Risk Update

Risk Reading — Insurance Claims and Search Warrants, Terms of Engagement & Billing Fights, Remote Work & Attorney Ethics Rules

Law firm denied coverage for search warrant compliance” —

  • “Where the government executed a search warrant at a law firm, that wasn’t a ‘claim’ under the firm’s insurance policy. The warrant authorized law enforcement to carry out the search and seizure without regard to any response by the target of the warrant.”
  • “The law firm of Brown Goldstein Levy LLP, or BGL, and one of its partners, Joshua Treem, filed suit against their insurer, Federal Insurance Company, when it refused to provide coverage for costs appellants incurred after the government investigated Treem, executed a search warrant at BGL’s office and notified Treem that his representation of certain clients may present a conflict of interest.”
  • “The district court held that there was no ‘Claim,’ as that term is defined in the insurance policy, and alternatively that any costs appellants incurred were excluded from the policy’s definition of ‘loss.'”
  • “The district court concluded, ‘[s]earch warrants are not forms of ‘relief,’ but rather constitute judicial authorization — based upon a finding of probable cause — to conduct searches of places and things.’ The district court further held that because ‘[t]he Government did not seek to redress any diminution of its legal rights, nor did it seek remedy for any harm brought upon it by [appellants] in its pursuit of the Search Warrant,’ the warrant application was not a demand or request for relief against the insured. This court agrees with the district court.”
  • “In support of their argument that the search warrant is a ‘Claim,’ appellants cite several cases which hold that subpoenas are written demands or requests for relief. But a subpoena differs from a search and seizure warrant in that it does command the recipient to comply.”

A Tenth Of An Hour” —

  • “In this appeal from summary judgment in a breach of contract action, defendants argue plaintiff law firm violated rules of professional conduct by failing to disclose in its retainer agreement the unit of incremental billing – one tenth of an hour – it would utilize during the course of representation. Plaintiff and defendants entered two retainer agreements, both of which disclosed a required initial deposit, the hourly rates of each attorney at the firm, and which party was responsible for certain administrative costs.”
  • “Plaintiff represented defendants for more than two years pursuant to the parties’ retainer agreements, sending monthly and bimonthly invoices throughout the duration demonstrating work billed in increments of one-tenth of an hour. When defendants refused to remain current with outstanding fees, plaintiff ceased representation and instituted the breach of contract action. The trial court granted summary judgment. Defendants urged reversal on appeal.”
  • “The court affirmed summary judgment as properly granted, and held the retainer agreement was lawful and ethical where, among other things, it sufficiently apprised the clients of the express terms of the agreement in accordance with RPC 1.5(b), and the parties’ course of conduct for two years demonstrated assent to those terms.”
  • “Defendants argue a retainer agreement must explain which increment of time–for example, one-tenth of an hour–the law firm will be utilizing despite hourly rates and initial deposits being otherwise clearly defined. The trial court noted a dearth of case law, statutes, and comments to the rule addressing this issue and ruled AMG was entitled to summary judgment for breach of contract. We agree.”

A Multistate Analysis of the Ethical Rules Governing Attorneys Working Remotely” —

  • “The COVID-19 pandemic, along with government stay-at-home orders, required millions of professionals to work from home, including attorneys. However, as the pandemic comes to an end, many attorneys wish to continue to work from home. In response, law firms across the country now offer a flexible working environment, with many settling on a hybrid working schedule and some offering fully remote positions.”
  • “However, remote work poses unique issues for managing personnel and supervising attorneys. Careful attention must be paid to the applicable rules of professional conduct regarding where the attorney lives and works to ensure that the attorney fully complies with these rules. This article offers insights into some of the major ethical concerns presented by remote legal work. It then provides some advice to supervising attorneys in order to avoid violating applicable ethics rules.”
  • “Managing partners’ most crucial consideration regarding remote work should be whether the practice would be viewed as the unauthorized practice of law (UPL). Attorneys not licensed by a governing state cannot practice law in that state. Accordingly, the following questions arise: If a lawyer is licensed to practice law by state A but lives in state B, would the lawyer violate the UPL rule of state B when the lawyer works remotely from home on matters exclusively dealing with state A?”
  • “ABA Model Rule 5.1(a) requires supervising attorneys to ‘make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.’ Hence, managing attorneys have an ethical responsibility to ensure the ethical issues identified above are addressed if any attorneys at their firm work remotely. But how can lawyers effectively supervise other lawyers remotely? Below is some advice to follow.”