An interesting article in today’s NYLJ discusses General Counsel and in-house attorney issues.  True Tales From the Law Department by Susan F. Friedman talks about the problems recently surfacing for these attorneys.  One caught our interest:

"Health Care Entity

In an action against a health care entity in the U.S. District Court for the Southern District of New York, the plaintiffs were hospitals and doctors who sought payment for the services they provided to participating members of the health care entity. The action named the health care entity and certain board directors and officers, including the general counsel, as defendants. The plaintiffs alleged breach of contract, fraud, misrepresentation, negligence, conflict of interest, deceit, conversion, and related allegations. In addition, the state insurance department commenced a simultaneous action making similar allegations including breach of fiduciary duty.

The general counsel was accused of legal malpractice and breaching his fiduciary duties by making misrepresentations to all of the plaintiffs including the regulatory body. He was also accused of negligently rendering legal opinions with regard to the business affairs of the health care entity.

All of the outstanding actions were eventually consolidated after a two-year period. Approximately four years after the initial action was commenced, and following substantial negotiations with all parties, a global settlement was effectuated and the claims were resolved in their entirety for $30 million. The entity and its directors and officers liability insurer both contributed to the settlement. In addition, the employed lawyers professional liability insurer paid for the claims alleging legal malpractice against the general counsel. "