Contract analysis

I. EXECUTIVE SUMMARY OF Q2 2024 CONFLICTS ACTIVITY During Q2 2024, the Conflicts Committee reviewed a total of 347 new-matter intake submissions. Of that number, 312 were cleared without issue following completion of standard conflicts searches and review procedures, 27 required enhanced review or conditional clearance (including the imposition of engagement conditions such as ethical screens, advance waivers, limite

II. MATTER OF NOTE: DECLINED ENGAGEMENT — MATTER NO. 1031-00001 A. Matter Identification The following information identifies the proposed engagement and the individuals and entities involved in the intake and conflicts review process: C&H Matter No.: 1031-00001 Prospective Client: Metropolitan Transit Development Corp. ("MTDC"), a unit of local government and special-purpose transit authority organized under the Ill

1. Defense of Civil Investigative Demand. MTDC received a Civil Investigative Demand ("CID") issued by the Illinois Attorney General's Bureau of Civil Rights on April 22, 2024 (Reference No. CRB-2024-0417). The CID alleges potential violations of the Illinois Biometric Information Privacy Act ("BIPA"), 740 ILCS 14/1 et seq., and the Illinois Personal Information Protection Act ("PIPA"), 815 ILCS 530/1 et seq., in con

2. Defense of Putative Employee Class Action. On April 29, 2024 — one week after the issuance of the AG's CID — a putative employee class action was filed in the Circuit Court of Cook County, Chancery Division (Case No. 2024-CH-04417). The action was brought on behalf of a class of approximately 12,400 current and former MTDC employees who were subject to biometric data collection through the workforce-management pla

3. Biometric-Data Remediation Advisory. MTDC sought advice on the remediation of its biometric-data practices to bring its workforce-management operations into compliance with BIPA and PIPA, including revisions to consent protocols, data-retention schedules, vendor-management procedures, and employee-notification practices.

4. Cross-Claims and Vendor Indemnification. MTDC anticipated asserting cross-claims and indemnification demands against the technology vendor whose biometric workforce-management platform was deployed, based on the indemnification, warranty, and compliance provisions of the Master Software License and Services Agreement between MTDC and the vendor. The proposed engagement scope contemplated investigation, preparation

5. Related Employment Counseling. MTDC also sought related employment counseling concerning the revision of workforce-monitoring policies implicated by the biometric platform deployment, including issues at the intersection of BIPA, the Illinois Employee Credit Privacy Act, and federal labor-law considerations arising from MTDC's collective-bargaining obligations with multiple labor organizations. The engagement was

I. Declination and Referral Actions Following the Committee's determination, the following declination and referral actions were taken in a prompt and orderly manner: Internal Declination Memorandum. Rachel Bernstein prepared the internal declination memorandum, dated May 15, 2024. The memorandum was circulated to the proposed engagement team (Miriam Calloway, Devon Archer, and Nadia Petrov) and to firm leadership, i

1. Matter Closure Form. The firm's standard Matter Closure Form (C&H Form MC-1) was completed by Rachel Bernstein and processed by Colleen Farrow on May 23, 2024. The stated reason for closure was: "Conflicts declination — unwaivable current-client conflict under Illinois Rule of Professional Conduct 1.7."

2. Confirmation of No Client Materials or Billings. The Conflicts & New Business Department confirmed that no client documents, confidential information, or privileged materials were received from MTDC at any point during the intake process. No fees were billed to MTDC, no disbursements were incurred on MTDC's behalf, and no work product was transmitted to MTDC. The matter was closed with zero billings and zero disbu

3. Return-of-Materials Confirmation. A return-of-materials confirmation letter was sent to Terrence Whitfield on May 23, 2024, confirming that the firm had no client materials to return and reiterating that no attorney-client relationship was formed between Calderwood & Harkness LLP and Metropolitan Transit Development Corp. as a result of the intake discussions.

4. Finance Department Notification. Colleen Farrow sent an email to the Finance Department on May 23, 2024, instructing that Matter No. 1031-00001 be closed in the firm's billing and accounting systems with zero billings and zero disbursements. The Finance Department confirmed closure on the same date.

5. Records Retention. All internal work product generated during the intake and conflicts review process — including the conflicts search reports, research memoranda, ethics analyses, the Confidential Information Inventory, Committee deliberation notes, the formal resolution, declination correspondence, and referral correspondence — has been retained in accordance with the firm's seven-year records-retention policy u

6. Conflicts Database Update. The firm's conflicts database has been updated to reflect the following: • MTDC is recorded as a declined prospective client (not a current or former client of the firm). • The nature of the conflict is recorded as an unwaivable current-client conflict under Illinois Rule of Professional Conduct 1.7. • A cross-reference has been entered linking MTDC's record to the existing client's matt

7. Notification to Existing Client's Engagement Partner. On May 23, 2024, Colleen Farrow sent a notification memorandum to the existing client's engagement partner confirming the declination and closure of Matter No. 1031-00001. The memorandum expressly confirmed that no existing-client confidential information was disclosed to the proposed MTDC engagement team (Rachel Bernstein, Miriam Calloway, Devon Archer, or Nad

8. Instruction to Proposed Engagement Team. On May 23, 2024, Rachel Bernstein notified the proposed engagement team members — Miriam Calloway, Devon Archer, and Nadia Petrov — of the formal closure of the matter. All team members were instructed to cease any work related to the proposed engagement, to archive all files and work product in accordance with the firm's retention policy, and to refrain from discussing the

III. OTHER Q2 2024 CONFLICTS COMMITTEE ACTIVITY — SUMMARY The detailed summary of all other Q2 2024 matters reviewed by the Conflicts Committee is set forth in the full version of this Quarterly Report, which has been provided to the Management Committee under separate cover. This excerpt addresses only the significant declination described in Section II above. For the Committee's reference, the aggregate Q2 2024 sta

IV. RECOMMENDATIONS AND FORWARD-LOOKING ITEMS Based on the Committee's experience during Q2 2024, and with particular reference to the circumstances of Matter No. 1031-00001, the Committee offers the following recommendations and observations for the Management Committee's consideration:

1. Early Identification of Technology-Vendor Relationships. The Committee reminds all partners of the critical importance of early identification of potential adverse parties at the intake stage, particularly in matters involving technology vendors where the firm may have existing patent, intellectual-property, licensing, or other relationships. The MTDC matter illustrates that a prospective client's technology-vendo

2. Automatic Flagging in Conflicts Database. The firm's conflicts database has been updated to ensure that future inquiries from MTDC, or involving the biometric workforce-management platform at issue, will trigger an automatic flag alerting the Conflicts & New Business Department to the prior declination and the underlying conflict. This measure is intended to prevent inadvertent engagement on a matter that would gi

3. Annual Ethics Training — Illinois Rules 1.7 and 1.10. The Committee recommends that the firm conduct a firm-wide refresher on Illinois Rules of Professional Conduct 1.7 (Conflict of Interest — Current Clients) and 1.10 (Imputation of Conflicts of Interest — General Rule) as part of the annual ethics training cycle. The Committee observes that the distinction between waivable and unwaivable conflicts, and the limit

V. CERTIFICATION This excerpt of the Q2 2024 Quarterly Conflicts Committee Report has been prepared for the Management Committee's review and is classified as privileged and confidential attorney work product. The contents of this report reflect the deliberations, analyses, and determinations of the Conflicts Committee in the discharge of its professional-responsibility oversight functions. Distribution of this repor