Monday, August 5, 2013

Cautionary Conflicts Workaround

An interesting story about  a creative (but not unprecedented) step taken to work around firm conflicts. In this case, lawyers left to set up their own firm. But that move brought new risks: "Boutique Firm Sues T-Mobile for Post-Merger Termination" --
  • "...former Paul Hastings lawyers resigned in 2011 to create Telecommunications Law Professionals, or TLP, a Washington-based firm that began specifically to support MetroPCS. After T-Mobile bought MetroPCS earlier this year, T-Mobile told TLP in May that it was ending the contract."
  • "According to the complaint, MetroPCS hired Paul Hastings's telecommunications group and partner Carl Northrop beginning in 2004 to handle a variety of legal matters. Over the next seven years, according to the complaint, Paul Hastings was increasingly conflicted out of work with MetroPCS because Verizon Wireless and AT&T Mobility were also clients."
  • "In 2011, Northrop and two other Paul Hastings attorneys that had worked with MetroPCS reached an agreement with the company to spin off and create their own shop. Under the terms of the retainer agreement, according to the complaint, MetroPCS would pay a fixed monthly fee that would cover the new firm's expenses for at least two years."
  • "The firm is arguing T-Mobile breached the contract signed between the firm and MetroPCS, which T-Mobile didn't object to as they were finalizing the merger. Although TLP has other clients, the firm claimed that because MetroPCS was its biggest client by design, it wouldn't be able to operate in its current form if T-Mobile severed ties."

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