Risk Update

OCGs Webinar Highlights — Have Outside Counsel Guidelines Become Too Much?

Nice write up on the recent ABA webinar on OCGs: “Do Strict Outside Counsel Guidelines Hurt The Profession?” —

  • “An American Bar Association presentation on Monday offered two opposing perspectives on a debate that’s raging over whether outside counsel guidelines place too many restrictions on attorneys, with one speaker saying a ‘total disparity of bargaining power’ has led to ‘frighteningly’ onerous provisions.”
  • “Clyde & Co. LLP of counsel Anthony Davis highlighted instances in which he believes outside counsel guidelines, which corporate legal departments often require their law firms to agree to before beginning representation, go ‘too far’ by restricting the outside attorneys when it comes to conflicts of interest and confidentiality beyond what the rules of professional conduct prohibit.”
  • “Some of the provisions that Davis pointed to that he believes are problematic include those that expand the definition of ‘client’ to include a vast array of subsidiaries or joint ventures, those that restrict lawyers from providing services to the client’s competitors, those that do not allow attorneys to take on clients that argue for positions on important legal issues that are contrary to the existing client, and those that require disclosure of confidential information of other clients.”
  • “[Bruce Green, director of the Stein Center for Law and Ethics at the Fordham University School of Law.] took a less alarmed view on the matter than Davis. He said that while he believes law firms should not agree to some of the most outrageous provisions, it is something that should and can be negotiated between the client and outside counsel on an individual basis without the need for an ethics rule.”
  • “But Davis said that he believes the idea that outside counsel are in a position to negotiate with clients freely when it comes to legal engagements is flawed. After the last recession, he explained, law transitioned to become a buyer’s market, and as a result of that, corporate clients now wield substantially more bargaining power than law firms do.”
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