For the first time in the lifetimes of most of our members, our nation is in a state of war. As I write this, the United States and its allies have begun the military response to the terrorist attacks of Sept. 11, 2001, in New York and Washington, D.C., and we are being warned of the strong possibility of further terrorist activities here. The initial attacks caused significant business interruptions, including a shutdown of the bankruptcy court in New York for about a week. A computer worm released around the same time disabled many office computer systems (at least to the extent of e-mail and Internet services) for a time. Overloaded telephone circuits interfered with both telephone land line and cell phone usage. Airport shutdowns prevented air travel for at least a week, and have certainly deterred many from travelling by air since the airports were re-opened.

The Straight & Narrow column is a forum for commentary on ethics and best practices, among other things, and it seems appropriate in the current environment to make a few practice suggestions—regarding e-mail use and business travel—that may have special resonance in the current environment. It is important to note that most of these suggestions are not new, but rather newly urgent. The conditions under which we now live and work demand that we pay greater attention, and make greater efforts, to implement them.

E-mail Practices

For most insolvency professionals, e-mail has become the dominant and preferred form of communication. From simple messages to complex advice, what was at one time the province of letters faxed or couriered with a hard copy paper trail has become almost completely electronic. We assume that what we "send" is received, and that what we "delete" is destroyed, yet both assumptions may be incorrect. We also assume that somewhere in our electronic desktop files is a copy of what we sent, creating a convenient record to review what we wrote, and we routinely use our e-mail inboxes as though they too were filing cabinets.

Create a hard copy of important incoming and outgoing e-mail communications. If you have e-mails sitting in desktop folders or inboxes and have not yet printed them to hard copy, do it now, and routinely print important incoming and outgoing e-mails as you receive and send them. File the hard copies as you would (or used to do) when most communication was by hard copy letter and memo, in client-designated folders that can be retrieved manually. When your e-mail service or computer system is disrupted—as it surely will be—your practice will be protected and you will have the appropriate records of the communications you need.¹

If the e-mail is important, require (and check for) an electronic receipt or call to confirm its receipt. We like to assume that e-mails we send are received and read, but this assumption may be wrong and should be discarded as a matter of best practices. Business disruption in the electronic chain, or computer system disability at the recipient end, among other things, may prevent e-mail from getting through. Many e-mail systems have "receipt" mechanisms to confirm to you that your e-mail was received by the intended recipient. When these systems are activated, the sender usually receives an electronic confirmation that an e-mail has been received. But such a system is useless unless you actually audit and confirm that you got a receipt for every one of the dozens or more e-mails you may send out in a day. In addition, some systems do not respond at all to the electronic request to generate a receipt.²

Where, as now, system and business interruptions should be anticipated, it is worthwhile to have a backup communication plan in place. With e-mail it is relatively easy. If you print hard copy of your e-mail as you are about to send it electronically (as suggested above), you will have a version that can be faxed or mailed to the intended recipients if e-mail flow is disrupted.

If you have an important reason for not preserving the information, or a legitimate reason to destroy it, you should not use e-mail at all. This may sound like a contradiction in the context of the best practices recommendations above to preserve and protect electronic communications with hard-copy backups. It is not. The foregoing recommendations are intended to deal chiefly with "access" issues, though long-term preservation is an important goal as well. With information that should not be retained, it is easy to get tripped up by another typical assumption, also erroneous, that e-mail you delete from your desktop is destroyed and irretrievable. On most systems it is not. Within the vast bowels of the servers that back up most e-mail systems, e-mails that you delete today can still be found and retrieved for years. (Any doubters should ask their information tech specialists.) So if the information is such that it should be discarded and rendered irretrievable after it is sent, you would be best advised to communicate orally only. (With e-mail, even if you could render a "sent" message irretrievable, you can never control what the recipient does with it.)

You should not use e-mail at all if you have an important reason for protecting the privacy or confidentiality of the communication. This is a large issue that will be discussed at greater length in a future column. It is large because professionals have become accustomed to the routine communication of their confidential advice by e-mail. For the time being, in the context of evolving best practices, you should assume that your e-mail communications are no more confidential than a postcard. There is no privacy protection whatsoever. Your e-mails may be monitored by office administrators. They can probably be intercepted outside your office as well. While many professional firms have instituted a practice of legending their e-mails with confidentiality notices, this does not stop an interceptor or unintended recipient from reading the e-mail, and there is to date no definitive judicial authority to the effect that such an e-mail practice creates a defense to a claim by an adversary that confidentiality has been waived. Where there are strong privacy and confidentiality concerns, hard copy transmission should continue to be preferred over e-mail.

From the perspective of privacy and confidentiality, a particularly dangerous trend has taken hold in practice. Important and lengthy documents, with an abundance of information intended to be kept private and confidential, are prepared on computers in word processing formats which could well be reduced to hard copy for transmission with appropriate protections, but instead are appended to e-mails as 'attachments' due to the ease of transmission and re-circulation. When they are sent electronically as attachments, they have no more privacy or confidentiality than the basic e-mail—i.e., no more than a postcard would have. Furthermore, depending on the format in which an electronic document is e-mailed, there are word processing software programs that allow a recipient not only to view the document in the form in which it was sent, but to actually track and review the edits and prior changes to that document. You might intend a counterparty to receive your client's first draft of a contract, but find that you unwittingly gave the counterparty access to your edits to that draft, and insight to your thought process. In other words, you may be involuntarily disclosing confidential and privileged information to a knowledgeable e-document recipient. If this is news to you, please discuss the issue immediately with your information tech specialists.

Remote Access E-mail

Many e-mail systems permit remote access from home or other office computers, either by dialing into a server that controls the main e-mail system, or over the Internet. Although these systems appear to be somewhat more vulnerable to disruption than the principal systems that serve the desktop, they do not present any special issues not already discussed. The same best practices should be observed.

It is worth mentioning, however, that during the Sept. 11 attacks in New York, when overloaded circuits disrupted most land and cell phone usage (and therefore remote access to e-mail through such systems), remote access through certain PDAs and paging systems seem to have functioned very well. One popular system, the so-called "Blackberry," which uses radio waves to receive e-mail forwarded from a central system and can also send and receive e-mail directly, was reported to have continued to function very well during the crisis. If you have not had reason to acquire such a system as an office tool, it may be worth considering as a crisis backup for e-mail communications.

Travel Issues

Business travel in wartime raises a host of ethical, political and economic issues, as well as being highly personal and sensitive. Assuming that my experience is similar to the experience of other insolvency professionals, the events of Sept. 11 have caused significant changes in travel plans and priorities. People are examining more closely the asserted "necessity" for an in-person meeting or court appearance. A number of in-person meetings have been replaced by lengthy teleconferences, and there is greater experimentation with videoconferencing.

On the other hand, I flew to Chicago and back for business last week, and feel compelled to report that it was the most comfortable, stress-free and efficient trip I have ever made. With passenger counts down and flights reduced, it seemed to me that the airlines were actually operating more efficiently than before. Security screening does not seem be a problem if you avoid packing items that are likely to raise questions with screeners, and screening delays (at least judged by the experience at O'Hare and LaGuardia, two of the nation's busiest airports) seem to be mitigated if you plan to begin your travel after the morning rush and before the evening rush.

Our political leaders advise us that it is a duty, to foster the economy and stand up to terrorism, to continue to fly. Our families and friends may have a different view. For insolvency professionals caught between politics, family and security concerns, the ethical question stems from client need. The question of whether a personal appearance, either at a meeting or in court, is needed in a given case is a very difficult one to answer. A client's particular views on the matter may create a pressure that is ethically difficult to resist one way or the other.

I cannot suggest a straightforward rule to apply to such a personal decision. In my experience, there are some hearings or meetings in which the dynamic of face-to-face communication, and with it the ability to read and interpret body language, understand vocal modulations in stress and tone that may not be as clear on a telephone, and observe the reactions of non-speaking parties, are very important to the effectiveness of my own advocacy. There are other situations where I simply need to listen and report, or where the role I must play is not likely to be affected by anything apart from the actual words spoken by others. This is all highly subjective and a matter of experience and professional judgment.

Sometimes, however, where one might decide that telephonic participation is sufficient in the circumstances, the opportunity for it is not there because of a particular court policy against (or inhospitability to) teleconferenced hearings. Court practice for teleconferenced hearings varies around the country. Some courts have been leaders in encouraging teleconferenced hearings, while others have been hostile to it. In the wartime circumstances we now find ourselves, our courts could proactively create more opportunities for teleconferenced hearings on a routine basis, so that the question of travel becomes, so far as it is possible, a matter of professional judgment and choice.

The insolvency business is clearly national (and international) in scope. Many ABI members travel frequently across and around the country to practice pro hac vice in whichever bankruptcy courts their clients have landed, whether by choice (on the debtor side) or not (on the creditor side).

It was once the rule that court appearances were required for all hearings everywhere, and conference calls were restricted to chambers conferences on discovery issues or other out-of-court matters requiring the court's attention. There has been a trend over the last five years or so to have more telephonic hearings, with call-in instructions distributed to participants. In some courts this is routine. In others, it is permitted when requested. In others still, it is resisted or not favored.

In view of the extraordinary circumstances facing our nation today, court hearings involving professionals and/or clients whose businesses are located farther than a convenient car or train trip to court should routinely and automatically be scheduled for call-in teleconferencing. Court rules could designate an appropriate professional (e.g., movant's counsel or debtor's counsel) to make the arrangements in a given case, if the court prefers not to assign the responsibility to its own staff.

By making the procedure routine, professionals need not be concerned about offending judges or parties in interest by making special requests for telephone arrangements or "suggesting" that they might not wish to make a personal appearance in a given case. The telephone option can then be factored into the decision-making among professionals, clients and others about the propriety of travelling in a particular situation.

Moreover, there could be significant restructuring cost savings in cases where out-of-town travel and hotel costs have to be borne by the estate (e.g., for debtor and committee professionals). While personal appearances by at least one principal representative of the debtor and the committee will still likely be considered necessary for most hearings, the numbers of secondary representatives can likely be reduced. There are many court hearings involving lengthy agendas of motions and matters, some of which must merely be monitored by counsel for significant parties in interest, and which do not involve the types of controversies or arguments for which a personal appearance is important.

Bankruptcy Judge Gregg W. Zive of the U.S. Bankruptcy Court for the District of Nevada in Reno has for several years been a leading proponent of teleconferenced hearings. I recently represented a creditors' committee in a case before Judge Zive. Attending hearings in Reno from my office in New York required about 6,000 miles of round-trip air travel and usually required at least one hotel stay. There were many other out-of-town counsel and professionals involved in the case. Because every significant hearing was scheduled by call-in teleconferencing, with arrangements coordinated by debtors' counsel and the court clerk, professionals and clients could attend and participate in the hearing from their own offices. As committee counsel, there were many occasions in which I needed to know what was happening, to report to the committee and others where the committee had a position that I needed to articulate. But unless there were a lengthy or particularly contested matter in which I was to be involved, or other circumstances in which a personal appearance was important for my advocacy and client needs, the teleconferencing afforded me the opportunity of participating from my office in New York, avoiding the expense of air travel and hotel, and immediately reporting results to the committee (to the extent committee members themselves chose not to call in).

Routine teleconferenced hearings will provide insolvency professionals and clients with at least a choice not to travel, which they do not now have in all cases.

Footnotes

¹ Many people also "store" messages in voicemail storage systems. These systems are also vulnerable to interruption, as well as loss. A better practice is contemporaneous transcription to writing of important messages that need to be saved. Return to article

² Again, the same cautions can be applied to voicemail. When you leave a voicemail message with someone, you cannot be certain it has been received and heard. Where is it important, a follow-up call or other communication to confirm receipt is recommended. Return to article