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Size certainly matters, but it’s not always an advantage, as 400-lawyer Pepper Hamilton learned the hard way. The firm’s Philadelphia office subpoenaed as a witness a longtime client of its Detroit branch, only to see a Pepper Hamilton lawyer from Detroit show up with a motion to quash. “Serving a subpoena on an existing firm client is, to say the least, a professional embarrassment to be avoided at all costs,” U.S. District Judge Stephen Orlofsky wrote in deciding a defense motion to disqualify the firm based on conflict of interest. Though he spared the Philadelphia-based firm the ultimate sanction, the New Jersey judge “strongly urge[d] Pepper Hamilton to improve the manner in which it conducts ‘conflicts of interest’ checks between its regional offices.” Orlofsky found that the Detroit representation would not confer any advantage on Pepper Hamilton in a suit by a Pennsauken auto-parts business against General Motors under the New Jersey Franchise Practices Act, Beilowitz v. General Motors, 02-3870. Plus, both the Detroit client and the local client waived the conflict. Don Foster, a partner in the Philadelphia office, represents the plaintiff, Steven Beilowitz. Before taking the case, he said in a certification, he “confirmed that no one at Pepper Hamilton was representing General Motors in any matter and that no conflict otherwise existed which would preclude the representation.” Alfred Wilcox, chairman of the firm’s professional responsibility committee, declines to comment on whether the firm ran the potential witness through its conflict-checking software, saying only “you can read between the lines.” On Aug. 30, Foster issued a subpoena to Urban Science, an auto industry consultant that helped General Motors develop a revised parts distribution agreement with dealers that is at issue in the suit. Urban Science has been represented by Pepper Hamilton for the past 14 years and partner Rene Hansemann of the Detroit office is that company’s general counsel. On Sept. 10, Pepper Hamilton withdrew its subpoena of Urban Science, replaced by one served by co-counsel Howard Langer of Philadelphia’s Sandals & Langer. On Sept. 16, Pepper Hamilton’s Detroit office moved to quash the second subpoena, but 10 days later notified the court that it was withdrawing from representation of Urban Science in connection with the subpoena. Nevertheless, General Motors’ lawyer, Stephen Payerle, a partner at Newark’s Carpenter, Bennett & Morrissey, pressed on with a motion to disqualify Pepper Hamilton from representing either party, which led to Orlofsky’s Oct. 28 ruling. In the aftermath, Pepper Hamilton has issued a memo exhorting its lawyers not to repeat the error. “Are lessons learned? Yes, indeed,” says Wilcox. “I think the real lesson for lawyers is you’d better make sure you do a conflict check when you issue a subpoena.” MOST WITNESSES AREN’T CHECKED The procedure that Pepper Hamilton followed heretofore is typical of other lawyers, says Richard Flamm, a Berkeley, Calif., attorney whose book, “Conflicts of Interest and Law Firm Disqualification,” will be published in January. Flamm says most lawyers probably would not search for conflicts among witnesses. Routing out conflicts poses a particular challenge at firms the size of Pepper Hamilton, he says, adding that smaller firms would be less likely to make a mistake like Pepper Hamilton did with Urban Science. At Morristown, N.J.’s McElroy, Deutsch & Mulvaney, with 110 lawyers, the firm uses a multi-step conflict screening process, but occasionally a problem slips through, says managing partner Edward Deutsch. When considering whether to accept a case, the firm runs named parties through its computer, he says. Then the potential client or the forwarding lawyer is questioned to see whether there are any tangential matters the firm should know about. Finally, if no party conflicts are detected, the file goes to a five-member new-case committee, which screens for issue conflicts. For example, if the firm has previously defended a bank in litigation, committee members might not want the firm to represent plaintiffs against a different bank if similar issues are raised, Deutsch says. Deutsch says when deciding whether to accept a case, a firm might not know which witnesses it will call. “There’s always going to be something that slips through,” he says. Any firm that seeks to avoid all conflict will never have any business, says Flamm. “There’s no such thing as doing it right all the time,” he says. “All a law firm can do is be extremely vigilant and have a qualified conflicts committee in the firm that’s extremely knowledgeable.” He adds: “At larger law firms the quality of conflict checking runs the gamut. You have the same software for everybody, but you might have one partner who’s hypervigilant … and you have people who, when a fairly blatant conflict bites them in the behind, they’re not sensitive to it.” Conflict-checking software is growing increasingly sophisticated, but those advances may prompt lawyers to become less vigilant, says Flamm. “There is a human factor in all of this. If you don’t input the right data, it’s not going to find [the conflict],” he says. It’s up to the lawyer to interpret the list of potential conflicts, says Stephanie Toman, public relations manager for Prolaw, a conflict-checking software package produced by a subsidiary of the West Group. Expert witnesses turn up in many conflict checks, she says, but lawyers usually don’t object to using the same experts in multiple cases. Prolaw checks party names against a firm’s accounts payable and accounts receivable records, marketing and vendor databases and among past clients, but the human factor is still a big part of every conflict search, Toman says.

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