“Bank Experience is Conflicting Juniors Out as Litigation Firms Struggle to Hire” —

• “Quinn Emanuel and several U.K. litigation specialists say lawyers are being conflicted from joining because of time spent advising banks early on in their career.”
• “According to Richard East, the founder and senior partner of Quinn’s London office, the firm is struggling to find good lawyers to recruit who are not already conflicted from litigating against major banks.
• “Most litigation lawyers spend at least some time advising banks early on in their career, according to East, meaning they are inadvertently conflicted from ever acting against those same banks in the future.”
• “‘Many financial institutions, including the banks and private equity houses, have for some years now, been restricting the law firms they engage and preventing them from taking adverse positions in disputes” according to Natasha Harrison, formerly of Boies Schiller Flexner and now founder and managing partner of Pallas Partners. “As a consequence, much of the City, including the major U.S. and U.K. firms, have been conflicted out of being adverse to banks.'”
• “It’s a situation CYK [litigation boutique, Cooke, Young and Keidan] has first hand experience of. Around 2016, the firm employed an ex-Clifford Chance lawyer who’d done work for Royal Bank of Scotland. CYK was involved in litigation against RBS and it was claimed the lawyer in question would have had access to confidential RBS documents while at Clifford Chance. The claim was enough to make the client jump to a different adviser for the case.”
• “Quinn Emanuel’s East believes such moves are unfair, saying: ‘The idea we would hire an associate who’s got a few hours’ worth of basic knowledge and information and then use it and breach our professional obligations is ridiculous.'”
• “One litigation firm partner said: ‘Being placed on a [bank] investigation as a junior lawyer is a death to your career.'”
• “One solution some firms have used to get around the issue is to seek waivers from the clients in order to be able to hire with the promise that individual lawyer will not litigate against them, but this is also proving difficult as banks simply don’t want to aid the development of firms that will potentially litigate against them.”
• “‘More often than not banks won’t give you a written waiver.’ commented East, ‘It doesn’t matter whether the lawyer’s worked on something for 10 or 100 hours, they don’t even look into it, they simply say no. On a number of occasions that has prevented moves.'”
• “Meanwhile one London partner has gone as far as threatening to sue, saying to the bank: ‘You either sign the waiver or I’ll go to court and seek a declaration myself that this person doesn’t have any conflicting interests.’ That’s worked on a couple of occasions.'”
• “Banks can also use appointments to their sizeable panels as a weapon, according to some. CYK’s O’Callaghan said: ‘We were acting against one particular retail bank in hard fought and aggressive litigation and I remember hearing through the grapevine that the bank had said that it would look to put us on its panel going forward as a means of removing us as opposition on future cases. Needless to say that we had no intention of ever agreeing to the appointment.’ She continued: ‘You often hear stories of large firms that are put on panels and are given hardly any work.'”
• “This ultimately has an impact for clients too, who may find they cannot work with their usual trusted advisors if a conflict dispute is a risk. ‘Clients are understandably not keen on the prospect of a tactical challenge which can end up being an expensive sideshow to the main litigation.’ commented one London partner.”