Table of Contents:
Recent Cases & Opinions:
Recent Articles of Note:
Professional Responsibility Committee:
Warner Norcross & Judd LLP
Sarah F. Warren
Fried, Frank, Harris, Shriver & Jacobson LLP
Note from Editor-in-Chief
Dear Committee Members,
Welcome back to The Ethical Business Lawyer! I am privileged to be the new Editor-In-Chief of the Committee's Newsletter. I look forward to
hearing your feedback on this issue, as well as ideas for future issues, and to meeting many of you in person at upcoming Committee meetings.
Sarah F. Warren
Editor-in-Chief, ABA/BLS Committee on Professional Responsibility Newsletter The Ethical Business Lawyer
Business Law Section Spring Meeting April 10-12 Los Angeles, California Committee Events & Ethics Programs
Committee Meeting - 2:30–4:30 p.m. on Friday, April 11th
"The Ethics of Whistleblowing by Lawyers under the SEC Rules."
8-10 a.m. on Friday, April 11. Panel: Brad Brian (qui tam litigator, partner at Munger Tolles & Olson); Mark Cahn (former General Counsel of the SEC,
now partner at WilmerHale); Cathy Dixon (former Chief Counsel of CorpFin, now Chair of the FedReg Committee and partner at Weil Gotshal & Manges); Tom
Karr (SEC Assistant General Counsel for Litigation and Professional Misconduct); and Bob Mundheim (former General Counsel of the US Treasury, former
General Counsel at Salomon Smith Barney Holdings, now Of Counsel at Shearman & Sterling).
Beyond the Privilege: The Ethical Duty of Confidentiality for the Business Lawyer
10:30 a.m.-12:30 p.m. on Saturday, April 12. Panel: Jeff Krause (Vice President and Loss Prevention Counsel at ALAS); Lois Mermelstein (partner at Farney
Daniels); Ellen Pansky (past president of APRL, member of ABA Standing Committee on Ethics and Professional Responsibility, and partner at Pansky Markle);
and Jackie Unger (associate at Carney Badle Spellman).
Ethics Programs by Other Committees
The Ethics of Internal Anti-Corruption Investigations. Co-sponsored by the Professional Responsibility Committee and the Corporate Counsel Committee
2:30-4:30 p.m. on Thursday, April 10
The Ethics Behind an Ethical Business Culture: What to Do When The Client Rejects Your Advice? Sponsored by the Corporate Counsel Committee
2:30-4:30 pm on Saturday, April 12
Recent Cases & Opinions:
"Ownership" of Attorney-Client Privilege in the Context of Mergers
While mergers and acquisitions are often complex enough in their own right, a recent Delaware decision compounds the inherent complexity by adding another
dimension: the attorney-client privilege. In Great Hill Equity Partners IV v. SIG Growth Equity Fund I, the Delaware Chancery Court adopted a
bright-line rule that attorney-client privilege falls within "all property, rights, privileges, powers and franchises" that belong to the acquirer after a
merger (unless the agreement provides otherwise). This marks a complete rejection of the New York rule from Tekni-Plex v. Meyner & Landis, where
the Court of Appeals applied New York privilege law to a Delaware corporation's merger and concluded that pre-merger attorney-client communications did not
pass to the acquirer.
Great Hill Equity Partners
In-Firm Attorney-Client Privilege
In two recent decisions, RFF Family Partnership(Massachusetts) and St. Simons Waterfront (Georgia), courts have upheld the attorney-client
privilege for communications between firm members seeking risk management and ethical advice from law firm general counsel or in-house counsel. The cases
establish prerequisites for protecting confidential communications between law firm attorneys and the firm's in-house counsel from disclosure to a client
who has asserted malpractice against the firm. Both courts also explicitly reject the assertion that principles of conflicts of interest or fiduciary
duties to current clients are reasons not to apply the privilege. In a November 4, 2013 NYLJ article, Anthony E. Davis discusses the significance of
RFF Family Partnership and St. Simmons and sets forth helpful "best practices" for extending the privilege protections of in-firm
RFF Family Partnership
St. Simons Waterfront
Selective Waiver Limited in S.D.N.Y.
A circuit split regarding "selective waiver," under which a party may voluntarily produce some privileged material to an adversary while maintaining the
privilege as to others, recently became even starker. In Gruss v. Zwirn, the district court for the Southern District of New York extended the
Second Circuit's decision in In re Steinhardt Partners, L.P. by further limiting the selective waiver doctrine. Despite a confidentiality agreement
with the SEC, the district court's opposition to "strategic and manipulative" abuse of this doctrine led the court to order, for in camera
inspection, production of interview notes prepared by outside counsel for a hedge fund during an internal investigation.
Attorneys' Ethical Obligations and Whistleblower Rewards
Payments of bounties to whistleblowers who report corporate wrongdoing to the U.S Securities and Exchange Commission ("SEC"), the Department of Justice,
("DOJ") or the Commodity Futures Trading Commission ("CTFC") are authorized by the Dodd-Frank Wall Street Consumer Protection Act of 2010 (the "Dodd-Frank
Act"). This fact raises questions as to the ethical implications of an attorney's acceptance of a whistleblower bounty in exchange for providing
information to a government agency, and has caused both courts and ethics bodies to examine an attorney's ability to reap rewards while being subject to
professional ethical obligations. In October 2013, the New York County Lawyers' Association ("NYCLA") Committee on Professional Ethics issued a formal
opinion (NYCLA Ethics Opinion 746) concluding that disclosure of a client's confidential information through a whistleblower program under the Dodd-Frank
Act "would give rise to ethical issues that would presumptively prevent a New York lawyer, acting as a lawyer for a client, from receiving whistleblower
bounties in situations in which the lawyer reveals client confidences." In a December 17, 2013 New York Law Journal ("NYLJ") article, Michael Rogoff, Paula
Ramer, and Deborah Liben discuss recent decisions by the Second Circuit and NYCLA Ethics Opinion 746, concluding that "there is likely no situation in
which an attorney could act as a bounty-seeking whistleblower against a current or former client without violating countervailing ethical obligations."
Similarly, in his November 6 NYLJ article, Barry Temkin concludes that "lawyers presumptively may not reveal client confidences in exchange for
NYCLA Committee on Ethics Formal Opinion 746
Release regarding NYCLA Ethics Opinion
November 6, 2013 NYLJ article
December 17, 2013 NYLJ article
Drunk "Tipping" Leads to SEC Enforcement Action
At social events, lawyers may "forget" their ethical obligations to maintain client confidences, which can lead to trouble for the lawyers and for those
with whom they share information. In a recent case in the federal district court in the Southern District of Florida, a law firm partner, following several
drinks at dinner, allegedly shared with his friend (who was also his investment advisor) non-public information about a planned acquisition of one of the
law firm's clients. After the advisor allegedly engaged in aberrational trading the next day by investing in the target company, the SEC sued the advisor
(but not the law firm partner) for misappropriating information in violation of a duty of trust and confidence.
Discoverability of Social Media Information
In a world where over 1 billion people are registered users of Facebook, the implications of social media content in court proceedings continue to evolve.
In a December 17, 2013 Bloomberg Law article, Michael B. Pullano and Matthew G. Laver review recent decisions involving social media in several states. The
authors conclude that judges frequently consider social media content to be akin to physical documents and photographs, so courts will require production
of such online content as part of a liberal discovery process "if a litigant can demonstrate a connection between the discovery sought and the claims
Florida Firm Sues Bar Association Over Website/Blog Restrictions
Legal advertising has long been restricted by state bar associations, but with the advancement of social media and the ever-changing forms of "speech," new
issues are surfacing with regularity. Recently, a Florida law firm sued the Florida Bar claiming that recent amendments to ethics rules restricting law
firm website content and blog posts by attorneys is unconstitutional. In additional to seeking a declaratory judgment that the ethics rules are
unconstitutional, Searcy Denney Scarola Barnhart & Shipley seeks an injunction preventing the bar from enforcing the rules because requiring that any
legal communication (including the firm's entire legal website) be "objectively verifiable" is extreme. The firm also claims that the rule violates their
First Amendment rights and is unconstitutionally vague.
Recent Articles of Note:
Martin I. Kaminsky, Legal and Ethical Issues Involved in Representing Affiliates or Principals of Clients, The Journal of the Legal Profession
A constant ethical issue for both in-house and outside counsel is the potential for a conflict of interest when an attorney seeks to represent a client in
a matter adverse to an affiliate or principal of an existing client. In Martin I. Kaminsky's recent article,
Legal and Ethical Issues Involved in Representing Affiliates or Principals of Clients, the author delves into various scenarios where such conflicts
could arise, and how courts treat them. Kaminsky describes how courts have recognized the complexity and fact-intensive nature of these potential
conflicts, and he concludes that a lawyer must undertake a "pragmatic and realistic evaluation of what is fair and reasonable" under the circumstances.
Christopher J. Whelan & Neta Ziv, Law Firm Ethics in the Shadow of Corporate Social Responsibility, Georgetown Journal of Legal Ethics
In the past few years, much attention has been devoted to corporate social responsibility, the idea that corporations should engage in "responsible" and
"respectful" activities with regard to their communities. In Christopher J. Whelan & Neta Ziv's article,
Law Firm Ethics in the Shadow of Corporate Social Responsibility, the authors analyze how corporate social responsibility could affect the ethical
requirements of outside counsel. In particular, Whelan and Ziv describe how Outside Counsel Guidelines can impact legal professionalism and independence in
a globalized corporate world. Reflecting upon the global economy, the authors warn that corporate social responsibility and other policies "may transform
the substantive norms as well as the regulatory framework under which lawyers work."
Brittany Stringfellow Otey, Millenials, Technology, and Professional Responsibility: Training a New Generation in Technological Professionalism, The Journal of the Legal Profession
As so-called "Millenials" have grown, they have become an increasing proportion of legal practitioners. In Brittany Stringfellow Otey's article,
Millenials, Technology, and Professional Responsibility: Training a New Generation in Technological Professionalism, the author analyzes the ethical
implications of technological change in light of Millenials' use of those technologies. Otey discusses evolutions throughout the legal profession, from
legal education to ethical and privacy considerations in practice to office technology, all within the context of the habits and interests of "Millenials."
Ultimately, Otey concludes that legal educators "must rise to the occasion" to "capitaliz[e] on the unique strengths of the Millenial generation."
Firm Counsel Connection Continues to Expand its Reach
The Firm Counsel Connection is now active in the following cities: Birmingham, Boston, Cincinnati, Cleveland, Dallas, Los Angeles, Minneapolis/St. Paul,
New York, Philadelphia, Richmond, St. Louis, San Diego, San Francisco, Seattle and Washington, D.C. If you are interested in learning more information
and/or joining the Firm Counsel Connection contact Co-chairs Lucian Pera at email@example.com and Philip
Schaeffer at firstname.lastname@example.org
Network of State and Local Bar Ethics Committee Liaisons
Allen Sparkman, of Sparkman Foote Minor, LLP, Houston, Texas, has agreed to take on the job of organizing a group of State and Local Liaisons whose role
will be to bring to the attention of the Committee significant ethics opinions, disciplinary rulings, judicial opinions, statutory developments, and
changes in rules of professional conduct in their respective jurisdictions. As of early February Allen has signed up Liaisons in Alabama, Colorado,
Connecticut, Florida, Iowa, North Dakota, Tennessee, and Texas. If you are interested in becoming a Liaison, please contact Allen, who is Chair of the new
Subcommittee on State and Local Liaisons, at Sparkman@sfmlawgroup.com
Multinational Ethics & Professional Responsibility Subcommittee
Co-chairs Jim Tallon and Jim Rosenhauer report that their Subcommittee is at work on a questionnaire designed to elicit input from a number of law firms as
to the most common ethics issues encountered in multinational practice and how firms deal with those issues.
Behavioral Ethics - behavioral ethics program planned for Section Annual Meeting in September 2014
The Committee's new Subcommittee on Behavioral Legal Ethics will be chaired by Michael Herman, a partner in the Toronto office of Gowlings. In light of how
well-received the Committee's behavioral ethics program was at the 2013 Annual Meeting
(Cognitive Biases, Blind Spots, and Other Impairments of Ethical Vision: How Good Lawyers Can Go Astray), a behavioral ethics program is planned for
the Section Annual Meeting in September 2014. This program will focus on what social psychology, group psychology, and organizational psychology have to
teach us about the context in which ethical decisions are made.
If you majored in psychology, or are otherwise interested in the interface between psychology and the law, then consider joining the Behavioral Ethics
Subcommittee. Michael would welcome your membership on the Subcommittee and your interest in this area, and can be reached at
Committee Meeting at 2014 National Conference on Professional Responsibility
7-9 a.m. on May 31 at the ABA's 40th National Conference on Professional Responsibility (May 29-30, 2014 at the Hyatt Regency in Long Beach,
Program topics include:
Keeping Client Data Confidential in a Digital Era
Ethics & Federalism Issues with Money Laundering & Marijuana Laws
Triage of Troublesome Cases
Hope to see you in Long Beach!
Sarah F. Warren
New York University School of Law
Lawrence A. Hamermesh
UC Hastings College of the Law
Myles V. Lynk
Arizona State University College of Law
George Washington University
Robert H. Mundheim
Shearman & Sterling LLP
Andrew M. Perlman
Suffolk University Law School
Milton C. Regan, Jr.
Georgetown University Law Center
Indiana University Maurer School of Law
Thomas E. Spahn
McGuire Woods LLP
Tina L. Stark
New York City
Peter J. Winders