Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1163340
26 LEXPERT MAGAZINE | Q3 2019 contracting Canadian legal market com- bined with the consolidating business mar- ket, "which leads to us bumping into one another far more than in the old days. And Canadian clients are used to that." U.S. companies retaining Canadian counsel on cross-border matters are not. Burgoyne says they will sometimes ask for an "issue-conflict" guarantee. "ey'll sometimes say you have to notify them before you take a position on behalf of an- other client — in a totally unrelated case — that be might contrary to the way they'd like that issue to be resolved. On those we push back almost universally. "For one thing, you don't know the is- sues they care about. And we have no way of searching for that, for issues we can't identify later on." He says U.S. companies may also try to impose conflict strictures "that say: 'If you do any little work for us you can't work for any other entity in our broad group.' And there may be 300 companies in this group, none of which you've dealt with before, and many of them having different names, mak- ing it difficult to identify them." Burgoyne says when they explain the dy- namics of the Canadian market to U.S. in- house counsel, they generally back off the requirement. at said, he says Osler walks away from "a not immaterial amount" of work, between 5% and 10% of potential engage- ments, for conflicts reasons. WITH CONFLICT determinations becom- ing more complex and the push for speed on potential new matters, Kenneth Cro- foot, general counsel of Goodmans LLP, says many law firms decided to "not rely on a litigator who may be in court that day to decide the issue. Most firms now have gen- eral counsel so that they have centralized policies and consistent decision-making in this sphere." Clients, too, are getting more and more sophisticated about conflicts and, "from the law firm's point of view, both in a good and bad way. "I find clients are more understanding in many cases that waiving conflicts is ap- propriate and that firms have systems to put up walls and insulate information, which means everyone on a matter can get the counsel of their choice. On the bad side, a lot of client terms of engagement we're see- ing from large international corporations are pretty onerous." When he talks about onerous, he's talk- ing about boilerplate that can be 40 pages long, "with conflicts expressed much more widely than under our law. ey extend to every single entity that's part of their em- pire; there can be 500 or more companies involved — which is a bit of a problem to put into your conflict system." U.S. and other international clients may also express conflicts as business conflicts rather than just legal interests. "ey provide that it can be a conflict for us to represent a party or take a stance in any proceeding that's inconsistent with their business interests. When you consider that would cover all these 500 companies, how are we supposed to know what their current business interests would be in all those operations? We have no way of track- ing that." He says a more homegrown challenge is the increasing number of proxy battles in Canada. "Before you take on the matter, you want to look at who's on the board, who the individuals are, and determine whether the firm has a relationship with someone you're going to end up fighting with. You may want to consider you may not want to get involved in it." Most times, says Crofoot, negotiation can lead to more manageable conflict terms, adding that Goodmans walks away from only "1% to 2%" of thousands of potential matters it deals with each year because con- flict issues can't be resolved. IF CONFLICTS are a headache for national firms in Canada, you'd think they'd be a migraine for Norton Rose Fulbright LLP, which has roughly 4,000 lawyers in more than 50 offices around the world. Global chair Walied Soliman is adamant they're not. "I've been in London in global meetings for the last two days," he says from the U.K. capital. "I can tell you the topic of a client TERRY BURGOYNE OSLER HOSKIN & HARCOURT LLP "CLIENT CONFLICTS ARE PROBABLY ONE OF THE GREATEST RISK-MANAGEMENT ISSUES FOR A LAW FIRM." ose are hard decisions, he says, and not just because they involve difficult discus- sions with clients. ey also cut to the heart of internal law firm politics. "You can have two partners, each respon- sible for a client, and there's some business issue where you have to choose between one of them," says Burgoyne, a former managing partner. "at's going to make not just one client unhappy but also one partner whose economic well-being derives from that cli- ent unhappy as well." e emergence of disruptive technol- ogy in law is not affecting how conflicts are handled per se, he says, "but it's speeding everything up." e bigger challenge is the