1. Lateral Intake Shawn R. Knight Derick J. Arthur

2. Lateral Intake What is a "lateral?” Partner or associate that did not come into the firm the "traditional" way, i.e., straight out of law school after working as a summer associate at the firm

3. Lateral Intake Why do we hire lateral attorneys and partners? Why do we hire lateral attorneys and partners? Too much work Too much work Expand client or practice base Expand client or practice base Book of business to good to pass on Book of business to good to pass on Attorney movement Attorney movement Expansion/new office opening Expansion/new office opening

4. 4 Lateral Intake Why are we so careful with laterals? Risk of conflicts is highRisk of conflicts is high Imputed knowledgeImputed knowledge

5. 5 Lateral Intake Consequences: Malpractice claimsMalpractice claims DisqualificationDisqualification Loss of clients and/or current and future businessLoss of clients and/or current and future business Reputation damageReputation damage Forfeit feesForfeit fees

6. 6 Lateral Intake THE BIG QUESTION -- How should I handle 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. 7 Lateral Intake Ethical and Legal Obligations to Client: Act consistentlyAct consistently Maintain confidentiality and protect client’s materialsMaintain confidentiality and protect client’s materials Get client consent – client always has the right to choose counselGet client consent – client always has the right to choose counsel Ensure transferred materials do not create conflictEnsure transferred materials do not create conflict Rules of professional conductRules of professional conduct Property and trade secretsProperty and trade secrets Partnership agreementPartnership agreement

8. 8 Lateral Intake Lateral Integration Team: General Counsel/PRC/assigned risk management attorneyGeneral Counsel/PRC/assigned risk management attorney RMRM ITIT Attorney Employment/RecruitingAttorney Employment/Recruiting Other departmentsOther departments Orientation sets the toneOrientation sets the tone

9. Lateral Intake Before Laterals Arrive – CONFLICTS: Partners come in via current partners/active recruiting Partners come in via current partners/active recruiting Associates come in via Recruiting Department Associates come in via Recruiting Department Partners bring clients and sometimes associates Partners bring clients and sometimes associates Conflicts Questionnaire Conflicts Questionnaire Review by GC’s office, hiring or lateral intake group Review by GC’s office, hiring or lateral intake group Check all clients in conflicts system Check all clients in conflicts system Reports are reviewed and conflicts cleared through the GC (or another partner assigned by the GC to handle the transition) Reports are reviewed and conflicts cleared through the GC (or another partner assigned by the GC to handle the transition) Series of discussions among parties Series 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 arrival Screening memo sent to all staff and attorneys upon arrival

10. Lateral Intake After Laterals Arrive – CONFLICTS: Formal conflict check run on each client as part of intake process Formal conflict check run on each client as part of intake process Conflict check on each party in each matter Conflict check on each party in each matter Time lapse Time lapse New attorneys trained to review New attorneys trained to review Assign another partner to review and clear conflicts Assign another partner to review and clear conflicts Ethical/screening walls erected Ethical/screening walls erected - Are walls adequate? - ABA Model Rule 1.10 Amendment Orientation and follow-up Orientation and follow-up CLE Course or additional training CLE Course or additional training

11. Lateral Intake After Laterals Arrive – RECORDS: Partners generally bring client materials, associates do not Partners 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 letters Need 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 together IT departments may need to work together Client materials entered into the system after client/matter numbers are created Client materials entered into the system after client/matter numbers are created What do you do if must keep new materials separate from the general population? What do you do if must keep new materials separate from the general population?

12. Lateral Intake Recommendations: Suggested reading – Suggested reading – - Your insurance carrier’s loss prevention manual/guide - Your insurance carrier’s loss prevention manual/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 your state rules - ABA Model Rules of Professional Conduct and your state rules - Be aware of special issues at your firm (IP work, Bankruptcy, international lawyers, etc.) - Be aware of special issues at your firm (IP work, Bankruptcy, international lawyers, etc.) Communicate with your General Counsel and Lateral Integration Team! Communicate with your General Counsel and Lateral Integration Team!