Navigating through the Various Rules of Professional Conduct

To catch potential conflicts of interest, firms can easily keep track of the clients, adverse parties, and third parties involved in each matter, in a database that can be searched for a record of the parties involved in new matters, and for new parties involved in existing matters.

Here is a summary of some of the American Bar Assiciation Model Rules of Professional Conduct that govern conflicts in the legal industry.

Rule 1.7 - Conflict of Interest: Current Clients

The typical client-lawyer conflict of interest in a U.S. law firm involves the representation of a client who is directly adverse to another client, or if there is a risk that the representation will be limited by the lawyer / law firm's responsibilities to another client, a former client or a third person, or by a personal interest of the lawyer.

Rule 1.8 - Conflict of Interest: Current Clients: Specific Rules

The specific rules forbid a lawyer from entering into a business transaction with a client. What happens if a business contact asks to retain a firm lawyer for a legal matter, does your firm keep a record of business relationships to catch potential conflicts?

Rule 1.9 - Duties to Former Clients

How does your firm treat former clients? If a lawyer has formerly represented a client in a matter, the rules prohibit the representation of another person in the same or a substantially related matter in which that person's interest are materially adverse to the interest of the former client, unless the former client gives informed consent confirmed in writing. 

Rule 1.10 - Imputation of Conflicts of Interest: General Rule

What about new lawyers joining the firm? Generally, while lawyers are associated in a firm, none of them are allowed to knowingly represent a client when any of them practicing alone would be prohibited from doing so.  How does your firm handle potential conflicts when lawyers are bringing in business that has not yet been screened?

All of the above rules are important reasons why it is critical to keep, in addition to the parties, a record of the description of each matter, the practice area, and the roles and relationships of each party involved in your matters. 

Further, corporate affiliations and relationships between the many parties involved in legal matters at law firms are complex and also important to know when running conflict checks. 

For more details on the ABA Model Rules of Professional Conduct, see: http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/model_rules_of_professional_conduct_table_of_contents.html

For a list of states that have adopted the ABA Model Rules of Professional Conduct, see:
http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/alpha_list_state_adopting_model_rules.html

I invite you to share your thoughts or questions in the comments section below.

Thank you,
Ryan Vago
Founder & President
RION Corp.

Corporate Restructuring

Did you know that in 2011, Qwikster changed their name to Netflix?

Here is a list of six more companies that changed their names recently (f/k/a stands for "formerly known as"):

- Academi (f/k/a Xe Services, Blackwater USA; 2011, 2009)
- Ally Financial (f/k/a GMAC; 2010)
- Accenture (f/k/a Andersen Consulting; 2001)
- Altria (f/k/a Philip Morris; 2003)
- World Wrestling Entertainment (f/k/a World Wrestling Federation; 2001)
- AirTran Airways (f/k/a ValuJet Airlines; 1996)

Source: http://247wallst.com/special-report/2013/02/11/seven-companies-forced-to-change-their-names/3/

There are several sources that you can ask to automatically send a notification if an entity you have researched has made a change by setting up alerts.

This may not always be necessary, but if you find a source that indicates a name change, merger, or acquisition is pending, then an alert may be useful to update your database when the time comes.

Google is one very good source that you can use to set up an alert, and most business intelligence data sources allow you to set up an alert so when your entity shows up in the news regarding an updated corporate structure or name change - you can be made aware.

Another source of information regarding changes to corporate structure is the Institute of Mergers, Acquisitions and Alliances (IMAA) which keeps track of selected, regularly updated statistics on Mergers & Acquisitions worldwide.

Source: http://www.imaa-institute.org/statistics-mergers-acquisitions.html#TopMergersAcquisitions_Worldwide

Many firms may not be able to keep track of this information unless the entity comes up in a new conflict check request, or update to an existing matter.

What do you do when a client or another party involved in one of your matters has changed its name or corporate structure? I invite you to share in the comments section below.


Ryan Vago
Founder & President
RION Corp.

Creating a Conflicts Checklist

How do you pursue conflicts analysis? Do you have a preferred method? I have found that Analysts can vary quite a bit in their approach. 

In my opinion, and I believe most will agree with me, that you're best to determine if the exact names exist in your database first by: 

1) Starting with your client 
2) Moving to your adverse parties 
3) Searching for your third-parties 

Then look for outside research, if that's necessary. A checklist can be instrumental in not just making sure that you are checking everything you need (by covering yourself if you are ever questioned or QC'd [checked for quality]), but also to direct you through your critical path. 

I welcome you to share your comments or ask questions in the box provided. 

Thank you.

Ryan Vago
Founder & President
RION Corp.

Conflicts-Centric Highlights from ILTA's 2014 Tech Survey!

In looking at ILTA's 2014 Technology Survey, we noticed some statistics that might be important to conflicts professionals. Note that the respondents to this survey are on the IT side of the house; but because acting as the liaison between IT and legal is part of the job, these results may be interesting to you:

·      A surprising number of firms reported that they do not use any software for conflict-of-interest management (citing the following responses: it is not applicable, we do not track it, or we do it manually). Note that responses from three firms with >700 attorneys are not available.

·      Firms are facing an increasingly competitive market, and leadership is taking note that cutting cost is no longer the most effective measure for increasing profitability – meaning everyone must learn to do more with less. “…the ratio of staff to attorneys continue(s) to fall, which puts pressure on available resources.”

·      A majority of firms with <350 attorneys have no business intake program to speak of.

·      An overwhelming majority of firms with >350 attorneys are MOST concerned with security and risk management. While the IT perspective for risk management is a broad focus, the degree of accuracy and precision related to the processes in conflicts of interest and business intake can contribute to managing risk.

·      Alternatively the overwhelming majority of firms with <350 attorneys are MOST concerned with managing change. This is counterintuitive because most believe the smaller the firm, the more agile and flexible they should be. I think this speaks to the need for centralized IT when a firm reaches a certain size - but it's also encouraging to anyone with ideas related to doing more with less in a larger firm.

The 2014 Technology Survey reports the input of 454 firms representing more than 106,000 attorneys and 217,000 total users.

Here is the link to the report:  http://www.iltanet.org/Downloads/2014-Tech-Survey.pdf

RION Corp. has a survey which is open at this time, and we are looking to include data from the perspective of conflicts analysts. We encourage your participation if your career intersects with this portion of business intake at law firms: https://www.surveymonkey.com/s/D2H2FZV

And a big thank you from me to anyone who has participated in the survey already!!

Cori Blackburn

Executive VP of Marketing & Sales

RION Corp.

cori.blackburn@rioncorp.com

Conflicts Considerations When Updating Matters

There are a few reasons why updates to existing matters are necessary:

1. You have to add a new party to an existing matter.
2. You have to change a matter description.
3. You have to change the name of a party.
4. You have to reopen a closed matter.

Aside from correcting typos, RARELY would you do all of the above to an existing matter.  If you are updating an existing matter and asked to perform all of the above tasks, you most likely need to open a new matter.  

Pay careful attention to the description of a matter.  If you are asked to change the matter description from something like “Plaintiff vs. Defendant” to something like “New IP Matter Description” then this likely is an entirely new matter.  

You will also want to be careful when adding new parties or changing the name of existing parties.  Be sure to confirm that a new party is being added with the correct relationship and / or role, and determine why they were not originally listed on the conflict check form.  More importantly, if you are changing the name of an existing party to a different legal form (from Inc. to LLC, etc.), be sure to run a new search if the previous corporate family was not already searched.

Finally, when reopening matters, be sure that you’re not simply reopening a matter so that time can be billed for the same client but a different matter.  Due diligence is tricky and requires careful attention to every detail.

Please share your thoughts and any questions in the comments section below.

Ryan Vago
Founder & President
RION Corp.

Conflicts Intake vs Conflicts Research vs Conflicts Resolution

There is a clear distinction between intake, research & analysis, and resolution of conflicts.  Determining first if all the information you have is accurate and complete is critical in the conflicts clearance process.  Once you can confirm that all information is clear and complete, you can begin your research and analysis of the parties, practice area, and matter description.  What are some of the questions you should ask yourself when performing an intake of your conflict check request?

• Do I have the complete legal name of this entity or individual?
• Is this party a current / active client?
• Do we have an engagement letter for this client / attorney?
• Are we already adverse to this counterparty?
• If a known conflict exists, do we have consent?
• If this matter is a transaction, who is the opposing party (purchaser, seller, etc.)?
• If this is a dispute, is this a contentious or litigation matter? Do I have the correct description of this matter?
• Is this third party potentially adverse?
• How long will it take to search this party’s corporate family, officers, directors, or individual for sanctions or financial compliance?

Once these questions have been addressed, then you can determine a course of action. When you begin to perform research on an entity or individual, you will come across some more questions.  Depending on your policy and procedures, you may or may not need to run a full search of the entire corporate family tree, or a limited search, or no search at all. You may or may not need to run a credit check, or search sanctions or law enforcement databases.  You may simply be able to clear the matter yourself in minutes, or you may need to run a thorough examination into all of the parties and, if conflicts exist, obtain all the consent you can, and / or move it forward for review by an attorney or committee.

Conflicts resolution can be tricky and requires in some firms an attorney to resolve potential conflicts, and implement ethical walls.  How does your firm approach this process?  We invite you to share in the comments section below.

Ryan Vago
Founder & President
RION Corp.

Bridging the Gap Between IT and Legal

If you are reading this I'm willing to bet your career is in IT, law, or somewhere in between; and it is likely your job involves working with both of these groups. If you don't find yourself somewhere in the mix of the aforementioned groups, then you might just be a big nerd, like me. I have a legal background with tech experience and have spent many years working in roles that served as a liaison between legal and IT teams. I have always worked with legal technology, and because it fascinates me, I have a nice big "nerd" badge.

One thing that has really helped my career is embracing the fact that it is difficult to bridge the gap between lawyers and information technology professionals; as both groups tend to be a little stubborn. In this article, I will discuss three key points that have helped me build a bridge to lessen the gap between the two and ease the process of working together:

• First, know your audience. Don’t talk to a Senior Partner at a law firm or General Counsel at a corporation and expect them to know or care about the details of your error message. Keep your communications clear and concise with whomever you speak to (this advice is generally ubiquitous) and let them know you are working to solve the issue with the greatest expedience.  Lawyers do not like it when you: a) "talk down," for example, by explaining a very rudimentary feature in Microsoft that everyone knows about (such as: what “read-only” means); or b) use IT jargon. If you're talking to an attorney about “unhandled exceptions,” “resource contention,” “I/O," etc., which they probably don't understand, they will tune you out. DO be clear with your IT staff about technical jargon, but if you are in a role where you have both legal and technical experience, you are not likely responsible for running SQL scripts or checking the event handler for application errors / warnings / etc.  Communicate with IT as the end-user, and if necessary, insist that you get on the call with your IT staff and your vendor’s technical support staff to troubleshoot and escalate issues as need be.  

• Second, be prepared. This involves making sure that you have researched and tested the issues and / or problems you are working on prior to making your recommendation to your legal and IT teams.  Be sure to run a thorough QA of the results of your work before you send it on to the legal team, and test / troubleshoot / resolve what you can on your end before escalating issues to your IT Support Team. Before contacting anyone from Legal or IT - ask yourself "what questions are they going to ask me?" Make sure you have answers (or status on things you don't know the answer to yet).

• Third, do what you can to be pro-active. Let's say you're aware that your file server is running low on space, or your indexing service may have been disrupted because of that unscheduled but absolutely necessary mid-day server reboot, take some time each afternoon before you leave the office and each morning when you return to do a full system check to be sure that you have covered your bases.  Finally, document EVERYTHING and make sure all interested parties are being updated in a timely manner and before they'd think to ask you.

These key points will help you become a trusted advisor within both groups at your organization, as well as expert liaison in between IT and legal groups. If you have additional ideas that you've learned along the way please share them in the comments - I look forward to discussing this topic with you!

Ryan Vago
Founder & President
RION Corp.