Sidley has significant experience representing accounting, law and other professional services firms in professional liability litigation, regulatory matters and government investigations. With highly skilled and experienced lawyers in Chicago, Los Angeles, New York, San Francisco and Washington, D.C., we are able to provide efficient and comprehensive assistance in matters arising all over the country and in any forum. Our practitioners have the skill, knowledge and experience to handle any professional liability matters, and we have the ability to bring all of Sidley’s vast resources to bear on issues facing our clients. Lawyers in our practice include first chair trial lawyers, former federal prosecutors and other high-ranking Department of Justice (DOJ) officials, former Securities and Exchange Commission (SEC) enforcement lawyers, a past president of the D.C. Bar Association and more than a dozen partners with over 20 years of experience representing professional services firms.
Our lawyers have represented professionals and professional services firms in matters in more than 38 states and in malpractice, securities and other cases in federal and state court, in mediations and arbitrations, in federal and state government investigations, and in disciplinary proceedings before state boards of accountancy and state bar associations. Our discovery capabilities allow us to assist our clients in meeting the obligation to preserve, collect and produce documents in an appropriate manner, whether our clients are parties to a litigation matter, subject to a government inquiry or simply served with a non-party subpoena.
Sidley regularly represents two of the “Big Four” accounting firms and one of the next largest domestic firms. We also have extensive international experience, representing foreign firms in matters pending within the United States and assisting those clients in matters pending outside the United States. We also represent domestic firms in matters raising international and transnational issues.
Our experience translates into a deep understanding of our clients and the profession. We have a detailed knowledge of Generally Accepted Accounting Principles (GAAP) and auditing standards, as well as a comprehensive understanding of how audit teams plan, conduct and document their audit work, the respective roles of management, audit committees and auditors in the financial reporting process, and how professional standards intersect with various federal and state laws, including the reforms enacted by the Sarbanes-Oxley Act of 2002. Our cases and matters run the gamut of issues from financial frauds and restatements to fair value accounting, pension accounting, inquiries into stock option dating practices and issues affecting the sub-prime mortgage lending industry.
We also understand the world in which our clients operate. We have a thorough understanding of the dynamics of the relationships between accounting firms and their regulators, including the SEC and the Public Company Accounting Oversight Board (PCAOB), and have represented accounting firms, their partners and employees before the SEC and the PCAOB.
Our lawyers represent law firms and lawyers in malpractice and negligence actions, as well as in a broad range of white collar and governmental regulatory actions, state bar proceedings and investigations at the federal and state levels. Our lawyers are not only effective litigators but creative problem solvers capable of addressing a broad range of the risk management issues law firms face.
Our experience in handling such matters allows us to develop the most effective strategy for dealing with a law firm’s professional liability and risk management problems. This includes strategies for cost-effectively resolving external challenges, identifying the cause of the problems giving rise to those challenges and working collaboratively with law firm management to develop and implement effective policies for avoiding them in the future.
Professional Liability Litigation Against Accounting Firms
We have successfully represented clients in cases brought by each of the different kinds of plaintiffs who bring professional liability suits against accountants and other professionals. We have represented clients in cases brought by their former clients, bankruptcy trustees, insurance liquidators, shareholders (through class actions, in derivative suits or otherwise), creditors, investors, insurers and a host of others who claim to have relied on our clients’ work.
Our clients regularly prevail in such cases – both on dispositive motions and at trial – not only because we defend the quality of the work of our client, but also because we aggressively pursue and pressure such plaintiffs on key defense issues including privity, causation, reliance, imputation, contributory fault, deepening insolvency and applicable statutes of limitations. For example, our lawyers recently tried a malpractice case brought by a liquidating trust. After two and a half weeks, our client prevailed on all counts. We also have planned for and successfully participated in early mediations, where our experience allows us to identify and focus quickly on the facts that are most helpful to our clients.
In addition to handling claims arising out of audit engagements, we have represented clients in litigation arising out of review engagements, engagements involving financial projections, tax work, valuation engagements and management consulting engagements.
Professional Liability Litigation and Risk Management Involving Law Firms
There are five specific areas in which we can provide significant value to law firms facing professional liability litigation.
Our lawyers can assist law firm clients facing a litigation or risk management crisis by collaborating with law firm management to develop a strategy for dealing with the litigation, as well as regulatory and media issues that may arise, to minimize the impact on firm reputation, lawyers, staff and clients.
We provide sound and experienced litigation and trial capability. Our lawyers have the skills and experience to assess and resolve cases effectively and efficiently, through any combination of means including dispositive motions, trial or when the facts, circumstances and case assessment warrant it, an early settlement or mediation.
Our lawyers provide sensitive representation in all aspects of internal investigations and governmental investigations, including SEC and grand jury investigations.
Our lawyers provide sophisticated counseling regarding the prophylactic steps necessary to minimize or avoid risk management issues.
Fifth, our lawyers provide experienced counseling regarding how to manage a law firm’s relations with its insurers to maximize the recovery of defense costs, settlements or judgments.
Our lawyers can also offer advice in many other areas affecting law firms, including labor and employment, governance, lending and bankruptcy.