Thursday, November 29, 2012

Law Firm Conflicts from the Corporate Perspective


Earlier this year, we called out part one of this excellent overview written by Michael Downey at Armstrong Teasdale for the ACC. Now comes part two, worth reading in its entirety: "Dealing with Outside Counsel’s Conflict of Interest, Part II" --
  • "Part I of this article – Still Talking – dealt with the first three of eight considerations for corporate counsel when analyzing and responding to outside counsel’s conflict of interest."
Consideration IV – Terminate the Conflicted Firm.
  • "Normally one consequence of a serious conflict of interest is that the affected client terminates the conflicted firm… More often, however, the client terminates the conflicted firm later in the process, after the two sides fail to reach a resolution or accommodation. Although the law firm’s representation of that client ends with termination, the firm must continue to protect the client’s interests, including turning over client files and property."
  • "Sometimes it might be impractical to terminate a firm, even though termination is often an important step before filing a motion to prevent that counsel from representing an adversary. For example, a particular matter may require immediate attention, or lawyers at the conflicted firm may be the only ones who can properly handle a matter. In such circumstances, corporate counsel may retain the conflicted counsel, but should be prepared to make a strong case for why the firm should be disqualified from representing someone else. This includes distinguishing corporate counsel’s own situation – where disqualification is apparently impractical – from the adversary’s."
Consideration V – Forced Disqualification.
  • A client may need to force the termination of the law firm’s relationship with other clients whose representation created the conflict. When asking (as part of the warning letter) does not work, normally such protections must be sought through a motion to disqualify (for a representation involving pending litigation) or an injunctive action (when there is no pending litigation).

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