Risk Update

Let’s Look at Laterals — Conflicts-influenced Moves, New #MeToo Risks

These lawyer lateral movement stories never come as a surprise: “Clifford Chance Paris trio form partnership” —

  • “A trio from Clifford Chance have launched their own firm, flagging freedom from conflict of interests associated with larger firms.”
  • “The new independent firm will focus on preventing and resolving business-related disputes, through litigation and arbitration, as well as alternative negotiated solutions. Grandjean Avocats aims to provide corporations and their managers value added, highly personal, creative and efficient legal services.”
  • “In addition to acting as counsel, all three partners aim to develop their roles as arbitrators and mediators, particularly since they say the size of their firm will enable them to avoid certain conflicts of interest inherent to larger firms.”

And: “2 Blank Rome White-Collar Partners Move to Norton Rose Fulbright” —

  • “Two white-collar defense partners from Blank Rome in New York, including the former head of its white-collar and investigations practice, have decamped to Norton Rose Fulbright.”
  • A client conflict played a role in their decision to leave Blank Rome, said the two lateral partners, Carlos Ortiz and Mayling Blanco. Still, they said, Norton Rose’s team of lawyers around the world was the key selling point in their move to the firm.”
  • “Ortiz said another ‘significant’ factor in the move was an opportunity to work with a client whose name he would not divulge that would have posed a ‘huge conflict’ at Blank Rome. He said he still had a great deal of respect for his former colleagues but stressed that the opportunities afforded by Norton Rose’s international reach and reputation were the most important factor in his and Blanco’s move.”
  • “Grant Palmer, Blank Rome’s managing partner and CEO, wished the departing partners well in a statement. ‘Carlos and Mayling left the firm due to a potential client conflict issue, and we parted ways on excellent terms,” he said. “They are our friends and we look forward to continuing our strong relationship with them moving forward.'”

What’s interesting, but not suprrising, is the increasing focus on lateral due diligence generally across the profession: “In the MeToo Era, Lateral Candidates Are Going Under the Microscope” —

  • “When assessing a prospective lateral partner candidate, those in charge of hiring at a law firm tend to consider a few common factors—ongoing work and client relationships and whether the candidate’s personality and approach will fit within the firm’s culture. But these days, in light of the MeToo movement that has called attention to workplace sexual harassment and misconduct, there are a few more questions that hiring partners might want answered before inviting a lateral on board, according to industry experts.”
  • “The issues facing law firms in the MeToo era are not just academic. In the recent past, several reports have emerged about lawyers who switched firms, only to be dogged by sexual misconduct allegations soon after.”
  • “…it’s unclear how common it is for a lateral hire to leave a new firm in the wake of a harassment or misconduct allegation. According to a recent survey of 50 firms by ALM Intelligence, 8 percent of respondents said that within the past five years they have had a lateral hire leave the firm because of actions the firm thought were unethical. A larger number, 40 percent, said they had lateral hires leave because of ‘behavioral issues’ involving staff or junior lawyers at the firm.
  • “The only way you can diligence this in a lateral context is asking the person if they’ve ever been accused of harassment,” Innocenti [Recruiter] says.
  • “Ninety-two percent of firms said they have had a lateral leave within the past five years because he or she failed to bring the expected book of business, while 80 percent of firms pointed to an inability to form new client relationships as an issue that drove away laterals. Seventy-four percent of surveyed firms said they have had laterals leave because of issues fitting in with other partners.”