information and failing to protect client data through inadequate security.”

• “In the former, the claim states that the defendant operates a Webtime service developed by Rippe & Kingston, which the claimants say has not been properly configured and is running out of date software.”

• “The claim, which Johnson & Bell has publicly called ‘baseless’ and ‘specious’ and says it will fully defend, seeks to compel Johnson & Bell to ‘implement industry standard protocols; to allow an independent third party firm to conduct a security audit; to inform Johnson & Bell’s clients that their confidential information has been exposed; and damages.'”

The complete complaint makes an interesting read.

To be fair to the vendor, it looks like the 100 lawyer firm’s IT standards were allegedly lacking… they hadn’t updated their self-managed, internet-facing system in several years.

But merits of this particular matter aside, no firm or vendor wants to see itself subject to this type of public attention and scrutiny. Like any category of serious risk, it’s always prudent to ensure your firm has its internal processes defined and up to date. And equally important that vendors are working carefully to ensure issues like these are addressed —  and updates are actually being implemented by clients. (I type as my Windows system informs me a mandatory shutdown is imminent…)

From the Ethical Grounds Blog (which sounds like the makings of a great name for a firm’s in-house coffee bar…) comes some interesting commentary in the just issued NYSBA Ethics Opinion 1164 (Returning client files without keeping a copy; conditions on compliance): “When a client asks you not to keep a copy of the file” —

• “A quick recap: Upon the termination of a representation, Rule 1.16(d) requires a lawyer to surrender ‘papers and property to which the client is entitled.’ The client is entitled to ‘the file.’ A lawyer may keep a copy of the file. A lawyer’s malpractice policy might include a provision that requires a lawyer to keep a copy of the file. Today’s question: what to do if a client directs a lawyer not to keep to a copy of a the file?”

• “Former Employer alleged that Client had misappropriated propriety information, and that some of it was in the data that Client had provided to Lawyer; Client terminated Lawyer, and hired new counsel; Lawyer forwarded the file, but kept a copy, including back-ups of the digital data; Client and Former Employer settled; the settlement required Client to “retrieve and destroy” all of the digital data; Client asks Lawyer to destroy the digital data.“

• The NYSBA’s response: A lawyer has a valid interest in keeping a copy of a former client’s file. The general rule is that a lawyer may do even over a former client’s objection. In New York, a lawyer may condition not keeping a copy on the former client providing a release.”

• “The lawyer’s interesting in keeping a copy of the file is not unqualified. There may be times when ‘extraordinary circumstances’ exist that favor requiring a lawyer to comply with a former client’s instruction not to keep a copy of the file. A lawyer may condition compliance with a former client’s instruction to destroy copies of the file on obtaining a release and hold-harmless agreement from the former client. A lawyer may condition compliance with a former client’s instruction to destroy copies of the file on creating and keeping an inventory of the material provided to the lawyer by the former client.”

Next, a different type of fight over client files: “Covington Told To Hand Whole Client File To Flynn Associate” —

• “Michael Flynn business associate Bijan Rafiekian won an order on Tuesday [4/9/19] telling Covington & Burling LLP to hand over notes and documents related to a false foreign agent registration that Rafiekian is accused of causing the firm to make about work he and Flynn did for the Turkish government.”

• “A Virginia federal judge ruled that Covington must hand over the entire client file including notes containing attorneys’ thoughts to Bijan Rafiekian, a former director of the Flynn Intel Group.”

• “Last month, he subpoenaed Covington for its client file related to the foreign agent registration he’s accused of lying to the firm about, ‘including, but not limited to, notes, memoranda, timesheets, billing records and other documents.’ Covington opposed the demand, saying the material was irrelevant, protected by attorney-client privilege and mingled in a file with non-FARA and non-FIG related work for Flynn. The firm also claimed Rafiekian was not the firm’s client.”

• “Yes, he is, U.S. District Judge Anthony J. Trenga decided on Tuesday. Judge Trenga pointed to the fact that Flynn and Rafiekian were the only directors and shareholders of FIG. Flynn was CEO and chairman of the two-person board, but the judge said that didn’t give him the sole right to Covington’s work for the company, which Rafiekian says he paid for in part. Instead, the judge said the pair are ‘comparably situated’ within the company under Delaware law.”

A fascinating scenario making news: “Did Defendants in Latest Roundup Trial ‘Geo-Fence’ Jurors?” —

• “At the beginning of the third and latest trial over alleged toxic properties of Roundup, plaintiffs lawyers asked a judge to prevent Monsanto Co. from advertising that its weed killer was safe. Their motion for temporary injunction focused on a full-page ad in The Wall Street Journal on the first day of voir dire, but that wasn’t what alarmed them the most—in court, they brought up another, more cutting edge, marketing practice: geo-fencing.”

• “Geo-fencing is a digital marketing tool that allows companies to send pop-up advertisements to cell phone apps within a designated geographical area—in this case, according to plaintiffs attorneys, the courthouse in Oakland, California, where the third Roundup trial is ongoing. At an April 4 hearing, plaintiffs’ attorneys told the judge that Monsanto’s advertising activities were akin to juror tampering and asked to prohibit geo-fencing within a quarter of a mile of the courthouse.”

• “Although she acknowledged that geo-fencing ‘raises a number of issues,’ noting that ‘technology has taken us places probably we never thought it would go,’ Alameda County Superior Court Judge Winifred Smith denied the plaintiffs’ motion. ‘The court is not persuaded that the alleged geo-marketing is materially different from carrying signs outside a courthouse or carrying placards or wearing buttons inside a courtroom or that it requires a different judicial response,’ she wrote.”

• “‘Some of the jurors who didn’t end up making it on the jury said they were getting pop-up ads touting the history and safety of Roundup,’ Brady said. ‘That’s when we became concerned about it. And we noticed it—a number of us who are not jurors to the case.'”

• “The American Bar Association, in fact, came out with a formal ethics opinion last year that addressed attorneys talking about their cases online, like in blogs. ABA’s Model Code of Judicial Conduct also prohibits lawyers from influencing a jury.”

Incredibly pleased to share my interview with Bill Freivogel: “Expert Exchange: William Freivogel.” (or another link if you prefer a collectible PDF)

A longtime friend and risk inspiration (and source of innumerable but always cited conflicts cases of note), he graciously agreed to spend some time sharing his perspective on a gamut of issues.

In our discussion, we cover: risk management, ethics and professional responsibility trends facing the legal industry — client pressures, conflicts challenges and response strategies.

Both a frank assessment of the current landscape:

• “Over the past few years, my work has been mostly with large general practice firms with big business practices. What we’re seeing, and a lot of it I get from talking to people in my network, is that the very best firms are making more mistakes. They’re under pressure to do more. They’re under budgeting pressures. The corporate world is constantly tightening the screws on what the firms can bill for. They put limits on how much you can bill for an associate, for example, or even billing for first-year people. That sort of thing.”

• “At the same time, business has improved since the Great Recession, so there’s often actually more work to be done. And all of these factors have added up to seeing a few more mistakes. Sometimes those are just plain missing deadlines, leaving paragraphs out of important deal documents, that sort of thing. But that hadn’t been the case for most of the 30-some years I’ve been doing this work.”

• “The bigger firms were largely clean of simple mistakes, but that’s changed a bit. That’s the one I’d note as a surprise. But in hindsight, we should have predicted it. Of course, another trend is tied to bad clients…”

And optimism:

• “My experience has been there is a general improvement among law firms as to the many things they need to do to avoid trouble, in the areas of conflicts of interest and representing dishonest clients.”

• “In terms of avoiding conflicts, the larger firms now have good experienced people who really know the conflicts rules. Increasingly, those people have the attention of the rainmakers in the firm, and command more attention and respect. Conflicts has become more of a profession now. I know some very fine lawyers who do this for large law firms. And they have large staffs that help them, including other lawyers.”

There’s more. And more detail to read. (And more original risk content in the works. Keen to connect with experts interested in sharing their own perspectives… or those with nominations. Feel free to get in touch.)

And, quick reminder, if you’re enjoying the blog, please do forward on a story or note and encourage your friends and colleagues to join the mailing list. This ship has plenty of room.

Karen Rubin at Thomson Hine notes: “Prosecutor’s conflict DQ’s entire office, says WA appeals court” —

• “A Washington appellate court recently disqualified a county prosecutor’s entire office from participating in the re-trial of a murder case. The chief prosecutor had previously represented the defendant while in private practice. The case shines a light on government lawyers and imputed conflicts of interest.”

• “The county prosecuting attorney, Garth Dano, had worked closely as a “consulting attorney” with the murder defendant’s trial team, and communicated about strategy, the theory of the case, potential witnesses and jury selection. Dano also had appeared in court with the defendant. After the guilty verdict, and while the case was on appeal, Dano won election as county prosecuting attorney.”

• “No amount of screening can be sufficient to fully wall off” Dano, the court of appeals held…. You might think that the lack of an imputation rule for government lawyers would have allowed all the county prosecutors except Dano to participate in the remanded murder case, particularly since Dano had been screened from the other prosecutors. But not so. The court said that Washington’s then-version of Rule 1.11 simply meant that instead of a sweeping rule of imputation, as in Rule 1.10, government lawyer conflicts must be ‘assessed more narrowly, according to each lawyer’s individual circumstances.'”

“Attorney Disqualification in a Legal Malpractice Setting” —

• “Akin to a pro-se situation, when law firms defend themselves in a legal malpractice setting they run the risk of attorney disqualification on the attorney-witness rule. “Quadrozzi v Castro 2019 NY Slip Op 30550(U) March 5, 2019 Supreme Court, New York County Docket Number: 151675/2018 Judge: Frank P. Nervo is a good example.”

• “‘However, the Court finds it is likely that defense counsel will be a witness on a significant issue of fact, namely the defendants’ representation of plaintiff in the real estate closing and research regarding liens. Plaintiff has established that defense counsel performed legal work on the matter giving rise to the instant malpractice action, and although defense counsel characterizes his involvement in the matter as more closely related to that of an assistant, he does not refute that he corresponded with plaintiff regarding the matter and billed plaintiff for 4.25 hours of said work. Defendant does not identify any other witness, besides Defendant Castro, who may be able to provide testimony relating to standard of legal work performed for the closing. Consequently, defense counsel’s testimony regarding the closing is likely to be necessary, and he should be disqualified from representing defendants (Delgado, 109 AD3d at 47; Chang, 190 AD2d at 311).'”

Bill Freivogel notes a Texan disqualification, noting unique Texan rules in play:

• “In re Liebbe, 2019 WL 1416637 (Tex. App. March 29, 2019). Susan Whomble suffers from Alzheimer’s disease. In this proceeding Richard Whomble applied to be guardian of Susan’s person. Donna Liebbe, Susan’s friend, contested Richard’s application. Donna’s lawyer was Bill Liebbe. Richard moved to disqualify Bill. The trial court granted the motion. Donna appealed.”

• “In this opinion the appellate court affirmed (denied mandamus). Bill had earlier represented Richard in two personal injury cases. The appellate court dwelled upon the interplay of Texas Rules 1.5 (Texas’ confidentiality rule) and 1.9 (Texas’ former client rule). Put simply, because it was probable that Bill violated Texas Rule 1.5, the prohibition of Rule 1.9 was triggered. [Bill’s note: This opinion can only be useful to Texas lawyers, so we are not going to say any more about it. Because of the uniqueness of Texas rules in circumstances such as this, we are completely unable to say whether this opinion has precedential value in Texas (or anywhere else, for that matter).]“

“SRA puts firms on notice for money laundering compliance checks” —

• “We will be carrying out rigorous checks on law firms to make sure they are meeting their anti-money laundering obligations.”

• “We will shortly be writing to an initial sample of 400 firms asking them to demonstrate compliance with the Government’s 2017 Money Laundering Regulations1. There are around 7,000 SRA-regulated law firms who fall under the scope of these Regulations.”

• “We want to make sure that firms have a money laundering risk assessment in place and are implementing it. A risk assessment is required by legislation and should be the backbone of a firm’s anti-money laundering approach. If firms are not complying, they will go into the regulator’s enforcement processes.”

• “Paul Philip, SRA Chief Executive, said: ‘Money laundering is far from being a victimless crime and must be taken seriously. Solicitors, as enablers of moving funds around, can willingly or unwittingly be part of the problem. So we expect firms to be vigilant and they, in turn, can expect us to be robust in our enforcement action where solicitors firms are involved in money laundering or are not complying with the relevant legislation.‘”

And for more from Paul Philip: “Tackling money laundering: making sure firms are doing their job” —

• “The reasons why tackling money laundering matters so much clearly hit home for everyone in the room. Beyond terrorism, money laundering also supports serious crimes ranging from people trafficking to drug smuggling. We all need to understand that the type of work law firms do and the credibility of solicitors makes them an attractive target for terrorists and criminals who want to process their ‘dirty money.’”

• “If we don’t successfully address the problem, the social, economic and security consequences can be devastating. Doing all we can is also essential if we are to continue to maintain trust and confidence in the legal profession. Trust that is vital to our country’s continued success as a leading international centre for legal services.”

• “We understand that the overwhelming majority of solicitors want to do the right thing. We have produced a package of support for solicitors to highlight good practice and understand what is needed. The onus is on firms to do what they are being asked to do. Many firms are, but those who are not should be on notice to get their house in order.”

One way of managing risk is with insurance. Clearly a backstop and less desirable strategy than avoiding or mitigating risk in the first place, it’s one of the biggest financial investments every prudent firm makes. Here are some recent articles, analysis and observations in this realm:

First, an article from Marsh on a topic that continues to unfold in unpredictable ways: “How Could Brexit Affect the Risk and Insurance Needs of UK Law Firms and Solicitors?“–

• “It is difficult to determine what the full impact of the UK leaving the European Union (EU) will be; however, there are questions UK law firms and solicitors should be considering now in order to be prepared for the outcome of future negotiations.”
• “While the expertise of law firms means they are well placed to face Brexit-driven challenges, they will still need to consider how the UK’s exit from the EU could affect their risk and insurance needs. Our adviser discusses some of the issues that law firms should consider in order to safeguard their businesses. Marsh will also continue to work with law firms and insurers to further understand the full risk and insurance implications of Brexit.”
• “From an insurance perspective, some commentators have considered how the current and future dependency on “freedom of services” passporting rights throughout the EU will affect insurance solutions for businesses.”
• “If the enforcement of UK judgments across the EU is not maintained, then litigation by EU companies in the UK courts is likely to decrease.”
• “While the application of law and technical aspects of contracts are likely to require individual review, some routine/boilerplate issues may need to be reviewed from a risk perspective.”
• “Consider changes to the Continuing Competence regime: Firms may want to ensure they can demonstrate that Brexit- related learning and development needs were identified and increased levels of specific training, and/or allocation of time in practice meetings was given, to address possible impact and changes.”
  “Data protection rights are likely to undergo changes before the UK exits the EU. From time to time, firms’ approaches will require review in any event.”

On the Brexit front: “Brexit Is Messy. London’s Lawyers Are Cashing In” —

• “In any divorce, lawyers are the only surefire winners, and as Britain muddles through one of the biggest, messiest and most complicated breakups in economic history, the country’s top law firms are booming.”

• “‘There’s been some swearing, some clients whose faces have drained of color, when they realize the sort of impact this all will have,’ said Andrew Hood, a regulatory and trade partner at Fieldfisher, a London-based firm with more than 1,000 lawyers. ‘And in the last six weeks, the number of clients who have woken up worried about what a no-deal Brexit looks like has doubled or tripled.'”

• “‘What’s now in the back of everyone’s mind is that Brexit may be great for lawyers in short term,’ said Jolyon Maugham, a tax lawyer and anti-Brexit campaigner. ‘But it’s like you’re a funeral director at the time of the plague. You’re busy in the moment but you fear a bit for your business model.'”

“After #MeToo, whole industries have been blacklisted by insurers for sexual harassment liability coverage” —

• “A new report from Betterley Risk Consultants, shared with The Intercept, reveals that many of the world’s largest insureres will no longer conside whole industries for “employment practices liability insurance” (EPLI), which covers liability from ‘sexual harassment, sex discrimination, and other employee claims.'”
• “Ten of the 32 largest insurers will no longer write EPLI policies for financial firms (brokers, investment banks, VCs, etc); eight will no longer sell EPLI coverage to entertainment and media companies. Also blacklisted are law firms, car dealerships, and other industries where ‘superstars’ or ‘celebrities’ or ‘high-billing rainmakers’ have historically been able to get away with bad behavior so long as they continued to perform for the firm.”

For additional commentary on the #MeToo topic, see also that latest in the Georgetown Journal of Legal Ethics: “Taking #MeToo Seriously in the Legal Profession” —

• “Part I reviews different states’ rules of professional conduct and their interpretations with respect to gender violence and harassment. It homes in on state-to-state discrepancies in interpreting certain shared provisions that could be used for disciplining rape, sexual assault, sexual harassment, and domestic violence. Part II then reviews enforcement patterns for states that either do or might professionally sanction gender violence and harassment. Noting that enforcement rates are staggeringly low, Part II identifies deficiencies in the rules of professional conduct that permit abusers to keep practicing without professional sanction.”

While likely not an issue for our readers specifically, this article was certainly educational about baseline industry standards on coverage: “More states consider requiring legal malpractice insurance” —

• “Currently, Oregon and Idaho are the only states that require attorneys to carry legal malpractice insurance coverage. Active consideration of the issue is taking place in Washington state, which has proposed that failure to comply with obtaining coverage would result in attorney suspension, as well as California, which has proposed similar amendments to its licensing rules. California is also proposing that attorneys be required to disclose if they are not insured.”

• “Those in favor of mandatory malpractice coverage argue public protection is at risk and that lawyers who fail to carry coverage may leave clients unable to secure relief in the event of malpractice. Those taken advantage of by attorneys acting fraudulently have limited recourse against lawyers who fail to exercise ordinary care.”

Which lead to this interesting update (h/t Prof Resp Blog): “New Jersey Supreme Court Rejects Mandatory Malpractice Insurance, embraces disclosure of coverage” —

• “The New Jersey Supreme Court has issued a Notice to the Bar. It has rejected in part, accepted in part, and deferred in part the recommendations of its Ad Hoc Committee on Attorney Malpractice Insurance. It concurred with the November 2017 report recommendation that malpractice insurance not be mandated for all private practitioners.”