Rookie Legal Mistakes Hurt Large Companies

Every so often, I see a news item that just blows my mind. In the last couple of months, I've seen two of them, both related to messaging—and both completely avoidable.

The first story concerns the ongoing legal feud between Qualcomm and Broadcom. The two sides are arguing over whether some of Qualcomm's cell phone chipsets, which are used in a wide variety of phones, infringe on Broadcom's patents. This sounds like a fairly straightforward legal dispute, and it was right up until the point when six of Qualcomm's attorneys were sanctioned by a federal judge. It's not quite the death sentence for their careers, but it comes uncomfortably close. What happened? The presiding judge, Barbara Major, had this to say: "The sanctioned attorneys assisted Qualcomm in committing this incredible discovery violation by intentionally hiding or recklessly ignoring relevant documents, ignoring or rejecting numerous warning signs that Qualcomm's document search was inadequate, and blindly accepting Qualcomm's unsupported assurances that its document search was adequate." ("Six Lawyers Referred to Calif. Bar for Qualcomm Discovery Abuse")

Harsh words indeed, but given that Major's order found the attorneys to have "\[produced\] 1.2 million pages of marginally relevant documents while hiding 46,000 critically important ones," not surprising. Qualcomm also has to pay $8.5 million of Broadcom's legal fees, and there may be ethics charges and a malpractice suit forthcoming. For more detailed information about the issues involved in the case, visit the American Bar Association Journal Web site and search for "Qualcomm."

The other case is perhaps even more interesting. The New York Times recently reported that Eli Lilly & Company, a large pharmaceutical firm, was in settlement talks with the US Department of Justice over claims of improper marketing of one of their flagship medicines ("Lilly Considers $1 Billion Fine To Settle Case"). The settlement? A cool $1 billion. This is exactly the kind of scoop that helps keep print newspapers relevant in an increasingly online world, but how did the reporter get the goods?

It's all in a name. The reporter's name is Alex Berenson. An attorney at one of Lilly's outside law firms meant to send a confidential document detailing the settlement to another attorney named Berenson at a different law firm. Instead, in a single inattentive moment, she addressed the document to Alex Berenson, who promptly recognized front-page material and wrote a story. (I'm still wondering why the attorney had Alex Berenson's address in her contacts folder, but that's a completely separate discussion.)

The point of both of these cases is that Internet email has become a ubiquitous part of business, and yet major companies—who spend tens of millions or even hundreds of millions of dollars on legal guidance—are making rookie mistakes like these. Lying or concealing evidence in discovery requests for electronic records never works, and sending a sensitive email to the wrong person is such an old chestnut that I can hardly find words to describe my surprise that a large company got bitten by it.

Are there protective measures you can take to guard your company against similar stupidities? Yes, there are, and I'll tell you about them next week.

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