Contract analysis

I. Question Presented Whether the conflict of interest identified under Illinois Rules of Professional Conduct 1.7(a)(1) and 1.7(a)(2) — arising from the Firm's concurrent representation of Pinnacle Workforce Analytics, Inc. ("Pinnacle") in patent-enforcement litigation concerning the TruScan 360 biometric platform (C&H Matter No. 1031-00001, Pinnacle Workforce Analytics, Inc. v. Veritas Biometrics Corp., U.S. Distri

II. Background The following factual background is drawn from the Firm's internal records, the new-matter intake file for Matter No. 1031-00001, the Conflicts Search Reports dated May 10 and May 13, 2024 (prepared by Colleen Farrow, Director, Conflicts & New Business), conversations with Jonathan Mercer and Priya Subramaniam regarding the scope and status of the Pinnacle engagement, conversations with Rachel Bernstei

III. Applicable Rule: Illinois Rule of Professional Conduct 1.10 A. Text of Rule 1.10(a) — General Imputation Principle The general imputation provision of Illinois Rule of Professional Conduct 1.10(a) provides in full: While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless the prohibit

IV. Analysis A. Jonathan Mercer's Status as a Current, Active Partner The threshold inquiry under Rule 1.10(d) is whether the disqualified lawyer is one who has recently "become[] associated with" the firm — that is, a lateral hire carrying a conflict from a prior firm association. Jonathan Mercer is not a lateral hire carrying a conflict from a prior firm. He is a sitting partner of Calderwood & Harkness LLP who has

V. Hypothetical: Could the Conflict Be Cured If Pinnacle Were a Former Client? For completeness, and as addressed in greater detail in the companion memorandum on Illinois Rule 1.9, we briefly examine the hypothetical scenario in which Pinnacle becomes a former client prior to the Firm's acceptance of the MTDC engagement. This analysis is presented to demonstrate that even under a more favorable analytical framework,

VI. Conclusion Based on the foregoing analysis, we reach the following conclusions:

1. Imputation applies. The imputation provision of Illinois Rule of Professional Conduct 1.10(a) imputes Jonathan Mercer's Rule 1.7 conflict with respect to Pinnacle Workforce Analytics, Inc. to all lawyers at Calderwood & Harkness LLP. Every lawyer at the Firm is deemed to share Mercer's disqualification from representing any client whose interests are directly adverse to Pinnacle or whose representation would be ma

2. The screening exception is unavailable. The screening mechanism set forth in Illinois Rule 1.10(d) is unavailable for two independent and each individually dispositive reasons: (a) the conflict arises from a current partner's ongoing representation of Pinnacle at this Firm, not from a lateral hire's prior association with another firm, and therefore the "becomes associated with a firm" trigger of Rule 1.10(d) is n

3. No other exception under Rule 1.10 applies. The narrow "personal interest" exception in Rule 1.10(a) is inapplicable because Mercer's disqualification is based on his professional duties to an existing client, not on any personal financial, familial, or other individual interest.

4. An ethical wall would not cure the conflict. Erecting an information barrier between the Mercer/Pinnacle team and the Bernstein/MTDC team would not cure the conflict under Illinois law. The Illinois Rules do not authorize screening for concurrent-client conflicts; the loyalty problem is institutional and cannot be compartmentalized; the confidential information concerns are compounded by the substantial relationsh

5. The MTDC engagement must be declined. The Firm cannot accept the proposed MTDC engagement (Matter No. 1031-00001) while continuing to represent Pinnacle (Matter No. 1031-00001). This conclusion holds whether the analysis is conducted under Rule 1.7 (current-client conflict) or, hypothetically, under Rule 1.9 (former-client conflict), and irrespective of any structural measures the Firm might consider implementing.

6. Consistency with companion memoranda. This analysis is fully consistent with the conclusions reached in the companion memoranda on Illinois Rule 1.7(a)(1)/(a)(2) (direct adversity and material limitation), Illinois Rule 1.7(b) (waivability), and Illinois Rule 1.9 (former-client considerations). Each of these independent analyses converges on the same result: the conflict is real, it is unwaivable, it is imputed fi

VII. Appendices / Attachments Referenced The following materials are referenced in this memorandum and are available in the Conflicts Committee's confidential matter file for C&H Matter No. 1031-00001: Appendix A: Text of Illinois Rule of Professional Conduct 1.10 (full rule with official comments), as adopted by the Illinois Supreme Court and currently in effect. Appendix B: Text of Illinois Rule of Professional Con