Client terms – Outside Counsel Guidelines, Master Letters of Engagement or similar – may contain a number of traps, and there are the risks of partners agreeing them without reference to the firm’s General Counsel or other management, or inadvertent acceptance through billing processes.
Some current issues include provisions which purport to prevent firms from complying with statutory and insurance-related breach reporting obligations, diversity and representation requirements which may breach data protection legislation, and indemnification provisions which may give rise to insurance coverage issues.
Other problems include definitions of ‘the client’, which may extend not only to (unidentified) subsidiaries and affiliates, but we have even encountered attempts to include the client’s customers. Practical problems can arise, as illustrated by a US decision in Harbour Antibodies BV v Teneobio, Inc. Civ. No. 21-1807 (MN) (D.C. Del. 2022) where a conflict arose in connection with an affiliate which was acquired a week after the firm had done its conflicts check.
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