As I understand a recent article, heavy hitters in the banking world have agreed some conflict of interest rules that more realistically adapt to current realities. Corp. Counsel, Vol. 16, March 2009 at 62, explains that Deutsche Bank, Goldman Sachs, UBS and JPMorgan Chase, among other banks, “are offering waivers allowing their external legal providers to act against them in certain disputes between financial institutions, in a bid to quickly resolve issues arising from the current economic turmoil.”
For example, a law firm that represents one of the banks could handle a mediation against it on a simple dispute, but still could not represent a plaintiff in a significant law suit.
The financial collapse has spurred this collective action to loosen conflicts rules. In part this will reduce legal costs because alternative dispute methods will be able to resolve more claims involving the banks.
It is not hard to imagine more holes being poked in traditional conflicts rules, especially if the law departments of industry leaders agree to a framework, so that a pragmatic easing saves money for everyone (See my post of Feb. 18, 2009: blanket waivers of conflicts of interest.).