Bressler Risk Blog

“Court of Appeal: Ethics Rule Didn’t Justify Total Disqualification of Lawyers” —

• “The two members of a father-and-son law firm were properly barred from representing the firm in its fraud/breach-of-contract action against two former clients who failed to pay for services and a lawyer, the Fifth District Court of Appeal held yesterday, but declared that there was no reason to order that they play no role in the trial preparation.”
• “Presiding Justice Brad Hill said in an unpublished opinion: ‘We hold the trial court acted within its discretion in disqualifying the Firm’s attorneys from representing the Firm at trial because they will likely be called as witnesses, carrying a significant risk of juror confusion and prejudice to the defendants. However, the trial court abused its discretion by disqualifying the Firm’s attorneys from representing the Firm in all pretrial phases of the litigation without making any findings as to how their continued behind-the-scenes activities preceding trial would undermine the purposes of the advocate-witness rule.'”
• “It was Stanislaus Superior Court Judge John D. Freeland who barred Michael J. Dyer and Dustin J. Dyer from doing any legal work for their Stockton firm, The Dyer Law Firm, in its action against ex-clients Karla Sam-Sin and Fernando Sam-Sin and Modesto attorney Mark S. Nelson. The Dyer Law Firm was representing the San-Sins in litigation. Nelson was allegedly in complicity with the San-Sins in causing the Dyers to change a portion of their retainer agreement with the Sam-Sins to mirror the arrangement the clients supposedly had with their previous lawyer not to charge for a certain portion of the work, although there was no such arrangement.”
• “In his opinion partially reversing and partially affirming the order, the presiding justice said: ‘[T]his is not a matter of the Dyers representing themselves, as Nelson often puts it; nor is this a matter of the Firm representing itself, as the Dyers sometimes frame it. Despite the Firm being a closely held corporation owned and directed exclusively by the Dyers, this is still a case with a client (the Firm) being represented by counsel (the Dyers). This is not a case of self-representation. The distinction matters because, if the Dyers were truly representing themselves in propria persona, there would be a good argument that the advocate-witness rule would not apply. Various appellate courts around the country—though none in California, to our knowledge—have held that a ‘lawyer-litigant’ has a right to appear pro se and should not be disqualified from doing so under the advocate-witness rule.'”
• “Hill noted that when Nelson represented himself, he did so as a ‘lawyer-litigant.'”
• “Rejecting the contention that Nelson waived a disqualification motion by waiting 21 months before bringing it, the jurist said that ‘[a]bsent a prima facie showing of extreme prejudice caused by the delay, there was no waiver of the right to seek ‘ and no such showing was made. He remarked: ‘This was not an eleventh-hour, eve-of-trial motion (nor a midtrial motion…).New counsel will have plenty of time to get up to speed, and the Firm will not be duplicating any expenses in the process of replacing counsel because the Dyers had been representing the Firm for free.'”
• “He declared that Nelson’s motion ‘clearly has merit with respect to protecting the integrity of the judicial process at the forthcoming trial” because “having the Dyers serve as both attorneys and witnesses at trial carries an unnecessary risk of confusing the jury and biasing the jury.'”

“‘Conflict of interest’: Idaho AG gave officials legal advice, then investigated them” —

• “An Ada County judge ruled Thursday that Idaho Attorney General Raúl Labrador had a “notable conflict of interest” when his office began investigating officials with the Idaho Department of Health and Welfare over how it distributed federal child care grants.”
• “The health officials were the attorney general’s clients. And a lawyer under Labrador had advised them that the grants in question were legally distributed.”
• “‘The attorney general provided an opinion to a client and cannot now seek to investigate whether… the client violated the law on the same issue,’ 4th Judicial District Judge Lynn Norton wrote in Thursday’s ruling.”
• “Labrador’s office demanded that the health officials hand over records related to the program around the same time Idaho lawmakers approved an audit of the grants, amid concerns that the federal funds weren’t distributed properly. Lawmakers dictated that the funding go to programs serving kids 5 to 13. Labrador previously told the Idaho Statesman that he’s investigating whether those directions were followed.”
• “Central to the health officials’ case are two legal opinions, written by former deputy attorney general Daphne Huang, who advised health department officials that the child care grants were distributed legally.”
• “Huang issued one opinion in November, during former Attorney General Lawrence Wasden’s tenure, and a nearly identical opinion in January, after Labrador assumed office and lawmakers questioned Jeppesen about the grants.”
• “But the legal advice created ‘a client relationship’ with health department officials and a “duty to act in protection” of the department’s interests, Norton wrote. Idaho State Bar ethical rules prohibit attorneys from advocating against their clients’ interests.”
• “Norton also wrote that an attempt by Labrador’s aides to seize the work phone of a former attorney assigned to the department shows that the attorney general’s office failed to create a sufficient ethical firewall between investigating attorneys and the lawyers advising the Department of Health and Welfare.”
• “Thursday’s ruling is the first time a judge has publicly analyzed the unique conflict between the executive branch officials and their own attorney. It’s among a handful of clashes between Labrador and state agencies that have marked the Republican’s first term in office.”

“Quinn Emanuel sues Los Angeles over legal tab for embattled ex-sheriff” —

• “Quinn Emanuel Urquhart & Sullivan has sued Los Angeles to recoup more than $280,000 in fees for its work defending a top law enforcement official, marking a new flashpoint in a long-running fight stemming from an employment scandal at the county sheriff’s office.”
• “California-based Quinn Emanuel filed the lawsuit in Los Angeles Superior Court on Aug. 10, seeking compensation for the legal fees it incurred in its 2019 representation of then Los Angeles County Sheriff Alex Villanueva.”
• “The county sued Villanueva in 2019 over his reinstatement of a deputy sheriff who had been fired over domestic violence allegations. An appeals court said last year that the rehiring was unauthorized.”
• “Quinn Emanuel contends Villanueva was authorized to hire the firm as outside counsel because of a conflict of interest between the sheriff’s office and the Los Angeles county board.”
• “The firm’s new lawsuit follows its defeat in a previous fight with the county over Villanueva’s legal fees. In that 2021 case, Los Angeles sued Quinn Emanuel, alleging that the firm did not have a valid and enforceable engagement agreement because the county did not approve its contract with the sheriff.”
• “Los Angeles County Judge Holly Fujie granted summary judgment to Los Angeles in May. She also said Quinn Emanuel could not file a ‘cross complaint’ as part of that litigation. Quinn Emanuel last month filed an appeal.”

“Ontario lawyers’ auto insurance tribunal allegations – ‘at least’ three insurers hired adjudicators” —

• “In the aftermath of allegations around ‘conflicts of ‘ risk relating to a Tribunals Ontario LAT adjudicator who made decisions in favour of Aviva prior to joining the insurer, the Ontario Trial Lawyers Association (OTLA) has set out three more instances of LAT adjudicators moving to insurance companies that it claims warrant investigation, though it has not alleged any definite bias risk.”
• “This August, the Ontario Trial Lawyers Association (OTLA) called for an immediate investigation after an adjudicator, who had received an offer of employment from Aviva, went on to render at least nine decisions for the LAT before starting work with the insurer. OTLA has set out that all decisions went in favour of insurers, including Aviva – though this has been disputed by the ex-adjudicator in question, who has said that one went in partial favour of a claimant and that most decisions typically do go in insurers’ favor.”
• “OTLA has claimed to have unearthed three other cases of LAT adjudicators moving to insurers, named as Aviva, Definity Insurance, and Intact Financial Corporation, and it has called for further investigation into these people moves. However, in an interview with Insurance Business, OTLA president Laurie Tucker stopped short of levelling accusations of definite bias risk. Rather, she claimed that further information on the people moves was needed to assuage any potential conflicts of interest concerns.”
• “‘At least three other adjudicators we know of have left the LAT and gone to work for these insurance companies,’ Tucker said. “‘We don’t know the details of when they applied [for roles], when they accepted employment with those companies, when they left the LAT, and whether they were rendering decisions during that period. We’ve asked the LAT for information, and we are continuing to look into this matter.'”
• “Reilly has contended that she was unaware of any potential conflict of interest concerns from the insurer prior to her June 2023 split from the business. The ex-adjudicator has called on both the LAT and Aviva to bring in more comprehensive policies and people moves procedures to prevent any potential ‘appearance of bias.'”
• “She has denied any bias in decision making in the interim period between a conditional offer of employment being received from Aviva in June 2022 and her move to the company later that year and set out in a statement that she operated ‘based on the facts, evidence, and law as presented.'”

“Mar-a-Lago worker’s lawyer has conflicts of interest in documents case, prosecutors say” —

• “Special counsel prosecutors asked on Wednesday for a hearing to inform the Mar-a-Lago club’s maintenance chief, charged with helping Donald Trump to obstruct the government’s attempt to retrieve the classified documents at the property, that his lawyer might be hamstrung at trial due to potential conflicts of interest.”
• “The issue, according to prosecutors, is that De Oliveira’s lawyer, John Irving, represents three other witnesses who provided incriminating evidence against Carlos De Oliveira and could be called to testify against him at trial.”
• “In an 11-page court filing, the prosecutors explained the potential conflicts could mean Irving might not be able to defend De Oliveira as forcefully as he would have otherwise because he needed to protect the interests of those other clients, described as ‘Witness 1,’ ‘Witness 2’ and ‘Trump employee 3.'”
• “‘An attorney who cross-examines a client inherently encounters divided loyalties,’ prosecutors in the office of the special counsel Jack Smith wrote. ‘A hearing would permit colloquy with Mr Irving’s clients to inform them of potential risks and inquire into possible waivers.'”
• “Wednesday’s request to the US district court judge Aileen Cannon is the second for a conflict-of-interest hearing in the classified documents case after prosecutors revealed last month that Nauta’s lawyer Stanley Woodward also had three potential conflicts of interest.”
• “De Oliveira told prosecutors in April that the reason he was on tape taking photos of the surveillance cameras in the tunnel outside the storage room was because he was looking for a shutoff valve after a a water pipe rupture and also wanted to document a broken door below one of the cameras.”

The aptly named Meatingplace, which bills itself as “the premier multimedia information source for the red meat and poultry processing industry” noted: “Federal judge offers to step down in poultry antitrust case” —

• “A federal judge offered to recuse herself from an antitrust case after a lawyer from the judge’s husband’s former law firm made an appearance on behalf of Cargill Meat Solutions, which is a defendant.”
• “Maryland District Judge Stephanie A. Gallagher submitted a letter last week disclosing the connection and offered to step down if either side felt her objectivity was compromised.”
• “Judge Gallagher said her husband has not worked for WilmerHale for more than three years, but made a capital contribution to the firm, of which a small percentage remains. She added that will be fully paid back to him by the end of this calendar year and that the capital contribution has not affected in any way by the firm’s success or profits.”
• “The judge said she believes this connection does not disqualify her from presiding over the case but wanted to leave it up to the parties to decide.”
• “The United States Department of Justice filed a lawsuit against Cargill and several other poultry producers for allegedly monopolizing trade. The DOJ claimed the poultry processors agreed that they would assist each other by discussing and sharing information about how to compensate their plant workers.”

“Avoiding Ethical Risks in Your Online Bio” —

• “Whether through a law firm’s website or through a social media platform like LinkedIn, a lawyer’s online profile is often the first resource available to potential clients, opposing counsel, or others in the field when they want to learn more about a lawyer… But there are also ethical requirements that lawyers should keep in mind when revising and publishing their online bios. Here are three issues every lawyer can consider when reviewing and updating their online bios.”
• “California has some of the strictest rules on client confidentiality in the country. Business and Professions Code Section 6068(e) requires every lawyer ‘to maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.’ Rule 1.6—the ethical rule on confidentiality—then incorporates that obligation, providing that lawyers shall not reveal information protected by that statute.”
• “For lawyers drafting their online bio, they may need to consider whether publishing information about their prior representations runs afoul of this rule. The ABA’s Standing Committee on Ethics and Professional Responsibility’s Formal Opinion 480, from 2018, confirms the need to protect clients’ confidential information in online formats. The opinion states that, even if there is information about a client in a court’s order or other public record, the lawyer’s duty of confidentiality still applies to ‘information related to a representation, whatever its source and without regard to the fact that others may be aware of or have access to such knowledge.'”
• “Thus, just because a fact relating to a representation is publicly available does not mean that the lawyer is free to publish it in a bio absent express or implied client consent. The opinion advises: ‘Rule 1.6 does not provide an exception for information that is ‘generally known’ or contained in a ‘public record.'”
• “Notably, even an accurate statement about a past representation could still be viewed as misleading to prospective clients, if the statement suggests that the results could be repeated for another client. The comments to Rule 7.1 indicate that, in order to avoid creating an ‘unjustified expectation,’ lawyers generally exclude from their bios information about a specific amount of damage award, the lawyer’s record in obtaining favorable results, and client endorsements. Lawyers who describe the outcomes of their cases in this way (which is more common for plaintiff’s-side lawyers) may also consider using a disclaimer or other clarification to note that the outcome of any single representation will depend on the facts and circumstances.”

“You Keep Using That Word, I Do Not Think It Means What You Think It Means: Accountant-Client ‘Privileged’ Communications May Not Be Privileged as a Conflict of Law Matter” —

• “In Florida, the legislature deemed open dialogue between an accountant and a client so important that, in 1978, it adopted a privilege nonexistent in the common law: the accountant-client privilege.”
• “Akin to the attorney-client privilege, the privilege permits a client ‘to refuse to disclose, and to prevent any other person from disclosing, the contents of confidential communications with an accountant when such other person learned of the communications because they were made in the rendition of accounting services to the client.'”
• “Cases applying section 139 to a conflict of law regarding the accountant-client privilege, in Florida state court, are nearly nonexistent. In fact, the authors of this article are aware of only one such decision, in which they participated — Schaeffer v. Dowling & Hales LLC.”
• “The court began its analysis by noting that a conflict existed because Florida (the forum) recognized the accountant-client privilege while California (the state where the communications occurred) did not. From there, the court noted that Florida applies the “‘interest analysis methodology’ for determining choice of law questions,” and then quoted section 139.[6] The court went on to apply section 139 in the context of the accountant-client privilege, and relied on an example given by section 139 of when not to recognize a privilege.”
• “There is a sizeable body of case law from courts across the country applying section 139 of the Restatement (Second) of Conflict of Laws.[9] Importantly, section 139 favors disclosure when there is a conflict. Thus, litigants should be aware of the pitfalls and opportunities presented when faced with privileges arising in a conflict-of-law context.”

“‘Conflict of interest’: Watchdog berates Holyrood plan to keep Law Society as regulator” —

• “Britain’s senior consumer watchdog has strongly criticised plans by the Scottish government to allow the Law Society of Scotland to carry on regulating the nation’s 13,000 solicitors. The Competition and Markets Authority reiterated its call for a new regulator north of the border that is properly independent of both the legal profession and government.”
• “The CMA’s plea is contained in its consultation response to The Regulation of Legal Services (Scotland) Bill, which was introduced to the Scottish Parliament in April this year. The bill aims to ‘modernise’ the regulation of legal services in Scotland, informed by a Scottish government-commissioned independent review led by governance expert Esther Roberton.”
• “Crucially, the Scottish government rejected a principal recommendation of Roberton – the creation of a single independent regulator – in favour of an approach that would ‘seek to develop the existing regulatory framework.'”
• “In truth, the 2018 Roberton report was merely the latest chapter in a saga that has lasted for nearly three decades. As the CMA acknowledges, there have been many alleged examples where conflicts of interest ‘may have led the Law Society of Scotland and the Faculty of Advocates to prioritise the interests of their members over those of consumers.'”
• “The Society and Faculty have lobbied ferociously to retain control of regulating their members, occasionally in the face of allegations of a conflict of interest from disgruntled clients. Such allegations have been periodically raised in the Scottish Parliament, including by John Swinney MSP who rose to become deputy first minister. So far the bodies, which wield considerable power in Scottish civil society, have succeeded in their aim. This marks a stark contrast with their counterparts in England and Wales, where the representative and regulatory functions were formally split more than 15 years ago.”
• “The Scottish government’s chosen model contains new safeguards, including bolstering the independence of the Society’s regulatory committee. But the CMA says today: ‘The experience in England and Wales illustrates that any incomplete separation has the potential to give rise to an inherent conflict between the responsibility to regulate in the consumer interest and the responsibility to represent the interest of their members. That has the potential to affect regulatory outcomes.'”

Charles Russell Speechlys Lawyers Dalal Alhouti and Georgia Fullarton write an excellent and detailed piece on: ” Conflicts of Interest in International Commercial Arbitration” —

• “Conflicts of interest can arise when an arbitrator has a connection to one of the parties or has otherwise conducted himself or herself in a manner that may give rise to justifiable doubt as to their impartiality. International commercial arbitration is largely a private process but the adage that justice must not only be done but be seen to be done holds true just as much as in litigation. Without this essential principle arbitration would stop being an effective means of commercial dispute resolution as users would lose faith in the process.”
• “In this Practice Note we explore the general principles applicable to conflicts of interest in international commercial arbitration, and how such conflicts are assessed and resolved.”
• “International commercial arbitration is not a single uniform system, it arises from the operation of national arbitration systems and the ability to enforce awards in different countries (mainly as a result of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958[8 p.8]). A variety of different rules simultaneously apply to an arbitration, chief among them is the law of the seat (or legal place) where the arbitration is occurring and any institutional rules that the parties have agreed should be applied.”
• “It is not possible in this Practice Note to survey all national arbitration laws to determine what they say about conflicts of interest, but most will contain language to the effect that an arbitrator must be impartial and independent.”
• “Parties do not have to use an institution to help manage the arbitration process, but it is almost always recommended given the significant benefits using an institution brings. Most institutional arbitral rules address conflicts of interest, for example…”
• “Whilst the law of the seat and the institutional rules are the primary sources for rules concerning conflicts of interests, there may be other rules to consider. For example, an arbitrator may be a professional (such as a lawyer) with professional rules to avoid conflicts of interest and anything that may bring the profession into disrepute.”
• “There is also ‘soft law’, being guidance and rules generated by industry bodies which are not mandatory, but which parties either choose to follow or which are taken to reflect best practice and so may be consulted when determining whether there is a conflict of interest. The main soft law in this area is the International Bar Association’s ‘Guidelines on Conflicts of Interest in International Arbitration’, first issued in 2004. The IBA Guidelines divide possible conflicts into three traffic light categories…”
• “The IBA Guidelines divide possible conflicts into three traffic light categories:
  • Red list items, being situations where there is clearly a conflict. This is divided further into ‘Red Non-waivable’ situations which result in automatic disqualification of the arbitrator, and ‘Red Waivable’ situations which require notification of the parties and their express consent to be given (i.e., a specific waiver provided) for the arbitrator to act.
  • Orange list items, being situations which ‘in the eyes of the parties give[s] rise to doubts as to the arbitrator’s impartiality and independence’. These require notification of the parties and an invitation to the parties to make an informed decision whether to request that the arbitrator be disqualified on the basis that there is an objective, justifiable doubt as to an arbitrator’s impartiality and/or independence.
  • Green list items, being situations ‘where no appearance of, and no actual, conflict exists from an objective point of view’. No obligation to disclose arises or a limit to disclosure applies based on reasonableness.”
• “Conflicts of interest can arise in many different forms, but perhaps the three most common are where… connection with one of the parties can arise where, for example, the arbitrator has previously substantively advised one of them in a professional capacity or has a financial interest in one of them…. A common source of conflict is where an arbitrator has a connection with one of the lawyers in the case.”
• “Issue conflict arises where an arbitrator has previously expressed a view on a particular legal problem that also arises in the arbitration, such that it may be argued that the arbitrator is no longer impartial or open-minded on the issue. This is traditionally hard to prove and doesn’t arise as often as the other conflicts referred to above.”
• “Arbitrators should also take care to understand as fully as possible the relevant corporate structure of the parties to the dispute so that any conflict check is complete. In carrying out this assessment, an arbitrator may look to the IBA Guidelines to understand the General Standards (Part 1 IBA Guidelines) as well as guidance on their practical application and specifically which situations do and do not constitute conflicts of interest and should be disclosed (Part 2 IBA Guidelines) using the IBA Guidelines’ traffic-light system.”
• “Conflicts of interest are a fact of life that will continue to occur, they just need to be properly identified and managed. Although as detailed above, the exact test to be applied can vary between different laws and arbitral rules, the key points are that arbitrators should confirm their impartiality and identify any possible conflict as soon as they can, using the IBA Guidelines for guidance. After that any challenge should be made promptly to minimise the delay to the arbitral process as far as possible.”

I’m pleased to invite our law firm risk readers to participate in the 2023 Risk Staffing Compensation Survey!

Last year’s exercise proved to be a great success. We saw participation from 80+ individuals, who contributed data on 375+ individual risk staff positions. (Let’s see if we can’t top that figure this year, shall we?) The final report came in at 14 pages and certainly proved popular.

I also received many encouraging notes of feedback and input from risk staff, risk managers, and firm leaders.

• Kudos to those managers using this industry data to advocate for and ensure that their team’s compensation is kept in line with industry averages.
• It was great to see several firms using the data to inform their staff recruiting and offer processes
• And it was particularly nice to hear from several individuals who were able to use the data to self benchmark and support their personal career efforts and growth.

This year’s exercise incorporates some lessons learned from 2022.

So if you’re an individual contribution looking to understand how your comp compares to your peers, or you’re a risk manager looking to keep your team (and potential new hires) on par with changing market standards, you don’t want to miss out.

SURVEY DETAILS:

• Participation open to law firm risk professionals only
• All responses will be treated confidentially
• Manager participants sharing data on their/their team’s roles and compensation will receive a report summarizing key findings and analysis
  • (The report may be shared internally within your firm, but not redistributed externally. So if you want the results, your best path is to participate!)
• Individual contributor participants sharing personal compensation data will be receive a personal benchmark compensation summary relevant to their specific role and firm demographics.

The survey will be open for the next month or so and can be accessed here: 2023 Risk Staffing Compensation Survey.

Feel free to share the link with law firm peers and colleagues.

And if anyone has questions, please do reach out to me directly. (Email readers can do that by just replying to this note — it’ll reach me. Others can use the contact form as well.)

Let’s see what we learn this round!

“Will Dentons’ China Breakup Trigger a Domino Effect?” —

• “Dentons has decided to end its combination with Dacheng Law Offices, the mainland China arm of the firm… Dentons said in an email alert to its clients that its decision to end the combination is due to ‘an evolving regulatory environment for Chinese law firms in China—including new mandates and requirements relating to data privacy, cybersecurity, capital control and governance.'”
• “The breakup puts an abrupt end to Dentons’ long-touted tagline of being the world’s largest law firm. As of last year, the firm reported a headcount of over 12,000 lawyers. It will force an inevitable reduction to Dentons’ $2.94 billion gross revenue intake reported in 2022.”
• “The Big Four firms and their affiliated Chinese law firms have reportedly suffered raids from Chinese authorities, as did corporate investigations firm Mintz Group and American management consulting firm Bain & Company, according to The New York Times.”
• “‘The Chinese regulator tends to be pretty opaque,’ said one Beijing-based partner at a U.S.-headquartered law firm. ‘But I think that’s going to increasingly be a challenge for global law firms to be able to operate in the marketplace. The intrusion of the Chinese government regulator into law firm business will not stop with Dentons.'”
• “For international law firms that have substantial practices in mainland China, the country’s focus on national security and the broader geopolitical issues has major implications. Under the broad national security umbrella, Chinese lawyers can be required to divulge explicit client information to the state. Lawyers can also be prohibited from releasing China-related data to their international counterparts, all making basic conflict checks and due diligence on cross-border deals impossible to implement.”
• “The ‘Chinese Wall’—an old term used to describe corporate measures adopted by firms to prevent information leaks internally—is now neither relevant nor adequate.”
• “According to Kent Zimmermann, a U.S.-based principal at Zeughauser Group, there has been an increasing number of law firm leaders who have been reassessing their China operations in recent months. ‘Dentons is not the first professional services firm practicing law to pull out of China,’ said Zimmermann. ‘It is not going to be the last. Given the conditions, which make it virtually impossible to practice there as a Western firm and comply with the laws and regulations, it wouldn’t be unsurprising if other firms follow suit.'”
• “American law firms will not risk having their lawyers go to jail over conflict checks, due diligence and their right to act in their clients’ interest, Zimmermann said. They will also not tolerate having Chinese authorities barge into their offices unannounced.”
• “‘The solution may be exactly what Dentons is doing—to have an independent Chinese firm with which the Western firm has a close relationship, but they’re independent entities.'”

“Trump’s Legal Team Is Enmeshed in a Tangle of Possible Conflicts” —

• “Former President Donald J. Trump’s growing cast of lawyers is marked by a web of overlapping interests encompassing witnesses, co-defendants and potential targets.”
• “M. Evan Corcoran, a lawyer who accompanied former President Donald J. Trump to court this week for his arraignment on charges of trying to overturn the 2020 election, has given crucial evidence in Mr. Trump’s other federal case — the one accusing him of illegally hoarding classified documents.”
• “Another lawyer close to Mr. Trump, Boris Epshteyn, sat for an interview with prosecutors this spring and could be one of the former president’s co-conspirators in the election tampering case.”
• “And Mr. Epshteyn’s lawyer, Todd Blanche, is defending Mr. Trump against both the documents and election case indictments.”
• “While it is not uncommon for lawyers in complex matters — like large mob cases or financial inquiries — to wear many hats or to play competing roles, the Gordian knot of intertwined imperatives in the Trump investigations is particularly intricate and insular.”
• “Some of the lawyers involved in the cases are representing both charged defendants and uncharged witnesses. At least one could eventually become a defendant, and another could end up as a witness in one case and Mr. Trump’s defender in a different one.”
• “All of that sits atop another thorny fact: Many of the lawyers are being paid by Save America PAC, Mr. Trump’s political action committee, which has itself been under government scrutiny for months. Some of the witnesses those lawyers represent work for the Trump Organization, Mr. Trump’s company, but their legal defense has not been arranged by the company, but rather by Mr. Trump’s own legal team, a person with knowledge of the matter said.”
• “Although clients might choose to stick with their lawyers despite a conflict, just this week, prosecutors under Mr. Smith sent up a warning flare about these issues. They asked Judge Aileen M. Cannon, who is overseeing the documents case, to conduct a hearing ‘regarding potential conflicts’ arising from the complex client list of one lawyer, Stanley Woodward Jr.”
• “‘This is boundary breaking,’ Bruce Green, who teaches legal ethics at Fordham Law School in New York, said about the totality of the issues involved. ‘What I’m most curious about is why these lawyers want to play so many roles. Usually, lawyers just want to be lawyers.'”
• “Many potential objections to conflicts in these cases could be waived by the clients or otherwise mitigated by the courts, Mr. Green said. But he cautioned that judges often lean toward avoiding conflicts at all costs — up to and including disqualifying lawyers who face them — because the consequences of allowing them to continue could result in the dismissal of the case.”

UIC School of Law, Chicago Professor Alberto Bernabe notes: “Breaking news: ABA House of Delegates approves changes to Model Rule 1.16” —

• “Last February, the ABA House of Delegates, which is comprised of 597 delegates from ABA entities and state, local and specialty bar associations, adopted a measure that updates the ABA’s policy that endorsed for the first time ‘reasonable and appropriate’ federal government efforts aimed at combating money laundering. The policy seeks to balance the longstanding attorney-client privilege with the demands of governmental entities seeking access to information on criminal activities.”
• “Following this policy, yesterday, the HoD adopted an amendment to Model Rule 1.16 ‘to protect lawyers from unwittingly becoming involved in a client’s or prospective client’s criminal and fraudulent activities.'”
• “Reportedly, there was a lengthy debate on the proposal but it was eventually approved by a vote of 216-102.”
• “The amendment creates a duty to ‘inquire into and assess the facts and circumstances of each representation to determine whether the lawyer may accept or continue the representation’ and adds a new (a fourth) case in which lawyers are obligated to refuse to represent a client or to withdraw from representing a current client.”
• “This section of the amendment states that the a lawyer shall not accept the representation or shall withdraw from representation if ‘the client or prospective client seeks to use or persists in using the lawyer’s services to commit or further a crime or fraud, despite the lawyer’s discussion pursuant to Rules 1.2(d) and 1.4(a)(5) regarding the limitations on the lawyer assisting with the proposed conduct.”
• “As you probably know, Model Rule 1.16(a) lists the circumstances when a lawyer is required to withdraw, while 1.16(b) lists the circumstances in which a lawyer may withdraw. Model Rule 1.16(b)(2) states that a lawyer may withdraw if ‘the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes is criminal or fraudulent.'”
• “The original proposal before the House of Delegates eliminated this discretionary duty and essentially converted it to an obligation. But, at some point in the process it was decided to keep section 1.16(b)(2), so now we have a mandatory duty related to a client’s intent to engage in fraud, etc, and a separate discretionary duty.”
• Read: Resolution and Full Report

“Dentons accused of AML regulation breach” —

• “Dentons has been accused of violating anti-money laundering (AML) regulations in a case set to go before the UK Solicitors Disciplinary Tribunal, reported the Law Society Gazette.”
• “The firm allegedly failed to conduct an adequate check on a client’s source of wealth when it represented a ‘politically exposed person or his associated entities’ from May 2013 to June 2017, as per a notice published by the UK’s Solicitors Regulation Authority (SRA). The tribunal certified the validity of the case brought against Dentons.”
• “In particular, the firm was accused of violating the Money Laundering Regulations 2007 with respect to compliance with legal and regulatory obligations, effective operation of the business in line with ‘proper governance and sound financial and risk management principles’ and compliance with AML legislation, the Gazette indicated.”
• “The conduct, according to the allegations, broke the public’s trust in Dentons and its legal services.”
• “Dentons confirmed in a statement that had ‘co-operated fully with the SRA throughout this investigation, which relates to a former client, and we will continue to do so.'”
• “‘As a firm we are committed to strict compliance with all laws, regulations and professional standards of the jurisdictions we operate in’, the firm said.”
• “The tribunal is set to hold a hearing later in the year.”

“Clyde & Co to Face SDT Over Alleged Breach of Money Laundering Regulations” —

• “Clyde & Co has been referred to the U.K.’s Solicitors Disciplinary Tribunal (SDT) for allegedly breaching money laundering regulations.”
• “In a decision published on the Solicitors Regulation Authority (SRA) website, the regulator said that the allegations related Clydes’ handling of a number of matters on behalf of a client and companies used by the client involving a ‘failure to comply with anti-money laundering procedures and breach of Money Laundering Regulations’.”
• “The SRA added that the alleged failures were ‘in relation to a number of matters spanning a period of over four years’.”
• “In a separate decision, also published on Wednesday, the SRA also referred former Clydes’ partner Edward Mills-Webb to the SDT, after concluding there was a case to answer in respect of allegations which also relate to matters arising from the handling of a number of matters on behalf of a client.”
• “In a statement, Clyde & Co commented: ‘In early 2019 we suspended a partner, Ed Mills-Webb and referred him to the Solicitors Regulation Authority of England & Wales in relation to matters concerning the application of the SRA Code of Conduct 2011 and the SRA Accounts Rules 2011. We assisted the SRA fully with its investigations and during that time Ed Mills-Webb resigned from the firm.”

“‘Shockwaves’ as [UK] Supreme Court rules litigation funding deals unenforceable” —

• “Litigation funders will have to redraft the terms of their agreements following a widely awaited ruling by the Supreme Court this morning. In PACCAR Inc & Ors v Competition Appeal Tribunal & Ors, four out of five justices ruled that such agreements fall within the statutory definition of damages-based agreements (DBAs). As they had been entered in to without satisfying conditions for DBAs, they were therefore unenforceable.”
• “In lead judgment today, Lord Sales ruled that litigation funding falls within the express definition of ‘claims management services’ – which includes ‘the provision of financial services or assistance’ – in the Compensation Act 2006. Lord Reed, Lord Leggatt and Lord Stephens agreed.”
• “Experts said the ruling would have significant implications for litigation funders. ‘The decision will send shockwaves through the funding industry and may lead to number of smaller operators going out of business,’ said Glenn Newberry, head of costs and litigation funding at international firm Eversheds Sutherland. ‘The decision is potentially a blow for the government as the collective funding of consumer claims has helped bridge the gap caused by the erosion of state funded legal assistance for civil claims. Funders themselves may well start to actively lobby to seek legislation which effectively reverses this decision.'”
• “Alice Darling, senior associate at magic circle firm Clifford Chance, said the decision ‘has rendered many funding agreements currently in place unenforceable.'”
• “Funders however said the industry would rapidly adapt. In a joint statement, the International Legal Finance Association and the Association of Litigation Funders of England and Wales said: ‘We are disappointed by this decision as it runs contrary to the accepted understanding that financing agreements are not damages based agreements.”

“Ethics opinion to allow Florida lawyers to passively invest in out-of-state firms that include nonlawyer owners to be published for comment” —

• “The Board of Governors has approved publishing proposed Advisory Opinion 23-1, which would allow a Florida lawyer to be a passive investor in an alternative business structure (ABS) in another state that allows non-lawyer ownership of law firms.”
• “Last October, the PEC voted 26-9 to direct committee staff to work on a draft opinion using ABA Formal Ethics Opinion 499 for guidance. The committee was scheduled to hear the draft at the Bar’s Winter Meeting in January, but a lawyer for the inquirers requested more time to gather additional information to support the position.”
• “Meeting the day before, the Board Review Committee on Professional Ethics voted 6-0 to recommend that the board approve publishing the proposed opinion.”
• “As approved, the proposed advisory opinion states that a Florida lawyer may passively invest in an ABS in another jurisdiction, so long as: the ABS satisfies certain requirements. Specifically, the proposed opinion says the ABS cannot have any presence in Florida nor can it provide Florida legal services, the ABS must comply with all requirements of the jurisdiction that permits it, the Florida investor cannot have a managerial role, or provide legal services through the ABS, the Florida lawyer cannot be involved in the daily operations of the ABS, and the Florida lawyer may not have access to any confidential information regarding the ABS.”
• “The staff’s draft opinion also cautions that ‘it does not address the propriety of investing Florida lawyer’s firm receiving referrals from the alternative business structure as those referrals may implicate concerns regarding solicitation, impermissible ‘feeder’ arrangements, and payments in exchange for referrals,’ according to a staff analysis.”

“California Supreme Court Approves New Rule Compelling Attorneys to Report Misconduct by Other Attorneys” —

• “The California Supreme Court has approved a new rule of professional conduct, rule 8.3 of the California Rules of Professional Conduct, that requires California attorneys to report any lawyer who commits a criminal act, engages in fraud, misappropriates funds or property, or engages in conduct involving ‘dishonesty, deceit, and reckless or intentional misrepresentations.'”
• “The court’s decision was based on one of two recommendations (Alternative Two) approved for submission to the court by the Board of Trustees of the State Bar of California on May 18. The court modified the State Bar’s proposal by adding additional provisions and comments to the proposed rule, including:
  • Adding the courts as an additional avenue to report misconduct. When misconduct occurs during litigation, the court may have the power to investigate or act upon the alleged misconduct and to take appropriate corrective action.
  • Adding commentary to the new rule to note that a court’s finding of misconduct may be used as evidence to facilitate subsequent State Bar disciplinary proceedings.
  • Requiring attorneys to report others if their misconduct “raises a substantial question as to that lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects,” which is the same standard employed by other states with a similar reporting rule.
  • Citing another rule of professional conduct that requires a lawyer to take remedial measures if the lawyer knows someone who has or will engage in criminal or fraudulent conduct related to pending litigation.
  • Adding commentary to the new rule to make clear that a false report to the court, like a false report to the State Bar, can subject the lawyer to discipline or other criminal penalties.”
• “The new rule follows several other directives from the court for the State Bar, including on noticing about attorney suspensions; updating its conflict of interest code for the Board of Trustees; and to develop new rules requiring candidates for the Board of Trustees and State Bar Court be screened for potential conflicts of interest.”

“Ex-Congressman’s Insider Trading Sentencing Delayed Due to Last-Minute Notice of Conflict” —

• “U.S. District Judge Richard Berman of the Southern District of New York on Monday ordered a last-minute adjournment of former U.S. Rep. Stephen Buyer’s sentencing on insider trading charges, citing a potential conflict of interest issue that came to light in the days leading up to the scheduled proceeding.”
• “Berman said Buyer’s defense counsel, Orrick Herrington & Sutcliffe partner Henry Asbill, informed the court that Orrick also represents T-Mobile.”
• “Buyer, who was elected as an Indiana Republican and served from 1993 to 2011, was found guilty in March of insider trading in connection with the 2020 merger of Sprint and T-Mobile, along with a separate insider trader scheme involving the consultant firms Navigant and Guidehouse. He worked as a consultant for both T-Mobile and Guidehouse, according to his indictment.”
• “Assistant U.S. Attorney Kiersten Fletcher said Asbill represented that he was not aware of the potential conflict during Buyer’s trial.”
• “‘Mr. Asbill has represented that this was just brought to his attention in the last few days,’ Fletcher said.”
• “Asbill said attorneys at Orrick are working ‘as fast as we possibly can’ to sort out the issue and determine whether the conflict can be waived and whether negotiations ‘between us and Mr. Buyer or between us and T-Mobile’ will be required.”

“Judge Who Thought His Obvious Conflict Of Interest Wasn’t A Conflict Of Interest Told In No Uncertain Terms: Yea, It Was A Conflict of Interest” —

• “It has been a very long time since Alvin Hellerstein graduated from law school (67 years, to be precise), and it shows in at least one aspect of his jurisprudence: Conflicts of interests.”
• “As we’ve discussed, the aged Manhattan federal judge got more than his fair share of the voluminous proceedings emanating from ethically- and legally-challenged (albeit, on the latter, not quite as legally-challenged as prosecutors thought) hedge fund Platinum Partners.”
• “As it turns out, Hellerstein knew all about the Platinum mess, on account of the indictment and subsequent cooperation of his sort-of surrogate son, the hedge fund’s marketing chief, having advised the boy on his situation and options. None of that latter bit seemed to Hellerstein worth mentioning when first he landed the bribery trials of Platinum co-founder Murray Huberfeld and former New York City corrections union chief Norman Seabrook, and later the sentencing hearing for the literal leather bagman standing between the two, Jona Rechnitz.”
• “Seabrook was duly tried, convicted and sentenced to just a hair under five years in prison. In the meantime, Huberfeld pleaded guilty, with Hellerstein sending him up the river for five times as long as prosecutors asked. Finally, 10 months later, he got around to Rechnitz. In spite of prosecutors praising Rechnitz as ‘one of the single most important and prolific white collar cooperating witnesses’ and insisting he had no idea that Platinum was up to no good, ‘or even that it was a bad investment,’ Hellerstein rejected the Probation Office’s suggestion that Rechnitz pay only the $1.2 million the corrections’ and NYPD unions paid in management fees to Platinum and insisted on half the $19 million lost when Platinum eventually collapsed.”
• “Then Huberfeld found out about Hellerstein’s relationship to Andrew Kaplan, the ex-Platinum executive. Well-versed as he was in matters of facilitating them via bribery, that sounded an awful lot like a conflict of interest to Huberfeld.”
• “Meanwhile, Rechnitz got wind of Huberfeld’s reassignment, and decided he’d like a new judge, too. Just 16 days after decided not to resentence Huberfeld, however, Hellerstein said he saw no reason to hand off Rechnitz’s sentencing, even if he had given Kaplan a few pointers on how to negotiate with prosecutors and judges, and even if for unstated reasons he’d decided not to resentence Huberfeld. And even after Kaplan asked him to think it over a while, Hellerstein still said there wasn’t even the appearance of impartiality in Rechnitz’s restitution order, and what’s more he wasn’t allowed to appeal the matter to those nitpickers on the Second Circuit. And with good reason, ‘cuz when they heard about in spite of the lack of writ of mandamus, they were not pleased:
  • ‘We conclude that the district judge abused his discretion by not reassigning the case…. That relationship was not only remarkably close; it was with a person who was directly involved in Rechnitz’s bribery case. Kaplan was mentioned in Rechnitz’s testimony—both in the initial joint trial of Seabrook and Huberfeld and in the retrial of Seabrook before Judge Hellerstein—several times as one of the Platinum employees involved in securing the COBA investment. That relationship alone, in light of these factual circumstances, was sufficient to raise serious questions about the need for recusal.
  • ‘But the facts here are even more complicated. The district judge did not merely have a close personal relationship with Kaplan; he advised Kaplan on his criminal case arising out of the Platinum collapse…. This close relationship, and the district judge’s advisory role, is further problematic in light of the restitution question, because Kaplan and Rechnitz’s interests are plausibly adverse on that issue. COBA, of course, can recover its losses only once, even though two groups—those involved in the bribery scheme and those involved in the fraud—arguably caused them. It therefore remains uncertain from whom COBA will recover the $19 million it lost. Because Kaplan is a defendant in the Platinum case, it is possible that he will be ordered to pay restitution. There is thus a reasonable and apparent relationship between COBA’s recovery from Rechnitz, Seabrook, and Huberfeld (the defendants in the bribery case) and its possible recovery from the defendants in the Platinum case (including Kaplan): the more COBA recovers from the bribery defendants, the less it will need to recover from the Platinum defendants.'”

“Special counsel asks if Nauta’s attorney has too many Mar-a-Lago clients” —

• “Special counsel Jack Smith has asked Judge Aileen M. Cannon for a hearing to discuss whether the lawyer who represents one of Donald Trump’s co-defendants in the classified documents case has too many conflicts to provide adequate legal advice to his client.”
• “In a court filing Wednesday, prosecutors said Stanley Woodward — the lawyer for Trump valet Waltine ‘Walt’ Nauta — has represented at least seven other clients whom prosecutors have interviewed about Trump’s alleged efforts to keep classified documents in defiance of the government’s demand they be returned. Two of Woodward’s clients could be called as government witnesses in the trial, the filing said.”
• “‘The conflict may result in the attorney’s improper use or disclosure of the client’s confidences during the cross-examination,’ the filing reads. ‘The conflict may cause the attorney to pull his punches during cross-examination, perhaps to protect the client’s confidences or to ‘advance the attorney’s own personal interests.’”
• “Smith asked Cannon to hold a hearing in which the judge would inform Nauta and the two witnesses, whose names have not been made public, of their legal rights and the potential conflicts their attorney poses. Lawyers are generally required to flag to a judge any potential conflicts of interest they encounter.”
• “If there is a conflict, Nauta would be asked if he still wants Woodward to represent him and if he waives his right to conflict-free representation. Cannon should then determine whether to accept that waiver. Smith suggested that Cannon arrange for an independent lawyer to be at the hearing to advise Nauta and the witnesses if they want.”
• “‘How is Woodward going to cross-examine the Trump employee when he is not waiving his rights?’ said Joseph A. DeMaria, a former federal prosecutor in Miami who now works as a private attorney.”
• “The potential conflict highlights how a relatively small group of lawyers are representing a large share of the people entangled in Trump’s legal battles. In addition to the classified documents indictment, the former president was charged Tuesday with conspiracies in connection with the effort to overturn the 2020 election results. He also faces state charges of falsifying business records, and is under investigation in Georgia for trying to block Joe Biden’s victory in that state.”

“Conflict of interest draws suspension for West Des Moines lawyer” —

• “A lawyer who has spent two decades representing various Iowa cities and counties has agreed to a 30-day suspension of his law license due to admitted conflicts of interest.”
• “In an affidavit filed with the Grievance Commission of the Supreme Court of Iowa, Brick acknowledges that while representing the city of Muscatine, he shared with the then-city administrator, Gregg Mandsager, information about the City Council’s plans to fire Mandsager. Brick also acknowledges he counseled Mandsager on how to set up the mayor and council for a claim of retaliation Mandsager could file against them.”
• “Court records indicate that the situation grew out of a 2017 case in which a district court judge ruled the City Council had illegally removed the mayor, Diane Broderson, from office, and Mandsager filed a defamation lawsuit against Broderson and the city.”
• “In April 2019, aware that some council members wanted him fired, Mandsager contacted Brick asking for advice about settling his defamation claim against the city. In his affidavit, Brick admits that he outlined a few options as to how the city administrator could proceed and then wrote, ‘Either way, you would want to make a big public statement about how much you look forward to working with the mayor and the council so you can set them up for a retaliation claim.'”
• “Brick admits that in the months that followed, as the lawsuit was settled and the council moved forward with plans to fire Mandsager, he provided advice to the council but also continued to communicate with Mandsager, sharing information about the council’s plans and providing advice to Mandsager on how best to proceed with a lawsuit against his client, the city.”
• “Despite that, Brick states in his affidavit, he wrote to a council member and assured him that if Mandsager was to ask for any legal assistance he would tell Mandsager he worked for the council and so Mandsager would need to obtain his own attorney.”
• “Brick acknowledges that even as he provided such assurances to the council, he continued to give advice to Mandsager. At one point, Mandsager was watching a livestream of a council meeting and texting Brick at the meeting, asking Brick to address certain matters. ‘Hold on,’ Brick texted back, ‘I’m trying to save your job.'”
• “A few weeks later, Brick admits, he texted Mandsager to alert him to the fact that one council member ‘just outed me as someone working behind the scenes on your behalf. I’m not sure any of them would be surprised by that, but it certainly makes it even less likely that they would take my advice.'”
• “In his affidavit, Brick admits that when the council drafted, with Brick’s help, an order terminating Mandsager’s contract with the city, Brick didn’t tell the council that the order’s wording was, in his opinion, legally insufficient — but he did alert Mandsager to that fact.”
• “In response to Brick’s affidavit consenting to a 30-day suspension, the Iowa Supreme Court Attorney Disciplinary Board agreed that such a penalty was warranted.”
• “The board said Brick’s ‘more than 20 years of experience as an attorney’ and his ‘deliberate deception of his client’ were aggravating factors in the case.”