Thursday, January 20, 2011

International Conflicts Management Challenges Facing Law Firms

As reported by several sources, Howrey has suffered several high profile defections in Europe. The firm is now reframing its approach to this market:
  • "Howrey global managing partner and CEO Robert Ruyak said the firm has made a conscious decision to scale back its European presence in favor of operating through a network of other firms... As of 1 January, we have spun off a number of our IP partners and associates into a new independent law firm on the continent with whom we will continue to cooperate."
This week, in its excellent analysis, The Lawyer explained why conflicts rules and practices are at the root of the problem. They suggest that international conflicts issues pose similar challenges for US firms operating internationally. Former Howrey Managing Partner noted that the strict enforcement of US conflicts rules in London created significant barriers for the local team:
  • "He estimates that they were losing a third of all potential instructions as a result and says that, although the team was busy, it could have been busier."
  • "According to Hoyng, Howrey applied the rules with the strictest possible interpretation. That meant that, even if there was a small possibility of a conflict occurring in the future with a potential client, work was turned down, even if a European case did not affect the US side of the firm."
The use by US firms of conflicts rules as tactical weapons was also a frustration:
  • "Hoyng describes cases where a US firm on an IP case will begin a battle by trying to use the rules to get rid of the ­opponent’s firm. This, he says, has led to the rules being used as a 'kind of tool for anticompetitive behaviour in the litigation arena.'"
The article includes interviews with representatives from other international firms including Hogan Lovells and Baker & McKenzie who discuss how those firms manage the complex conflicts landscape.

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