Ethical Dilemmas In E-Discovery When Things Go Bad Who Gets The Blame

July 23, 2014

OUR PANELISTS

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PAUL KELLER

Allen & Overy Partner

RICK SHOENECK

Accenture Director Of E-Discovery

MICHEAL DUFFY

Mindcrest VP Litigation Services

GEORGE HEFFERAN

Mindcrest Sr. VP, International & General Counsel

ETHICAL DUTIES IMPLICATED IN OUTSOURCING OF E-DISCOVERY

Duty to avoid the unauthorized practice of law

Duty to supervise non lawyers

Duty to represent a client competently

Duty to maintain client confidences

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RELEVANT BAR OPINIONS

American Bar Association Formal Opinion 08- 451 August 5 2008, Lawyer’s Obligation When Outsourcing Legal and Non Legal Support Services.

Association of the Bar of the City of New York Committee of Professional and Judicial Ethics, Formal Opinion 2006-3; August 2006.

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NEW YORK CITY BAR OPINION 2006-3

A New York lawyer may ethically outsource legal support services overseas to a non lawyer, if the New York lawyer

(A) rigorously supervises the non lawyer so as to avoid aiding the non lawyer in the unauthorized practice of law and to ensure that the non lawyer’s work contributes to the lawyer’s competent representation of the client;

(B) preserves the client’s confidences and secrets when outsourcing

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ABA FORMAL OPINION 08-451 (AUG 5, 2008)

A lawyer may outsource legal or non legal support services provided the lawyer remains ultimately responsible for rendering competent legal services to the client under Model Rule 1.1 [Duty to represent a client competently.] In complying with her Rule 1.1 obligations, a lawyer who engages lawyers or non - lawyers to provide outsourced legal or non legal services is required to comply with Rules 5.1 [Responsibility of Partners, Managers and Supervising Lawyers] and 5.3 [Duty to Supervise Non Lawyers.]

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DUTY TO AVOID THE UNAUTHORIZED PRACTICE OF LAW

ABA Model Rules of Professional Conduct Rule 5.5: Unauthorized Practice of Law (A) A lawyer should not practice law in a jurisdiction in violation of the regulation of the legal profession

in that jurisdiction, or assist another in doing so.

New York Rules of Professional Conduct Rule 5.5: Unauthorized Practice of Law a) A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession

in that jurisdiction.

b) A lawyer shall not aid a nonlawyer in the unauthorized practice of law.

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duty to avoid the unauthorized practice of law

NEW YORK CITY BAR OPINION 2006-3

[T]o avoid aiding the unauthorized practice of law, the lawyer must at every step shoulder complete responsibility for the non-lawyer’s work. In short, the lawyer must, by applying professional skill and judgment, first set the appropriate scope for the non-lawyer’s work and then vet the non-lawyer’s work and ensure its quality.

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duty to avoid the unauthorized practice of law

ABA FORMAL OPINION 08-451

Ordinarily, an individual who is not admitted to practice law in a particular jurisdiction may work for a lawyer who is so admitted, provided that the lawyer remains responsible for the work being performed and that the individual is not being held out as being a duly admitted lawyer.

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duty to avoid the unauthorized practice of law

DUTY TO SUPERVISE NON LAWYERS, cont.

New York Rules of Professional Conduct Rule 5.3: Lawyer’s Responsibility for Conduct of Nonlawyers

A lawyer with direct supervisory authority over a nonlawyer shall adequately supervise the work of the nonlawyer, as appropriate. In either case, the degree of supervision required is that which is reasonable under the circumstances, taking into account factors such as the experience of the person whose work is being supervised, the amount of work involved in a particular matter and the likelihood that ethical problems might arise

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duty to supervise non lawyers

DUTY TO SUPERVISE NON LAWYERS

ABA Model Rules of Professional Conduct Rule 5.3 Responsibilities Regarding Non-Lawyer Assistance

With respect to a non-lawyer employed by or associated with a lawyer. b) A lawyer having direct supervisory authority over the non-lawyer shall make reasonable efforts to

ensure that the person’s conduct is compatible with the professional obligations of the lawyer.

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duty to supervise non lawyers

NEW YORK CITY BAR OPINION 2006-3

Proper supervision is also critical to ensuring that the lawyer represents his or her client competently, … obviously, the better the non-lawyer’s work, the better the lawyer’s work product.

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duty to supervise non lawyers

ABA MODEL RULES - COMMENT ON RULE 5.3

Non Lawyers Outside the Firm

Comment [4] Where the client directs the selection of a particular non lawyer service provider outside the firm, the lawyer ordinarily should agree with the client concerning the allocation of responsibility for monitoring as between the client and the lawyer. When making such an allocation in a matter pending before a tribunal, lawyers and parties may have additional obligations that are a matter of law beyond the scope of these Rules.

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duty to supervise non lawyers

DUTY TO REPRESENT A CLIENT COMPETENTLY

New York Rules of Professional Conduct Rule 1.1: Competence

a) A lawyer should provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

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duty to represent a client competently

DUTY TO REPRESENT A CLIENT COMPETENTLY, cont.

ABA Model Rules of Professional Conduct 1.1: Competence

a) A lawyer should provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

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duty to represent a client competently

DUTY TO REPRESENT A CLIENT COMPETENTLY, cont.

New York Bar Opinion 2006-3

Proper supervision is also critical to ensuring that the lawyer represents his or her client competently, as required by DR 6-101 — obviously, the better the non-lawyer’s work, the better the lawyer’s work-product.

ABA Opinion 08-451

The challenge for an outsourcing lawyer is therefore to ensure that tasks are delegated to individuals who are competent to perform them, and then to oversee the execution of the project adequately and appropriately.

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duty to represent a client competently

DUTY TO REPRESENT A CLIENT COMPETENTLY, cont.

Two parts to the duty

Ensure outsourced entity is competent to perform legal tasks

Properly supervise the project

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duty to represent a client competently

DUTY TO MAINTAIN CLIENT CONFIDENCES

New York Rules of Professional Conduct Rule 1.6: Confidentiality of Information

A lawyer shall not knowingly reveal confidential information, as defined in this Rule, or use such information to the disadvantage of a client or for the advantage of the lawyer or a third person, unless:

1) The client gives informed consent, as defined in Rule1.0(j);

2) The disclosure is impliedly authorized to advance the best interests of the client and is either reasonable under the circumstances or customary in the professional community; or

3) the disclosure is permitted by paragraph (b)

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duty to maintain client confidences

DUTY TO MAINTAIN CLIENT CONFIDENCES, cont.

ABA Model Rules of Professional Conduct 1.6: Confidentiality of Information

a) (a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted in par. (b).

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duty to maintain client confidences

DUTY TO MAINTAIN CLIENT CONFIDENCES, cont.

NY Bar Opinion 2006-3

Measures that New York lawyers may take to help preserve client confidences and secrets when outsourcing overseas include restricting access to confidences and secrets, contractual provisions addressing confidentiality and remedies in the event of breach, and periodic reminders regarding confidentiality.

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duty to maintain client confidences

ORACLE AMERICA, INC. V. GOOGLE INC.

Oracle America, Inc. v. Google Inc., 2012 U.S. Dist. LEXIS 125237 (N.D. Cal. 2012)

Oracle sues Google for copyright infringement

Google does (mostly?) electronic review of 11 million documents and produces 3.7 million

Misses 8 “auto saved” drafts of key email addressed to in-house counsel

Trial Judge says all Oracle needs is that email and the Magna Carta and they have a winner

Potential for $ billions in damages if willful infringement proven

Google spends 6 months trying to clawback email

Denied

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ORACLE AMERICA, INC. V. GOOGLE INC., cont.

Email from Google engineer, Tim Lindholm, to Andy Rubin, VP in charge of Android platform, copied to Google Senior Counsel, Ben Lee.

What we've actually been asked to do (by Larry and Sergey) is to investigate what technical

alternatives exist to Java for Android and Chrome. We've been over a bunch of these, and think they

all suck. We conclude that we need to negotiate a license for Java under the terms we need.

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J-M Manufacturing Co. Inc. v. McDermott Will & Emery

J-M Manufacturing Co. Inc., v. McDermott will & Emery, Case No. BC 462832, Superior Court of the State of California, County of Los Angeles

Qui Tam action versus J-M Manufacturing MWE uses outsourced vendors to respond to government subpoenas Vendors used responsive and privilege filters, attorneys review “potentially privileged” documents and produce to government Government informs MWE that significant number of privileged documents included in production and asks MWE to resubmit Same process followed second time and multiple privileged documents included in resubmission Motion to clawback denied as continued use of same defective process not reasonable under FRE 502(b) Client sues MWE for malpractice

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QUALCOMM INC. V. BROADCOM CORP

Qualcomm Inc. v. Broadcom Corp. No. 05-CV-1958, 2007 U.S. Dist. LEXIS 57122 at 7 (S.D. Cal. Aug. 6, 2007)

Qualcomm sues Broadcom for patent infringement Qualcomm’s retrieval and production of documents primarily handled in-house Multiple representations by Qualcomm that it had not participated in a standard-setting industry group turned out to be false 46,000 documents produced post trial contradicted Qualcomm’s assertions Qualcomm ordered to pay all of Broadcom’s legal fees and costs - $8.5 million 6 attorneys referred to the State Bar of California for investigation of possible ethics violations

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WHAT IS REASONABLE?

FRCP 26(g): Signing Disclosures and Discovery Requests, Responses, and Objections.

1) Signature Required; Effect of Signature. Every discovery request, response, or objection must be signed by at least one attorney of record in the attorney's own name…By signing, an attorney or party certifies that to the best of the person's knowledge, information, and belief formed after a reasonable inquiry: (B) with respect to a discovery request, response or objection it is:

i. consistent with these rules and warranted by existing law

ii. not interposed for any improper purpose,

iii. neither unreasonable nor unduly burdensome or expensive,

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WHAT IS REASONABLE?, cont.

Federal Rule of Evidence 502 (b):Inadvertent Disclosure

When made in a Federal proceeding or to a Federal office or agency, the disclosure does not operate as a waiver in a Federal or State proceeding if:

a) the disclosure is inadvertent;

b) the holder of the privilege or protection took reasonable steps to prevent disclosure; and

c) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B).

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DUTY TO REPRESENT A CLIENT COMPETENTLY

Ensure outsourced entity is competent to perform legal tasks

Obtain background information on vendor

Obtain resumes of participants

Conduct reference checks

Review samples of prior work

Interview participants in advance

Conduct on site inspection of vendor’s facility

Investigate hiring practices of vendor

Inquire as to onboarding training program and on going training of participants

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DUTY TO REPRESENT A CLIENT COMPETENTLY, cont.

Proper supervision of project

Interview and select participants on basis of suitability for project

Evaluate vendor management team for appropriate level of US legal experience

Provide and participate in project specific training

Establish metrics to determine review rates and error rates from individuals and check regularly during project

Formulate procedures for regular and frequent communication with project team for escalation and feedback on critical issues

Require written reports and documentation for key metrics and resolution of escalated issues (defensibility issue)

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QUALCOMM INC. V. BROADCOM CORP.

For the current “good faith” discovery system to function in the electronic age, attorneys and

clients must work together to ensure that both understand how and where electronic

documents, records and emails are maintained and to determine how best to locate, review,

and produce responsive documents.

- Magistrate Judge Major

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Thank you