Legal Malpractice and Conflict of Interest -- Again
As firms become more competitive and more aggressive with marketing, they need to remain ever cognizant of legal ethics requirements on avoiding conflicts of interest. Otherwise, the next time a firm gives short shrift to one client to go after another, it might find itself in the circumstances that one BigLaw firm finds itself in, as reported by Anthony Lin in this New York Law Journal article, Proskauer Hit With Malpractice Suits in Florida. According to the article, Proskauer has been sued by Ron Perelman, who last year won a $1.6 billion verdict against Morgan Stanley for similar conflicts claims. And Proskauer has been sued in two other suits alleging that Proskauer breached its fiduciary duty to two former clients and gave them erroneous advice that cost them millions. Allegedly, in both cases, Proskauer sacrificed the plaintiffs' interests to advance the firm's ability to develop relationships with other clients or entities in order to generate more future work.
Increasingly, large firms are becoming subject to legal malpractice suits like this one. It will be interesting to see how large firms react: Will they cut back on controversial decisions to minimize malpractice exposure? Or, as I predict, work to change ethics rules so as to allow firms to represent conflicting interests without risking grievance committee discipline and malpractice exposure.
Posted by Carolyn Elefant on April 18, 2006 at 05:17 PM | Permalink
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