Greetings!  This is the first newsletter of 2010 to keep you abreast of developments of importance to in-house counsel.

Our second annual Tennessee Corporate Counsel Forum presenting a 3 CLE credit program entitled “Changes in the Law That Affect Corporate Counsel", will take place February 12th at the Tennessee Bar Center in Nashville. Registration begins at 8:30 am and the program will begin at 9:00 am. This year’s program includes an Update on Labor and Employment Laws; "Monitoring Your Company's Activities Under the Foreign Corrupt Practices Act. Yes - Tennessee Companies Can Violate the FCPA!"; and Changes to the Separate Delaware Entity Laws.

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The fifth annual Corporate Counsel Pro Bono Initiative Gala will be held on March 27th at the Hermitage Hotel, Nashville. The reception begins at 6:00 pm with dinner to follow at 7:00pm. A two-hour CLE program will precede the Gala at the TBA Center. Funds raised through attendance at the Gala goes to support the Access to Justice Committee’s Pro Bono Initiative, which promotes pro bono activity in our legal community with grants. We encourage companies and their corporate counsel to participate in the Gala and support the Pro Bono Initiative! At this year’s Gala the Pro Bono Initiative Awards will be presented to recognize a corporate legal department and law firm that best exemplify the commitment to access to justice and the pro bono initiative. Many of our section members have nominated firms and departments for these awards. Thanks for your assistance and stay tuned for more information about the winners.

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By Laura L. Chastain
Corporate Counsel and Ethics Officer
Harper Industries, Inc.
1136 Second Avenue North
Nashville, TN 37208
lchastain@harper1.com

      Lawyer X has recently been hired by a large law firm to be the Ethics Counsel within the firm. Basically, Lawyer X is to act as in-house ethics counsel to the law firm as a whole and possibly individual lawyers within the firm if no conflict exists between the law firm and the individual lawyer. Lawyer X has just been approached by Lawyer Y, an individual lawyer for the firm, and asks if he can confidentially consult with Lawyer X about a matter involving one of the firm’s clients who Lawyer Y directly represents for the firm.

DILEMMA: Lawyer X is concerned that he may be violating the confidentiality of the client and may learn something that the Rules of Professional conduct would mandate that he report to the Board of Professional Responsibility. Would it be unethical for Lawyer X to allow Lawyer Y to consult with him regarding a client matter involved in representation of the client by the firm?

SOLUTION: No, it would not be unethical for Lawyer X to allow Lawyer Y to consult with him regarding a client matter involved in representation by the firm. Lawyer X should review with Lawyer Y the firm’s obligations to the client and the possibility of having to report Lawyer Y’s conduct to the management or even disciplinary authority if the consultation reveals serious ethical violations by Lawyer Y, as well as other issues such as conflicts of interest that may cause the firm to have to withdraw from representation.

     A phenomenon has been emerging nationwide in that law firms are either hiring or promoting from within, lawyers to the position of ethics counsel for the purpose of having in-house ethics consulting in the law firm. Many questions such as those of Lawyer X have been the subject of a new Formal Ethics Opinion of the American Bar Association. Formal Opinion 08-453 is an in-depth study of the variety of issues that arise in having in-house ethics consulting.

     The intent of law firms in having their members comply with their ethical obligations has caused firms to turn to ethics counsel within the firm to whom the firm and its members may consult for advice on ethics matters.

     The lawyer-client relationships created by ethics consultations within the firm are separate from those between the firm and their outside clients.

     There is no problem with disclosing confidential information of the client within the firm, unless the client has specifically requested that information is to be confined to certain lawyers because it is impliedly authorized for the firm to utilize all of its resources for the client. The client does not need to be informed that this consultation has occurred, but must be informed if it reveals a conflict and the need of the firm to withdraw so as not to violate its obligations to the client.

     Ethics Counsel may be under an obligation to report an individual lawyer’s ethical violations to the firm’s management under Rule 1.13, Tennessee Rules of Professional Conduct which requires a lawyer representing an organization to protect the organization. As to whether the lawyer’s ethical violations must be reported to a disciplinary authority is governed by Rule 8.3 of the Tennessee Rules of Professional Conduct as to when one lawyer must report another lawyer’s conduct, which is when a lawyer has committed a violation of the rules A that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects.@ In other words, conduct that is egregious and needs to be prevented by the profession.

     ABA Formal Opinion 08-453 In-House Consulting on Ethical Issues, issued October 17, 2008 states in conclusion: AIn-house ethics consulting is without question valuable, but is use must be implemented with consideration of all ethical issues that may arise.@

The ABA Opinion may be obtained from the American Bar Association Standing Committee on Ethics and Professional Responsibility, Telephone (312) 988-5300.

Our survey respondents also confirmed a growing trend within corporate counsel practice – the lack of legal malpractice insurance coverage for in-house counsel. More than half of the members who responded stated that they were not currently covered by a legal malpractice policy (employer-provided, or otherwise). Some members have commented that the lack of coverage is a direct result of the cost of coverage for in-house legal staffs at smaller companies. Others commented that company lawyers tend to often be covered under a company’s directors and officers insurance; and that many such lawyers forego malpractice coverage because of the other coverage. Obviously, the two coverages are not the same and some of our members are making a difficult choice. The section’s executive council agreed to explore the viability of “pool coverage” for group’s of in-house counsel. We will report back to the section.

NOTICE: The information available in this newsletter includes basic legal information and is not a substitute for legal advice or professional alternative dispute resolution advice. The information is provided for general information only. It should not be considered legal advice or other professional advice. You should consult an attorney if you have questions concerning any specific situation.

Laura Chastain
Chair
Harper Industries, Inc.
(Nashville)
(615) 870-8644
lchastain@harper1.com

William David Smith Jr.
Immediate Past Chair and CLE Coordinator
Thomas & Betts Corp.
(Memphis)
(901) 252-5843
david_smith@tnb.com

John Bowles
Vice Chair
Graceway Pharmaceuticals
(Bristol)
(423) 274-2100
john.bowles@gracewaypharma.com

Brett Burrell
East TN Delegate
King Pharmaceuticals Inc.
(Johnson City)
(423) 534-5259
brett.burrell@kingpharm.com

Jane Allen
Middle TN Delegate
Counsel On Call Inc
(Brentwood)
(615) 467-2388
jane.allen@counseloncall.com

James Blackstock
Middle TN Delegate
(Brentwood)
(615) 500-5173
jim.blackstock@comcast.net

Julie Burnstein
Middle TN Delegate
Leader Bulso Nolan & Burnstein PLC
(Nashville)
(615) 780-4115
jburnstein@leaderbulso.com

Chadwick Conn
Middle TN Delegate
(Smyrna)
(202) 997-9555
chadwickconn@hotmail.com

John Gillmor
Middle TN Delegate
Bradley Arant Boult Cummings
(Nashville)
(615) 252-2305
jgillmor@babc.com

Sherie Edwards
Middle TN Delegate
State Volunteer Mutual Insurance Co.
(Brentwood)
(615) 377-1999
sherieE@svmic.com

Andrew Loope
Middle TN Delegate
Healthcare Realty Trust Inc.
(Nashville)
(615) 463-7737
ALoope@healthcarerealty.com

Candice Reed
Middle TN Delegate
Counsel on Call Inc.
(Brentwood)
(615) 467-2388
candice.reed@counseloncall.com

Devin Schultz
Middle TN Delegate
Ingram Barge Company
(Nashville)
(615) 298-8239
devinschultz@gmail.com

Al Bright
West TN Delegate
Butler Snow O'Mara Stevens & Cannada PLLC
(Memphis)
(901) 680-7308
al.bright@butlersnow.com

Jason Hood
West TN Delegate
Wright Medical Technology Inc.
(Arlington)
(901) 867-4743
jphood@wmt.com

Steven Heinrichs
Delegate
Marietta
(678) 795-9122
sheinrichs2008@kellogg.northwestern.edu