Tuesday, July 5, 2011

Risky Clients? Approaches to Evaluating "Controversial" New Firm Business

King & Spalding made news in April when it took on the defense of the "Defense of Marriage" act on behalf of the US House of Representatives. The move caused significant public controversy and the firm quickly extracted itself from the matter, saying that the matter was not properly vetted through its normal intake process (detailed here).

The American Lawyer just published an interesting article which sets out one potential framework for considering such matters: "Too Hot To Handle? How to evaluate a partner's wish to represent a controversial client--before taking on the case." The authors set the stage, noting the need to balance several factors:
  • "So many controversial cases raise divisive political, policy, and moral issues, and, increasingly, firms may be forced to say where they stand on the political spectrum in choosing clients... The question here is a related but different institutional one: When should a firm override the decisions of individual partners to take a case?"
  • "We believe that there are three broad and related considerations: deference to the pluralist views of partners; "principles" screening by firm management based on firm values; and "reputational" screening by firm management based on business considerations."
In addition to the preferences and principles of individual partners, the authors note that firms must weigh the impact of clients on their reputation and future business prospects. This includes consideration of "soft conflicts" -- representations which are not ethically prohibited but may upset the sensibilities of existing clients (such as business competitors).

For more specific detail on how several firms evaluate controversial clients, see also: "Vetting Controversial Clients: How Am Law 200 Firms Do It," which reviews practices of: McDermott, Will & Emery, Gibson Dunn & Crutcher, Quinn Emanuel Urquhart & Sullivan, and Hogan Lovells.

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