Risk Update

Reputation Risk (When Practice Provokes PR Peril)

The questions of how and where firms draw the line in terms of completely legitimate engagements that raise public scrutiny and those that might be more problematic, how they address member behavior that may cause issues, and how organizations just generally traverse the challenges and uncertainties of reputation risk is one that’s always intrigued me. Here are some recent stories making news on this theme:

Federal Prosecutors Are Thinking About Going After Skadden: The Biglaw firm is under fire for its work on behalf of Paul Manafort.” —

  • “The work that Skadden Arps did for Paul Manafort on behalf of the Ukrainian government — specifically, writing a report justifying the prosecution of former Russian-aligned Ukrainian President Viktor Yanukovych’s political rivals — has long been in the spotlight, what with it being a featured part of the Mueller investigation’s case against Manafort. In addition to being well-known, it has also triggered a series of legal woes for Skadden attorneys that worked on the matter.”

  • “Former Skadden associate Alex van der Zwaan pleaded guilty to lying to investigators in the Mueller probe. And the case against former Skadden counsel Greg Craig was referred to the Southern District of New York for potentially acting as an unregistered lobbyist.”

  • “As CNN reports: In addition, these sources said, prosecutors in the US Attorney’s Office for the Southern District of New York are considering taking action against powerhouse law firm Skadden, Arps, Slate, Meagher & Flom LLP, where Craig was a partner during the activity under examination. Prosecutors are considering a civil settlement with the firm or a deferred prosecution agreement with Skadden, these sources said.”

On Leave From Willkie, Where Does Gordon Caplan Go From Here?” —

  • “A lapse in ethical judgment can quickly turn a Big Law leader into a target of an internal investigation, industry sources said.”

  • “Willkie placed Caplan on leave Wednesday as he defends himself against charges related to allegations that he spent $75,000 to have his daughter’s standardized test score fudged. Caplan was allegedly overheard on federal wiretaps saying he was not concerned with “the moral issue” related to lying to colleges about his daughter’s ACT score.”

  • “Caplan is confronting the potential that the law firm he once helped lead will now turn an investigative lens toward him. Legal industry sources said it is possible—some said likely—that Willkie would view Caplan’s apparent dishonesty in prosecutors’ claims unveiled Tuesday as an entrée to investigate his work on behalf of clients. Law firms are also often obligated to report their lawyers’ unethical conduct to state bar regulatory bodies.”

  • “The question, in one way, is how to square a law firm’s brand as an imprimatur of the ethical exercise of good judgment with a partner allegedly overheard on federal wiretaps arranging for cheating on a standardized exam.”

David Boies’s Fall From Grace” —

  • “Boies’s firm soldiers on and continues to rake in money by the barrel-load. Yet cracks in its once-burnished veneer are now visible to the naked eye.”

  • “When news first trickled out about his work on behalf of Harvey Weinstein, his supporters winced and his legacy began to creak and yawn. As further evidence established that this representation included an attempt at silencing, and undermining the statements of, possible sexual assault victims, and doing so in an underhanded attempt to stymie The New York Times, which also happened to be his client, that legacy tottered over and came crashing down.”

  • “When it was later revealed that Boies was complicit in the great Theranos tragedy, people were less surprised… Boies was a Theranos board member and stockholder. He was also, somehow, the company’s lawyer. This conflict of interest may have been the impetus for Boies’s aggressive and distasteful defense of the company. He worked to intimidate whistleblowers, running up their legal bills and threatening litigation, and acted in a manner that Wall Street Journal reporter John Carreyrou, who exposed both Theranos and Boies, described as thuggish.”

  • “He is steadfast in asserting that it was not a conflict of interest to represent the New York Times while also attempting to silence a New York Times journalist at the behest of another client, Weinstein… Boies notes that his attempt to “completely stop,” as his contract with a covert investigator put it, a NYT article was completely appropriate because ‘reporters do not have a monopoly on investigating facts.'”