City lawyers this week sympathised with Freshfields Bruckhaus Deringer over last week's High Court decision to stop the firm working on Philip Green's bid for Marks & Spencer, but they did not think that the decision had changed the law.

Three partners in top corporate City firms spoke to the Gazette anonymously about the outcome.

One said: 'It will make practitioners stop in their tracks and consider whether they can take on cases.

There isn't a change of the law but this case has shown that the court is sceptical about Chinese walls.

The law has been clarified and this will have a salutary effect on firms.'

Another said: 'If Freshfields didn't erect a Chinese wall as soon as they acted Philip Green [on the bid], then that was a mistake.'

The firm erected the wall when it realised its work for M&S George Davies's contract was relevant to the bid.

The third said: 'I think that we'd have been a bit more wary in view of the quantum of fees (1-1.5 million) that Freshfields had billed Marks & Spencer in recent years.

So we would automatically have thought twice about acting for Mr Green in those circumstances.'

Freshfields chief executive Hugh Crisp said the firm has a good conflicts-checking process, which was applied properly.

But the third partner added: 'I think it's hard to say the firm was stupid or behaved iniquitously and there's quite a bit of me that says "there but for the grace of God".'

The others were similarly consoling.

One said: 'Any City firm could have done work beforehand and not realised the significance of that work to the bid.'

The other said: 'I feel a bit sorry for Freshfields.

They are a proper firm and took a proper view [of the conflicts situation].'

Discussions have meanwhile been taking place to iron out glitches in draft Law Society conflicts and confidentiality rules, which Slaughter and May flagged with the Society's standards board (see [2004] Gazette, 20 May 5,).

A new draft is expected to be put before council in July.See News Analysis, [2004] Gazette10 June, 10.

Jeremy Fleming