How often are lateral hires prevented due to conflicts?

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How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Sun Oct 07, 2012 2:50 am

I am a second-year transactional attorney looking to lateral from one large law firm to another. I was just wondering, how often does a law firm extend an offer only to have to rescind it because of a conflict of interest?

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Sun Oct 07, 2012 8:27 am

I don't think its very often given the ability to screen people from matters. If you are currently working on a deal directly against the target firm, you should probably wait until the deal closes, but other than that you should be fine. Its harder when you're a partner bringing clients to the firm, but even then a lot of times they can make it work. There's also the ability to get a waiver from the client, but its a little more awkward for an associate because you have to get someone at your current firm to help you coordinate that (aka a partner).

I wouldn't worry too much about it unless you know you've done a lot of work "against" the target firm.

-Person who lateraled this past summer

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Sun Oct 07, 2012 9:03 am

I think it depends on the firm. I worked at a V100 firm this summer. While I was there, two laterals were rescinded offers after they didn't pass their conflict check. At least one had already given notice to his firm and was out of a job. If you find yourself in this situation, do not tell your existing firm you are leaving unless you have already passed a conflict check in your second firm.

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Sun Oct 07, 2012 10:24 am

I know an associate who was unable to lateral despite being offered by a partner that was lateraling because of conflicts.

ETA: But this was litigation, not transactional.

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Sun Oct 07, 2012 1:21 pm

OP here.

Were the associates who were prevented from lateraling more senior? Does it matter what jurisdiction I'll be practicing in?

anon168
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Re: How often are lateral hires prevented due to conflicts?

Postby anon168 » Sun Oct 07, 2012 1:56 pm

I'm not a transactional lawyer, nor do I play one in real life, but don't most midlevel transactional associates provide a deal sheet when interviewing? Wouldn't this raise any potential red flags before it became too late?

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Wed Aug 10, 2016 2:18 pm

Anonymous User wrote:I think it depends on the firm. I worked at a V100 firm this summer. While I was there, two laterals were rescinded offers after they didn't pass their conflict check. At least one had already given notice to his firm and was out of a job. If you find yourself in this situation, do not tell your existing firm you are leaving unless you have already passed a conflict check in your second firm.


Apologies for reviving a dead thread from 3 years ago, but I'm going through the lateral process now and this is my nightmare (rescinded offer due to conflicts). Would be curious how common this is today. Seems like at the very least the new firm would give you a chance to work with the partners at your current firm to try and get a client waiver for the problematic conflict.

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Re: How often are lateral hires prevented due to conflicts?

Postby ttg7ya12 » Wed Aug 10, 2016 3:23 pm

This recently happened to me. Quick summary: Top 15 percent at T10 law school; 2 years at NYC V50. Midway through district court clerkship began looking at another market. Got three offers. Chose V15 offer in DC.

New firm adverse to client from old firm on matters unrelated to my representation. New firm requested conflict waiver; old firm absolutely refused. Have appealed directly to client. Fortunately had time to start looking elsewhere.

Lessons - this is happening more and more frequently, and firms are using it as a way to hold on to talent or, at a minimum, to prevent talent from going elsewhere. Its unethical, but its reality. Get your conflict check done before you accept an offer.

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Wed Aug 10, 2016 4:05 pm

ttg7ya12 wrote:This recently happened to me. Quick summary: Top 15 percent at T10 law school; 2 years at NYC V50. Midway through district court clerkship began looking at another market. Got three offers. Chose V15 offer in DC.

New firm adverse to client from old firm on matters unrelated to my representation. New firm requested conflict waiver; old firm absolutely refused. Have appealed directly to client. Fortunately had time to start looking elsewhere.

Lessons - this is happening more and more frequently, and firms are using it as a way to hold on to talent or, at a minimum, to prevent talent from going elsewhere. Its unethical, but its reality. Get your conflict check done before you accept an offer.


Can't firewalls at new firm prevent this type of thing from occurring? Can't new firm just say you won't work on matters relating to the particular problematic client? I think I read this on a different TLS thread. Anon because I'm the OP that revived the thread.

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Re: How often are lateral hires prevented due to conflicts?

Postby WhiteCollarBlueShirt » Wed Aug 10, 2016 4:24 pm

(1) Deal sheet that you provide when interviewing typically does not disclose names (nor is it exhaustive). More so akin to a partner's representative transactions list.

(2) Some firms/groups don't have the client base to be hiring someone with a lot of conflicts (so wall building becomes irrelevant).

(3) I gave notice before waiting for conflicts to clear, and that was nerve racking, just don't do that and you're golden. P.S. be careful about who you tell, generally don't tell anyone in your firm about what you're doing ever, gossip flies!

(4) There are certain practice areas where depending on the side of the transaction that you're on, you can quickly rack up the conflicts and that is concerning--no additional thoughts here, just a current concern.

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Wed Aug 10, 2016 4:58 pm

Mark for later. Thx for the info.

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Wed Aug 10, 2016 5:16 pm

WhiteCollarBlueShirt wrote:(1) Deal sheet that you provide when interviewing typically does not disclose names (nor is it exhaustive). More so akin to a partner's representative transactions list.

(2) Some firms/groups don't have the client base to be hiring someone with a lot of conflicts (so wall building becomes irrelevant).

(3) I gave notice before waiting for conflicts to clear, and that was nerve racking, just don't do that and you're golden. P.S. be careful about who you tell, generally don't tell anyone in your firm about what you're doing ever, gossip flies!

(4) There are certain practice areas where depending on the side of the transaction that you're on, you can quickly rack up the conflicts and that is concerning--no additional thoughts here, just a current concern.


So with these large law firms serving thousands and thousands of clients, aren't incoming lateral candidates guaranteed to have a bunch of conflicts issues, especially when coming from another big firm?

WhiteCollarBlueShirt
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Re: How often are lateral hires prevented due to conflicts?

Postby WhiteCollarBlueShirt » Wed Aug 10, 2016 5:39 pm

Anonymous User wrote: So with these large law firms serving thousands and thousands of clients, aren't incoming lateral candidates guaranteed to have a bunch of conflicts issues, especially when coming from another big firm?


*Just clients I worked for, parties I worked with, and parties I worked against.

ttg7ya12
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Re: How often are lateral hires prevented due to conflicts?

Postby ttg7ya12 » Fri Aug 12, 2016 6:36 pm

Firms can erect what is known as an ethical wall.

Generally, the way the rules work in most states is as follows. There is a true "conflict" if you represent Client X in either a transaction or a litigation, then you move to Firm 2, and Firm 2 is adverse to Client X on a matter that is substantially related to that representation. If there is no substantial relationship between what you worked on at Firm 1, and the case that Firm 2 is involved in, there is no conflict.

If there is a conflict, the conflict will generally be imputed to all the lawyers at your new firm. This creates a rebuttable presumption of shared client confidences, and would allow disqualification of the new firm. So lets say you represent Client X at Firm 1, and Client X is adverse to Company Y. Then you move to Firm 2, where Firm 2 represents Company Y in a case against Client X. If the two cases are substantially related, there is a conflict. The conflict is imputed to Firm 2, even if you personally do not work on Company Y's case. Courts will then presume that you have shared confidential information about Client X to lawyers at Firm 2, and allow a motion to disqualify Firm 2.

However, the presumption is rebuttable. The reason it is rebuttable is that Courts generally want to give a client the choice of their attorney, and disqualification obviously prevents that. Further, Courts for whatever reason still believe that attorneys are honest. Generally, the biggest factor which weights against disqualification is a chinese wall. If the chinese wall is erected as soon as you start at Firm 2, disqualification is rare. However, other factors courts have considered include (1) the size of Firm 2; (2) whether the attorney was admitted to the bar, or working as a law clerk; (3) the degree of control the attorney had over the representation; and (4) whether the attorney was involved in crafting litigation strategy, or merely performing clerical tasks (document review, due diligence, etc.)

I will note however that some state courts can be extremely curmudgeonly about conflict issues. The supreme court of Massachusetts issued an opinion a few years ago that disqualified a medium-sized firm for hiring an associate based on a conflict, despite what the evidence suggested was an extremely effective chinese wall. In my view, judges like that need their head examined and are completely detached from the realities of the modern legal workplace.

In practice, however, firms have become extremely sensitive to conflict issues. This is particularly true if you are a litigator, and you move from a firm that does defense work to a firm that does some plaintiff's work. Ten years ago, pre-hiring conflict waiver letters were extremely rare and only used by extraordinarily risk averse clients. Now, they are somewhat commonplace. And if you run into a situation where either your old firm or your old client are suspicious or just plain dislike the new firm, you may be in trouble. The other problem with waiver letters is that it alerts your old firm that you are looking, before the conflict check has cleared.

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Re: How often are lateral hires prevented due to conflicts?

Postby r6_philly » Sat Aug 13, 2016 12:21 am

There is also a more practical reason why laterals are not hired because of conflicts. Sometimes firms will staff long term cases by hiring laterals. So if you are trying to lateral but cannot work on that case, then you will not be hired. I don't know how often firms hire to staff on specific cases but it does happen quite a bit.

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Mon Aug 15, 2016 9:23 am

ttg7ya12 wrote:Firms can erect what is known as an ethical wall.

Generally, the way the rules work in most states is as follows. There is a true "conflict" if you represent Client X in either a transaction or a litigation, then you move to Firm 2, and Firm 2 is adverse to Client X on a matter that is substantially related to that representation. If there is no substantial relationship between what you worked on at Firm 1, and the case that Firm 2 is involved in, there is no conflict.

If there is a conflict, the conflict will generally be imputed to all the lawyers at your new firm. This creates a rebuttable presumption of shared client confidences, and would allow disqualification of the new firm. So lets say you represent Client X at Firm 1, and Client X is adverse to Company Y. Then you move to Firm 2, where Firm 2 represents Company Y in a case against Client X. If the two cases are substantially related, there is a conflict. The conflict is imputed to Firm 2, even if you personally do not work on Company Y's case. Courts will then presume that you have shared confidential information about Client X to lawyers at Firm 2, and allow a motion to disqualify Firm 2.

However, the presumption is rebuttable. The reason it is rebuttable is that Courts generally want to give a client the choice of their attorney, and disqualification obviously prevents that. Further, Courts for whatever reason still believe that attorneys are honest. Generally, the biggest factor which weights against disqualification is a chinese wall. If the chinese wall is erected as soon as you start at Firm 2, disqualification is rare. However, other factors courts have considered include (1) the size of Firm 2; (2) whether the attorney was admitted to the bar, or working as a law clerk; (3) the degree of control the attorney had over the representation; and (4) whether the attorney was involved in crafting litigation strategy, or merely performing clerical tasks (document review, due diligence, etc.)

I will note however that some state courts can be extremely curmudgeonly about conflict issues. The supreme court of Massachusetts issued an opinion a few years ago that disqualified a medium-sized firm for hiring an associate based on a conflict, despite what the evidence suggested was an extremely effective chinese wall. In my view, judges like that need their head examined and are completely detached from the realities of the modern legal workplace.

In practice, however, firms have become extremely sensitive to conflict issues. This is particularly true if you are a litigator, and you move from a firm that does defense work to a firm that does some plaintiff's work. Ten years ago, pre-hiring conflict waiver letters were extremely rare and only used by extraordinarily risk averse clients. Now, they are somewhat commonplace. And if you run into a situation where either your old firm or your old client are suspicious or just plain dislike the new firm, you may be in trouble. The other problem with waiver letters is that it alerts your old firm that you are looking, before the conflict check has cleared.


Thanks a lot for this thoughtful post. I've been in conflicts purgatory for several weeks (waiting for them to clear) and am getting pretty anxious about it. Would continue doing defense work at new firm (not switching to plaintiff side) but have done a lot of due diligences over the years and am hoping that there are no issues with any of those clients or targets.

Does anyone have any sense of whether due diligence-related conflicts are easier to navigate through than other types?

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Mon Aug 15, 2016 9:28 am

What if the firm is in immediate need and expects you to give two weeks notice immediately once they convey an offer? Are large firms known to do a conflicts check before conveying an offer?

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Re: How often are lateral hires prevented due to conflicts?

Postby Anonymous User » Mon Aug 15, 2016 10:00 am

Anonymous User wrote:What if the firm is in immediate need and expects you to give two weeks notice immediately once they convey an offer? Are large firms known to do a conflicts check before conveying an offer?


Hey, I'm the anon above you. I'm not sure whether large firms are "known" for this, but yes, it happens often where conflicts are checked before a formal offer is given, probably in large part for the reason you mentioned.




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