THE BELTWAY AND BEYOND

THE BELTWAY AND BEYOND

Stephen M. Ryan

What's on the horizon for IT contract law?

By Stephen M. Ryan

Two developments in legal ethics and business could affect the frequency and tone of contract award protests and related activities.

Believe it or not, most lawyers take their ethics seriously and would not knowingly put forth a position in court or to an agency that they do not believe to be true, or at least supportable. But government contract lawyers are nervous about the initial sanctioning of a lawyer in a government contract case in the Court of Federal Claims.

The judge in that bid protest found that the protester effectively misled the court and abused the judicial system and protracted the litigation. The sanction was split evenly between the law firm and the client. Both the accused and accusing law firms are prestigious, and the sanctioned lawyer is an experienced and respected colleague.

Because the case is on appeal, I won't dwell on the correctness of the judgment. But I do think this unprecedented case will have a long-term impact.

First, it requires protesters and their attorneys to ask themselves, before the client casts a stone: Am I living in a glass house ethically?

Second, I suspect more allegations of sanctionable behavior, such as frivolous protests, will be made and not all of them justified. In fact, such allegations are already increasing. To be sure, litigation is normally an unpleasant and tough business that should be avoided, but making caustic comments that clients and lawyers deserve sanctions should be reserved for the relatively rare instances when their conduct really is outside the pale.

Government officials who are veterans of what they believe are frivolous bid protests by contractors and their lawyers might not be sympathetic to this concern.

It's all business

The business landscape for lawyers who support information technology clients is rapidly evolving. As some law firms become less like genteel partnerships and more like businesses, they adopt businesslike practices such as marketing to clients and seeking out new and growing niches of lucrative legal specialization.

Information technology practices such as mundane contract work are appearing less exciting in legal circles than mergers and acquisitions, initial public offerings and intellectual property practices in the technology sphere. Several large West Coast law firms, known for their explosive growth and high per-partner profits gained by supporting Internet and IT companies, have announced their movement into the Northern Virginia high-tech market, the traditional home of the so-called Beltway Bandits.

Some firms known for their expertise in representing IT companies in the government market have been touting their firms as high-tech specialists. Others expand their firms by acquisition to take on the hot deal-making and IPO work. Whether the West Coast technology firms will have staying power in the Washington area remains to be seen.

The demise of the General Services Board of Contract Appeals for IT and the potential demise of District Court jurisdiction over bid protests'scheduled for Jan. 1 unless Congress intervenes'is reducing the traditional protest practice that sustained so many law firms. The shakeout caused by this change continues. Also changing the legal landscape is a movement to create international law firms by combining big firms from different countries.

That makes the future insecure for regional firms headquartered in big cities other than New York, Chicago, San Francisco or Los Angeles. If these regional firms'many of which do much of the protest work'are not nimble, they may fall behind, able to cope with neither the small specialty law firms nor the mega firms.

I choose you

Finally, many clients have grown more sophisticated in their legal affairs. They seldom give a single law firm all their work. Instead, clients pick individual lawyers within firms for their expertise in the issue at hand.

The legal relationship remains one between individuals, not institutions. This reality will influence the development of the legal business market for IT companies, as well as the strategies they pursue when challenging the government.

Stephen M. Ryan is a partner in the Washington law firm of Brand, Lowell & Ryan. He has long experience in federal information technology issues. E-mail him at smr@
blrlaw.com.

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