Lost offer due to conflicts check? Forum

[Anonymous User]

Have you or someone you know ever lost an offer due to failing a conflicts check? Currently a 3rd year considering a lateral offer from my current V50 to a V40. I want to discuss the offer with a couple of associates at my current firm (one is a senior, but is likely going to leave this year). The associates are people I trust, but I am still concerned that it could get around my practice group.

FWIW the lateral offer is a bit of a retool to a related M&A support practice. Both groups mostly feed on private equity deals. There is some overlap between (but also some differences) private equity clients.

[Lawman1865]

Have you or someone you know ever lost an offer due to failing a conflicts check? Currently a 3rd year considering a lateral offer from my current V50 to a V40. I want to discuss the offer with a couple of associates at my current firm (one is a senior, but is likely going to leave this year). The associates are people I trust, but I am still concerned that it could get around my practice group.

FWIW the lateral offer is a bit of a retool to a related M&A support practice. Both groups mostly feed on private equity deals. There is some overlap between (but also some differences) private equity clients.

I don't know anybody that has had an offer revoked, although I'm sure there have been some rare cases. I imagine it would have to be a substantial conflict. Even if there is a conflict, it's my understanding that you could get a waiver for that.

In any case, I would be careful regarding who you share this info with in your firm, even just to make sure you get to decide when to start your next job/when to give notice at your current firm. I know when I lateraled, I spoke to people/mentors outside of my firm and only really talked to people inside my firm when I had given notice/was about to give notice. That being said, if you trust them go for it, but you are correct that these things somehow get around once it's out in the open (although perhaps less so in the remote-environment).

[Anonymous User]

A 6th year in my office put in his notice that he was leaving, then failed conflicts, and then rescinded his notice and is still my colleague. We are busy and he is well liked, so the firm is happy to keep him around. I don't think that this would work in every case though.

The general rule that you should not talk about leaving (let alone give notice) until the Is are dotted and the Ts are crossed, including conflicts, will not steer you wrong. Once your new firm is all signed off, they can wait at least two weeks for you to fulfill a notice/transition period. With that said, only you can make decisions about you can truly trust to be discreet on your behalf.

[Anonymous User]

Dumb question, but why would you fail conflicts? Couldn't they just screen you away from clients where there would be an issue?

[Anonymous User]

Dumb question, but why would you fail conflicts? Couldn't they just screen you away from clients where there would be an issue?

Not a dumb question and I had these concerns when I lateraled a few years ago. My impression is that it’s extremely difficult to fail conflicts in corporate, given the nature of deals (they close or they’re separate from each other… in the VC world for example, I’ve been on deals at the same time where I was both representing the VC firm in one transaction and the company in an entirely different deal where the same VC firm was investing in the company.)

[Anonymous User]

Dumb question, but why would you fail conflicts? Couldn't they just screen you away from clients where there would be an issue?

I’m the anon you quoted. I don’t know the details, but this person is in litigation, which creates more conflicts issues. My guesses would be: a client didn’t want to give informed consent for a lawyer from the other side in an ongoing case to come over (even with a wall), or the two firms were adverse in so many matters that it would too severely limit the opportunities of the potential lateral. My firm has had eras where nearly the entire group is working on Massive Case X (spanning many years), and so a lateral who would be walled from that case would be notably less valuable to the firm than one who would not be.

[Anonymous User]

I’m the anon you quoted. I don’t know the details, but this person is in litigation, which creates more conflicts issues. My guesses would be: a client didn’t want to give informed consent for a lawyer from the other side in an ongoing case to come over (even with a wall), or the two firms were adverse in so many matters that it would too severely limit the opportunities of the potential lateral. My firm has had eras where nearly the entire group is working on Massive Case X (spanning many years), and so a lateral who would be walled from that case would be notably less valuable to the firm than one who would not be.

This. A friend of mine had a 2L SA offer revoked because of a 4 hour research project they did as a 1L SA.
The new firm's client wouldn't sign off on the screen. Luckily they had left another 2L SA offer open and just went there instead--otherwise they would have had to ask firms they shut down to reopen their offers.

[Anonymous User]

Yes, I have. I did a small amount of work for a client at my firm. As part of trying to resolve the conflict that client gave me a waiver, but the new firm’s client would not sign off. Lots of bad blood between the clients and I later learned that I was not the only one this happened to.

[dtlaatty]

Dumb question, but why would you fail conflicts? Couldn't they just screen you away from clients where there would be an issue?

Not all conflicts are screenable (and, for that matter, some conflicts cannot even be waived through informed consent). This probably comes up more in litigation.

[Anonymous User]

Just did. Tried to lateral and current firm client would not sign off on the waiver. It's an awful position to give notice and now be conflicted out of a job. It's an active litigation matter that I did minimal work for.

[Anonymous User]

Just did. Tried to lateral and current firm client would not sign off on the waiver. It's an awful position to give notice and now be conflicted out of a job. It's an active litigation matter that I did minimal work for.

I am sure it stings, and a lot, but it happens probably more than you think. I know of two people at my V10 who failed conflicts after giving notice of lateraling. Both were able to rescind their notice and stick around, and one of them is still there a handful of years later and made partner.

Let this be a lesson to others, though, to not give notice until conflicts are cleared.