"Wanted: Law Firm to Sue the UK’s Big Five Banks" is
the headline of this piece
at The Lawyer. They report that, per their "research,"
26 of the top 30 UK firms in the "Lawyer 100" are conflicted out
of acting against any of the big five banks (namely,
Royal Bank of Scotland, Halifax Bank of Scotland, Lloyds TSB,
Barclays, and Hong Kong Shanghai Bank [HSBC]). Clearly,
if you have a beef against one of these major players, this presents
a problem.
Far more interesting to me is the window this article opens into
clarifying issues surrounding conflicts. From a strictly
economic perspective, nothing should disable a firm from acting
against a current or former client on a matter where the firm actually
lacks any material information. In other words, the
reason we object to "conflicts" should be because we object to
firms taking information shared with them for one purpose (a purpose
intended to be for benefit of the client) and using that information
for another purpose, one intended to be detrimental to the client. If
there is no "double-dealing" in information, there should be no
legal conflict.
Of course, the story doesn’t stop there. I’d wager that
all of the top 30 UK firms devoutly wish to have all of the big
five banks as clients (the article actually appends a list of which
firms work for which banks). If your litigation department
sues a client of your corporate department, you have, if not a
legal conflict, a tremendous financial conflict and, depending
on the circumstances, serious reputational risk. Moreover,
if your litigation department sues a potential client
of your corporate department, you can kiss that potential goodbye.
So the situation is, thanks to market dynamics, probably even
more bleak than the article posits—"bleak" from the perspective
of the outraged and lawyer-less plaintiff, at least.
But we’re still not done with market dynamics: If there’s
a situation with £1.1-billion at stake (as the article
notes with respect to a partial sale of Canary Wharf), an enterprising
non-top-30 firm will eagerly raise its hand. I don’t know
enough about the UK market to nominate a candidate, but in the
U.S. I’ll drop a name: Boies-Schiller.
And, if this conflicts dynamic plays itself out regularly enough,
the Boies-Schiller’s of the world will rapidly move up the AmLaw
200, and the very composition of same will change. Don’t
say we didn’t warn you.
