Wednesday, April 4, 2012

How Law Departments View Law Firm Conflicts (Perspective from the Other Side)

From the ACC comes an interesting article offering advice law departments should follow when faced with law firm conflicts: "Dealing with Outside Counsel’s Conflict of Interest."

It's always valuable to understand the perspectives on the other side of the table. The author reviews eight considerations, a subset of which organizations should evaluate when faced with a law firm conflict. Three of which are reviewed in the first of this two part article:

Consideration I – Evaluate the Conflict --
  • "The first task, and sometimes among the most challenging, is to evaluate the nature of the conflict. For corporate counsel, this evaluation may occur on three separate levels.... A client may be willing to work with a firm when there has been a good law firm-client relationship in the past, particularly if the conflict was thrust upon the firm due to a merger or acquisition. Alternatively, a conflict that may involve relatively minor or no ethical issues, but suggest disloyalty to the client might lead to termination of a lawyer."
Consideration II – A (Strong) Warning Shot --
  • "The warning serves the dual purpose of (a) inducing a law firm and current or former client to undertake serious efforts to resolve the conflict of interest without incurring substantial delays and costs, and (b) evidencing that the law firm received full notice and an opportunity to avoid greater problems before the client seeks disqualification, disciplinary sanctions, or other remedies."
Consideration III – Seeking Justice, and Discounts --
  • "Three types of remedies are often sought. First, clients often demand that a law firm mitigate or cure the conflict. This may include demanding the firm end its representation of the adversary or erect an ethics screen."
  • "Second, the corporation may seek a discount or refund of some or all fees to reflect disloyal service as well as the aggravation and distraction a conflict caused."
  • "Third, clients often demand specific, written assurances that confidences have been protected, and that the firm will properly protect the client’s interests in the future. If a firm is not willing to provide such specific assurances, corporate counsel should assume a firm is not taking a conflict seriously."
See the complete text for much more detail. We'll post a link to the enticingly named part two ("Relationship Over, Let’s Litigate"), when it's available.

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