We have assisted many accounting firms in the creation or revision of their client engagement letters. They very often question the need to include certain provisions intended to limit their liability to their clients and sometimes ask whether the provision is even enforceable. Whether the provision will be enforced is uncertain due to the very limited case law addressing liability-limiting provisions in accountants’ client engagement letters, and there could be variations in enforcement from state to state. Nevertheless, we regularly advise our clients to include the provisions, even if enforcement is uncertain, because the provision might just be accepted and never challenged, thereby serving its purpose, even if a court strikes it down after a legal challenge. Continue Reading Deloitte’s $500 Million Sentence
People take being sued personally, and lawsuits can take an emotional toll on defendants, whether as an individual or as a representative of an employer. Anger and frustration always lead to the same questions: Can we sanction them for lying? Can I get my fees (or my insurance deductible) back? Won’t the court do something?
Continue Reading The Punishing Effect of Rule 11
On April 3, 2016, the public learned that millions of client documents from the Panamanian law firm and corporate services provider Mossack Fonseca & Co. (MF) had made their way to an international organization, the International Consortium of Investigative Journalists (ICIJ), and that the information would be used to publish potentially damaging stories. In addition, authorities across the globe, from Japan to Switzerland to the United States, are reviewing the documents and investigating potential tax implications, regulatory violations and criminal activity.
Continue Reading What Attorneys Can Learn from History’s Largest Data Breach
A recent Washington Post article examined the issue of patient privacy complaints after medical providers responded to negative Yelp® reviews about medical care. The issue of how a professional can (or should) respond to negative online reviews is not limited to physicians or medical facilities. While attorneys are not subject to HIPAA, they are all well aware that attorney-client communications are privileged and confidential and only the client can waive that privilege.
Continue Reading Negative Online Reviews: The Best Defense
Consider this scenario: A young couple entrusts you, an experienced real estate attorney, to assist them in the purchase of their first home. Days before closing, your unsecured email account gets hacked and your client receives an email, which to all appearances is from you, telling them to wire funds to a third-party account instead of bringing the cash to closing. You only find out about “your” email to your client after the transfer has been made and your clients’ savings, accumulated over many years, is gone. What exactly do you think you can say to your clients to make it better?
Continue Reading The Proof Is in the Password!