Cybercrime at Firms Triggers Ethical Duties: Business of Law

Law firms of all sizes are falling prey to hackers and Internet scams. Now the New York City Bar Association has released an ethics opinion clarifying that lawyers must report hacking or other breaches of their computer systems.

The opinion makes clear that lawyers don’t violate their ethical obligations by reporting cyberfraud to enforcement authorities. The opinion also emphasizes that law firms must tell clients if their interests might be at risk.

Because Internet scams can result “in harm to other clients of the law firm, such as the loss of client funds due to an escrow account scam,” the firm “must promptly notify the harmed clients.”

Lawyers can’t jump to conclusions, apparently, even if the questionable e-mail appears to come from a Nigerian prince looking for a new lawyer.

“Before concluding that an individual is attempting to defraud the attorney and is not owed the duties normally owed to a prospective or actual client, the attorney must exercise reasonable diligence to investigate whether the person is engaged in fraud,” according to the opinion.

The opinion offers a primer on the many ways that lawyers - - even the most sophisticated -- can sometimes become unwitting victims to scams that may seem obvious.

Scams range from small-scale frauds to individuals’ impersonating international corporate clients seeking representation. The ethics opinion notes that falling for a scam can not only lead to reputational damage and financial loss but may result in a lawyer’s violating the duty of competence.

Perhaps most frightening: The Bar Association committee that wrote the opinion found that not all malpractice insurers are willing to cover losses from these frauds.

To read the opinion, click here.

SEC’s White Addresses Corporate Fears of Whistle-Blower Probes

U.S. Securities and Exchange Commission Chair Mary Jo White on Thursday sought to allay corporate fears over its whistle-blowing enforcement efforts.

In April, the agency sanctioned KBR Inc. for trying to block employees from reporting misdeeds to anyone outside the company. While the company said they weren’t trying to stop whistle-blowers, the SEC wasn’t persuaded and fined the company $130,000 in its first action of this type. Business groups including the U.S. Chamber of Commerce subsequently accused the SEC of overreaching.

In a speech Thursday, a copy of which appears on the agency’s website, White said the whistle-blower rule, enacted as part of the 2010 Dodd-Frank Act, “is not, however, a sweeping prohibition on the use of confidentiality agreements.”

“The SEC is not trying to dictate the language of these agreements or warnings -– that is the company’s responsibility,” according to the transcript. “But a company needs to speak clearly in and about confidentiality provisions, so that employees, most of whom are not lawyers, understand that it is always permissible to report possible securities laws violations to the commission.”

To read the speech, click here.

Jackson Walker Hires 4 Real Estate, Finance Partners in Houston

Jackson Walker LLP has hired Alfie Meyerson, Thad Armstrong, David Jones and David Robins as partners in Houston. The four, who joined the real estate and finance practice groups, previously practiced at Thompson & Knight LLP.

Meyerson’s practice encompasses all aspects of commercial real estate transactions, while Armstrong advises on real estate, development, construction and leasing and subleasing deals and projects. Jones represents banks and other lenders, with an emphasis on real estate secured lending. Robins practices in commercial real estate and real estate finance, with an emphasis on the lender-borrower relationship.

Arnold & Porter Adds Real Estate Lawyer Shepherd in New York

Gerald Shepherd has joined Arnold & Porter LLP as a partner in the New York office as a member of the real estate and corporate and securities groups.

Shepherd advises private-equity and real estate funds and public and private companies on financing transactions and major acquisitions and dispositions of retail, hospitality, office and development properties. He also advises clients on REIT investments and works on cross-border investments and joint ventures for Canadian investors.

Shepherd was previously a partner in the New York office of Davies Ward.

Jones Day Adds a Partner to Be Based in Tokyo and London

Myles Mantle has joined Jones Day as a partner in its projects and infrastructure practice, resident in its London and Tokyo offices. Mantle, who was previously a partner in the Tokyo office of Ashurst, is a cross-border project finance lawyer. He has advised on the development, financing and acquisition of energy, offshore, manufacturing and infrastructure projects.

Roetzel & Andress Expands Its Chicago Office with 11 Lawyers

Roetzel & Andress LPA has added 11 attorneys from Kamensky Rubinstein Hochman & Delott LLP in Chicago. The group specializes in health-care work as well as corporate, retirement plan consulting, estate probate and wealth planning, employment law, and commercial litigation capabilities.

Seven of the attorneys -- Ericka Adler, Michael Brohman, Avery Delott, David Hochman, Marvin Kamensky, Ben Roth and Sherwin Rubinstein -- are joining as partners.

Reed Smith Adds Lawyers in New York and Chicago

Reed Smith LLP has added two partners in New York and one in Chicago.

Sahra Dalfen has joined the corporate transactional advisory group and Jody Saltzman has joined the real estate group. The two have worked together for many years, the firm said in a statement, and are joining from Crowell & Moring LLP in New York.

Dalfen focuses on fashion, retail and apparel, and also advises domestic and foreign clients on U.S. corporate and regulatory compliance. Saltzman advises on commercial leases, including retail leases, warehouses, showrooms, galleries, and office spaces for clients in luxury, fashion, retail, health care, banking and other industries.

The firm has also added William Cook as a partner in its intellectual property, information and innovation group in Chicago. Cook was previously a partner in the Chicago office of McGuire Woods. He focuses on internal investigations and data security and privacy counseling, as well as IP, export-import and white collar litigation. He also advises on data privacy and security matters.

Kelley Drye Adds Antitrust Lawyer Evans in Washington Office

David Evans has joined Kelley Drye & Warren LLP’s antitrust and competition practice group as a partner in Washington. His practice includes civil and individual criminal antitrust litigation, as well as international mergers and acquisitions. Evans joins from Chadbourne & Parke LLP, where he was a partner.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE