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July 18, 2011 7:21 PM

Phone-Hacking Scandal Keeping Lawyers Busy on Both Sides of Pond

Posted by Tom Huddleston Jr.

As the scandal involving allegations of phone-hacking and bribery spreads like a fast-moving fire through the News Corporation media empire and into London law enforcement circles, more and more lawyers are landing assignments.

LegalWeek is reporting that the head of criminal litigation at U.K. firm Kingsley Napley, Stephen Parkinson, is representing Rebekah Brooks as a result of her arrest in connection with the scandal over the weekend. The former chief executive of News International--News Corp.'s subsidiary and operator of News of the World (NoW), the now-defunct tabloid at the heart of the controversy that LegalWeek has dubbed "Hackgate"--was arrested on suspicion of corruption and conspiring to intercept communications, according to a statement from The Metropolitan Police.

Brooks was released Sunday night and is scheduled to be questioned Tuesday by a government committee for the Department of Culture, Media and Sport, LegalWeek says. Authorities have not filed charges against her.

Bloomberg reported that News Corp. has now brought on U.K. attorney Lord Anthony Grabiner of One Essex Court to head up an internal probe of phone-hacking at NoW. Grabiner, who represented the Liverpool Football Club last year in a legal battle with former owners Tom Hicks and George Gillett, will serve as an independent director with the company, looking into any wrongdoing by employees, according to Bloomberg.

News Corp. is trading verbal blows with its former counsel at Harbottle & Lewis, which had been retained by the media conglomerate to assist in the original internal investigation into phone-hacking at News International.

According to LegalWeek, News Corp. chairman Rupert Murdoch said last week that Harbottle & Lewis had made a "major mistake" in its role in the investigation, which involved reviewing e-mails from NoW staffers following the sentencing of that tabloid's former royal editor, Clive Goodman.

Harbottle & Lewis responded to news stories about Murdoch's allegations on Monday in an open letter,  saying that the firm is constrained by client confidentiality in discussing its retainer from News International, according to LegalWeek. The firm would only say that "many recent press reports have not accurately described" the details of that retainer.

The rift with its past counsel notwithstanding, Murdoch's company has been busy bolstering its current stable of lawyers, especially in the wake of the resignation of News International legal manager Tom Crone last week. That departure came only a month after News Corp.'s general counsel, Lawrence Jacobs, also resigned, LegalWeek says.

As The Am Law Daily has previously reported, News International hired U.K. firm Olswang as an adviser in relation to the allegations shortly after they surfaced a few weeks ago, with the firm also helping the company create a new code of conduct.

Since then, and in the wake of Murdoch's decision to close NoW in light of the arrests and government inquiries prompted by the scandal, the company hired Williams & Connolly to serve as its primary outside counsel. That firm's star litigator, Brendan Sullivan, Jr., has been tasked with guiding News Corp. through the coming legal storm, according to The New York Times. The addition of a heavyweight like Sullivan demonstrates that News Corp. is taking very seriously the possibility that it could be exposed to criminal prosecution as the parent company of NoW, according to The New York Times.

The hiring of Williams & Connolly comes as  something of a surprise for several reasons, the NY Times noted. Joel Klein, News Corp.'s executive vice president and a leading figure in the internal investigation of the phone-hacking matter, is the husband of a former Williams & Connolly partner.

(That isn't the only spousal connection to arise in connection with one of the many law firms getting work because of this scandal: the wife of Liberal Democrat leader Nick Clegg is a partner at DLA Piper, which is representing Andy Coulson, former NoW editor and ex-aide of U.K. prime minister David Cameron.)

The Williams & Connolly appointment is also telling, the NYT notes, because News Corp. has a long history of turning to Hogan Lovells or Skadden, Arps, Slate, Meagher & Flom as its primary outside counsel.

Hogan Lovells just recently helped Murdoch's company sell MySpace for $35 million and, along with Skadden, worked on News Corp.'s now-abandoned attempt to buy the 61 percent of British Sky Broadcasting (BSkyB) that the company didn't already own. As we have reported, that bid was dropped in the wake of the current controversy.

Cleary Gottlieb Steen & Hamilton had been providing antitrust counsel on that proposed transaction, and Allen & Overy had been hired to advise on competition aspects as well.

On yet another front, Allen & Overy is reacting to allegations made by U.K. newspaper The Guardian, which published an article July 11 that claims the firm was "conned" into releasing client files when it was representing former prime minister Gordon Brown, according to LegalWeek. The Guardian article claims that a conman working for a major newspaper convinced the firm to hand over unspecified details from Brown's file. A spokesperson for the firm told LegalWeek only that Allen & Overy has not represented Brown in the past.

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