Blanket waivers sought by law firms

Large law firms will accept smaller assignments if doing so will not conflict them out of larger assignments later. In fact, Corp. Counsel, Vol. 15, Aug. 2008 at 22, states that “more companies are being asked to sign a blanket waiver that allows a firm to represent a client’s rivals or adversaries under almost any circumstances.” I suspect that the tidal wave of economic misfortune has taken that demand off the table.

A post on Adam Smith, Esq.,reminded me of the often-mentioned practice of some law departments to hire firms expressly to knock them out of representing a competitor. Although perhaps more urban legend than fact, this deliberate practice flies in the face of convergence. It also raises the question of when a law firm ceases to be in conflict if a client has not used them for a time.

The minimum position a general counsel should take is that the firm will not take on matters substantially related to the matter for which they are representing you. A further non-negotiable would be that the law firm not bring a law suit against you. Other than those two requirements, it is understandable why a large firm would not want a small matter to preclude them from representing other clients in your industry (See my post of April 20, 2008: conflicts of interest and 24 references cited.).

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