Extras - Asking All the Right Questions: Researching Possible Conflicts of Interest

Rochelle Cheifetz is the head librarian for Rosenman & Colin LLP.  She previously worked as Head Librarian at Haskins & Sells and Brookdale Institute of Gerontology in Jerusalem, Israel.  She was also editor of "Research" for the Hebrew University of Jerusalem, and  Director of Libraries for Legal Aid Society of New York. She received an MLS from Rutgers University and a MA from New York University.  

        Introduction

It's been said, "Don't ask questions and don't volunteer". Somehow I always trip up on this wise advice.

The process for researching possible conflicts at Rosenman & Colin LLP was not unusual. As a matter of fact, it is the system that is presently in place in most law firms. What turned out to be unusual was the commitment of Management to improve a system that had not been looked at or changed in over ten years.

Our Firm's conflict search was the joint responsibility of our MIS and Accounting Departments. The procedure was simple: 

  • The attorney (or secretary) filled out the Conflict Search Request form and send it to the appropriate MIS person.
  • The names were run through the Conflict Database and the printout was sent back to the attorney, who would have to review it to see if there were any "conflicts". If there were, that attorney would contact the responsible attorney for the client posing the possible "conflict". They would then discuss and clear up the conflict. Waivers were obtained when necessary.
  • The Conflict Search Request would then be attached to New Billing Client/Matter Form and find its way to Accounting, where a client/matter number would be assigned and the data input into the Accounting system, which fed into the Conflict Database.

All well and good, until I ignored the "Don't ask questions" rule.

About 5 years ago an article appeared in a local law journal about a motion that had been filed to disqualify a large law firm from a bankruptcy case. The firm had failed to disclose a possible conflict of interest in their relationship with members of the board of directors of the company filing for bankruptcy and members of the audit committee. A substantial portion of their fee was held in the balance. Innocently, I asked our Managing Partner if we would be able to discern if there were conflicts due to our relationships with clients' boards of directors. He didn't know so he called in the Director of MIS who replied that our system just  matched those names given by the attorneys to those in the conflict database. No other checking of any kind was done.

I foolishly pursued the issue by going to the Chair of our Ethics Committee and posed the ethics issue to him. He was disappointed to learn that this problem, which had already been discussed with the Ethics Committee and MIS Director, hadn't been corrected. Then the Managing Partner and Chair of the Ethics Committee asked me "How do you think it should be done?". The library does research, so it's a natural question. Without realizing it I then violated rule number 2 and volunteered to have the library take over the Conflict research work. After all, librarians seem to have an innate sense of ethical responsibility  towards their employers.

Some of the questions that need to be addressed were:

  • how could we make sure that we covered all the issues
  • what research had to be done
  • what were all the necessary resources and how would matters be coordinated with the Accounting Department, which retained the responsibility of opening the client-matter numbers and entering the data into the system.

As it turned out, those were the easy questions. The most difficult job was changing the  attitude of the attorneys towards the new system.

We started by redoing the Conflict Search request form. In consultation with the Chair of the Ethics Committee we started revamping the form and composed an accompanying instructions memo. The rationale behind the requested information was  given. Each segment of the form was reviewed, redone, revised and redone again.

The new form was reviewed and approved by the Management Committee. The form was introduced to the firm with a covering letter from the Chairman of the Management Committee.

We called in the technology personnel from the software company that supported our Accounting system. The technical accounting personnel, those who did the input, and the library personnel, who would be responsible for the conflict research, met for two days with the database support people.  We went over all the fields, discussed what needed to be changed and what could be changed. We reviewed different aspects of the system to determine how to maximize the system to our advantage. When we were finished, we had pages and pages of changes necessary to make the system viable. Accounting would have to do a lot more input so that the printout would be more comprehensible to the attorney reviewing it. And we knew from the outset that the library's work would involve quite a bit of extensive research and training of attorneys.

It was also agreed that we would need at least one dedicated researcher to do this work. Since it wasn't as simple as just inputting the information the attorneys' provided, I needed someone who liked digging for facts and had the patience to work with attorneys and their secretaries on a new system that we knew would initially cause quite a bit of frustration. I was very lucky and have one of the best people I could ever expect to employ in the position. Time has proven him to be able to do detailed research, understand the responsibility of doing the work thoroughly and he has gained the confidence of the secretaries and attorneys.

When we started the new system, it took a number of months to get the secretaries to use the new form. Many had saved the old form on their C drive and were reluctant to download a new form, especially one that required much more detail. Despite the fact that all the relationships that were required were spelled out on the form, we still found ourselves calling and visiting secretaries and attorneys, explaining and going over the form. We found that we needed more detail, so we went back to the drawing board and revised the form again. Finally, the form became a natural part of the system.

The next part was more difficult. The new procedures required more information from the attorneys. We suddenly were not accepting the words "client" and "adversary" as the only descriptors for the names given. We required full descriptions of the matter. We started telling them that there might be conflicts because of a subsidiary or board member. We weren't "just" running the names through the system so a search didn't take 15 minutes anymore.

We were asking the attorneys for more detail. "Related party" wasn't sufficient, we needed to know the exact relationship. We didn't accept a matter description of "General Representation". The attorneys needed to be  more explicit as to what they were doing for the client for each matter. We had to explain why we had to research a particular company and its subsidiaries so the process would take longer than before. When an attorney would become exasperated and cry, "Why do you need that? It's simple, just run it through the system!" we would have to go through the explanations all over again. We were lucky to have management's support. The Chair of the Ethics Committee, and if necessary the COO, would sit with the individual attorney and explain to him/her the need for the detail and extensive research. In the end, it was to protect the Firm.

As in many firms, the amount of work has increased. A corresponding increase in the request for conflict research has kept the Conflict Researcher more than just a little busy. And, as in most firms, the budget hasn't been increased. I was able to get permission to have a student work with the Conflict Researcher for 10 hours a week. I also have one of our Summer Interns assigned to that area.  I'm still trying to get additional staff.

We still encounter the occasional attorney who insists on having his conflict research request returned to him immediately, even though the list of individual and corporate names can run over two pages, it's 5 p.m. and he want the results by day's end. Some of the results can be quite daunting in volume. We try to package the results so that it's palatable and understandable. All companies and subsidiaries are clipped together. If necessary, we will include a family tree so that the attorney knows why certain company names and officers were searched. We tag possible conflicts and include a cover explanation memo so that the attorney can follow the tags and knows what to expect and why we think consideration must be given as to whether a conflict exists. But the Conflict Researcher still needs to explain the explanation to the attorneys.  In the case of a class action suit, the volume of the search could make anyone dizzy.

The library's responsibilities supposedly end with the research. But, we review the data in the system to make sure that the input is correctly done. If the details aren't correct or complete then we have more work when we have to explain why something shows up as a possible conflict. It's in our interest to have it correct from the onset. We also find that we sometimes are checking the files to make sure that what we had tagged as a possible conflict had either been signed off by the attorney as "no conflict" or that a waiver had been obtained in the original search.

We've come a long way. We still get incomplete forms. But, we don't meet the resistance we did at the beginning when we request additional information. The attorneys cooperate and if they don't have the answers to some questions, they are willing to direct us to the attorney who might. In the end, we all understand the case better. Not as much falls through the cracks as before. The COO is quite diligent in returning to the library conflict forms that aren't exactly kosher (no formal sign off signature, the coding doesn't seem right or the matter hasn't been fully explained). It's been accepted that the detail is necessary to avoid possible conflicts and that the library is the natural place to do such detailed and extensive research.

Our Firm is in the process of reviewing new financial and accounting systems and the library will be involved since we will be responsible for approving the Conflicts module. But that's another story.