Author Archives: Colleen M. Murphy

Liability for Lax Data Security

Clients entrust professionals with personal information. As such, professionals have an ethical duty not to disclose confidential information in a manner not permitted by the client. However, in today’s electronic age, professionals are also expected to take proactive steps to ensure that third-parties do not access confidential client information without authorization. Professionals who fail to prioritize client data security could expose themselves to civil liability.

Continue Reading....

In Pari Delicto Not Enough to Save an Accountant

In the face of corporate fraud and deceit, it is not uncommon for the defrauded entity to turn on its professionals. The inevitable issue becomes who is responsible for overseeing the enterprise: the business entity or the independent professional? Perhaps both. The in pari delicto affirmative defense can be an effective tool for professionals to shield themselves from liability arising from alleged wrongdoing of their underlying client. For example, we previously posted a victory for an accountant who successfully asserted the defense here. But, how and when to assert the defense is tricky as evidenced by a recent Pennsylvania District Court decision.

Continue Reading....

Affidavit of Merit Failures: Chose Your Expert Wisely

In many states a litigant cannot proceed with a professional liability lawsuit without an appropriate affidavit of merit. As our handy table shows, each state has its own rules as to AOM requirements and other details regarding substance and form. Simply filing an AOM though is not always enough. Ensuring that the AOM has been prepared by the appropriate professional and addresses the issues of the particular case is critical to surviving a potential motion to dismiss. Take for example two recent cases out of New Jersey.

Continue Reading....

Attorneys: Don’t Hack Your Adversaries’ Files

Professionals look for ways to gain an edge over their competition. Taking extra time to prepare, investigate claims, and anticipate an adversary’s strategy can often mean the difference between success and failure. However, professionals must ensure that their attempts to gain a tactical advantage do not run afoul of ethics rules. When professionals cross the line, they not only jeopardize their clients’ interests, but also put themselves at risk of litigation or disciplinary action. Some lines are clearer than others. For example, one firm recently learned that it is improper to hack into an adversaries' files to gain a strategic edge.

Continue Reading....

Ain’t Nothin’ But A “G”ift Thing – Ethics of Accepting Client Gifts

Rapper Dr. Dre recently made headlines when he gifted each member of his legal team a holiday “bonus,” in sums of $10,000 and up. While undoubtedly very generous, is such a grand gesture from a client to an attorney ethically permissible? It depends.

Continue Reading....

Don’t Judge a Client by its Cover

Clients come in all shapes and styles, backgrounds and personalities. Some are needy; they are less knowledgeable and require handholding, they have a litany of questions and need more attention. Others are more sophisticated, understand the subject matter, have been there before and therefore ask less from you. The sophisticated client is a treat because she understands general concepts and allows you to focus elsewhere, right? Nope! The professional that takes her client lightly, hits the autopilot switch and relaxes her attention is asking for trouble. Consider this recent malpractice claim out of New Jersey.

Continue Reading....

Does Bitcoin Make Cents? Evaluating New Payment Options For Your Firm

Recently, a New York law firm made news when it announced that it would begin accepting Bitcoin as payment. The firm will partner with a Bitcoin payment processing company who will host the firm’s payment system and assist the firm in converting digital currency payments into fiat currency. Other professionals are taking notice, and are permitting clients to pay for legal services using Bitcoin. Should you?

Continue Reading....

Out of State Advice Leads to Out of State Liability

Professionals may be exposed to liability outside of their “home” state. For those professionals that provide interstate advice, they may be subject to the jurisdiction and laws of any state in which they practice. Take for example the recent legal malpractice case in which a Connecticut law firm was dragged into a lawsuit in Arizona because of allegedly negligent tax advice. Sure, the first rule is to avoid a lawsuit. But, a close second rule is to implement procedures such that the professional is in a better position to defend the inevitable lawsuit. A forum selection and choice of law clause may be the key.

Continue Reading....

Emotional Distress Damages in Professional Malpractice Matters

Many aspects of litigation involve high levels of emotion when reputations, resources, pride, and goals are on the line. Nonetheless, it is highly unusual for an attorney to be subject to mental distress damages arising from a legal malpractice claim. Recoverable damages are usually limited to compensatory losses. However, a recent decision from Iowa’s highest court suggests that the tide may be turning.

Continue Reading....

Hollywood Heist Leads to Cyber Liability Suit

The fact pattern sounds like it was ripped from the pages of a Hollywood screenplay. Two criminals back a trailer to a pharmaceutical warehouse and cut a hole in the ceiling of the facility. They proceed to utilize the company’s own forklifts to load over $80 million in prescription drugs into the trailer and exit without detection on any security cameras. All told, authorities estimate that the heist represents the largest known theft of prescription drugs in US history. The last scene in this bizarre, real world thriller takes place in the Federal District Court of Connecticut where the parties are fighting the first cyber liability suit of its kind with major implications on the fiduciary responsibilities of data storage and security companies.

Continue Reading....