Lateral IntakeLateral Intake

Shawn R. KnightShawn R. Knight

Derick J. ArthurDerick J. Arthur

Lateral IntakeLateral Intake

What is a "lateral?”What is a "lateral?”

Partner or associate that did not come into the Partner or associate that did not come into the firm the "traditional" way, i.e., straight out of firm the "traditional" way, i.e., straight out of law school after working as a summer law school after working as a summer associate at the firmassociate at the firm

Lateral IntakeLateral Intake

Why do we hire lateral attorneys and Why do we hire lateral attorneys and partners?  partners? 

•        Too much work Too much work •        Expand client or practice baseExpand client or practice base•        Book of business to good to pass onBook of business to good to pass on• Attorney movementAttorney movement• Expansion/new office openingExpansion/new office opening

4

Lateral IntakeLateral Intake

Why are we so careful with laterals? Why are we so careful with laterals?

• Risk of conflicts is highRisk of conflicts is high• Imputed knowledgeImputed knowledge

5

Lateral IntakeLateral Intake

Consequences:Consequences:• Malpractice claimsMalpractice claims• DisqualificationDisqualification• Loss of clients and/or current and future Loss of clients and/or current and future

businessbusiness• Reputation damageReputation damage• Forfeit feesForfeit fees

6

Lateral IntakeLateral Intake

THE BIG QUESTION -- How should I handle THE BIG QUESTION -- How should I handle the lawyers and all their stuff?the lawyers and all their stuff?

• Consistency is keyConsistency is key• Ethical and legal obligations to clientsEthical and legal obligations to clients• Lateral integration team is importantLateral integration team is important

7

Lateral IntakeLateral Intake

Ethical and Legal Obligations to Client:Ethical and Legal Obligations to Client:• Act consistentlyAct consistently• Maintain confidentiality and protect client’s Maintain confidentiality and protect client’s

materialsmaterials• Get client consent – client always has the right to Get client consent – client always has the right to

choose counselchoose counsel• Ensure transferred materials do not create Ensure transferred materials do not create

conflictconflict• Rules of professional conductRules of professional conduct• Property and trade secretsProperty and trade secrets• Partnership agreementPartnership agreement

8

Lateral IntakeLateral Intake

Lateral Integration Team:Lateral Integration Team:• General Counsel/PRC/assigned risk General Counsel/PRC/assigned risk

management attorneymanagement attorney• RMRM• ITIT• Attorney Employment/RecruitingAttorney Employment/Recruiting• Other departmentsOther departments• Orientation sets the toneOrientation sets the tone

Lateral IntakeLateral Intake

Before Laterals Arrive – CONFLICTS:Before Laterals Arrive – CONFLICTS:

•    Partners come in via current partners/active recruitingPartners come in via current partners/active recruiting• Associates come in via Recruiting Department Associates come in via Recruiting Department •    Partners bring clients and sometimes associatesPartners bring clients and sometimes associates• Conflicts QuestionnaireConflicts Questionnaire•    Review by GC’s office, hiring or lateral intake groupReview by GC’s office, hiring or lateral intake group•    Check all clients in conflicts systemCheck all clients in conflicts system•    Reports are reviewed and conflicts cleared through the GC (or Reports are reviewed and conflicts cleared through the GC (or

another partner assigned by the GC to handle the another partner assigned by the GC to handle the transition)transition)• Series of discussions among partiesSeries of discussions among parties• Polling memo to all firm attorneys Polling memo to all firm attorneys •    Screening memo sent to all staff and attorneys upon arrivalScreening memo sent to all staff and attorneys upon arrival

Lateral IntakeLateral Intake

After Laterals Arrive – CONFLICTS:After Laterals Arrive – CONFLICTS:

• Formal conflict check run on each client as part of intake Formal conflict check run on each client as part of intake processprocess• Conflict check on each party in each matterConflict check on each party in each matter•    Time lapseTime lapse• New attorneys trained to reviewNew attorneys trained to review• Assign another partner to review and clear conflictsAssign another partner to review and clear conflicts• Ethical/screening walls erectedEthical/screening walls erected

- Are walls adequate?- Are walls adequate?

- ABA Model Rule 1.10 Amendment- ABA Model Rule 1.10 Amendment• Orientation and follow-up Orientation and follow-up • CLE Course or additional trainingCLE Course or additional training

Lateral IntakeLateral Intake

After Laterals Arrive – RECORDS:After Laterals Arrive – RECORDS:

• Partners generally bring client materials, associates do notPartners generally bring client materials, associates do not• What are they allowed to bring?What are they allowed to bring?• Need client release letters Need client release letters • Need new engagement lettersNeed new engagement letters• Cannot bring in client materials before they arrive Cannot bring in client materials before they arrive • IT departments may need to work togetherIT departments may need to work together• Client materials entered into the system after client/matter Client materials entered into the system after client/matter numbers are creatednumbers are created• What do you do if must keep new materials separate from the What do you do if must keep new materials separate from the

general population?general population?

Lateral IntakeLateral Intake

Recommendations:Recommendations:

• Suggested reading –Suggested reading – - Your insurance carrier’s loss prevention - Your insurance carrier’s loss prevention manual/guidemanual/guide - Your firm’s policies re: lateral intake- Your firm’s policies re: lateral intake - IntApp 2009 Law Firm Risk Management Survey- IntApp 2009 Law Firm Risk Management Survey - ABA Model Rules of Professional Conduct and - ABA Model Rules of Professional Conduct and

your state rulesyour state rules - Be aware of special issues at your firm (IP work, - Be aware of special issues at your firm (IP work,

Bankruptcy, international lawyers, etc.)Bankruptcy, international lawyers, etc.)

• Communicate with your General Counsel and Lateral Communicate with your General Counsel and Lateral Integration Team!Integration Team!