When does one undisclosed relationship become a firm-wide disclosure problem?
Chief U.S. Bankruptcy Judge Eduardo Rodriguez ordered Jackson Walker on October 2 to explain why it should not face sanctions for failing to disclose its work in Diebold Nixdorf’s bankruptcy. Former judge David Jones oversaw that proceeding; he resigned in 2023 after acknowledging a romantic relationship with a Jackson Walker partner. The firm must identify comparable matters by October 15. Rodriguez is considering recommending a special master to investigate additional undisclosed cases. The order seeks an explanation; it has not imposed sanctions. Reuters
The New Question Is the Scope of the Review
The development shifts attention toward whether the relevant universe of cases has been fully identified.
For firm management, that is a different problem from investigating a single relationship. Once an issue potentially affects multiple matters, the review must establish which files are connected, what disclosures were made and where gaps may remain.
The court’s consideration of a special master underscores the importance of that factual inquiry. It should not be reported as an appointment already made or a finding that every connected proceeding was compromised.
Why Centralized Records Matter
The governance implications below are analysis, rather than findings about Jackson Walker’s internal systems.
A retrospective review depends on more than asking individual lawyers to remember their files. A firm may need to reconcile engagement records, appearances, billing information and prior disclosures to identify matters requiring examination.
The objective is a defensible account of the review’s scope. Which records were searched? What criteria defined a connected matter? Who resolved uncertain cases?
Without a clear method, management may struggle to distinguish a complete review from a list assembled through incomplete recollection.
Escalation Must Reach Beyond the File Team
A sensitive concern can involve information held by different people: a relationship known to one lawyer, a court assignment known to another and a disclosure obligation addressed by a third.
That creates a practical question for law-firm governance: who brings those pieces together?
A useful escalation process identifies someone with the authority to assess the concern across matters. It also provides a route for raising issues involving senior colleagues without leaving the decision entirely with the affected team.
Where a concern spans several files, management should assess the scope promptly rather than assume that resolving the first identified matter resolves the underlying problem.
The Canadian Relevance
The U.S. bankruptcy proceeding does not establish Canadian disclosure requirements. Canadian counsel would need to examine the applicable professional rules, court requirements and facts.
Its comparative value lies in the management problem: how a firm responds when new information calls earlier disclosures into question.
That response may require record preservation, a defined review process and careful assessment of whether earlier representations need correction. The appropriate steps depend on the circumstances; a broad review should not be confused with a conclusion that every file contains a breach.
The immediate issue is whether Jackson Walker’s account of the relevant matters is complete. The broader lesson is that a firm needs a reliable way to answer that question.
Sources: Reuters.