Risk Update

Relationship Risks — Conflicts and Client-driven Lawyer Lateral Departures, Corporate Counsel Conflicts

As Holland & Knight Grows, Another Partner Leaves Because of Conflicts” —

  • “With two recent major mergers in the books, Holland & Knight is losing another partner to a dispute resolution firm in South Florida, the latest in a string of conflict-related departures.”
  • “Rodolfo ‘Rudy’ Sorondo Jr., a longtime partner and former state court judge, is leaving the Am Law 100 firm after more than 20 years. He’ll join newly launched alternative dispute resolution firm Private Resolutions, founded by another local ex-judge, Alan Fine, after he left the bench earlier this year.”
  • “Sorondo is referring to being conflicted out of certain arbitration cases at Holland & Knight because of the firm’s size.”
  • “‘The conflict database [at Holland & Knight] is enormous. And consequently, there are many arbitrations and special master assignments that I simply cannot take,’ he said. ‘In those instances, you are an adjudicative officer and people don’t feel comfortable if there is a conflict.'”
  • “And although mediations typically avoid conflict issues because a mediator has less power than an arbitrator, Sorondo said the conflicts also bled into mediation at times.”

Cadwalader Partner Steps Down to Represent Trump in Manhattan DA’s Criminal Case” —

  • “Todd Blanche, a partner at Cadwalader, Wickersham & Taft, has resigned from the law firm to join the defense team representing former U.S. President Donald Trump in a criminal case brought by the Manhattan District Attorney’s office. According to reports by Politico and Law.com, Blanche will eventually lead Trump’s representation. A spokesperson for Cadwalader confirmed Blanche’s departure but declined to comment further.”
  • “In an email obtained by Politico, Blanche stated that he resigned from Cadwalader because he had been asked to represent Trump in the recently charged Manhattan District Attorney’s case. He further explained that after careful thought and consideration, he believed it was the best opportunity for him and an opportunity he should not pass up. Blanche’s LinkedIn profile indicates that he was a partner at Cadwalader from September 2017 to April 2023 and is now listed as the founding partner of Blanche Law.”
  • “Blanche will join a defense team that includes lawyers Joe Tacopina and Susan Necheles. In a statement to Law.com, an anonymous source described Blanche’s departure from Cadwalader as a ‘happy uncoupling.'”

Pitfalls for Corporate Counsel in Business Divorce Disputes” —

  • “No corporate lawyer wants to get drawn into a nasty litigation between an entity’s owners. But the reality is that corporate and general counsel often find themselves unwittingly ensnared in business divorce cases. Sometimes a corporate transaction is the genesis of litigation, and corporate counsel’s role or advice may be exceedingly important.”
  • “Other times, corporate counsel may have served in a joint, dual, or uncertain capacity, providing advice to the entity and its owners simultaneously. This can create particular problems when formerly aligned interests diverge.”
  • “In this week’s business divorce, we’ll consider three doctrinal pitfalls for corporate and general counsel in business divorce litigation: the fiduciary exception to the attorney client privilege, the joint representation exception to the attorney-client privilege, and a virtual per se rule of disqualification for litigation counsel who previously served as corporate counsel for a closely-held entity whose owners become adverse.”
  • “A final rule of law that crops up repeatedly in business divorce cases: ‘One who has served as attorney for a corporation may not represent an individual shareholder in a case in which his interests are adverse to other shareholders’ (Matter of Greenberg, 206 AD2d 963 [4th Dept 1994]).”
  • “Under this principle of law, an attorney may not serve as corporate or general counsel for an entity, or its owners jointly, then morph roles to become litigation counsel for one owner adverse to the other.”
  • “The bottom line of all of these concepts is that corporate and general counsel should be exceedingly careful when taking on taking on new representation to spell out in their engagement letters exactly who are the clients, who are not the clients, and the precise scope of the representation.”
  • “Recently, my firm and I successfully relied upon the Deerin line of case law for disqualification of opposing counsel in a pair of cases involving a 50% / 50% father-son shareholder dispute in the Suffolk County Commercial Division.”
  • “According to our client (the father), opposing counsel previously served as both trust and estate counsel for the father and as corporate counsel for the entity and its shareholders, including drafting the shareholders’ agreement on behalf of both shareholders. Opposing counsel then switched roles, becoming litigation counsel for the son suing the father for attempted rescission and damages relating to a stock purchase agreement both sides allege the other breached. You can read the resulting disqualification decisions here and here.”