Screenings by major law firms of potential hires for conflicts of interest are becoming so extensive that they often slow down the hiring process and sometimes cause job offers to fail altogether.
Executing the checks is often “the hardest job” for law firms, said Jeffrey Lowe, legal recruiter for Major, Lindsey & Africa in Washington. “You have to do it exactly right, not mostly right,” he said.
Companies often review a wide range of information to verify disputes, including customer representations, stock holdings, and criminal records. They are largely looking for factors that may create conflict with the company’s customer base.
Growing challenges are part of a new reality for some of the world’s largest companies. Businesses are increasingly sprawling, global operations with a vast network of customers, requiring extensive conflict checks for new hires.
Getting it wrong can have huge consequences. Dentons, which bills itself as “the largest law firm in the world”, is currently appealing a $32 million malpractice judgment over an alleged client conflict issue in a patent case. RevoLaze, a former client, argued that the firm was in conflict because attorneys from a subsidiary of Dentons were representing a company that RevoLaze had sued for patent infringement.
The process at Holland & Hart, a Denver-based firm with some 400 attorneys and annual gross income of about $300 million, has slowed and become more involved in recent years, according to firm president Chris Balch. That’s primarily because the firm has grown in lawyers and clients — and the lawyers the firm seeks often have a high volume of business, Balch said in a written statement.
“(T)there is no room for error in this process,” Balch said. “No side partner wants to end up in limbo and you certainly don’t want to end up jeopardizing a client relationship because someone missed a conflict.”
The issue has taken on particular significance as law firm executives have repeatedly said in recent years that hiring the right side partners, associates and groups is one of their highest priorities.
Of eight major law firms contacted for this story, Winston & Strawn and White & Case declined to comment and others such as Troutman Pepper Hamilton Sanders and Paul, Weiss, Rifkind, Wharton & Garrison did not respond to questions .
‘Cut on the Hunt’
Checks that used to be done at the end of a hiring process now often happen much sooner, said Sharon Mahn, a New York-based legal recruiter and managing director at ZRG Partners.
“Kind of like Tinder versus eharmony – let’s cut to the chase,” she said.
Companies rely on side-partner questionnaires, known in the legal recruiting industry as LPQs, to screen candidates for potential conflicts, Mahn said. Increasingly large questionnaires, she said, can slow down the hiring process for firms looking to hire certain lawyers with big books of business before their competitors do it first.
A typical LPQ, she says, typically includes questions about the attorney’s clients and whether they’ve been open to repeat business; how much customers were charged compared to the amount they actually paid the business; and whether the lateral candidate is the lead attorney for a particular client.
Leaving out relevant information exposes the lawyer and recruiters like Mahn to the risk that the deal will fall through later.
Checks can leave companies and candidates in untenable situations, Lowe said. By the time a check flags that a potential hire is too confrontational, in some cases the recruited partner has already given notice to what they consider their old company, effectively leaving them jobless, he said. he declares.
Recruiting companies risk candidates overestimating their business books.
“I think all the businesses were burned down,” he said.
Law firm conflict-checking departments, once back-office functions, have become a dominant force in the hiring process, recruiters say.
Today, 10 to 20 people typically work in departments, with some reaching 30 or more people in larger international companies. Non-lawyers, including paralegals, primarily employ them, although lawyers handle the most complicated work.
Mary Beth Robinson, senior vice president of the Attorneys’ Liability Assurance Society, which provides legal assurance to firms, said that while conflict checks are time consuming and slow down the hiring process, they are worth it. .
“We advise companies to take their time and do this job properly,” Robinson said. “It’s a priority for us.”