Risk Update

Risk Glitches & Surprises — Waivers Waving, Walls Working, Client Selection Vetting Surprises

Glenmark Says Glitch Calls For Supplement To DQ Testimony” —

  • “In a letter to Senior U.S. District Judge R. Barclay Surrick, Glenmark Pharmaceuticals Inc. said there was a glitch that corrupted a portion of the recording of the May 5 hearing in Pennsylvania federal court, including during the testimony of the company’s general counsel who waived any purported conflict of interest created by Morgan Lewis’ work on behalf of co-defendant Teva Pharmaceuticals in separate civil litigation.”
  • “As a result of the failed recording, Glenmark said, there’s no transcript of its waiver.”
  • “At the hearing last month, Rizkalla testified that he had considered and was comfortable with potential conflicts created by Morgan Lewis’ work on behalf of Teva, but Judge Surrick said he wanted to hear from Teva about its understanding of the firm’s dual representation.”
  • “Federal prosecutors sought the hearing in March as they pointed out that Morgan Lewis, which is representing Glenmark in the criminal case, was also representing Teva in multidistrict civil litigation over alleged price-fixing by generic-drug makers, and that the firm had also worked on behalf of Teva as part of the investigation leading up to its indictment in August.”
  • “Morgan Lewis has pointed to a so-called ‘ethical wall’ it set up in January 2017 after it started representing both companies in connection with alleged price-fixing the previous year.”

More Law Firms Are Vetting Cases for Political Risks. But There’s No Foolproof Solution” —

  • “Amid political polarization throughout the United States, an increasing number of law firms are seeking to vet their lawyers’ engagements for potential political fallout in addition to client conflicts. As Barnes & Thornburg recently discovered, the reputational risks are high if not done properly, while firms face competing business pressure to act quickly for clients.”
  • “The firm announced June 4 that it had parted ways with labor and employment partner Alec Beck after the attorney put his name on a new federal lawsuit on behalf of prominent President Donald Trump supporter and conspiracy theorist Mike Lindell without prior authorization. The incident attracted a firestorm of attention and criticism toward Barnes & Thornburg on social media.”
  • “Barnes said it ‘has clear procedures for evaluating and authorizing proposed new client matters before they can proceed, including local counsel engagements. As we shared last week, this recent matter was engaged without receiving firm authorization pursuant to internal firm approval procedures.'”
  • “Several law firm public relations professionals said that they are seeing a growing number of firms implementing procedures to assess clients and engagements for reputational risk. For now, though, the process is bound to be imprecise, particularly because speed matters in new matters.”
  • “‘It’s a delicate balance to tell entrepreneurial partners who are trying to get new business to slow up,’ said former Morgan, Lewis & Bockius managing partner Tom Sharbaugh.”
  • “And introducing politics into the question adds a level of complexity that goes beyond working through the firm’s existing roster of clients for conflicts. Should firms be flagging every new potential matter in an email for each member of the partnership, prompting questions over confidentiality and privilege? Or feeding each one to a small committee that could quickly be overwhelmed by a huge administrative burden?”
  • “‘Neither one is perfect,’ said a former Am Law 200 media relations professional who sought anonymity based on his current employer’s policies. ‘But I do think this is necessary work. Even if there’s no great solution, the reality is that firms are going to be getting black eyes left and right if they’re not doing this appropriately.'”
  • “The incident places Barnes in the ranks of others such as Fox Rothschild and Foley & Lardner that were forced to take action against attorneys who aligned themselves with efforts to cast doubt on the integrity of the 2020 presidential election.”
  • “‘Firms don’t want to restrict the freedom of their people to believe whatever they want to believe,’ said former Orrick, Herrington & Sutcliffe chairman and CEO Ralph Baxter. ‘But now, there are business consequences of taking positions on issues that are themselves political, so it’s going to be harder for firms to navigate that.'”
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