In-House Counsel

The Curious Conflict-Check Maze

What happens when outside counsel conflict checks turn into a way for firms to evaluate whose business is worth more to them?

Despite their smiles as we shook hands and they left the conference room, we knew our mutual peace would be short lived. After months of back and forth negotiations over a sizable dispute with one of the nation’s largest insurance companies, we knew we were headed to court.

At best, our new agreement would buy us a few weeks, but more than likely we knew we had only bought ourselves a couple of days. In either event, we knew we would be in need of some outside counsel help, and fast.

To those Biglaw colleagues reading in hopes of gleaning a little bit of insight into the selection process, I will save you the read. Sometimes there is little analysis put into the decision.

In the instant case, we knew we needed help, we knew the size of the dispute was large, and we did not care what we would have to pay counsel to protect our interest. Thus we started with the largest firms and worked backward.

Given the size of our hospital network, to say the respective firms’ managing partners were easy to get ahold of would be an understatement. You could practically hear the screech of their S-Classes’ tires racing through the city streets in an effort to meet with us as soon as possible.

At the start of each meeting, the large grins and visions of dollar signs dancing in their heads quickly faded as we named our likely opposing party. By and large, all were polite as they attempted to side-step our business, but by the seventh decline, they all pretty much started to sound the same.

“Oh, it’s insurer X, well you know we would love to help, but I think we are conflicted out for X, Y, or Z reason. But thanks for thinking of us and please keep us in mind for future engagements.”

And one by one, just as quickly as they had filed in to discuss the potential engagement, they left with the same sullen look.

That is, until our eighth meeting gave us a glimmer of hope. After being told no seven times before, the eighth told us they thought they could help, but that they would need to consult with their firm’s management committee.

We ended with a sense of hope and relief that our search was finally over until the firm called back to inform us they had an existing engagement with the insurer, but they were confident they could sufficiently wall off the engagement so as not to present a conflict to our present engagement.

Gee, how kind of you to offer up a reduced legal team so you could preserve your existing engagement with our adverse party. This time, we were the ones politely declining and onto the ninth meeting we went.

Eventually, we secured outside counsel and, to date, they have proven to be a capable partner in our corner. But if you could not tell already, the search for outside counsel left a bitter taste in my mouth.

The conflict check I had always heard about, and even recall from my professional responsibility course in law school, seemed a whole lot less about ethics than it did as a way for a firm to evaluate whose business was worth more to them.

At the end of the day, I understand. Keeping a steady large client happy is often more important than a single engagement, as sizable as it may be.

But if you are a firm who has constantly attempted to develop our business on numerous occasions, when the opportunity finally presents itself, might I suggest something more than a generic decline used nearly verbatim by your Biglaw competitors.


Stephen R. Williams is in-house counsel with a multi-facility hospital network in the Midwest. His column focuses on a little talked about area of the in-house life, management. You can reach Stephen at [email protected].