By Eileen Burkhalter Smith 

For those of us who are litigators, a referral from the corporate guy downstairs is great, right?  I have really enjoyed stepping in for a client of one of my corporate colleagues when the client is in a litigation situation.  This referral situation raises some conflict issues, though, that might be overlooked here when they would not have been for a new client off the street.  Here is what I now have on the top of my list in this situation when handling the new matter:

1. Did the guy downstairs run a conflict check on this new litigation matter?  Often some preliminary negotiations or conflict resolution may have been performed, but was a formal conflict done consistent with firm procedures?  When in doubt—run the conflict check!
   
2. Does the engagement need to be defined in a letter?  How is this matter being treated—as part of the corporate matter or a new matter completely?  I think it never hurts to put in writing your understanding of the representation.
   
3. Are the parties here the same as in the corporate matter?  This is important with entity-clients whose individuals have a litigation matter—whether personal or related to the business performed by the corporate attorneys.  Rule 1.13 of the Tennessee Rules of Professional Conduct, for example, addresses specifically Organizational Clients and “dealing with” the individuals associated therewith.
   
4. Does the dispute concern work that the firm did?  This may or may not completely prevent me from handling it.  For example, if my colleague may be a witness or documents we prepared are at issue, the Rules of Professional Conduct in Tennessee likely prevent me from handling it (See R. P.C. 3.7 and 1.10).  This may not always be the case, though.  If my corporate colleague anticipated a potential conflict and received a conflict waiver, or if his representation was narrowly defined, I might still be okay.
   
5. Is this something the firm wants to handle?  This should be part of every inquiry on a new matter, obviously.  But with this type of referral, I find that I sometimes forget to ask it.  Are other entities or parties involved in the new litigation matter that were not involved in the corporate matter?  Are there employees involved that have a precarious relationship with the corporate client/employer? 

By James Bowden 

Here are a few drafting tips that I’ve learned the hard way: 

“Due to” Always Means Money Owed – If the recession has affected a registrant’s financial position, “overall revenue decreased because of prevailing economic conditions.” Leave “due to” for promissory notes and the like. 

Define Terms and Use Them – It is best practice to write out the full “the 2010 Annual Report to Shareholders on Form 10-K (the “Annual Report”) as filed with the Securities Exchange Commission (“SEC”) on March 15, 2010” the first time the terms are used in each document. After that, writing the full description in detail is too cumbersome in a document that refers repetitively to the Annual Report and the SEC, especially since 10-K and proxy season dictates that emails to my spouse routinely refer to the Annual Report and the SEC (“I’m going to be a bit late – we’ve got to get the Annual Report to the SEC”). 

When Drafting Board Minutes, Stay Out of the Weeds - If you are drafting minutes to a meeting in which two engineers and a software executive on the Board of Directors get hot and wonky discussing the compatibility of a potential acquisition’s patented technology with the Company’s product line in endless and graphic detail, “A thorough discussion of the potential benefits of a strategic partnership ensued.” That is all. 

Triple Check People’s Names – Want to offend an executive officer who is very proud of their Scandinavian heritage? Pretend you are a customs agent at Ellis Island circa 1907 when you draft a document requiring their signature. Bonus points for feigning shock that “Bjerke” is a proper noun after granting the hapless exec an involuntary name change (“Since when is Sarah Burke our CFO?”).

 Plain Language is a Badge of Honor – Keep it direct and legible. Annihilate all unnecessary adjectives; eliminate superfluous SAT words with extreme prejudice. Leave “Whereas, the party of the first part heretofore dost transfer all dower and curtesy thereto to the party of the second part” in the nineteenth century where it belongs. The SEC has requested that I mention the benefits of justifying left. 

Replace-All Has Been Disabled – A friend of mine once told me that the fact* that the blender is always broken was the best lesson he learned in bartending school (“I’m sorry – I could spend 10 minutes making a sticky mess of the bar and ignoring other patrons while I make you a frozen daiquiri that you will not tip me for, but unfortunately the blender is broken. Can I get you a rum and coke instead?”). Similarly, it is a fact* that the “Replace-all” feature in your word-processing program has been disabled. That is, of course, unless you want to change every “unit” in your document into “membership interests,” including those in the Membership Interested States of America. It is also a fact* that reply-all has been disabled on your email.  

If you have any other drafting tips, please leave them in the comments section for my benefit. Please.

By Eileen Burkhalter Smith

So, I have just learned that there are rules in hockey about who can fight whom in a fight (the allowance of which is in and of itself an unwritten rule).  Apparently, these rules are not actually written, but they are enforced.  Check out the outrage that happens when someone doesn’t follow them here.

This made me think about the unwritten rules in a trial.  I think we can all agree that we have our fair share of written rules, but would you agree with me that there are unwritten ones as well?  Here are three (a hat trick?) that I think exist based on some recent experience:

1.  Embrace your case.  We all have to be advocates, right? I was surprised recently by seeing someone act almost sheepishly about her position in a case during a trial.  I think this might be effective during negotiations, counsel to counsel communications or in other situations, but in front of the judge? The jury?  I think you have to take a stance and believe it.  If you don’t, no one else will.

2.  Pick your battles.  A trial is different than a written motion where it may be appropriate to footnote or reference every facet of every argument.  In a trial, making a mountain out of a molehill can backfire.  Consider whether your strong dispute about a harmless hearsay statement will make the Judge less likely to give you time to argue your later motion to exclude testimony.

3.  Respect their time.  I think it is also important to edit arguments, witness examinations and even evidence depending on how a case is going.  Has the point been made?  Is it 4:00 p.m. on a Friday?  If the case allows for it, I think it is appropriate to realize that the trier(s) of fact may have made a decision and would appreciate an early end.

These are all case specific, of course, but perhaps we should learn a thing or two from hockey:  don’t run a foul of the unwritten rules; it may leave you short-handed.

By James Bowden 

A securities offering which I worked on recently required me to communicate frequently with a representative of a Self-Regulatory Organization (SRO). As all things are for a new attorney, it was a learning experience. Here are seven little nuggets of wisdom that I took away from the experience. [I know, “not another list!”]

1) Be prompt (because the person you will be working with will be). I’ll admit that I was skeptical when I sent the first package of correspondence to the catch-all SRO email address; I figured that I wouldn’t hear back from them for weeks, if at all. Wrong: I sent the first email late in the afternoon and a voicemail was waiting for me when I arrived at the office the next morning (see #3). Throughout the process I found that I could expect a response consistently within two hours. How often do you hear back from opposing counsel in two hours? Probably not often. Also, if you are a securities practitioner and your caller ID registers a 202 area code don’t let your assistant answer for you. It’s the Feds -  pick up the phone!

2) Do your homework. Know every aspect of the issue you are working on and every law/regulation/rule implicated. Believe me, your regulator does know, and they will call you, on the phone (see #3), and ask you about every single law/regulation/rule that you overlooked. “UHHHMMMMM …” is not a particularly satisfying answer. Oh, and DO NOT ask your regulator if there is any law, rule, or regulation that allows you to do what you are trying to do – and if you do, don’t be surprised when the answer is “No.” Or worse.

3) Forget about email. It sounds strange in our email-based world, but regulators use the telephone. I only received three emails from the SRO over the course of the deal: two stating simply, “thanks,” and one confirming that the review was complete.

4) Silence is not consent. Don’t try to pull the old, “If I don’t hear otherwise, I’m going to assume that you are cool with all of this.” Trust me, your regulator will not be cool with all of this

5) Do not seek approval. At least as far as securities regulators go, regulators do not  “approve” of anything. They are like the father of every woman I’ve ever taken on a date. They may not have an objection. They may agree to take no action. But they do not “approve.”

6) Don’t play hard-to-get. Regulators are not supposed to be obstructionists – you shouldn’t be one either. Work through the issues they raise with them. They are listening. Good tip: lead off by explaining your understanding of the laws, rules, or regulations and then confirm that your regulator shares the same understanding. Here’s another good tactic: when they ask you a question, try to restate their question as you understood it before you try to respond. This has the double benefit of giving you time to think about the answer and making sure that your answer will be responsive without being overly broad.

7) Be polite. OK, I learned that one in kindergarten, but I still think it is important. Here’s the thing – regulators tend to be underpaid and overworked. Sympathize with them. Or, if you aren’t the sympathetic type, commiserate with them over the weather. They had to commute across the frozen tundra this morning just like you did. The conversation will make both of your days that much more enjoyable. 

By Robert Chapski

Over my career, there are a number of events that stick out in my mind.  You wouldn't think a discovery-related event would be one of them, but I recall vividly years ago being sent across the state on a fool's errand to defend a motion to compel.  The long and short of it is that the opposing party requested a bunch of stuff, and we refused to produce any of it.  We tried to work it out in advance of the hearing, but the other lawyer ignored our letters and phone calls.  So it goes.  Thus, as a hapless, young, eager associate, I did my duty and drove three hours to defend the motion to compel filed against our client.  I'll spare you the details.  It didn't go well.  It didn't help my cause that one of the opposing lawyers was also a local, sitting judge.  (I'm still not sure how that works.)  In my eagerness, I also managed to interrupt the judge while he was basically giving the opposing lawyer everything he asked for in discovery.  He wasn't won over by my zealousness.  It wasn't pretty, but I narrowly escaped town without sanctions at least.

I came to learn the hard way a few things from that event:

First, judges absolutely hate discovery hearings.  This judge hated it and just about every other one I have appeared in front of hates them.  And, if you think about it, it's not that surprising.  The judge rightly expects parties to be reasonable and to resolve in good faith discovery disputes on their own.  Where compromise does not prevail, a judge is forced to rule on a fight between two lawyers and their clients about the details of interrogatories and requests for production.  Most of the time, the judge has never seen the documents, may not yet fully understand the context of the whole case to know what is relevant, and is forced to make an educated judgment call.  Yuck.  Not much is advanced in the way of justice that day.  A waste of time.  So, take the fact that a judge hates discovery hearings to begin with and then compound it with a position from a lawyer that appears unreasonable, and you have a tough road ahead of you, my friend.

The second, and main thing, I learned was that the best thing to do in discovery is to do what would appear reasonable if you were the ruling judge.  I'm not saying "give in to everything" but pick your battles.  What do you really care about?  I ask you:  does it seem reasonable to object to every single interrogatory and request with the following statement:  "[Defendant/plaintiff] objects on the basis that the request is vague, unduly burdensome, not reasonably calculated to lead to the discovery of admissible evidence and seeks information that is or may be subject to the attorney client and work product privileges"?  Um, probably not.  Think about the responses.  What are the real objections (if any)?

Sure, discovery is not fun, but many cases are won or lost during the discovery phase, particularly if you give the other party a lot of leverage by raising the ire of the trial judge early on in the lawsuit.  Think, what would I do with this motion if I were the judge?  Be reasonable.