Paul Hodkinson, Editor-In-Chief of Law.com International and Legal Week opines: “In a Market Gone Mad, High-End Private Equity Hires Have Gotten Out of Hand“–

• “The demand for private equity partner hires has never been greater. It makes perfect sense, in a way. With more than $1.5 trillion available to spend, the private equity industry has become the most powerful driver of global mergers and acquisitions and economies ravaged by the coronavirus look ripe for a surge of investment. High-level hires are deemed an essential way for law firms to get in on the action because buyout firms rarely operate formal legal rosters, meaning it is crucial to have partners who hold those relationships.”
• “Such a fluid market does not offer any benefit to clients, who no doubt feel frustrated by so many changes. And—I say this as gently as possible—it also has to be asked whether all this hiring is really worth it for law firms.”
• “The chances of consistently winning all the work from any one client are slim—regardless of how close a partner’s relationship is—as there are often so many bidders in auction processes that conflicts are rife.”
• “Individual lawyers face conflict challenges, too. Some of the market’s most prolific private equity lawyers privately admit they sometimes get asked by clients what the other side might be thinking because they’re so familiar. Don’t be surprised if a court claim features such discussions one day.”

“Insurer Seeks To Dodge Mass. Firm’s Overbilling Probe Fees” —

• “An insurance company on Thursday asked a Massachusetts federal court to declare that it is not responsible for paying attorney fees incurred by Thornton Law Firm LLP when the firm faced an investigation over alleged overbilling in a $300 million State Street Corp. settlement.”
• “Continental Casualty Co. should not be obligated to pay Thornton Law the unspecified amount of fees the firm paid to its legal counsel for representation throughout the investigation, along with the unspecified amount the court ordered to be deducted from the firm’s fee award to help cover the investigation’s costs, according to Thursday’s complaint in the District of Massachusetts.”
• “Continental argues that Thornton Law did not take out insurance that would require the insurer to defend or indemnify the firm in the investigation. The company noted that the investigation was not a claim triggered by an ‘act or omission in the performance of legal services’ by Thornton Law, nor does it leave open the possibility of covered damages, according to the complaint.”
• “The investigation’s findings — that Thornton Law and Labaton Sucharow LLP repeatedly violated the rules of professional conduct in part by overbilling — meant that the insurance policy’s ‘intentional acts exclusion’ is also triggered, according to the complaint.”