"Are we beginning to reach a point where the full-service law firm model that fuses transactional and litigation departments is antiquated more generally, aside from high profile, hot-button issues? Are the synergies from that fused model really worth it—what advantage is there to a large corporate client having its litigation done by the same firm as its transactional work? I can imagine some efficiencies with respect to litigation arising from the deal work. But does (for example) a Big Pharma company benefit from having the same firm defend it in mass products liability actions as represents it in an M&A transaction? Given the increasing business, if not formal, conflicts of interest between the lit and transactional departments in Big Law, might we be on the verge of seeing an explosion in corporate defense-side lit boutiques?"
Jun 24, 2022·edited Jun 24, 2022Liked by David Lat
David - to provide my $ 0.02 to the conversation:
Shouldn’t law firms be constantly evaluating their existing client relations in light of evolving norms/values and economics (just as clients evaluate their relations with law firms)? Can turning away from an institutional client after the resolution of a milestone in their case even be a sign of thoughtful management?
In my view, big law is part of a profession that has many non-economic aspirations, such as providing rigorous representation for each and every client. But realistically, we ought to expect that big law will focus on the situations (whether it be litigation, deals, or a mix of the two) that create the most long-term economic value for the clients, and in turn, the firm. I think a well-managed law firm approaches each representation with recognition of its incentivizes as well as the client’s incentives, taking on matters when interests are aligned, and respectfully turning down matters when they are not.
What happens when things change? A firm ought to reevaluate each of its relationships and run their own calculus on what makes sense for them economically. Don’t get me wrong, I think 9 times out of 10 it would be a poor business decision to leave a client high and dry in the midst of a major controversy or deal.. but to part ways peacefully after a milestone in their case when interests no longer are aligned doesn’t seem awful to me. On the contrary, it seems like an ethical and practical thing to do.
At these forks, the client and law firm alike have the opportunity to be rematched with the partner that best suits their interests on a go-forward basis. This reshuffling hopefully brings society as a whole closer to the idealized world of rigorous representation for each and every cause.
I wouldn't say that K&E doesn't want litigators, it just wants litigators that support its rain making practices. They backed up the money truck for Sandra Goldstein after all, but she's more likely to be found in Delaware Chancery arguing about an MAE than in federal appeals courts doing work for clients that wouldn't know an asset purchase agreement if one fell on their head. And that's probably as it should be, if you're a business firm do business work!
Thank you for this thought-provoking post on l'Affaire Clement et Murphy. The most interesting sentence in the post, in my opinion, is this quote from Clement and Murphy: "Those who object to the representation are thus taking issue with the Constitution as interpreted by a majority of the high court." I do, indeed! Just because you can win in court, doesn't mean that you should pursue the case. Lawsuits exist in a larger context of society, and respecting the social contract should prevail (usually) over legal ethics.
As a case in point, consider Ledbetter vs. Goodyear. Surely, Goodyear gained only a miniscule advantage in winning this case. Yet, by winning, they caused very real harm to many people. And, surely this harm was easily predictable. Lawyers should have refused this case. I was so incensed that I avoided doing business with Goodyear for years. And, if these had been my lawyers, I would have fired them on the spot.
A comment from a lifelong boutique lawyer:
"Are we beginning to reach a point where the full-service law firm model that fuses transactional and litigation departments is antiquated more generally, aside from high profile, hot-button issues? Are the synergies from that fused model really worth it—what advantage is there to a large corporate client having its litigation done by the same firm as its transactional work? I can imagine some efficiencies with respect to litigation arising from the deal work. But does (for example) a Big Pharma company benefit from having the same firm defend it in mass products liability actions as represents it in an M&A transaction? Given the increasing business, if not formal, conflicts of interest between the lit and transactional departments in Big Law, might we be on the verge of seeing an explosion in corporate defense-side lit boutiques?"
David - to provide my $ 0.02 to the conversation:
Shouldn’t law firms be constantly evaluating their existing client relations in light of evolving norms/values and economics (just as clients evaluate their relations with law firms)? Can turning away from an institutional client after the resolution of a milestone in their case even be a sign of thoughtful management?
In my view, big law is part of a profession that has many non-economic aspirations, such as providing rigorous representation for each and every client. But realistically, we ought to expect that big law will focus on the situations (whether it be litigation, deals, or a mix of the two) that create the most long-term economic value for the clients, and in turn, the firm. I think a well-managed law firm approaches each representation with recognition of its incentivizes as well as the client’s incentives, taking on matters when interests are aligned, and respectfully turning down matters when they are not.
What happens when things change? A firm ought to reevaluate each of its relationships and run their own calculus on what makes sense for them economically. Don’t get me wrong, I think 9 times out of 10 it would be a poor business decision to leave a client high and dry in the midst of a major controversy or deal.. but to part ways peacefully after a milestone in their case when interests no longer are aligned doesn’t seem awful to me. On the contrary, it seems like an ethical and practical thing to do.
At these forks, the client and law firm alike have the opportunity to be rematched with the partner that best suits their interests on a go-forward basis. This reshuffling hopefully brings society as a whole closer to the idealized world of rigorous representation for each and every cause.
I wouldn't say that K&E doesn't want litigators, it just wants litigators that support its rain making practices. They backed up the money truck for Sandra Goldstein after all, but she's more likely to be found in Delaware Chancery arguing about an MAE than in federal appeals courts doing work for clients that wouldn't know an asset purchase agreement if one fell on their head. And that's probably as it should be, if you're a business firm do business work!
Thank you for this thought-provoking post on l'Affaire Clement et Murphy. The most interesting sentence in the post, in my opinion, is this quote from Clement and Murphy: "Those who object to the representation are thus taking issue with the Constitution as interpreted by a majority of the high court." I do, indeed! Just because you can win in court, doesn't mean that you should pursue the case. Lawsuits exist in a larger context of society, and respecting the social contract should prevail (usually) over legal ethics.
As a case in point, consider Ledbetter vs. Goodyear. Surely, Goodyear gained only a miniscule advantage in winning this case. Yet, by winning, they caused very real harm to many people. And, surely this harm was easily predictable. Lawyers should have refused this case. I was so incensed that I avoided doing business with Goodyear for years. And, if these had been my lawyers, I would have fired them on the spot.