Corporate counsel are being bullied into retaining panels of law firms despite conflicts of interest, a conference heard last week. Counsel at the C5 Reducing Legal Costs event reported taking the decision to drop law firms from their panel because those firms were simultaneously advising competitors – but some said they were later intimidated into reinstating them.

Conflicts of interest within firms are becoming a growing problem for corporate general counsel as firms continue to consolidate and grow.

One corporate counsel claimed a European royal asked his company chairman to reinstate a firm. Another said that, on deciding to drop a firm which was advising a close competitor, they were called in to a meeting. ‘I was confronted by the top four partners in the firm,’ said the counsel. ‘They tried to bully me into taking them back on. It was no wonder – they were billing me £5m a year.’

Another counsel said: ‘The problem is with the large firms that advise multiple clients in the same sector. It is because law firms are becoming more multinational.

‘You get promises of Chinese walls, but that is no guarantee. When the matter is too close to home, you have to say no.’