Rules and Procedures Governing Service of Firm Lawyers on Boards of Directors Or Other

DOCUMENT #33

Rules and Procedures Governing Service of Firm Lawyers on Boards of Directors or Other Governing Bodies of For Profit or Not For Profit Entities

The following is the Firm's policy governing service of firm lawyers, both partners and associates, on boards of directors or other governing bodies of for profit or not for profit entities, whether or not such entities are clients of the Firm. As used herein, the term "board of directors" shall mean any governing body (e.g., boards or committees of directors, trustees, managers, managing partners) of any type of entity (e.g., corporation, limited liability company, partnership, trust, association). The procedures to be observed by any firm lawyer desiring to serve on a board of directors are stated below.

I.Service of Firm Lawyers on Board of Directors of Current or Imminently Prospective the Firm Clients, including both For Profit and Not for Profit Entities.

1.General Policy Considerations.

When a member of a law firm serves on the board of directors of an entity client of the Firm, whether for profit or not for profit, troubling problems of professional responsibility can arise. With respect to an entity client, the law firm and its individual lawyers are each required to give primary allegiance to the interests of the client, not to those of the client's individual officers and directors. When a member of the law firm serves as a director, the lawyer may develop a personal tie with other directors and officers that complicates fulfilling the law firm's duties of allegiance and independent professional judgment to the client.

There can be situations in which a lawyer's membership on the board of directors of an entity client can have a positive benefit to the client and to the individual lawyer. The question of continued service on particular corporate boards by a the Firm lawyer should be determined at reasonable intervals by the Directors Committee (and not unilaterally by the lawyer). In granting approval or disapproval, the Directors Committee should consider all available information, including the client's historic relationship to the Firm and including the principles, policies and practices set forth herein.

2.Issues to be Considered for Approval.

Issues that the Directors Committee should confront before approving or disapproving service by a lawyer on the board of directors of an entity client include at least the following:

·Maintenance of fealty and professional independence.

·Risk of role confusion.

·Possible loss to the client of the attorney-client privilege.

·Increased exposure of the law firm to conflict of interests, and disqualification to represent or continue representation of a client because of the conflict.

·Potential liability of the law firm for the lawyer-director's acts or omissions as a member of the board of directors.

· The higher standard of care with which a lawyer-director may be charged as a director than would be applicable to non-lawyer directors.

·Risk of insider trading accusations.

To minimize those and other risks, the Directors Committee shall be guided among others by the following principles, policies and practices which may, in the discretion of the Directors Committee, without limitation or restriction to other pertinent matters, be imposed on the lawyer as conditions precedent to approval for service as a director of an entity client:

a.All directors' fees shall be paid to and remain the property of the lawyer serving as director, and shall not be shared with the Firm. The lawyer shall not, on behalf of the Firm, charge the entity client for time as a director in preparing for or attending meetings or otherwise acting on behalf of the entity client. Expenses incurred by a lawyer in serving as director shall not be paid or reimbursed by the Firm.

b. The lawyer serving as director shall not function as a lawyer on behalf of the entity client in any matter or engagement, shall not have law firm billing responsibility to the entity client, and shall not supervise the rendition of legal services by the Firm to the entity client. A firm lawyer performing legal services for an entity client shall act independently of the lawyer serving as a director of the client. When the entity client requires legal advice or services at a meeting of the client's board of directors, the lawyer-director should decline to provide such advice or services and the Firm will provide a lawyer other than the lawyer serving as a director to perform such legal services.

c. Prior to the time the director relationship begins, the entity client shall be advised that the relationship may jeopardize the attorney-client privilege. In the conduct of litigation, other adversary proceedings, or other matters in which the maintenance of the attorney-client privilege might become important, the lawyer serving as a director of an entity client shall receive no communications concerning the matter that are not concurrently received by other directors of the entity client.

d. With respect to an entity client on whose board of directors a the Firm lawyer sits, the trading or investing in the client's securities by any partner, associate, employee, or consultant of the Firm, including all entities and individuals under the control of the Firm shall be prohibited unless and until advance approval of such trading or investing has been given by the Managing Partner. If a request for approval is made to the Managing Partner, the Managing Partner shall discuss the request with the lawyer serving as a director of the entity client and seek to determine the existence of material information known to the lawyer-director and not publicly disclosed. If any material information known to that lawyer has not been publicly disclosed, the Managing Partner shall withhold approval until after public disclosure of the material information. The Firm shall maintain an up-to-date list of its lawyers who serve as directors of corporate clients. The Firm shall establish, implement and maintain principles, policies and practices reasonably and prudently necessary to prevent or prohibit "insider trading" in securities of an entity client having a Firm lawyer serving as a director.

e.With respect to each corporate client on whose board of directors a Firm lawyer sits, all responses by the law firm to auditor inquiries concerning the client shall expressly indicate that the response does not include information that may have been acquired by an individual lawyer so serving as a director of the entity client in his or her capacity as a director.

f.A firm lawyer serving as a director of an entity client shall abstain from participating in any matter coming before the board of directors of the entity client, or any committee thereof, that involves another existing client of the Firm. In serving as a director of an entity client, a the Firm lawyer shall at all times be sensitive to the possibility that the lawyer in the capacity of a director may acquire confidential information that is relevant to the interests of other clients of the law firm. The lawyer shall maintain an informational barrier against the transmission of such confidential information to other the Firm lawyers.

g.A lawyer serving as a director of an entity client shall, when practical, personally inform each other director of the entity client of the general nature of the terms and conditions of the Firm's approval of the lawyer's service as a director.

h. The entity client having a Firm lawyer serving as a director shall indemnify the lawyer serving as a director thereof against liability to the maximum extent permitted by law.

In some instances the foregoing principles, policies and practices might be inconsistent with the relationship heretofore or hereafter existing between the Firm and a particular corporate client. In such cases, the Directors Committee may, as a condition of its approval, deviate from or waive one or more of those principles, policies and practices. Nevertheless, the exceptional nature of service by a Firm lawyer as a director of an entity client is such that the Directors Committee should carefully consider the full implication of any deviation or waiver.

Approval by the Directors Committee of a firm lawyer's service as a director of an entity client may involve detriments and risks to either the client or the law firm that are not identified above. With respect to granting or withholding approval, the interests of the entity client shall be paramount, and the desires of the individual lawyer seeking approval shall be subordinate. Approval shall be for such period of time as is determined by the Directors Committee. The appropriateness of a firm lawyer's continued service as a director of an entity client may be reviewed at any time by the Directors Committee.

The conditions, matters, issues, principles, policies and practices set forth herein are not exclusive, and the Directors Committee may add thereto or subtract therefrom.

3. Procedures for Approval.

a.With the intention to expedite an approval process that contains several potential layers of review, the Directors Committee encourages early submission of all relevant information. The Firm's General Counsel and the Firm's Professional Standards and Loss Prevention Partner will jointly appoint a designee to serve as the Government and Corporate Board Service Administrator ("Administrator"). A firm lawyer desiring to obtain approval to serve on the board of directors of a firm client shall submit a request to the Administrator prior to acceptance of the appointment to the board of directors. At the time of the request, the lawyer shall submit the following information to the Administrator.

(i)The name of the entity and proposed term of service;

(ii)A statement as to how each of the issues identified in paragraph 2 above are to be addressed so as to demonstrate that service on the board is to the benefit of the client, the Firm, and the individual lawyer; and

(iii)Either one of the following: (a) a statement that, upon reasonable inquiry, the Firm lawyer has determined that service on the board of directors or governing body of the entity will not bar or disqualify the Firm from continued or future appointment as counsel to the entity; or (b) if the lawyer determines that such service shall, or is likely to, prevent the Firm from continuing or future appointment as counsel to the entity, then the lawyer shall provide an explanation as to why service on the board is a benefit to the client, firm, and the individual lawyer and outweighs the benefit to the Firm to be gained by continued or future representation of the entity.

b.The Firm lawyer may be requested to provide additional information to the Administrator during its review in order to assist the Administrator in formulating a recommendation.

c.The Administrator will, before concluding her or his review, give a 10 day notice to all attorneys, seeking input as to possible conflicts of interest, adverse effects upon existing or potential representation, and similar matters. All input received will be taken into account by the Administrator in her or his final report to the Directors Committee.

d.The Administrator will report her or his findings to the Chair of the Directors Committee, with a recommendation for or against approval of the requested appointment to the board of directors. At the time of submission to the Directors Committee, the Administrator will provide a copy of her or his report to the lawyer and to the Managing Partner.

e.Following submission of the Administrator's report, the Chair of the Directors Committee will place the matter on the agenda of the next general meeting of the Directors Committee.

f.The Managing Partner has the right to make the final decision with respect to any appointment, and may intervene at any time in the process. If the Managing Partner intervenes, he or she shall be governed by all conditions, criteria, and guidelines for approval as are applicable to the Directors Committee as set forth in this policy. In the absence of the Managing Partner's wish to review the matter further, the decision of the Directors Committee on the matter will be final.

g.Upon approval of service of a firm lawyer on a client board of directors, the lawyer will direct a letter, in the form provided by the Firm's Loss Prevention Administrator, to the client on whose board the lawyer will serve establishing the terms and conditions of the lawyer's service on the board. Board service is subject to the following conditions: 1) the lawyer may not be involved in rendering legal services to the client (except as provided in Section III), and may not have supervisory or billing responsibility with respect to services performed by other Firm lawyers; 2) except with respect to certain community based or religious organizations, the lawyer must confirm that the corporation or entity has D & O coverage and the limits of that coverage; 3) the lawyer must enter the relationship on the Firm's conflict data base; and 4) the lawyer must obtain indemnification from the client indemnifying the lawyer as to liability as a result of the lawyer's service on the board.

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PRMS #33_ Service of Firm lawyers on Boards of Directors - Law Firm 1