Legal News

Conflicts of Interest: The Bane of BigLaw?

By Nathan Koppel

BigLaw has it all: fat salaries, mahogany wood, marble, majestic views of urban skylines, free coffee, mouthwash in the bathrooms, and late night car-rides home.

Unfortunately, many leading firms also are knee deep in conflicts of interest.

A WSJ piece out Wednesday looks at how corporate firms are losing out on one of the hottest legal assignments du jour: investigating and suing banks. With so many corporate failures, busted deals, and securities offerings gone awry there is a lot of finger-pointing at banks.

Problem is that banks and Wall Street firms are the core clientele of BigLaw, and firms (as any 2L knows) can't easily turn around and sue a present or former client.

Who comes out ahead in this ethical morass? Small to medium size firms, some of which are making a killing suing banks.

The WSJ piece looks at Quinn Emanuel, one of the most profitable firms in the country. The freedom to sue financial firms “is one of the single biggest ingredients to the success of our firm,” said Michael Carlinsky, a partner at the 400-attorney firm.

Houston lawyer Hugh Ray said he got so fed up with conflicts last year that fled Andrews Kurth, his longtime firm, for 125-lawyer McKool Smith, which has no banking clients. “I came over because my phone was ringing with big-case opportunities, but it kept raising conflicts,” the 67-year-old attorney said.

In other words, it still sometimes pay to be relatively small in a land of giants.

Full post as published by Law Blog - WSJ.com on April 07, 2010 (boomark / email).