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Advance Waivers in Engagement Letters – Be Wary

by Editors on July 3, 2013

In-house counsel should read engagement letters with outside counsel carefully – as many may contain advance waivers that can come back to haunt their company down the road:

A recent decision in Galderma Labs v. Actavis Mid Atlantic, concerning the breadth of an advance waiver between a sophisticated client and law firm, should be reviewed very carefully by in-house and outside counsel. The Northern District of Texas court held that a few sentences of an engagement letter provided sufficient advance waiver notice of an unforeseen future conflict, and distinguished a 2008 New Jersey decision with similar facts (Celgene v. KV Pharmaceutical). Counsel should note the language used to balance a client’s relative sophistication with a law firm’s ethical duty to provide reasonably adequate disclosure for the client to provide informed consent for such advance waivers.

Read: In-House Counsel Can Inadvertently Waive Conflicts at CorpCounsel

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