Conflict risk to increase as mergers rise, lawyers warn

Outsourcing: many firms are now linked to competitors

Conflicts of interest at law firms are becoming almost impossible to avoid in a climate of mergers and continual consolidation, delegates were told last week at the International Bar Association's (IBA) international corporate counsel conference in Paris.Finding a law firm which has sufficient expertise in the area and no involvement with a competitor is becoming increasingly difficult forin-house lawyers wishing to outsource work, according to Bruno Cova, general counsel for Fiat Spa and co-chairman of the IBA's corporate counsel committee.

'Companies and law firms are both continually merging and consolidating, leaving only a certain number of big players in each area,' he said.

'Finding one whom you can trust, with whom you can build a relationship and who has no dealings with your rivals is not easy.'Law firms that have a 'best friend' relationship with another firm create further difficulties in determining whether there is a conflict of interest, said Alberto Gonzalez-Pita, general counsel for BellSouth International in the US.'When I give work to a firm, I do not expect them or any of their partners or merged firms to have anything to do with a competitor.

However, when a firm is not fully merged and their 'best friend' may be working for a rival in other jurisdictions, the position becomes more difficult and detailed discussions are needed.'Louis-Bernard Buchmann, a private practitioner at Paris firm Caubet Chouchana Meyer, said the situation for external firms was not always clear-cut.

'If a French firm is instructed by a UK firm which is in turn instructed by a private company in the UK, does that mean that the French firm cannot take any work from competitors of the UK company?' he asked.See Editorial, page 16Victoria MacCallum