When is the Company's Lawyer Not Your Lawyer?

As reported on Law.com, a former Citigroup executive, David H. Trautenberg is suing Paul, Weiss, Rifkind, Wharton & Garrison, "claiming the law firm was conflicted when it advised Citigroup on [his] severance package." Trautenberg was involved in the litigation that ensued after WorldCom imploded because he had approved large personal loans for former WorldCom CEO Bernard Ebbers.

Paul Weiss represented both Citigroup and Trautenberg in his capacity as a Citigroup employee during that litigation. Trautenberg claims that the Paul Weiss lawyers obtained confidential information from him which they then used against him in subsequent negotiations over a severance agreement. Trautenberg claims that he lost $20 million because of Paul Weiss's involvement and is seeking $80 million in damages.

The lawsuit is a cautionary tale for executives:

• First, if the company's lawyer represents both the company and you in litigation, you should remember that there may come a time when your interests diverge from those of the company. Consider seeking independent advice from another lawyer and asking your company to reimburse you for the expense.
  
  
• Second, when negotiating an employment contract or severance agreement, the company's lawyer is not your lawyer and is committed to achieving the best result for the company, not you.