Risk Update

Verein Conflicts Considerations — Resource + Commentary

Always nice to send a ping out and get a response with these updates. Hat tip to Max Welsh, law firm risk management consultant and educator, for the commentary and added links he shared on LinkedIn, following our earlier story on the Gartner/Norton Rose conflicts allegation. Here’s what he has to say, and a link to his LinkedIn post and thread for anyone looking to continue the dialogue.

  • “This one involves Norton Rose, which is organized as a Swiss verein, with the conflicting relationships belonging to separate firms within Norton Rose’s verein structure.”
  • “In looking for another conflict situation involving a verein (the Dentons US/Canada case involving an allegation of conflict in representing and being adverse to The Gap), I found a great article by Cassandra Burke Robertson on how courts and regulatory authorities should approach the imputation of conflicts of interest in the verein context. The article is available here [Conflicts of Interest and Law-Firm Structure].”
  • “Professor Robertson argues that determining whether a conflict of interest exists – that is, whether confidentiality and loyalty truly are at risk – in the verein context ‘requires an analysis of the particular facts and circumstances at hand.’ I certainly agree.”
  • “However I think that’s true outside of the verein context in evaluating the imputation of conflicts of interest. As Professor Robertson points out, the nature of law firms and the concepts of client confidentiality and loyalty have changed dramatically and the imputation of a conflict might make sense in certain circumstances (a 30-lawyer, one-office law firm) but not in others (a 1,000-lawyer firm spread across the world).”
  • “Of course, the question is: Who gets to conduct ‘the analysis of the particular facts and circumstances at hand’? If the conflict arises in litigation, it’s the court (and you hope you have a judge who understands conflicts). But what about in other matters? Our regulatory system isn’t set up to handle that type of evaluation. Do we let the lawyers/firms or clients decide? There’s significant bias in those positions. What do you think?”