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The recent withdrawal of Boies, Schiller & Flexner from the Adelphia bankruptcy case due to alleged disclosure and conflict problems regarding a document-management company highlights the profession’s need for clearer guidance in dealing with outside electronic-discovery vendors. Even the appearance of potential ethical problems associated with the provision of e-discovery services, particularly regarding the suddenly emergent third-party “industry” of nonlegal providers, can become a sideshow in litigation, or worse. Unsettled ethical issues in this area can become traps for the unwary, potentially leading to extreme sanctions-disqualification, disgorgement of fees, disciplinary action and other damage to professional reputation. E-discovery raises novel issues Ethical issues surrounding nonlegal services in litigation are nothing new. The American Bar Association, through its Model Rules of Professional Conduct and predecessor Code of Professional Responsibility, has long sought to regulate the problems that can arise, whether the nonlegal services are provided by the client, by outside counsel or by a third party. But e-discovery is not mere photocopying. Given the high stakes of cost, complexity and proximity to the heart of the litigation process, e-discovery calls-at the very least-for new attention to the details of ethical best practices. Each of the three basic models for nonlegal services has its pitfalls. The do-it-yourself approach appeals to some sophisticated clients. Ideally, these organizations are looking beyond potential e-discovery savings to aligning their records management practices more closely with potential litigation and regulatory requirements. However, the Zubulake and Metropolitan Opera cases show that the obvious dangers of client errors or omissions are more than theoretical, and outside counsel have some ill-defined obligation to ensure client diligence in any law-related services they take on. But the ability of outside counsel to supervise in-house efforts is limited, and clients will always need informed counsel to respond to requests from opposing parties and the court or to defend against claims of impropriety. When law firms provide ancillary services, the Rules of Professional Conduct always apply, “[e]ven when the law-related and legal services are provided in circumstances that are distinct from each other, for example through separate entities or different support staff within the law firm,” says Model Rule 5.7. Provision of nonlegal services by a firm can also raise the problem of the “lawyer/witness.” Model Rule 3.7 prohibits lawyers from serving as advocates in trials in which “the lawyer is likely to be a necessary witness.” Such situations could arise when the adequacy of the law firm’s conduct of discovery processes is at issue. A court might then have to choose which entity-the client, the law firm or both-should bear responsibility for the problem. Further, if the conduct is found to be inadequate, and the client is sanctioned, the client might eventually assert a claim for malpractice against the law firm. Potential conflict-of-interest concerns include Rule 1.7′s statement that “a lawyer may not allow related business interests to affect representations, for example, by referring clients to an enterprise in which the lawyer has an undisclosed financial interest.” The third scenario-use of outside vendors-is perhaps the most common in major litigation, and the most challenging. While it is routine for firms to recommend vendors for photocopying and the like, the Model Rules place limitations on even these relationships. E-discovery inevitably raises extra red flags, given the inherent difficulties of fulfilling oversight responsibilities. Among concerns here are exclusive referral agreements, especially arrangements of which clients may be unaware. The Model Rules countenance clients hiring third-party vendors controlled by their counsel, so long as the client knows the lawyer-client privilege may not apply, but they generally obligate counsel to refuse compensation by the third party for such referrals. Model Rule 5.5 requires lawyers to police the unauthorized practice of law. This rule could be implicated when a nonlawyer vendor advises a client that a particular document is or is not relevant (or privileged) for purposes of document production. The rule suggests that lawyers must at least coordinate the efforts of the private vendor and independently review the results of those efforts. Given these types of problems, the profession needs an ethical best practices guide that would explicitly confirm the steps that can and should be taken in the course of providing e-discovery services. Such a guide should help ensure ready compliance with the essential goals of the ethics rules, and eliminate any patently improper practices before they become prevalent. At a minimum, such a guide would encourage communication among attorneys, clients and vendors concerning their respective roles in the e-discovery process. Steven C. Bennett is a partner in the New York office of Jones Day and chairman of the firm’s e-discovery committee.

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