The Top 5 Ethical Issues Facing In House Counsel*
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1 1 The Top 5 Ethical Issues Facig * *(Ad What To Do About Them!) Attorey Advertisig Prior results do ot guaratee a similar outcome Models used are ot cliets but may be represetative of cliets 321 N. Clark Street, Suite 2800, Chicago, IL
2 * 2 *(Ad What To Do About Them!) Preseted by: Nacy L. Stagg Parter Foley & Larder LLP Sa Diego, CA stagg@foley.com Direct: September 5, 2013
3 * 3 *(Ad What To Do About Them!) Preseted by: Michael P. McCloskey Parter Foley & Larder LLP Sa Diego, CA mmccloskey@foley.com Direct: September 5, 2013
4 * 4 *(Ad What To Do About Them!) September 5, 2013 Preseted by: Phillip H. Rudolph EVP, Geeral Cousel & Corporate Secretary Jack i the Box Ic. Sa Diego, CA phillip.rudolph@jackithebox.com
5 5 Goal for Today: Idetify the most frequetly ecoutered ethical issues faced by i house cousel Idetify the best practices for addressig ethical issues
6 6 What are the Top 5 Ethical Issues? 1. Who s Your Cliet? 2. E-Discovery 3. Hirig Coflicts of Iterest 4. Outsourcig (Avoidig Uauthorized Practice of Law) 5. Attorey Cliet Privilege ad Attorey Work Product
7 7 Goverig law ad helpful guidace: State Bar Rules of Professioal Coduct ABA Model Rules of Professioal Coduct Court opiios Ethics opiios of bar associatios/committees sidex cs_opiios&template=/
8 8 1. Who s Your Cliet? Officers/Directors Employees Subsidiaries/Affiliates
9 9 Who s Your Cliet? Formatio of attorey-cliet relatioship is NOT depedet upo a writte agreemet Give Mirada warigs ( I represet the compay ad may have to report what you tell me ) Recogize situatios where separate cousel may be eeded Ecourage employees to retai separate cousel Avoid givig advice o persoal matters
10 10 Who s Your Cliet? Do you have a duty to make reasoable efforts to correct a employee s misuderstadig of your role? Yes! You must explai who you represet ad must ot lead the employee ito believig that he or she may cofide i you i a way that will ot be used i the compay s iterest. (Cal. Rule Prof. Coduct (D))
11 11 Who s Your Cliet? Subsidiaries/ Affiliates/ Joit Vetures/ LLCs Geerally o coflict where paret ad 100% sub are both solvet ad their iterests are aliged But coflicts ca occur: I trasactios betwee compaies Whe oe becomes isolvet Where owership varies or is partial
12 12 Who s Your Cliet? What are the cosequeces of a ethical coflict? Violatio of state bar rules, which could lead to attorey disciplie Disqualificatio of represetatio (which may also be imputed to outside cousel) Subject matter waiver of attorey-cliet privilege
13 13 2. E-Discovery ABA Model Rules apply to the legal departmet of a corporatio (ABA Model Rule 1.0) ABA Model Rule 1.1 requires that a lawyer shall provide competet represetatio to a cliet. Competet represetatio requires the legal kowledge, skill, thoroughess ad preparatio reasoably ecessary for the represetatio. Competet represetatio meas issuig timely litigatio holds
14 14 2. E-Discovery But it s ot eough to just issue the hold otice: I house cousel are charged with takig affirmative steps to moitor compliace with litigatio holds so that all sources of discovery iformatio are idetified ad searched or preserved. Also icludes readig the Federal Rules of Civil Procedure to ascertai what cousel s ad his or her cliet s obligatios are with regard to ESI. Swofford v. Esliger, 671 F.Supp2d 1274 (M.D. Fla. 2009)
15 15 2. E-Discovery Sactios are t the oly cocer: ABA Model Rule 1.6 prohibits a attorey from revealig iformatio related to the represetatio of a cliet uless the cliet gives iformed coset Gives rise to a duty to safeguard cliet iformatio from iadvertet disclosure, icludig privileged commuicatios Employ these best practices: Associate competet outside cousel to advise o ESI issues Use Federal Rule of Evidece 502 to protect privileged ifo from iadvertet disclosure or whe disclosure to gov t is required (Ad take your IT persoel to luch!)
16 16 3.Hirig Coflicts of Iterest Ethics rules do t prevet the corporatio from hirig a attorey who has bee adverse to the corporatio i litigatio - The Rule of Professioal Coduct apply to lawyers, ot corporatios - But.
17 17 3. Hirig Coflicts of Iterest I most jurisdictios, a corporate law dept. is a law firm subject to same coflicts rules as outside legal cousel Requires that the law departmet follow the same coflict screeig whe hirig i house cousel The ew lawyer caot accept employmet adverse to the prior cliet -- uless the former cliet provides iformed writte coset
18 18 3. Hirig Coflicts of Iterest Coduct a thorough review of the ew hire s coflict screeig memo for possible coflicts Do t assume recet relaxig of vicarious disqualificatio rules i some jurisdictios will suffice If challeged, you eed to show ethical walls are i place to protect the attorey s former cliets Kirk v. First America Title Is. Co., 183 Cal.App.4 th 776 (2010) Adams v. Aerojet-Geeral Corp., 86 CalApp.4 th 1324 (2001)
19 19 4. Outsourcig (avoidig the uauthorized practice of law) - Documet review ad maagemet - Tax work - Legal research - Patet applicatios (i foreig jurisdictios) ABA Formal Opiio (2008): The decisio to outsource legal services does ot abrogate the lawyer s resposibilities uder Model Rule 1.1 ABA Model Rules 5.1 ad 5.3 also require the lawyer to make reasoable efforts to esure the work performed is cosistet with his or her professioal obligatios
20 20 4. Outsourcig (avoidig the uauthorized practice of law) Best Practices: Coduct proper due diligece: Review the educatio & backgroud of cotract lawyers Review the security of the facility How will that jurisdictio treat privileged iformatio? Obtai cliet coset Documet your supervisory activities
21 21 5. Attorey Cliet Privilege ad Attorey Work Product - Court ofte presume that i-house cousel s commuicatios are more busiess tha legal - Heighteed scrutiy of privilege claims whe o outside cousel are ivolved
22 22 5. Attorey Cliet Privilege ad Attorey Work Product Mark cofidetial commuicatios But labelig aloe wo t protect Covey that your commuicatios have a legal purpose Cosider ivolvig outside cousel
23 23 5. Attorey Cliet Privilege ad Attorey Work Product Special Issues: M&A trasactios post-closig issues? Foreig jurisdictios privilege ot always available to i-house cousel
24 24 Bous Roud! I additio to these 5 issues, are there other recurrig ethical issues corporate cousel face regularly?
25 25 Questios? Nacy L. Stagg Direct: Michael P. McCloskey Direct:
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