Last year’s merger of Squire Sanders and Patton Boggs, resulting in mega-firm Squire Patton Boggs LLP, raised some interesting points for us ethics nerds (yes, we have a secret handshake).
SPB represented a number of plaintiffs in a federal lawsuit pitting the sugar industry against the high fructose corn industry in the Central District of California.
Before the merger, Patton Boggs represented a couple of big companies that happened to be defendants in the aforementioned lawsuit in other matters. Once the merger happened, its soon-to-be former big company clients informed SPB that it had a conflict that each of the clients would not waive.
SPB sent some of its lawyers to meet with the clients to try a Jedi-mind trick. That did not work, so SPB dropped the clients like a hot potato.
The now-fired clients, via their lawyers in the sugar lawsuit, filed motions to disqualify. SPB claimed there was an error somewhere and these clients were left off of the pre-merger conflict list. SPB also claimed that since it was not representing these former clients anymore, it could continue its work on the case.
Ultimately, the court did not buy SPB’s arguments and the firm is now officially off of the soda sweetener case of the century.
It is not clear from the court’s decision whether SPB had this case on a contingency fee for the plaintiffs or hourly, but either way, there is no doubt that the firm is out a lot of money. And while that alone is an important lesson, there are other reasons lawyers should take heed.
First lesson: Conflict systems matter. I have seen conflict report systems that are ridiculously confusing. Some would say that is a good thing because then the lawyers cannot just assume there is no conflict, but instead must ask questions.
But it wasn’t a confusing report that caused this expensive and embarrassing failure. It apparently was human error, for a paralegal “allegedly” forgot to include both clients on a list.
Second lesson: Think redundancy. While it is easy to say someone forgot to include some clients on a list, I think that type of excuse is worse than my kid blaming me for not checking his homework when he gets into trouble at school. This is the era of “big data.” The bigger the law firm, the more likely it has access to lots of information.
Here, it would have been very easy for either of the pre-merger firms to pull client names from prior bills, dump all of the names into a file and then run another search comparing the billed clients with the conflicts report. We lawyers like to bill our clients, after all, so how is it that any lawyer suddenly does not know the name of the billed client once the merger begins?
Third and final lesson: Size matters. Every time a firm grows, regardless of its size, this kind of stuff happens. And as a firm grows, it becomes harder for one to infer that it does not have the resources to stop this kind of problem from happening. While smaller firms and solos arguably bear the brunt of legal discipline, that is due more to a lack of resources and time to invest in the nonbillable side of things than those lawyers being less ethical.