Bressler Risk Blog

Happy New Year!

“Attorney disqualified over settlement discussion” —

• “A Business Court judge has decided to disqualify an attorney who engaged in a lengthy settlement conference without first obtaining the consent of opposing counsel. “
• “The plaintiff engaged a firm to represent it in a suit against the defendants. On Dec. 24, 2025, one defendant contacted a partner at the law firm, asking if he, the partner and other defendant could meet in the hope of resolving the case. The complaint had not yet been served on any of the defendants. “
• “The meeting was held at the law firm’s office on Christmas Day. During the meeting, one defendant expressly told the partner he had a lawyer, but he would not tell the partner his name. The partner claimed that he received no confidential information during the meeting and that instead the over-90-minute meeting focused on settling the case. “
• “‘To make a long, irrelevant story short (of which the plaintiff waxes eloquently), the settlement talks were unsuccessful, and this case has been hotly litigated,’ Judge Michael Warren noted. “
• “‘Before the Court is Defendants Rapid Restoration 24/7 LLC, Ari Kostelitz, Chesky Weinberger, and Zev Goldner’s Motion to Disqualify Counsel for Gold Star Restoration MI LLC. … At stake in this Motion is whether MRPC 4.2 is violated when the Plaintiff’s lawyer who knows an individual Defendant is represented by opposing counsel can engage in a lengthy settlement conference without first obtaining the consent of that Defendant’s lawyer? Because the answer is ‘yes,’ and disqualification is a proper remedy, the Motion is granted,’ the judge wrote. “
• “‘Despite his protestations to the contrary, [the partner] clearly violated MRPC 2.4(a). The Rule required that [the partner] receive the permission of [the defendant’s] lawyer, not [the defendant], to continue the Christmas Day discussion. This is a bright line rule. This is akin to when a criminal defendant asks for a lawyer in the middle of a custodial interrogation — the officers must stop. Full stop. MRPC 2.4(a) is at least as strong — it prohibits any discussion until permission is granted by the lawyer. There are no ‘well, we didn’t talk about confidential information,’ or ‘it was just settlement discussions,’ or ‘the meeting was initiated by the other party’ exceptions. [The partner] dances around the fact that he knew [the defendant] was represented and continued communicating with him for over 90 minutes in an effort to settle the case. In the unlikely event the learned [the partner] is unaware, the Court takes judicial notice that nearly all of its civil cases settle. In other words, settlement discussions are the whole ballgame approximately 99% of the time. Downplaying the ethical violation by focusing on the fact that the subject matter was only about settlement actually exacerbates the wrong. The moving parties have met their burden,’ Warren stated. “
• “‘[The partner] and his firm should be disqualified. This was no fleeting discussion that only tangentially affected the case. By an ill-gotten ethical violation, [the partner] now knows the parties’ settlement positions. Again, this is almost always the whole ballgame. The only measure to protect the integrity of the profession and the integrity of this case is to disqualify [the partner] and his firm. This bell cannot be unrung or cured by a lesser sanction. The havoc across the justice system that would ensue with a contrary ruling would be too much to bear,’ the judge concluded. “
• “The six-page decision is Gold Star Restoration MI LLC v. Klainberg; MiLW No. 10-110086. “

“Oura Health’s Legal Battle: Former CEO Challenges Firm Over Potential Conflict of Interest” —

• “…the former CEO of Oura Health has moved to disqualify the esteemed law firm Quinn Emanuel from representing the company in a lawsuit concerning his termination. The ex-CEO argues that he disclosed confidential details to the firm during consultations regarding his claims before the initiation of the lawsuit.”
• “The former executive contends that during preliminary discussions, sensitive information was shared, which could now be unfairly leveraged against him, raising ethical and procedural concerns.”

“Luigi Mangione lawyers renew bid to toss death penalty charge, alleging Pam Bondi has a conflict of interest” —

• “Lawyers for Luigi Mangione on Friday renewed and expanded their effort to have the death penalty thrown out in his case, arguing Attorney General Pam Bondi has a disqualifying financial conflict of interest.”
• “In court filings reviewed by Fox News Digital, the defense argued that Bondi’s calls for the death penalty following Mangione’s arrest were improper because she was previously a partner at Ballard Partners, a lobbying firm that represented UnitedHealth Group, the parent company of slain CEO Brian Thompson.”
• “The defense argues Bondi continues to receive financial benefits through Ballard’s profit-sharing plan and should have recused herself from any role in the case.”
• “Mangione’s attorneys further argued that when Bondi left Ballard Partners to become attorney general in 2025, the first defendant she ‘personally selected’ for capital punishment was the man accused of killing the CEO of her former client.”
• “Mangione is accused of killing UnitedHealthcare CEO Brian Thompson on Dec. 4, 2024, outside a Manhattan hotel where the company was hosting an investor conference. The execution-style shooting was caught on camera and prosecutors allege that Mangione targeted Thompson due to financial and corporate grievances. Mangione fled the scene but was captured days later.”

“JPMorgan says Javice firms billed millions just for ‘attendance’” —

• “JPMorgan Chase & Co. said Charlie Javice’s ‘unconscionable’ $74 million tab for legal fees included more than $5 million in charges for lawyers and other staff just for attending her fraud trial, even on days court wasn’t in session.”
• “A previously sealed Delaware court filing released Monday offered the most detailed picture yet of JPMorgan’s claim that Javice, who was convicted in March of defrauding the largest US bank in a $175 million deal, abused a 2023 order requiring it to cover the costs of her defense. “
• “JPMorgan is seeking to avoid $10.2 million in disputed charges and end the requirement that it pay future bills. Lawyers at Javice’s five law firms billed unnecessary work and inappropriate expenses under the mindset that ‘someone else is paying her bills,’ according to the filing.”
• “The bank focused much of its criticism on Javice’s two largest firms, Quinn Emanuel Urquhart & Sullivan and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, which it said ‘have already received tens of millions, and seek millions more for patently unreasonable fees and expenses that constitute clear abuse.’ “
• “In a statement, a Quinn Emanuel spokesman said, ‘JPMorgan is trying to walk away from its contractual obligation to pay the remainder of Ms. Javice’s legal bills — all in hopes it can cut off her right to pursue her meritorious appeal.’ Mintz didn’t immediately respond to phone calls and emails seeking comment.”
• “Quinn Emanuel’s fee’s ‘skyrocketed’ after telling the court before trial that it anticipated transitioning its responsibilities to Mintz, JPMorgan argued. And the Mintz Levin lawyers were ‘peripheral and unnecessary, even during trial,’ the bank said.”
• “JPMorgan said that Javice had as many as 16 to 29 lawyers and other legal professionals in court for every day of her trial, billing an average of $360,000 a day during the six weeks of the trial. No more then four lawyers had speaking roles, and many of the bills were for ‘trial attendance alone,’ JPMorgan said. ‘Javice’s counsel even improperly billed for trial ‘attendance’ on non-trial days.'”
• “According to the bank, lawyers attending the trial charged a number of inappropriate expenses, the bank said. Included in 2,377 pages of receipts submitted for March were a Cookie Monster toddler’s toy, lavender and jasmine sachets, 57 hotel room upgrades at $300 a night and a $900 meal at Koloman, a highly rated New York restaurant, JPMorgan said.”
• “A New York jury found Javice guilty of misleading JPMorgan into acquiring her student-finance startup, Frank, by creating millions of fake users for the site. She was sentenced in September to seven years in prison but is free on bail pending her appeal.”
• “As part of her sentence, Javice was ordered to repay the legal fees JPMorgan covered. But even if that order is upheld, the bank is unlikely to ever get back more than a small fraction of the total amount. Javice is only required to pay 10% of her income in restitution after she leaves prison, and the order expires in 20 years.”

“Law Firm That Regularly Sues the City Over Police Misconduct Is Representing Peacock Councilors” —

• “A law firm that regularly sues the city on behalf of protesters and other citizens alleging police misconduct is now representing five Portland city councilors in an ethics case.”
• “All six members of the council’s progressive caucus—called Peacock—are now under investigation by the Oregon Government Ethics Commission for an August retreat. The ethics commission voted 7-0 on Friday to investigate the meeting and whether anything the councilors discussed during it violated public meetings law, which says that a quorum of councilors cannot discuss any policy in private that may reasonably come before the council or a council committee. Councilors maintain they did not talk about any policy-related matters.”
• “Ben Haile, a lawyer with the Oregon Justice Resource Center, represented five of the six councilors in front of the ethics commission. He’s working pro bono, he told WW in a brief phone call on Tuesday.”
• “Haile’s representation of the Peacock councilors is peculiar for a few reasons.”
• “OJRC, a civil rights law firm founded in 2011 to ‘improve legal representation for communities that have often been underserved in the past,’ typically works in civil litigation related to inmate rights, wrongful conviction, police misconduct and excessive use of force and other social justice areas. There’s nothing to suggest that OJRC regularly represents elected officials in front of the state’s ethics commission.”
• “But more importantly, OJRC regularly represents clients who are suing the city. OJRC has represented a handful of protesters and journalists who have sued the city alleging police misconduct and excessive use of force during the 2020 racial justice protests. In most of those cases, the city and OJRC have settled outside of court, with the city paying substantial settlement amounts to the plaintiffs. (Street Roots reported earlier this year that claims stemming from the 2020 protests have cost the city $9.1 million so far in settlements.)”
• “OJRC has also represented victims of Portland police misconduct. This summer, the City Council voted to approve a $3.75 million settlement awarded to the family of Immanueal ‘Manny’ Jaquez Clark-Johnson, whom a Portland police officer shot in the back in November 2022 after he was mistaken for a robbery suspect. OJRC represented Clark-Johnson’s family.”
• “The City Council is the final level of approval for every settlement over $50,000 that the city seeks to reach, and councilors can elect to increase the settlement amount if they choose. That means OJRC not infrequently has business in front of the City Council—and usually as an adversary.”
• “Tung Yin is a professor of law at Lewis and Clark Law School. He says that OJRC representing plaintiffs seeking settlements from the city, and representing city councilors raises questions about a perceived or real conflict of interest.”
• “‘It’s when we have these two things together that we have this appearance of conflict,’ Yin says. ‘It really is a question of: Does it look like the councilors might make decisions on behalf of the public that would benefit the same lawyers who are representing them pro bono?'”
• “Oregon law prohibits elected officials from accepting gifts of over $50 from ‘sources that could reasonably be known to have a legislative or administrative interest in the vote or decision of the public official who holds any official position or office.’ It’s not clear if free legal services meet the definition of a ‘gift’ under state statutes, but the laws do identify a gift as ‘something of economic value.'”
• “Haile declined to answer WW’s questions whether he or his firm had represented elected officials before in front of the ethics commission. But he said in a statement that ‘all of our legal work, advocacy, and public education…is consistent with our mission, mandates as a civil rights organization, and our work to defend democracy. As a resource center, we take great pride being available to those who seek to defend the rights and dignity of Oregonians.'”

“A Utah prosecutor’s relative was there when Charlie Kirk was shot. Tyler Robinson’s attorneys want his office kicked off the criminal case.” —

• “A key prosecutor’s family member was at the Utah Valley University campus event where Charlie Kirk was fatally shot — and now the defense team for the accused shooter argues that creates a conflict of interest that means the entire Utah County Attorney’s Office should be banned from handling the criminal case against him.”
• “Tyler Robinson’s defense team last week filed a motion asking a judge to disqualify the Utah County prosecutor’s office from the case. The court papers were initially filed under seal. But on Wednesday evening, the defense attorneys filed a public version that revealed why they felt it would be improper for the Utah County agency to prosecute their client.”
• “Some wording in the filing is redacted, so the public version doesn’t specify which lawyer on the six-person prosecution team has a ‘personal connection’ with a student who was at the Turning Point USA event when Kirk was shot in September.”
• “It also does not disclose the specific relationship between the prosecutor and the student. But it said that the young person texted the ‘family text group’ that day, writing that someone had been shot and added, ‘I’m okay.’ Later, the student texted the same group that it was Kirk who had been shot.”
• “Robinson’s defense attorneys noted in their filing that the prosecutor had been with Utah County Attorney Jeff Gray when these messages were sent, and he ‘shared those with Mr. Gray in real time.'”
• “That prosecutor’s ‘familial relationship with a witness presents a concurrent conflict of interest and disqualifies him from participating in the prosecution of this case,’ the defense team argued.”
• “They also noted that this prosecutor holds a supervisory role at the county attorney’s office, and argued that creates a conflict so significant that 4th District Judge Tony Graf should ban the entire office from prosecuting the case. There’s been ‘no effort’ to shield this prosecutor from the case so far, they asserted.”
• “Christopher Ballard, a prosecutor on Robinson’s case and the office’s spokesperson, said in an email Wednesday evening that his office disagrees and will file their opposition in court. Robinson’s team, he said, ‘has not identified any valid basis for disqualification.'”
• “‘Despite being present at the event, the individual identified in the motion knew less about the details of the shooting than non-attendees who were following news reports and social media posts,’ he said. ‘The Utah County Attorney based his charging decisions solely on the circumstances of the alleged crimes, without regard for the identity of any specific attendee.'”
• “The prosecutor disclosed the family relationship to the defense after speaking to the entire prosecution team about the potential conflict, they said. And, they alleged in the court filing, this prosecutor went back to campus with an investigator to determine the exact distance from where his family member was to where Kirk was when he shot. (It was 85 feet.)”
• “While Robinson’s attorneys wrote that they didn’t question the prosecutor’s integrity, they argued that the prosecutor’s personal relationship could affect his ability to handle the case ethically.”
• “There’s a ‘natural instinct’ to protect and shield a relative from ‘past and future harm,’ Robinson’s attorneys wrote, adding that the prosecutor and his family member aren’t immune from the trauma that many experienced that day when Kirk was shot.”

“Eleventh Circuit Upholds Embattled Corporate Transparency Act as Constitutional” —

• “The U.S. Court of Appeals for the Eleventh Circuit has upheld the Corporate Transparency Act, ruling that the law—the subject of court fights across the United States—is constitutional.”
• “A unanimous three-judge panel said the law was an appropriate exercise of Congress’ power over interstate commerce, as Commerce was regulating an economic activity when it passed the law. The CTA requires businesses to identify their corporate owners for a nationwide registry.”
• “‘By requiring these corporate entities to provide beneficial ownership information, the CTA regulates how they operate and the level of secrecy with which they do business,’ Circuit Judge Andrew Brasher wrote on behalf of the panel.”
• “In upholding the law, the panel deemed rational Congress’ findings that anonymous corporate dealings have a substantial effect on interstate commerce. Based on reports from national security and law enforcement, Congress had concluded that anonymous shell companies were contributing to fraud and money laundering, the Eleventh Circuit explained.”
• “The panel decision reverses U.S. District Judge Liles Burke’s May 2024 ruling against the law. Burke, who sits in the Northern District of Alabama, was swayed by arguments from the National Small Business Association and small business owner, Isaac Winkles, that the law targets the non-economic activity of incorporation. The challengers are represented by Hughes Hubbard & Reed and Maynard Nexsen.”
• “But the circuit rejected that reasoning, saying the law regulates entities after they have been incorporated.”
• “‘The statute in no way affects how businesses incorporate. It does not alter any relevant state law. It addresses only what entities must do after they are registered to do business,’ Brasher wrote.”
• “Jamie Schafer, a partner and firmwide co-chair of Perkins Coie’s regulatory compliance and disputes practice, told the National Law Journal and Law.com that the Eleventh Circuit’s reasoning may be persuasive to the Supreme Court, which upheld the Bank Secrecy Act in its decades-old ruling, California Bankers Association v. Schultz. The Bank Secrecy Act requires banks to report large cash transactions and other suspicious activity.”
• Decision: here.

David Kluft asks: “If a lawyer and former client don’t remember or recognize each other, is it still a conflict of interest for them to be adverse?” —

• “An OH lawyer represented a defendant in a murder trial. The lawyer had represented an adverse witness in the case five years earlier. However, it was undisputed that he didn’t remember or recognize the witness, and the witness didn’t remember or recognize the lawyer, so nobody noticed the conflict or discussed it with the defendant.”
• “About 15 years after his conviction for murder, the defendant found out about the conflict and filed a motion for a new trial based on ineffective assistance, claiming that the lawyer’s loyalties to the witness (his former client) conflicted with his duties to the defendant.”
• “The OH Ct. of Appeals denied the motion because the defendant was unable to point to a specific adverse effect and because, ‘without knowledge of the supposed conflict, trial counsel’s performance could not have been impacted by the conflict.'”
  Opinion: here.

“Big Law, Bitcoin and Conflicts: Dickinson Wright Hit With Malpractice Suit” —

• “Dickinson Wright and several of its lawyers are facing a malpractice lawsuit in Michigan state court alleging that they overstated their Bitcoin regulatory expertise and failed to disclose conflicts of interest in a cryptocurrency recovery effort.”
• “The case dates back to early 2022, when the Jonna Group retained Dickinson Wright in connection with a $541,045 investment in Bitcoin Latinum, a cryptocurrency project the investors alleged engaged in securities fraud. The clients sought the recovery of their principal and lost profits, which the law firm allegedly valued at more than $6.7 million.”
• “Dickinson Wright promoted its experience in Bitcoin regulation and the credentials of partners Frank Gilligan and Jacob S. Frenkel, including Frenkel’s experience in whistleblower matters, per the lawsuit. At various times, the firm projected a potential case value of up to $120 million and described Frenkel as a ‘master of the craft,’ representations that the plaintiffs said induced them to retain the firm.”
• “Key to the litigation strategy, the lawsuit alleged, was the role of Don Basile, an individual connected to Bitcoin Latinum who was also involved in other crypto startups and had a sketchy reputation. The firm allegedly advised that the Jonna Group could pursue whistleblower status tied to anticipated U.S. government investigations into Basile and related entities.”
• “However, the strategy unraveled because Dickinson Wright allegedly failed to disclose a conflict of interest involving Basile and affiliated companies, per the complaint. The firm had an attorney-client relationship with Monsoon Blockchain Corp., an entity contractually linked to Bitcoin Latinum through intellectual property and network agreements funded by token presales.”
• “Bitcoin Latinum was associated with non-fungible token projects and other ventures affiliated with Monsoon and entities owned or operated by Basile, the lawsuit says. At the same time, Dickinson Wright represented Basile and received attorney fees from Monsoon as a current client, even as it pursued claims on Jonna Group’s behalf against Bitcoin Latinum.”
• “The conflict surfaced when Dickinson Wright served discovery demands on Bitcoin Latinum, seeking formation documents relating to Monsoon, prompting a motion to disqualify the firm, according to the complaint. In support of that motion, Bitcoin Latinum disclosed payments it had made to Dickinson Wright for legal services provided to Monsoon.”
• “The plaintiffs further alleged that they later learned that Dickinson Wright intentionally failed to file a formal whistleblower claim because of its undisclosed relationship with Basile and his companies. That decision, the lawsuit says, jeopardized the Jonna Group’s ability to recover a judgment by failing to name Basile as a defendant and preserve potential whistleblower protections.”
• “The complaint alleged that the disqualification required the investors to retain successor counsel, driving up legal costs because new attorneys had to become familiar with the underlying litigation. The plaintiffs also alleged that Dickinson Wright engaged in excessive billing, including fees associated with whistleblower efforts that ultimately yielded no recovery.”

Rhode Island Supreme Court Ethics Advisory Panel Op. 2025-15: “Attorneys – Conflict – Prospective client” —

• “Where (1) an attorney agreed to represent the family of a nursing home resident who had recently fallen and died and (2) approximately one week later, the intake department at the attorney’s law firm conducted an interview of a prospective client who worked as a nurse and potentially was involved in the fatal fall, the attorney’s sole remedy is to withdraw from the representation of the decedent’s family, as the nurse’s intake interview created a conflict under the Rules of Professional Conduct.”
• “‘The inquiring attorney agreed to represent the family of a nursing home resident who had recently fallen and died (the ‘Decedent’). Approximately one (1) week later, the intake department at the inquiring attorney’s law firm conducted an interview of a prospective client who described him- or herself as a nurse who had worked at the same nursing home at which the Decedent had fallen and died (the ‘Nurse’).”
• “The Nurse sought representation because a resident to whom he or she may have incorrectly administered medication had fallen and died, thereby potentially threatening the status of his or her nursing license and exposing her to potential civil liability. Although the Nurse did not mention the resident’s name during the intake interview, other information he or she did divulge — such as the dates on which the medication had been allegedly incorrectly administered — led the inquiring attorney to strongly believe the Nurse was referring to the Decedent.”
• “‘The inquiring attorney reports that the intake interview was conducted entirely by office staff and no attorney from his or her law firm had or has since spoken to the Nurse. Nonetheless, he or she wonders whether the Nurse’s interview creates a conflict requiring him or her to withdraw from representing the Decedent’s family. …”
• “‘It is the Panel’s opinion that the Nurse’s intake interview does create a conflict under the Rules of Professional Conduct requiring the inquiring attorney to withdraw from the representation of the Decedent’s family. …”
• “‘As an initial matter, because the Nurse actively sought representation from the inquiring attorney, it is clear he or she is a prospective client within the meaning of Rule 1.18 of the Rules of Professional Conduct. …”
• “‘… Rule 1.18 places certain limitations on an attorney’s use of information gleaned from a prospective client. … Second, Rule 1.18(c) prohibits an attorney and his or her associates from ‘represent[ing] a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter,’ with certain exceptions set forth in Rule 1.18(d)(1) and (2).”
• “‘It is this second limitation, under Rule 1.18(c), which is of relevance here. Its applicability turns on two (2) factors. First, the interests of the Decedent’s family and the Nurse must be materially adverse in the same or a substantially related matter. Second, the inquiring attorney must have received information from the Nurse that could be significantly harmful to him or her in the matter.”
• “‘The Panel finds that the facts as described by the inquiring attorney satisfy both prongs of Rule 1.18(c). First, there exists the substantial risk that the interests of the Decedent’s family and of the Nurse are materially adverse in the same matter due to the Nurse’s potential involvement in the Decedent’s death. … Second, such information would undoubtedly be of significant harm to the Nurse in this matter, as it would bear on both the Nurse’s possible liability in a civil action as well as the risk of losing his or her nursing license. Together, these facts are sufficiently disqualifying to trigger Rule 1.18(c)’s prohibition on representation here. …”
• “‘It follows that, given the applicability of Rule 1.18(c) to this matter, the inquiring attorney’s sole remedy is to withdraw from the representation of the Decedent’s family. …”
• “‘In withdrawing from the representation, the Panel urges the inquiring attorney to take all reasonable steps required by Rule 1.16(d) to mitigate the consequences to the Decedent’s family of his or her withdrawal, including, but not limited to, providing notice to them of his or her intention to terminate representation — thereby permitting them time to select replacement counsel — returning their papers and property, and refunding any unearned fees or expenses, if any. This is a non-exhaustive list of mitigation steps; the particular circumstances of the matter may require additional efforts. …’ “
• Full opinion: here.

“Terry Rozier paying for friend’s lawyer in gambling case a potential conflict, feds say” —

• “Federal prosecutors asked the judge overseeing the illegal sports gambling case involving Terry Rozier to determine if a conflict of interest exists because the Miami Heat guard is paying the legal fees of one of his codefendants. Prosecutors said in a new legal filing on Tuesday that Rozier’s lawyer may ultimately try to blame that codefendant, Deniro Laster, for the crime as well, allegations that Rozier’s lawyer has denied.”
• “Lawyers for the U.S. Attorney’s Office said in the filing that Rozier is covering legal fees for Evan Corcoran, the attorney representing Laster, and that they want the judge to determine if that relationship could impact Corcoran’s representation of Laster. They have asked Judge LaShann DeArcy Hall for a hearing that would, at a minimum, make Laster aware of those potential conflicts, and could possibly lead to him getting a new lawyer.”
• “Rozier, who has made more than $100 million during his NBA career, is longtime friends with Laster. Prosecutors allege Rozier told Laster that Rozier was leaving a March 2023 game early. Laster, according to an indictment filed in October, sold that information to a group of sports gamblers, who then made wagers on Rozier’s statistics for that game. Rozier and Laster were both arrested and charged this fall on two federal counts and have both pleaded not guilty.”
• “The prosecutors said in the filing that Jim Trusty, Rozier’s lawyer, has made public comments ‘suggesting that Rozier’s defense strategy at trial will be to inculpate Laster.'”
• “‘Neither Terry’s longstanding generosity towards a friend since childhood nor Evan Corcoran’s representation create any actual ethical issues in this case,’ Trusty told The Athletic. ‘My comments about Mr. Laster have not been to ‘blame’ him for anything – my focus has been on the fact that even if the government’s allegations about Mr. Laster are true, that does not mean Mr. Rozier did anything wrong.'”
• “‘The primary concern is that this payment structure creates an obvious incentive for the attorney’s divided loyalties between (i) his client Laster and (ii) the person paying his legal fees, co-defendant Rozier,’ the assistant U.S. attorneys said in the filing. ‘Particularly in light of Rozier’s attorney’s public comments placing the blame on a ‘friend’ who is almost certainly Laster.'”
• “Prosecutors pointed to Trusty’s comments in the days after Rozier’s arrest, where he said that Rozier told a friend that he would come out of the game. Trusty told CNN that Rozier ‘relied on a bad friend’ and told Fox News, ‘whatever that friend did is not on Terry (Rozier).'”
• “Prosecutors have called for the judge to name a lawyer for Laster who would advise him on any potential conflicts of interest. They did not say that the issues they raised are disqualifying for Corcoran to serve as Laster’s attorney.”
• “Rozier is also waiting on a response to a motion he made last week to dismiss the case. The motion has been filed to the prosecutor’s office, but has not been made public yet. Trusty indicated in a court hearing last week that Corcoran would join that filing as well.”

“Building a Proactive Risk Management Culture: Lessons from Law Firm General Counsels at the Aon Law Firm Symposium” —

• “At the 2025 Aon Law Firm Symposium, four experienced law firm general counsels – Martin S. Checov, O’Melveny & Myers LLP; Diana K. Ashton, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP; Kathryn J. Fritz, Fenwick & West LLP; and Amanda Kushnir, Blake, Cassels & Graydon LLP – shared their ideas, strategies, and best practices for developing and sustaining a proactive risk management culture. We recap below some of the key insights from this excellent faculty.”
• “Cultivate Relationships Firmwide:”Developing strong relationships between the general counsel’s office and lawyers and staff across the firm fosters trust, encourages early engagement with risk issues, and helps ensure that risk management is viewed as a resource rather than a barrier. A law firm general counsel must be visible, approachable, and responsive, and known as a good listener and problem solver. If these connections within the firm do not exist or if people are not comfortable contacting the general counsel, the general counsel is more likely to encounter difficult issues after they arise rather than being in a position to provide guidance on the front side of tough matters.”
• “Engage Management at All Levels: Law firm general counsels must work closely with senior leadership and practice group heads to secure their support and make sure that risk management is integrated into decision-making throughout the firm. Keeping firm management informed about emerging risks and bringing attention to behavior issues observed within the firm’s ranks is a critical part of this role. A risk management update should be a standing item on the executive committee’s agenda. Moreover, when the law firm’s general counsel has an important message to communicate to the firm, it is often advisable for leadership to convey it in tandem with the general counsel.”
• “Deliver Targeted Training and Education: Careful consideration of the intended audience is paramount when developing risk management training and education. These programs should be tailored to the needs of different groups, such as associates, lateral partners, administrative assistants, and business professionals. For instance, train senior lawyers expected to develop business on conflicts clearance, educate members of the human resources department on privacy issues, instruct administrative
• “Conduct Informal Audits to Assess Compliance: Law firms can have the best risk management policies in place, but policies are only effective if they are followed. To confirm that policies broadcast to the firm are working in practice, the general counsel should conduct periodic informal checks to monitor compliance, identify areas for improvement, and then adjust implementation strategies as needed. This process is most successful when the general counsel establishes strong relationships with the right people across firm departments.”
• “Provide More than a Simple ‘No’: Lawyers are less inclined to approach the general counsel if the individual in that role is perceived as consistently rejecting their proposals. A practical strategy is to consult with lawyers about the requirements for a potential ‘yes’ response, such as identifying the relevant stakeholders to speak with and outlining any additional steps necessary for the firm to proceed. The path to ‘yes’ may not look very good in the end and, upon further review, many lawyers will independently arrive at a decision of ‘no.'”
• “A law firm general counsel must act as a ‘partner’ to all members of the firm, maintaining a degree of separation from firm politics, balancing independence with collaboration, and always keeping the firm’s best interests in mind. This perspective is crucial for guiding the firm through complex decisions and maintaining a resilient risk management culture.”

Leigh Zidwick, Sr Director Info Governance at DLA Piper US, sent in her analysis: “IG Hiring Trends in Law Firms: What We’re Seeing Across the Industry” —

• Over the past several months, many of us have noticed something new in the legal market: a sharp uptick in Information Governance–related hiring activity. There have been a few requests lately to share open positions with the Legal IG Roundtable, and many firms are expanding or redefining IG roles in ways we weren’t seeing even a year or two ago.
• While there isn’t yet a single public statistic that quantifies “new IG roles in the last 12 months,” the directional indicators are consistent and strong. Here’s a snapshot of what’s driving this momentum:
• 1. AI Adoption Has Become the Catalyst
  • Law firms are rapidly moving from experimenting with generative AI to implementing it – especially with tools like Microsoft Copilot, M365 integrations, and iManage AI capabilities.
  • This shift is exposing an uncomfortable truth: You cannot deploy AI responsibly without strong Information Governance. Firms are realizing that unclassified, duplicative, ungoverned data creates unacceptable risk when connected to AI tools. As a result, IG teams are being asked to define governance models, retention, classification, data minimization, and AI-related risk controls.
• 2. Recruiters Are Reporting Increased Demand
  • Legal tech recruiting firms have said explicitly that demand for IG professionals has increased in the past year, particularly in roles touching AI governance, M365/Teams, data lifecycle management, and privacy/security alignment.
  • We’re also seeing new hybrid titles, such as: Information Governance Manager (AI/Analytics), IG & Data Governance Lead, M365/Copilot Governance Manager, Director of Information Lifecycle & AI Enablement
  • This is a shift in both volume and specialization.
• 3. Firms Are Formalizing IG as a Strategic Function
  • Participating firms in recent IG staffing surveys have highlighted: Multiple distinct IG roles within the same firm. • Increased headcount in the past 12–18 months. Future hiring plans tied directly to AI and M365 transformation initiatives.
  • This is a notable evolution from prior years, when many IG programs were under-resourced or rolled into other departments.
• 4. Advisory and Vendor Ecosystems Are Reinforcing the Trend
  • Consultancies, managed services groups, and legal tech vendors have all built AI-governance and IG-readiness practices because firms have accelerated demand. Their service offerings often mirror internal hiring trends.

What This Means for Our Community

• The Legal IG Roundtable is now seeing more job traffic, more recruiter outreach, and more firms looking for guidance on how to build or expand IG teams. It’s a sign that:
  • IG is no longer a “back-office function
  • Organizations are recognizing IG as strategic infrastructure for law firms, not just compliance overhead
  • IG is foundational to AI readiness and risk management
  • The role of IG professionals is expanding in scope, recognition, and strategic importance
• If these trends continue—and all signals suggest they will—we may soon enter the first real IG talent shortage the legal industry has experienced. The rise of “AI and IG” roles signals a career growth opportunity for those with both governance and technology fluency.
• Our community is helping shape what this next era looks like.

David Kluft asks: “Am I disqualified if my firm is merging with a firm that represents the opposing party’s corporate affiliate?” —

• “An AL plaintiff sued a corporation for discriminatory termination. After the litigation commenced, the plaintiff’s counsel’s firm merged with another firm that had been hired by a corporate affiliate of the defendant in an unrelated litigation.”
• ” The defendant moved to disqualify plaintiff’s counsel, but the Court denied the motion. The Court held there was no conflict because the corporate affiliates were distinct corporate entities and, under an old Alabama bar ethics opinion, a lawyer may sue a parent company while representing a wholly owned subsidiary in an unrelated litigation, provided the separate identity of the companies prevents the risk that confidential information will be misused.”
• ” The Court also explained that the cases were being handled by geographically distinct offices of the newly merged firm, and the attorneys on the respective matters would have no communication with each other.”
• Decision: here.

“Iowa Supreme Court rules for Democratic auditor in dispute with GOP AG” —

• “What began as controversy over settlement agreements for three Davenport city officials who alleged they had been harassed has resulted in a win for Iowa State Auditor Rob Sand over Iowa Attorney General Brenna Bird after the state Supreme Court sided with Sand’s office.”
• “Bird, a Republican who’s often been at odds with Sand, the sole statewide elected Democrat, argued in the case leading to the Friday, Dec. 5, ruling that her office, as the state’s legal counsel, should represent the auditor’s office in an ongoing court case regarding the legality of the settlement agreements for the Davenport employees. Sand, a lawyer and former state assistant attorney general, contended that his office should be able to represent itself.”
• “At issue was Sand’s allegation that Davenport may have violated open-meetings laws when its City Council approved the settlements, totaling $1.8 million, in December 2023, weeks after they were announced and months after they were signed.”
• “Sand noted the council had held closed sessions to discuss litigation around the period when the settlements were made and again before its vote. His office called Davenport’s city attorney, who allegedly approved the settlements without council authorization, a ‘walking audit risk’ and suggested the city lacks effective internal legal controls over expenditures.”
• “Iowa District Judge Jeffrey Bert did not rule that Sand could see the closed meeting records. But in a May 2024 order, Bert found that Sand’s office could access attorney-client protected information, as opposed to the separate category of ‘attorney work product,’ and he ordered the city to provide the records to him for his private review to determine which category applies in this case.”
• “Davenport appealed, arguing that both attorney-client communications and attorney work products should be protected from the auditor’s subpoena under Iowa law.”
• “According to the Supreme Court’s 6-0 ruling, written by Justice Edward Mansfield, Bird’s office in an initial brief backed Sand’s position that state law entitles his office to request attorney-client communications. But the day before that brief was due, she advised him she was removing that part of the brief and would refuse to argue for that position. The ruling said she explained that she disagreed and that the position was unlikely to succeed.”
• “Sand then filed his own brief through the general counsel for his office and Asked the court to block the brief from Bird’s office, the ruling said.”
• “Sand and Bird’s clash reflects a broader disagreement stemming from the Republican-dominated Iowa Legislature’s 2023 passage of a law that limited Sand’s ability to force state agencies to provide documents. Sand in a statement suggested Bird ‘doesn’t want the Auditor’s Office to argue we should get this evidence of waste, fraud and abuse, because that could lead to us getting evidence about other waste, fraud and abuse in other cases.'”
• “Bird’s office described her dispute with Sand as a disagreement not over the scope of the auditor’s power but about legal strategy.”
• “‘Iowa law makes clear that it is the job of the Attorney General’s Office to represent the state in court, not the auditor’s. We have checks and balances for a reason,’ Bird said in a statement. ‘As we have thoroughly discussed with the auditor’s team, our brief makes the most sound and strategic arguments to help the state win its case in court.'”
• “The Supreme Court in its ruling found that the Attorney General’s Office has a conflict of interest in representing Sand’s office because the ‘she believes it would be disadvantageous to the state as a whole’ to allow the auditor’s office to view the attorney-client records.”
• “‘The auditor wants to argue for affirmance of the district court’s view of the auditor’s legal authority, and the attorney general does not want to do so in part because of legitimate concerns about the impact such a decision would have on other state officers and agencies,’ Mansfield wrote. ‘That’s a conflict.'”
• “Also at issue was whether the auditor’s office needed the approval of the Executive Council of Iowa — a state board comprised of Sand, Gov. Kim Reynolds, Secretary of State Paul Pate, State Treasurer Roby Smith and Agriculture Secretary Mike Naig — to use alternative counsel if the Supreme Court disqualified Bird’s office.”
• “The court found that state law requires executive council approval to use paid attorneys outside of state government, not attorneys already working for the state, as was the case with Sand’s office. Mansfield noted in his opinion that Sand’s office previously represented itself in a 2021 case before the Supreme Court.”

“‘A masterful coup’: law firm behind Musk pay lawsuit faces internal revolt” —

• “In early 2024, two hard-nosed lawyers who had just helped defeat a $55bn pay package for Tesla chief executive Elon Musk gave an exultant talk at Columbia Law School detailing their stunning triumph over the world’s richest man. Now those two star partners, Greg Varallo and Jeroen van Kwawegen, are at the centre of an ugly rupture at the powerhouse shareholder law firm Bernstein, Litowitz, Berger & Grossmann.”
• “On Thursday, van Kwawegen announced he had departed BLB&G to form his own firm, JVK Law, and that about a dozen lawyers representing virtually the entire BLB&G corporate governance practice, as well as additional support staff, would soon join him.”
• “Coincidentally or not, a decision from the Delaware Supreme Court on Musk’s pay package is expected any day and will give final word on both the cancellation of the $55bn arrangement and a $345mn attorney’s fee award which mostly accrues to BLB&G.”
• “In an interview with Bloomberg Law on Thursday announcing his new firm, van Kwawegen said he ‘had a fundamentally different vision about what the law firm should look like, what the culture is that you should have and whose interests you should be serving first’, an apparent criticism of his previous firm’s management.”
• “BLB&G later fired back in a statement, saying it was ‘disappointed that Mr van Kwawegen has made misleading statements about his departure from the firm’.”
• “BLB&G added that van Kwawegen had not left voluntarily but had been terminated after the firm’s leadership determined that he ‘engaged in misconduct that was inimical to the best interests of the firm’. The firm declined to specify the nature of the alleged misconduct.”
  “In any instance, the public fracas has rocked an important corner of corporate law just as regulators and politicians are seeking to shift the legal balance between companies and investors. ‘Jeroen has pulled off a masterful coup. My hat is tipped,’ said one rival shareholder lawyer.”
• “BLB&G was founded in 1983 and has more than 100 lawyers across the US. It made its name in federal securities law litigation, typically bringing class action lawsuits on behalf of shareholders against listed companies, alleging that sharp drops in stock price were the result of disclosure failures.”
• “Varallo and van Kwawegen, on behalf of BLB&G, had petitioned the court for a $7bn fee in the form of Tesla shares for the victory in the pay package case, a figure that shocked even some plaintiff law firms who were otherwise sympathetic to BLB&G. The trial court knocked down that number to $345mn, still the largest single award in Delaware history, should the state’s supreme court confirm it.”
• “At the same time, the future of Delaware corporation litigation remains uncertain as the state has recently enacted sweeping changes to protect boards of directors from shareholder lawsuits. The legislature is also considering a new law to potentially reduce fees paid to lawyers who win big settlements or judgments.”
• “For now, the legal community is looking to see which clients stay with the reconstituted BLB&G governance group and which land at JVK Law, which will have to determine how to underwrite the considerable investment in contingency cases.”
• “The drama at the firm that took down Musk has not escaped the entrepreneur’s fans on X. ‘When 8+ partners walk out [of BLB&G] citing concerns about whose interests the firm serves, that’s not just a personality conflict — that’s a crisis of purpose,’ read one X post on Thursday.”

More recent conflicts decisions of note from Bill Freivogel:

• Pinnacle in Home Care, LLC v. 1 Source Senior Care, LLC, 2025 Ark. 193 (Ark. Dec. 4, 2025).
  • Both parties “are licensed to provide targeted case-management and personal-care services.” 1 Source is suing Pinnacle and certain former employees of 1 Source for certain abuses arising out of Pinnacle’s having hired those employees. Law Firm began representing Pinnacle and the former 1 Source employees.
  • As those employees left Pinnacle, Law Firm withdrew from representing the employees. 1 Source moved to disqualify Law Firm from representing Pinnacle because it appeared Pinnacle would defend by blaming those employees, being former clients of Law Firm. The trial court granted the motion to disqualify.
  • In this opinion the court affirmed, finding a Rule 1.9 violation. The opinion did not mention a standing issue. The court continued clinging onto an “appearance of impropriety” standard although admitting the Arkansas rules excluded it.
• Maddicks v. 106-108 Convent BCR, LLC, No. 656345/2016 (N.Y. Sup. Ct. N.Y. County Nov. 17, 2025).
  • This is a rent overcharge class action. Defendants moved to disqualify Plaintiffs’ law firm (“Law Firm”), because Law Firm had represented some Defendants in rent overcharge cases involving, in some cases, the same units involved in this case.
  • The court found this was a former-client conflict, but, because Defendants waited for many months before making the motion, Defendants waived the conflict.
• Option Consommateurs & Gagnon v. Samsung Elecs. Canada Inc., 2025 QCCS 4209 (CanLII) (Super. Ct. Que. Nov. 20, 2025).
  • This class action is against Samsung for manufacturing defective washing machines. In this opinion the court held it was proper for members of plaintiffs’ legal team to be class members.
  • There was an issues about those lawyers having contacted certain Samsung employees; however, the court excused those contacts because the employees were not of “a decision-making role.” The court warned the lawyers to be careful about that.
• Nocita v. Housing Auth. of Grays Harbor Cnty., No. 3:24-cv-05771-TMC (W.D. Wash. Nov. 12, 2025).
  • Plaintiff is suing Authority for wrongful eviction and related claims. Lawyer is representing Authority. Plaintiff moved to disqualify Lawyer because Lawyer had previously represented another state agency regarding the dependency of Plaintiff’s children.
  • In this opinion the court denied the motion to disqualify. In construing Rules 1.9 and 1.11, the court said although such successive representation of different government agencies “has the potential to implicate” ethics rules, such was not the case here.

“Why the SEC’s top accountant is weighing changes to audit inspections, conflict-of-interest rules” —

• “The Securities and Exchange Commission is evaluating whether to change rules around conflicts of interest for auditors and their clients, how its audit watchdog handles inspections of accounting firms and the cost for companies of complying with requirements.”
• “Accounting standard setters need to more closely scrutinize the costs of disclosures for companies applying new rules, SEC Chief Accountant Kurt Hohl said Monday at a conference in Washington, D.C. ‘What we don’t want to happen is essentially a high compliance cost to dissuade companies from accessing the public market,’ Hohl said.”
• “Hohl, who has served as chief accountant since July, advises the commission on accounting and auditing issues and oversees interpretation of accounting rules. Hohl spent 26 years as a partner at Ernst & Young, rising to global deputy vice-chair of the Big Four firm’s global assurance professional practice and retiring in 2023. He also previously worked at the SEC from 1989 to 1997.”
• “What do you want to see change with the SEC’s auditor independence rules? The regulator last eased these rules in 2020.”
  • “The independence rules are fairly clear. You can’t have direct business relationships with audit clients. Where it gets complex is where you basically are partnering with a nonaudit client and that nonaudit client uses an audit client as part of their service delivery. That’s what adds complications to the situation. Looking and seeing how pervasive that is, looking and making sure and talking with firms to understand how that affects how they monitor and enforce their independence requirements is something that’s top of mind.”
• Is that a greater issue amid companies’ AI partnerships and private-equity money pouring into accounting firms?”
  • “There are complications that AI adds to the business development relationship required under the auditor independence rules. Also private equity is buying some of these smaller accounting firms and making the decision that we don’t want to serve in the public company market anymore because it’s too expensive for us to operate in that space. Auditor choice is a priority. We want to make sure that companies accessing the public markets—we’re trying to encourage companies to come to the marketplace—have a choice of audit firms in which to pick from.”
    “There’s nothing in the works to loosen the independence rule. But we want to take a look at how the changing business environment affects our independence rules to make sure that they continue to be fit for purpose in the environment. We’ll work closely with the commission in terms of our observations and how they apply to the current rules, and we’ll decide what to do at that time.”
• “What would a potential change to auditor independence rules look like?”
  • “I talk to the private-equity firms all the time. Some of the things that I did in retirement was actually consult for PE firms. The focus was, hey, look, if you’re going to do this, there’s a cost to basically build a high-quality audit practice that serves the public markets. You have a lot more rules that you have to comply with and the expectation is the work that’s going to be done is going to be the highest quality standard.”
  • “That’s one of the things that I talk to PE firms about. If you’re going to do this, you’ve got to go all in in order to make the investments that are necessary to serve that marketplace and encourage them to stay in because we want competitive options available.”
• “You’ve said you want the PCAOB to add more context to their inspection reports on audit firms. What would that look like?”
  • “I mean, wouldn’t you like to know what the particular market share is and what types of clients that your auditors were serving? If I basically said here’s an auditor who’s not doing so well in quality and they basically do like these types of audits, that’s some level of context. I have no predisposed notion on what goes into the inspection report. If the PCAOB shifts to a quality control or quality management process, that adds complications because the statute limits what they can say immediately. But I think that’s probably a better way to go because the true accountability for a firm’s quality rests with their organization structure, with their system of quality management and ultimately with the firm’s leader, not the particular engagement team who’s getting inspected.”
• “Should the PCAOB be folded into the SEC and do you expect lawmakers to revive that push?”
  • “Audit regulation is incredibly important. We need basically high-quality auditing standards so that we have a robust capital market in the United States. Whether it’s part of the SEC or part of the SEC’s oversight of the PCAOB, it’s critically important to our ecosystem. I don’t follow Capitol Hill very closely, but based on the fact that we were closed for 43 days and we couldn’t even get a simple vote on a continuing resolution, I doubt if we’re going to basically see PCAOB elimination and folding into the SEC anytime soon.”

David Kluft asks: “Does a prior authorized disclosure of confidential information waive confidentiality on the subject matter?” —

• “Company A hired a TX lawyer to draw up agreements with Company B over certain oil and gas drilling leases. When Company A declared bankruptcy, Company B filed an adversary action for declaration that its rights were not part of the bankruptcy estate.”
• “The lawyer submitted an affidavit for Company B, against his former client Company A’s interests, that was ‘replete with internal discussions with his former clients and his mental impressions regarding the representation.'”
• “Company B argued that the information in the affidavit was not confidential, or alternatively it was subject to a waiver, because it merely reflected conversations the lawyer had with the counterparty, which his former client authorized.”
• “The Court held that the lawyer breached his duty of loyalty: ‘a prior authorized disclosure … does not waive [the lawyer’s] continuing duty of confidentiality’ because “confidential information does not become freely revealable after a prior disclosure.”
• Decision: here.

Bill Freivogel always spots the most interesting updates, including:

• Callery v. HOP Energy, LLC, No. 20-3652 (E.D. Pa. Dec. 1, 2025).
  • Plaintiffs moved for class certification, which Defendant, HOP, did not oppose. Several “objectors” claimed class counsel were not adequate on seven grounds. One ground was counsel had a conflict because they had filed a RICO case, which caused disclosure of certain confidential information relating to this case. In rejecting that basis (along with all the others), the court did not see how that disclosure constituted a conflict for class counsel.
• PTC Therapeutics, Inc. v. Acurex Biosciences Corp., No. 25-cv-04594-AMO (N.D. Cal. Nov. 26, 2025).
  • PTC moved to disqualify Lawyer/Expert and Law Firm. Both had once worked for Bio Electron. In 2019 PTC purchased “substantially all of BioElectron assets.” In this Order the court denied the motions to disqualify. Because PTC purchased fewer than all BioElectron assets, BioElectron’s confidentiality rights did not pass to PTC.
• Inspire Medical Sys., Inc. v. Nyxoah, Inc., No. 25-667-RGA (D. Del. Nov. 18, 2025).
  • Law Firm has never represented Defendant. However, Law Firm has represented Underwriter in a number of securities offerings by Defendant. Law Firm represents Plaintiff in this case. Defendant moved to disqualify Law Firm. In this opinion the magistrate judge granted the motion to disqualify. Law Firm would have learned too much about Defendant during due diligence in the earlier offerings, making Law Firm’s representation of Plaintiff “deeply improper.” In addition to that rubric, the magistrate judge wades into the problematic “appearance of impropriety.” A good example of an underwriter case going the other way is HF Mgm’t. Serv. LLC v. Pristone, 818 N.Y.S.2d 40 (N.Y. App. Div. 2006).
• Delgado v. Meta Platforms, Inc., 2025 WL 3251621 (N.D. Cal. Nov. 21, 2025).
  • Defendant moved to disqualify Plaintiff’s expert (“Expert”). In this order the court denied the motion. The order is very fact-specific. Expert had had several contacts with lawyers for Defendant including emails and telephone calls. Expert had alerted Defendant’s lawyers of a possible conflict. The court felt there just wasn’t enough contact of the sort that would create an expectation of confidentiality. Moreover, the court felt the case was at a stage where Plaintiff would be unnecessarily prejudiced by a disqualification.

“Law Firm Disqualified in Ford Lawsuit Spurs Debate on Expert Witness Ethics” —

• “… the disqualification of the law firm Quill & Arrow from representing in a lawsuit against Ford Motor Company due to irregularities involving an expert witness.”
• “… the court ruled that the firm improperly communicated with an expert witness hired for the case… the judge’s decision was grounded in allegations of an undisclosed conflict that undermined the legal process’s integrity.”
• “The case highlights a crucial issue in legal ethics: the impartiality and independence of expert witnesses. Legal experts argue that this disqualification serves as a cautionary tale for law firms to maintain transparency and adhere strictly to procedural norms when engaging external experts.”
• Additional detail in the order: here.

“Litigation Funder Certum Launches MSO Aimed at Mass Tort Firms” —

• “Another litigation funder is investing in the law firm space, by taking over a managed service organization to provide pre-litigation support for mass tort and personal injury firms.”
• “Texas-based Certum Group, which specializes in litigation finance and related insurance offerings, acquired a managed service organization in October. Rechristened Certum Legal Solutions, the MSO has already partnered with several firms working on a fees for services basis, but will consider acquiring stakes in law firms down the road, said Certum Group’s managing director David Diamond.”
• “Litigation funder Burford Capital in August said it was exploring MSOs and other options for investing in firms, while Big Law’s McDermott Will & Schulte said last month it is considering selling a stake in the firm to outside investors.”
• “The service organizations, increasingly seen in the healthcare and accounting industries, are getting a closer look in the US legal market as a way for firms to raise capital and steer clear of restrictions on direct investments in most states. Some MSOs are entities spun off from law firms so that outside investors can take direct stakes, while others are created to offer services directly to firms. Certum is part of the latter camp.”
• “Certum Legal CEO Asim Badaruzzaman built the MSO last year inside New Jersey law firm Sbaiti & Company, where he serves as partner and chair of the mass tort practice group. The firm has handled cases in major mass torts, including litigation over injuries and illnesses allegedly caused by water contamination at Camp Lejeune, PFAS ‘forever chemicals,’ and weedkiller Roundup.”
• “The MSO will continue to service Sbaiti while also taking on other firms, although Badaruzzaman declined to name them. The company will handle case intake and discovery support tasks done by a mix of attorneys and non-lawyers. Certum Legal has proprietary tools to manage integration with medical records providers, an app that allows the MSO to communicate with clients directly, and uses automation to receive documents, Badaruzzaman said.”
• “Mass torts and personal injury law are ‘ground zero’ for MSOs, according to Rich. She said her team has about 40 different projects right now, with about half in personal injury or mass torts.”

“Private equity overcomes California hurdle to expansion in US legal market” —

• “Private equity has scored a partial victory in its push to expand in the US legal market, after lobbyists softened legislation in California that threatened to disrupt liberalisation of law firm ownership rules.”
• “Attorneys in the country’s largest state will be allowed to partner on some legal work with investor-owned law firms under the terms of a law signed by Governor Gavin Newsom.”
• “A previous version of the legislation would have banned all such work, in an attempt to freeze out new potential competitors from other states that allow non-lawyers to own law firms.”
• “The California legislation signed by Newsom on Friday originally aimed to keep ABS firms out of the state by banning local attorneys from co-counselling and fee sharing with any firm owned partly by non-lawyers.”
• “After an intense lobbying effort by a group of ABS firms, the legislation was watered down so that it bans co-counselling only on contingent-fee cases such as personal injury claims. That was a particular focus of the bill’s sponsor, the Consumer Attorneys of California, a trade group for plaintiff-side trial lawyers who take on corporations and government agencies.”
• “As amended, the law allows fee sharing as long as there is a dollar figure stated in the contract, as well as in a limited number of other circumstances.”
• “‘This is a move away from the outright prohibition on sharing fees and seems to be tailored to preventing ABS firms competing on contingency fee business,’ said Austin Maloney, a partner at Hunton Andrews Kurth, which advises professional services firms on mergers and acquisitions.”
• “The outcome was described as an improvement on the original bill by ABS firms that had backed the lobbying effort, albeit not a total victory.”

“Private Equity-Big Law Tie Ups Could Disrupt Associate Careers” —

• “Private equity and Big Law appear increasingly destined for the equity-ownership altar. Such a marriage was unthinkable a generation ago, thanks to longstanding bans on non‑lawyer ownership and control of law firms. But that prohibitionary wall has been chiseled away—first by litigation finance and outsourcing, and more recently by jurisdictions relaxing ownership limits (notably the UK, Australia, and Arizona).”
• “The management services organization, or MSO, model goes yet a step further, replacing the chisel with a jackhammer. In its simplest form, the model splits a firm into two entities. One practices traditional law, while the other—the MSO—owns and runs the ‘non‑lawyer’ functions: human resources, payroll, billing, business management, office leases, and (increasingly) information‑technology infrastructure. The law firm then buys or leases those services back under an affiliate contract.”
• “The MSO business pitch is seductively simple: Let lawyers lawyer, while professional managers—and their investors—handle everything else. And there are plenty of examples to go around: MSOs long ago penetrated medicine, dentistry, accounting, and other professional services. Perhaps their arrival in law was only a matter of time.”
• “Now add an MSO to the mix. If ‘IT services’ reside within the MSO, as is common, the MSO could own, operate, and continuously train a private LLM—selling its outputs back to the law practice. As the LLM continues to improve, lawyers increasingly risk becoming glorified conduits for AI‑generated analysis.”
• “In the meantime, junior partners and associates are still needed, not only to check for hallucinations and spurious results but also to produce the memoranda, markups, and deal documents that will calibrate the model dynamically—effectively transferring their experience and judgment into the MSO’s future asset pool. And as client deliverables become progressively anchored to the model’s output, the IT portion of the MSO is poised to capture an outsized share of law firm invoices. Whether this is a good thing depends on one’s perspective.”
• “Clients will no doubt applaud clearer invoices and lower charges from the MSO model, at least initially. And many a senior partner is sure to cheer on this development, too, for a simple reason: PE investments monetize both current goodwill and future client flow through a one-off cash transaction, letting today’s senior partners absorb the cash payout in the form of higher salary and bonuses before sailing into retirement.”
• “But junior partners, non‑equity partners, and associates are unlikely to celebrate. After investment proceeds are distributed and the MSO is cleaved away, the legal practice may be functionally forced into ‘buying back’ its own historical expertise through LLM queries. The end result may be that there will be less left over for future lawyer cohorts at the law firm, even as those same cohorts are expected to correct errata and train the model for the sake of improving accuracy (and the MSO’s future profitability).”
• “With diluted ownership of their own work product, will these cohorts play ball or will they decamp to non‑MSO firms? And even if they stick around, will they sprout alligator arms when it comes to sharing their own client materials, or strategically convince their clients to forbid the use of confidential documents to train the model?”
• “State bar authorities and professional associations (such as the American Bar Association) will elbow in on the party as well. ABA Model Rule 5.4 still forbids non‑lawyer ownership of the practice of law in most jurisdictions. If an MSO‑controlled LLM comes to dominate legal service delivery, has the firm ceded de facto control of legal operations and professional judgment?”
• “If so, the claim that the MSO isn’t ‘practicing law’ becomes harder to defend, inviting a stiff-arm that could reverse the pendulum swing—re‑internalizing AI tools and training within lawyer-owned firms. Ironically, younger lawyers who may roll their eyes at many professional guardrails could become their biggest defenders here.”
• “Is the MSO a wise move? Like most interesting legal problems, this question invites a characteristically lawyerly answer: It depends. Although the promise of attracting private equity investment capital is intriguing, the threats of the MSO structure noted are just as real. We suspect some firms may simply wait on the sidelines, at least for now, while others plunge ahead.”
• “Private equity can bring scale, systems, and discipline to legal services. But absent thoughtful architecture, the MSO model risks shifting control and value away from the lawyers who owe duties to clients and the courts. Firms that embrace this approach will need to think carefully about structural design. And to answer this challenge, they may require a good (most likely human) lawyer.”

“Everything Old Is New Again: Why Law Firm MSOs Fit Comfortably Within Existing Ethics Rules” —

• “The business of law is evolving. Today, management services organizations (MSOs) for law firms are becoming an increasingly attractive tool to allow lawyers and law firms the ability to leverage outside investment and support.1 Investors exploring these models are enticed by the promise of professionalized operations, scalable technology, data infrastructure, human resources (HR) and payroll efficiencies. Lawyers and law firms are interested in the ability to access outside capital and logistics support through a parallel, nonlawyer-owned entity.”
• “These structures raise obvious ethical questions: Can lawyers partner with an MSO? Can they invest in one? Can an MSO participate in revenue? Can an MSO hire, discipline or evaluate lawyers? And where is the line between legitimate administrative services and the unauthorized practice of law?”
• “Taken together, this body of authority shows that partnerships between law firms and MSOs are not brand-new structures requiring brand-new rules. Instead, they are a modern tool in a time-honored industry of outsourcing and co-employment arrangements. These arrangements have been addressed by regulators and ethics authorities for decades, and the principles that made PEOs permissible (with guardrails) apply with equal force to MSOs. This Holland & Knight article traces that history, summarizes MSO-specific opinions and distills common principles for structuring a compliant law firm/MSO partnership.”
• “Across jurisdictions, the ethical analysis is remarkably consistent. These arrangements require the law firm to firmly remain at the helm, directing every aspect of legal work and exercising unqualified authority over professional judgment. The outside entity – whether called a PEO, an employee-leasing company, a management company or an outsourcing provider – operates strictly in a supportive role, never crossing into the domain of legal practice and never exerting pressure on the lawyer’s decisions. Its function is purely administrative, not advisory, and its compensation reflects that distinction, avoiding any form of fee-splitting that would compromise professional independence.”
• “Within this framework, client confidences are treated with the same sanctity as if the lawyers were employed directly by the firm, and conflicts of interest are scrutinized under identical standards. Transparency is paramount: When required, communications about the structure must be candid and accurate, leaving no room for misunderstanding. When these elements align, the entity is not a shadow law firm, but a logistical partner – one that enables operational efficiency without eroding the ethical bedrock of the profession. These principles now serve as the foundation for the ethical analysis governing modern MSOs.”
• “Texas Ethics Opinion 706, issued by the Professional Ethics Committee for the State Bar of Texas, is the first modern ethics authority to substantively and explicitly address MSOs.15 The opinion analyzes a nonlawyer-owned, support-services company that provides a bundle of operational services, including marketing, payroll, HR and technology, and proposes to charge law firms a percentage of revenues while also offering lawyers an opportunity to hold equity in the MSO.”
• “First, Texas concludes that paying an MSO a percentage of the firm’s revenues is impermissible fee-splitting with a nonlawyer. Even if the MSO does not practice law and even if the percentage is designed to reflect services performed, tying the MSO’s compensation to the firm’s legal revenues crosses Rule 5.04(a). This is consistent with every PEO opinion from the last three decades: A nonlawyer entity cannot receive a share of legal fees, directly or indirectly.”
• “Second, Texas also affirms that lawyers may invest in or own equity interests in companies that provide law-related services, including MSOs…”
• “Firms must analyze conflicts arising from MSO relationships the same way they analyze conflicts arising from a PEO and other temporary lawyer arrangements. If lawyers have ownership interests in the MSO, referrals between the firm and MSO may require informed written consent from clients.”
• “Lawyers must remain responsible for the conduct of nonlawyer personnel performing delegated functions. Lawyers must supervise MSO personnel who perform delegated functions and must ensure that those personnel act in ways consistent with lawyers’ professional obligations.”
• “Firms must describe the law firm/MSO relationship accurately in marketing, engagement letters and client communications. Where required, clients must understand which entity is providing legal services and which is providing business support.”