Houston-based law firm Baker Botts has been sued for legal malpractice over an alleged failure to disclose a conflict of interest when servicing two clients. The lawsuit states that the firm was engaged simultaneously with two clients for the same service – but these services were in direct conflict and could not have been done adequately to both clients.
The suit was levied by Axcess International, Inc., a wireless intelligence and business monitoring company. They engaged Baker Botts to assist in the filing of patents for radio frequency identification (RFID) products. These services began in 1998 and by 1999 various patents had been filed for Axcess. However, in 1999 Baker Botts engaged with Savi Technologies, Inc. who also wanted help filing patents for RFID technology. This conflict created tensions, according to Axcess and even when concerns were raised in 2002 by Axcess, the company claims that Baker Botts deflected the questioning and never told Axcess of the conflict.
Currently in jury deliberations, the $51M ask amount highlights the dangers of client conflicts. The importance of maintaining proper client conflict procedures cannot be understated. This is especially true when dealing with technology clients or with services around products and services with high dollar amounts attached. Open and honest communications with clients can help prevent disagreements from rising to the level of a lawsuit.
Proper risk mitigation techniques, good internal controls and procedures and a strong lawyers professional liability insurance program should be in place at every law firm. Contact us to discuss ways to improve your insurance program or implement risk management techniques.