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Edward C. Mendryzcki Award

The Assignment: Essay Hypothetical

2024 ABA LPL Edward C. Mendrzycki Scholarly Writing Competition—Hypothetical

Sponsored by:
ABA Standing Committee on Lawyers' Professional Liability
and Long & Levit, LLP

2024 ABA LPL Edward C. Mendrzycki Scholarly Writing Competition—Hypothetical

Reeder Jones LLP is a law firm that specializes in intellectual property matters, and that has an office in the State of Sunshine. The firm represents many technology companies, and prides itself on staying at the forefront of technological advancements. The firm recently decided to subscribe to a state-of-the-art generative artificial intelligence (AI) system called “LawGen” to aid it in legal research and document preparation. Unlike ChatGPT and other open source systems, LawGen is a closed system that only uses publicly available cases, statutes, patent filings, and other legal research materials, as well as data input into the system by the law firms using LawGen. As part of their contract with LawGen, subscribing firms are required to input into the system all of their client files, except for those portions of the client files that include attorney-client privileged communications between the firms and their clients. 

Reeder Jones rolled LawGen out to its lawyers this month, and has encouraged them to use LawGen for all legal research and drafting projects. To recoup the significant expense associated with LawGen, the firm also decided this month to revise its standard form engagement letter to include language notifying the client that firm lawyers may use LawGen for client work, and that the firm will assess the client a flat fee of either $1,000 per month or 10% of each month’s bill, whichever is less, for use of LawGen. 

Sarah Reeder is a patent lawyer and a partner in Reeder Jones. For years, she has worked with one of the firm’s long-time clients, chip manufacturer CHIP-Force, Inc., helping it obtain patent protection for its chip technology. She has a standing call every two weeks with Clifton Ruiz, CHIP-Force’s Vice-President in charge of research and development, to discuss pending patent matters. On the most recent call, Mr. Ruiz told Ms. Reeder that two of the company’s former employees had left CHIP-Force to join a competitor, and that the competitor has now released a chip using technology strikingly similar to technology being developed by CHIP-Force. Mr. Ruiz asked if Ms. Reeder could advise CHIP-Force about claims it may have against its former employees and competitor for theft of trade secrets.

The firm sent an engagement letter to CHIP-Force several years ago describing that the firm was engaged to perform “patent prosecution and other intellectual property work.” The firm sent additional engagement letters to CHIP-Force as new non-patent matters were opened up, but Mr. Ruiz expressed annoyance about receiving those letters because he viewed them as unnecessary and as serving no purpose other than to clutter up his files. Mr. Ruiz reiterated on the most recent call with Ms. Reeder his desire not to receive unnecessary engagement letters, and stated that the trade secret work could be done under the existing engagement letter. Ms. Reeder agreed.  

Following the call, Ms. Reeder asked Michael Kraft, an associate at the firm, to assist in evaluating CHIP-Force’s potential trade secret claims. Mr. Kraft input the facts known to him into LawGen, describing CHIP-Force, its former employees, its competitor, and the trade secrets suspected to have been stolen, and asked LawGen to provide a draft memorandum analyzing potential claims. LawGen generated a memorandum in response, citing a number of statutes and cases, and identifying potential claims and defenses that could be asserted. Mr. Kraft asked LawGen to provide him copies of the authorities cited in the memorandum, carefully read them, and was satisfied that the memorandum accurately summarized the applicable law. He made some stylistic edits to the memorandum and provided it to Ms. Reeder, who in turn provided it to Mr. Ruiz.

The following week, Mr. Ruiz left Reeder Jones’s managing partner, Abby McLaren, a frantic voicemail message requesting an in-person meeting with her. He stated that he had received the firm’s invoice for the previous month’s work, saw the charge for LawGen, and was upset that the firm was using LawGen because he did not trust generative AI. He seemed panicked at the thought that CHIP-Force’s data might be disseminated to competitors via LawGen. He also was upset with the fee the firm was charging for it.

You are a lawyer in the State of Sunshine who represents other lawyers in grievance matters, and who is retained by Reeder Jones from time to time to advise the firm regarding ethical issues. The State of Sunshine has adopted the ABA Rules of Professional Conduct, and Reeder Jones wants you to prepare a memorandum advising it whether any of its lawyers have violated any of the Rules, whether it has malpractice exposure, and how it should respond to Mr. Ruiz.

Please prepare the memorandum.