ETHICAL ISSUES FACING IN-HOUSE COUNSEL · 1/25/2013 · Mississippian, St. Louis, Cana Woodford, Granite Wash 6 to 9 Tcfe resource potential (WKLFDO ,VVXHV )DFHG E\ ,Q +RXVH &RXQVHO&KDSWHU

$Page 1: ETHICAL ISSUES FACING IN-HOUSE COUNSEL · 1/25/2013 · Mississippian, St. Louis, Cana Woodford, Granite Wash 6 to 9 Tcfe resource potential (WKLFDO ,VVXHV )DFHG E\ ,Q +RXVH &RXQVHO&KDSWHU$
ETHICAL ISSUES FACING IN-HOUSE COUNSEL

DAVID P. POOLE, Fort Worth Range Resources Corporation

BARRY D. THOMAS, Dallas EnCana Oil & Gas (USA) Inc

State Bar of Texas ENVIRONMENTAL IMPACTS OF

OIL AND GAS PRODUCTION January 25, 2013

San Antonio

CHAPTER 5


David P. Poole, is Senior Vice President – General Counsel and Corporate Secretary of

Range Resources Corporation (NYSE:RRC), a Fort Worth, Texas based oil and gas

exploration and production company. David joined Range in June 2008 as its first

General Counsel. David has approximately 24 years of legal experience. From 2004

until March 2008 after its $45 billion sale in the largest LBO in US history, he was with

TXU Corp., serving most recently as Executive Vice President – Legal, and General

Counsel. Prior to joining TXU, he spent 16 years with Hunton & Williams LLP and its

predecessor, where David last served as the Managing Partner of the Dallas office. David

graduated from Texas Tech University with a B.S. in Petroleum Engineering and a J.D.

magna cum laude from Texas Tech University School of Law.

List of Speeches:

Chicago – Ark Group – Creating an Effective In House Team

DBA Diversity Panel

Government Investigations

North Dallas

Downtown

5th

Annual Corporate Counsel Forum at State Bar Meeting 2007

Tarrant County Bar Association November 2007 Top Issues in Energy

Law

Texas Lawyer Energy Law Roundtable

FIOS Ediscovery Online Presentiation

Fulbright & Jaworski – in house presention How to Work Effectively with Inside

Counsel

State Bar of Texas Advanced In-House Counsel Course 2008 July 24, 2008 Frisco, Texas

Media Issues: To Talk or Not to Talk - Panel

BARRY D. THOMAS is the Group Lead, Legal (MCBU) for Encana Oil & Gas (USA) Inc. He has been with

Encana for the last six years, during which he has been responsible for managing Encana’s legal needs

associated with its operations in the southern tier states. Prior to that, he practiced with the Dallas

office of Hunton & Williams, LLP, handling primarily upstream oil and gas transactions. He has also been

the president of a small private exploration and production company operating in East Texas. He

graduated from Rice University in 1985 with a BA in history and from Texas Tech University School of

Law in 1988.


Ethical Issues Faced by In House Counsel Chapter 5

i

TABLE OF CONTENTS POWERPOINT PRESENTATION – Ethical Issues Faced by In House Counsel .............................................................................. 1


ETHICAL ISSUES FACED BY IN HOUSE COUNSEL

David Poole & Barry Thomas

Range Resources Corporation

Focus on PER SHARE GROWTH of production and reserves at top-quartile or better cost structure

Maintain simple, strong financial position

Operate safely and be

a good steward of the environment

Gulf Coast

Total Resource Potential44 to 60 Tcfe without Utica Shale

Nora Area Berea, Big Lime, Huron Shale, CBM

3 to 3.3 Tcfe resource potential

Marcellus Shale24 to 32 Tcfe resource potential

Upper Devonian Shale10 to 14 Tcfe resource potential

Utica Shale

West Texas / New MexicoCline Shale, Wolfberry, Avalon/Bone Spring

1 to 1.7 Tcfe resource potential

MidcontinentMississippian, St. Louis, Cana Woodford, Granite Wash

6 to 9 Tcfe resource potential


1

3

Greater Sierra (inc. Horn River)

Duvernay

Cutbank Ridge (inc. Montney)

Bighorn

Coalbed Methane

Jonah

DJ NiobraraNiobrara/Mancos

Piceance

TexasHaynesville

Tuscaloosa

Collingwood/Utica

Deep Panuke

Encana Oil & Gas (USA) Inc.

A division of Encana CorporationLeading North American Resource Play Company

Mississippi LimeSan Juan

Eaglebine

3,33324.0

The Not-So-Rhetorical Questions:Who is the Client?

Why is this such an important question?

Company

Senior Officers

Employees

Board of Directors


2

Conflict of Interest Rules

ABA Model Rule 1.7 (Conflict of Interest: Current Clients)

(a) Except as provided in paragraph (b), a lawyer shall not represent A client ifthe representative involves a concurrent conflict of interest. A concurrentconflict of interest exists if:

(1) the representative of one client will be directly adverse to another client; or

(2) there is significant risk that the representation of one or moreClients will be materially limited by the lawyer’s responsibilitiesto another client, a former client or a third person or by a personalinterest of the lawyer

Conflict of Interest Rules.

(b) Notwithstanding the existence of a concurrent conflict of interest underparagraph (a), a lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able toprovide competent and diligent representation to each affectedclient;

(2) the representation is not prohibited by law;

(3) the representation does not involve the assertion of a claim byone client against another client against another clientrepresented by the lawyer in the same litigation or otherproceeding before a tribunal; and

(4) each affected client gives informed consent, confirmed in writing.

ABA Model Rule 1.7 (Conflict of Interest: Current Clients)


3

Conflict of Interest Rules

(a) A lawyer who has formerly represented a client in a matter shall not thereafterrepresent another person in the same or a substantially related matter in which thatperson’s interests are materially adverse to the interests of the former client unlessthe former client gives informed consent, confirmed in writing.

(b) A lawyer shall not knowingly represent a person in the same or a substantiallyrelated matter in which a firm with which the lawyer formerly was associated hadpreviously represented a client

(1) whose interests are materially adverse to that person; and

(2) about whom the lawyer had acquired information protected by Rules 1.6and 1.9(c) that is material to the matter;

unless the former client gives informed consent, confirmed in writing.

Rule 1.9 Duties To Former Clients

Conflict of Interest RulesABA Model Rule 1.9 (Duties To Former Clients)

(c) A lawyer who has formerly represented a client in a matter orwhose present or former firm has formerly represented aclient in a matter shall not thereafter;

(1) use information relating to the representation to thedisadvantage of the former client except as these Ruleswould permit or require with respect to a client, or whenthe information has become generally known; or

(2) reveal information relating to the representation exceptas these Rules would permit or require with respect to aclient.


4

Conflict of Interest RulesABA Model Rule 1.9, Comment 3

“Matters are ‘substantially related” for purposes of this Rule ifthey involve the same transaction or legal dispute or if thereotherwise is a substantial risk that confidential factualinformation as would normally have been obtained in the priorrepresentation would materially advance the client’s position inthe subsequent matter…”

Engagement Letters

Hot Issues

-Expenses Long Distance CallsFaxesPizzaLimos

- Prospective Conflict Waivers

- Superior Client Waivers


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Joint Representation Waivers

Do they work

Other “Who is the client” issues

Company affiliates and constituents

ABA Model Rule 1.7, Comment 34 (Organizational Clients)

“A lawyer who represents a corporation or other organization does not, byvirtue of that representation, necessarily represent any constituent oraffiliated organization, such as a parent or subsidiary. See Rule 1.13(a).Thus, the lawyer for an organization is not barred from acceptingrepresentation adverse to an affiliate in an unrelated matter, unless thecircumstances are such that the affiliate should also be considered a clientof the lawyer, there is an understanding between the lawyer and theorganizational client that the lawyer will avoid representation adverse tothe client’s affiliates, or the lawyer’s obligations to either the organizationalclient or the new client are likely to limit materially the lawyer’srepresentation of the other client.”


6

Can the other side talk with my people?

ABA Model Rule 4.2 (Communicating with a Represented Party)

In representing a client, a lawyer shall not communicate about thesubject of the representation with a person the lawyer knows to berepresented by another lawyer in the matter, unless the lawyer hasthe consent of the other lawyer or is authorized to do so by law or acourt order.

Can the other side talk with my people?

ABA Model Rule 4.2, Comment 7

“In the case of a represented organization, this Rule prohibitscommunications with a constituent of the organization whosupervises, directs or regularly consults with the organization’slawyer concerning the matter or has authority to obligate theorganization with respect to the matter or whose act or omission inconnection with the matter may be imputed to the organization forpurposes of civil or criminal liability. Consent of the organization’slawyer is not required for communication with a former constituent.If a constituent of the organization is represented in the matter byhis or her own sufficient for purposes of this Rule. Compare Rule3.4(f). In communicating with a current or former constituent of anorganization, a lawyer must not use methods of obtaining evidencethat violate the legal rights of the organization. See Rule 4.4.”


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Former Employees

ABA Formal Op. 95-396 (July 29, 1995)

“Rule 4.2 prohibits a lawyer from knowingly communicating with arepresented person about the subject matter of the representationwithout the consent of that person’s lawyer….”

Former Employees

ABA Formal Op. 91-359 (Mar. 22, 1991)

“The prohibition of Rule 4.2 with respect to contacts by a lawyerwith employees of an opposing corporate party does not extendto former employees of that party.”


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Former Employees

ABA Formal Op. 91-359 (Mar. 22, 1991)

“With respect to any unrepresented former employee, of course, the potentially-communicating adverse attorney must be careful not to seek to induce the formeremployee to violate the privilege attaching to attorney-client communications to theextent his or her communications as a former employee with his or her formeremployer’s counsel are protected by the privilege (a privilege not belonging to or forthe benefit of the former employee, [but] the former employer. Such an attempt couldviolate Rule 4.4 (requiring respect for the rights of third persons).”

“The lawyer should also punctiliously comply with the requirements of Rule 4.3, whichaddress a lawyer’s dealings with unrepresented persons. That rule, insofar aspertinent here, requires that the lawyer contacting a former employee of an opposingcorporate party make clear the nature of the lawyer’s role in the matter givingoccasion for the contact, including the identity of the lawyer’s client and the fact thatthe witness’s former employer is an adverse party.”

Former Employees

ABA Model Rule 3.4 (Fairness to Opposing Party and Counsel):

A lawyer shall not:* * *

(f) Request a person other than a client to refrain from voluntarilygiving relevant information to another party unless:

(1) the person is a relative or an employee or other agent of aclient; and

(2) the lawyer reasonably believes that the person’s interestswill not be adversely affected by refraining from givingsuch information.


9

In-House Counsel

ABA Formal Op. 06-443 (Aug. 5, 2006):

“Model Rule of Professional Conduct 4.2 generally does not prohibita lawyer who represents a client in a matter involving anorganization from communicating with the organization’s insidecounsel about the subject of the representation without obtaining theprior consent of the entity’s outside counsel.”

Unrepresented

ABA Model Rule 4.3 (Dealing with Unrepresented Persons)

In dealing on behalf of a client with a person who is not representedby counsel, a lawyer shall not state or imply that the lawyer isdisinterested. When the lawyer knows or reasonably should know thatthe unrepresented person misunderstands the lawyer’s role in thematter, the lawyer shall make reasonable efforts to correct themisunderstanding. The lawyer shall not give legal advice to anunrepresented person, other than the advice to secure counsel, if thelawyer knows or reasonably should know that the interests of such aperson are or have a reasonable possibility of being in conflict withthe interests of the client.


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Did you really mean to send me this?

ABA Model Rule 4.4(b) (Respect for the Rights of Third Persons).

(b) A lawyer who receives a document or electronically storedinformation relating to the representation of the lawyer’s client andknows or reasonably should know that the document or electronicallystored information was inadvertently sent shall promptly notify thesender.


Stengart v. Loving Care Agency, Inc., 990 A.2d 650, 665 (N.J. 2010)

“We next examine whether the Firm’s review and use of the privilegedemails violated RPC 4.4(b). The Rule provides that ‘[a] lawyer whoreceives a document and has reasonable cause to believe that thedocument was inadvertently sent shall not read the document or, if heor she has begun to do so, shall stop reading the document, promptlynotify the sender, and return the document to the sender.’ According tothe ABA Model Rules on which RPC 4.4(b) is pattered, the term“’document’ includes e-mail or other electronic modes of transmissionsubject to being read or put into readable form.” Model Rules ofProf’ I Conduct R. 4.4 cmt. 2 (2004).”


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“Loving Care contends that the Rule does not apply because Stengartleft the e-mails behind on her laptop and did not send theminadvertently. In actuality, the Firm retained a computer forensicexpert to retrieve e-mails that were automatically saved on thelaptop’s hard drive in a ‘cache’ folder of temporary Internet files.Without Stengart’s knowledge, browser software made copies of eachwebpage she viewed. Under those circumstances, it is difficult to thinkof the e-mails as items that were simply left behind. We find that theFirm’s review of privileged e-mails between Stengart and herlawyer, and use of the contents of at least one e-mail inresponding to interrogatories, fell within the ambit of RPC 4.4(b)and violated that rule.”



“To be clear, the Firm did not hack into plaintiff’s personal account ormaliciously seek out attorney-client documents in a clandestine way.Nor did it rummage through an employee’s personal files out of idlecuriosity. Instead, it legitimately attempted to preserve evidence todefend a civil lawsuit. Its error was in not setting aside thearguably privileged messages once it realized they were attorney-client communications, and failing either to notify its adversary orseek court permission before reading further. There is nothing in therecord before us to suggest any bad faith on the Firm’s part inreading the Policy as it did. Nonetheless, the Firm should havepromptly notified opposing counsel when it discovered the nature ofthe emails.”


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When can I get rid of these documents?

Litigation Holds; Document Retention Policies; and Assertion of the Attorney Work Product Doctrine.

Litigation Hold – When to Initiate.

“Once a party reasonably anticipates litigation, it must suspend itsroutine document retention/destruction policy and put in place a‘litigation hold’ to ensure the preservation of relevant documents. Asa general rule, that litigation hold does not apply to inaccessiblebackup tapes (e.g., those typically maintained solely for the purposeof disaster recovery), which may continue to be recycled on theschedule set forth in the company’s policy. On the other hand, ifbackup tapes are accessible (i.e., activity used for informationretrieval), then such tapes would likely be subject to the litigationhold.”


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Litigation Holds; Document Retention Policies; and Assertion of the Attorney Work Product Doctrine

Litigation Hold – Ethical Duty to Monitor

“Once a ‘litigation hold’ is in place, a party and her counsel must make certain thatall sources of potentially relevant information are identified and placed ‘on hold’, tothe extent required by Zubulake IV. To do this, counsel must become fully familiarwith her client’s document retention policies, as well as the client’s data retentionarchitecture. This will invariably involve speaking with information technologypersonnel, who can explain system-wide backup procedures and the actual (asopposed to theoretical) implementation of the firm’s recycling policy. It will alsoinvolve communicating with the ‘key players’ in the litigation, in order to understandhow they stored information…. [I]t is not sufficient to notify all employees of thelitigation hold and expect that the party will then retain and produce all relevantinformation. Counsel must take affirmative steps to monitor compliance so that allsources of discoverable information are identified and searched. This is not to saythat counsel will necessarily succeed in locating all such sources, or that the laterdiscovery of new sources is evidence of a lack of effort. But counsel and client musttake some reasonable steps to see that sources of relevant information are located. ”


Litigation Hold – Ethical Duty to Monitor

A lawyer shall not:

(a) Unlawfully obstruct another party’s access to evidence orunlawfully alter, destroy or conceal a document or other materialhaving potential evidentiary value. A lawyer shall not counsel or assistanother person to do any such act;

ABA Model Rule 3.4(a).


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The Attorney Work Product Doctrine.

Federal Rule of Civil Procedure 26(b)(3)(A)(Trial Preparation: Material)

(A) Documents and Tangible Things. Ordinarily, a party may notdiscover documents and tangible things that are prepared inanticipation of litigation or for trial by or for another party or itsrepresentative (including the other party’s attorney, consultant, surety,indemnitor, insurer, or agent).…”

In House Issues with Emails

Email – Will we never, ever learn?


15

Email Between Range Employe

From: employee 2

To: employee 1

Message: Seriously let me know aboutlunch… I don’t want to forceyou…. I want to be with youbecause I love you, but if youwant me to back off you need tolet me know…. I’m sorry for beingforceful and selfish……

From: employee 1

To: employee 2

Message: Come f*** me please!

Between employeesBetween employee and outside parties

From: VendorTo: EmployeeMessage: Spoke to this jerk yesterday.

From: EmployeeTo: VendorMessage: He’s a f*** jerk off. He wanted

a reaction. So f*** him…

– If I copy the in house lawyer its privileged, right?

– My emails are private, right?

– My emails are deleted, right?

– Dumbest emails?

– “call me – I can’t put this in email”

– “I know I should report this, but….”

– Beware the “Reply All” Button.

– Beware of “Auto Complete” Function of your email system.

– Auto Signatures


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Unauthorized Practice of Law and Multi-State Practice of Law

MISSISSIPPI

Mississippi Commission on Judicial Performance v. Jenkins, 725 So.2d 162 (Miss.1998)

“The practice of law includes“…the drafting or selection of documents, thegiving of advice in regard to them, and the using of an informed or traineddiscretion in the drafting of documents to meet the needs of the person beingserved. So any exercise of intelligent choice in advising another of his legalrights and duties brings the activity within the practice of the legal profession.

Unauthorized Practice of Law and Multi-StatePractice of Law

MISSISSIPPI

Mississippi Code Annotated §73-3-55

“Any person…shall be deemed guilty of a misdemeanor... Any person whoshall for fee or reward or promise directly or indirectly write or dictateany…bill of sale, deed of conveyance, deed of trust, mortgagecontract…other than his own or in which he may own an interest…”


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A lawyer shall not:

(a) Practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction; or

(b) Assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law.

Texas Disciplinary Rules of Professional Conduct

Rule 5.05 does not attempt to define what constitutes the unauthorizedpractice of law but leaves the definition to judicial development.

Competent professional judgment is the product of a trained familiaritywith law and legal processes, a disciplined, analytical approach tolegal problems and a firm ethical commitment; and the essence of theprofessional judgment of the lawyers is the lawyer’s educated ability torelate the general body and philosophy of law to a specific legalproblem of a client.


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Section 954.001. EXCEPTION TO PRACTICE OF LAW

For the purposes of the definition in Section 81.101, Government Code, the“practice of law” does not include acts relating to the lease, purchase, sale, ortransfer of a mineral or mining interest in real property or an easement orother interest associated with a mineral or mining interest in real property if:


(continued)

Section 954.001. EXCEPTION TO PRACTICE OF LAW

(1) the acts are performed by a person who does not hold the person out as an attorney licensed to practice law in this state or in another jurisdiction; and

(2) the person is not a licensed attorney.


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Questions


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