While losing its appeal of a $32 million Ohio malpractice verdict in April, Dentons’ global chair Joe Andrew has vowed to fight on, no matter the cost. At the heart of this fight, said Andrew, was not just vindication for his firm’s conflicts procedures, but also the fate of the legal services industry itself.
Andrew insists his existential claim for law firms is no hyperbole. Dentons’ loss, on appeal in an Ohio court, has “dire” ramifications for all “quality” law firms, and firms operating in smaller markets, he said in an interview with The American Lawyer. If the decision stands—a decision Dentons has asked the court to review—how law firms manage conflicts of interest, and client relationships generally, could become extremely difficult and adverse to clients themselves, Andrew claims.
The case involved patent infringement litigation Dentons conducted on behalf of client RevoLaze—a laser equipment supplier. The client claimed Dentons should not have represented them as plaintiffs because Dentons’ Canadian firm represented RevoLaze’s adversary—Gap Inc.—in other matters. Dentons argues that it operates a robust conflicts system, and that RevoLaze signed the appropriate advance waivers. Such conflict waivers—which clients of large firms with multiple offices regularly sign—are common throughout the legal services industry and part of the essential nature of client services and conflicts management, said Andrew.
“If we don’t get a hearing on this appeal, then literally every single advance waiver for every single lawyer is all open to question,” Andrew said.
The Ohio Supreme Court is currently considering Dentons’ request. Dentons is represented by Jones Day’s Yvette McGee Brown, Tracy Stratford and Thomas Demitrack.
In Dentons’ request for a review, Brown wrote that the legal profession needs further guidance on the standards for legal malpractice claims.
“At stake is the fundamental nature of the relationship between attorney and client and the need to protect lawyers and law firms of all types against speculative claims for losses they did not cause,” Brown wrote in her filing.
While the matter is before the Ohio courts and the decision solely impacts lawyer-client relationships in that state, Andrew worries other jurisdictions will use it as guidance in their own malpractice cases.
“The reality of it is, it’s going to be everywhere,” Andrew warned. “We think it is inevitable that it will get cited in all the other jurisdictions around the United States. What you’re looking at here is the seeds of a massively big issue for all lawyers at quality law firms.”
A Red Herring
In February 2020, a Cuyahoga County, Ohio, jury sided with RevoLaze and awarded $32.3 million in damages against the firm. On appeal in April, a three-judge panel in Ohio’s Eighth District Court of Appeals upheld the jury verdict.
Both the trial and appellate court decisions relied heavily on the fact that Dentons is structured as a Swiss verein, finding that the structure was part of the problem. But Andrew said the firm’s structure has nothing to do with the case, and the result of the court not addressing the underlying issue of waivers has opened the door to an existential problem for law firms.
A Swiss verein is a formal legal structure akin to a voluntary association. It helps law firms in multiple jurisdictions operate as a unified body of thousands of lawyers. Other global law firms like Baker McKenzie, DLA Piper, Littler Mendelson, Norton Rose Fulbright and Squire Patton Boggs also use the structure. All of these firms, including Dentons, profess a “one firm” approach to conflicts.
“There is literally no place [in this matter, where] we’ve ever made the claim that our verein structure is a defense, because we operate all across the globe as one firm for conflict policies,” Andrew said. “We have to get to the underlying merits of the case, which is about consent.”
And he is not alone in his assessment. On June 10, Dentons asked the Ohio Supreme Court to review the lower court’s decision, and quickly won support from two professional liability insurers who filed amicus briefs.
All three organizations—Dentons, and in amicus, the Attorneys’ Liability Assurance Society (ALAS) and the Ohio Bar Liability Insurance Co. (OBLIC)—claim the court has made it too easy for plaintiffs to sue their law firms for malpractice. Ostensibly, they argue that industry-standard, watertight waivers will no longer have any meaning if the court’s decision stands.
Robin Weaver, head of claims for OBLIC, agrees that by ignoring the underlying substantive issues of the case, the appellate court’s decision opens the door for more malpractice suits with less cause.
“The verein issue is a red herring,” said Weaver in an earlier interview. “This decision essentially invites parties to find some fault with their counsel.”
Dentons is maintaining that neither the trial court nor the intermediate appellate court has addressed the merits of their position that Dentons had RevoLaze’s consent. Instead, Dentons says both courts have incorrectly expressed an opinion about its verein structure, as if the firm had used that structure as a defense.
“That is not our position, but it keeps being pushed by our opponents,” Andrew said.
‘Overplayed Their Hand’
That the 11,000-lawyer international firm’s global chair has spoken out on the case shows just how serious the firm is treating the matter. That it has not settled the suit—and Andrew said Dentons will never settle—is further evidence of how seriously it is taking the matter.
“I’m getting involved as global chairman, because if you can’t rely on a client’s consent, then everybody—everywhere—has a problem,” said Andrew, adding that he believes Dentons’ opponents have “overplayed their hand” in a bid to extract a settlement.
Andrew said the monetary hit from the malpractice verdict will “inevitably” be paid from Dentons’ professional indemnity insurance, but he is willing to keep paying for outside representation and committing in-house resources to continue the fight. The issue is one of principle, he said.
If the appellate court decision stands, Andrew said, “all of a sudden, clients have an argument that waivers don’t work in the United States.”
Conflict waivers are used as agreement—and proof—that a client has given informed consent for a firm to handle a legal matter, despite any potential disqualifying conflict of interest.
“Every big firm in the U.S.—and also a lot of single practitioners in small markets or niche practice areas—use these waivers,” said Andrew, explaining that the largest firms may have thousands of clients across hundreds of practice areas in dozens of markets.
It will be particularly an issue for the provision of legal services in smaller markets, said Andrew, where there are fewer high-quality firms to choose from, and more likelihood of potential conflicts with firm clients in larger markets.
Theo Liebmann, executive director of the Monroe H. Freedman Institute for the Study of Legal Ethics, said he does not disagree with Andrew that the use of advanced waivers is important to the practice of law today, because of all the potential conflicts inherent in large practices.
“There’s lots of reasons that if advanced waivers were not considered viable protection, that it would make it very difficult for large firms, and it would make it much more difficult for lawyers to move from firm to firm. And that’s problematic for a lot of reasons,” said Liebmann.
In general, when looking at advanced waivers to determine if they are acceptable, Liebmann said courts typically examine two characteristics. The first is how broad the advanced waiver is. The broader the waiver, the more likely the courts will question its viability.
The second is the sophistication of the individual or entity signing the waiver.
“In this case, you have a corporation that almost certainly had a general counsel who reviewed the advanced waiver,” Liebmann said. “Usually, with a sophisticated client—which this almost surely is—it would be pretty unusual if the advanced waiver was invalidated by the court. Even if Dentons had an unusually broad waiver, if the client is sophisticated, most of the time courts would uphold the advanced waiver.”
Lawyers for RevoLaze—at Tucker Ellis, Patterson Law Firm, and Warren Terzian—did not immediately respond to requests for comment.