Regulating Law Firm Conflicts in the 21st Century: Implications of the Globalization of Legal Services and the Growth of the 'Mega Firm’

Document Type

Article

Publication Date

2005

ISSN

1041-5548

Language

en-US

Abstract

In the United States, conflicts of interest is one of the most litigated subjects in the area of the professional responsibilities of lawyers.' Violations of the applicable rules are commonly alleged not only in disciplinary proceedings, but also in civil lawsuits seeking damages for breach of a lawyer's common law fiduciary duties, fee forfeiture actions, and motions to disqualify a lawyer from representing a party in pending litigation.2

For lawyers who practice exclusively in the United States, the legal standards governing the representation of conflicting interests are usually fashioned at the state level. The state's highest court typically articulates these standards; initially, by adopting a lawyer ethics code and, subsequently, by applying and interpreting the applicable code provisions in various proceedings in which violations are alleged.3

Over the last decade, state regulators have begun to acknowledge the problems raised when U.S. lawyers cross borders between states, as they increasingly do when they represent not only companies doing business on a national level, but also individuals whose movements or property create legal issues that cannot be confined to a single state.4 As a result, the ABA recently endorsed all of the recommendations of its Commission on Multijurisdictional Practice ("MJP Commission"), 5 including revisions to the ABA Model Rules of Professional Conduct ("Model Rules") regarding unauthorized practice,6 jurisdiction to discipline out-of-state lawyers,7 and choice of law rules governing multistate representation.8 These revisions are currently being examined by virtually all of the states, and their reception so far has been overwhelmingly favorable. 9

Less frequently acknowledged in the U.S., however, are the problems presented when both U.S. and foreign lawyers cross borders between nations, as they increasingly do in response to the rapid globalization of commerce, including legal services markets.' Although the percentage of the total lawyer population may be small, a significant number of lawyers now travel to foreign countries in the course of their practices, either temporarily or with the purpose of establishing an office outside their home coming to the United States, the MJP Commission made several recommendations to accommodate this type of travel, including encouraging jurisdictions to adopt the ABA's 1993 Model Rule for the Licensing of Legal Consultants' 2 and proposing a new Model Rule for Temporary Practice by Foreign Lawyers.' 3 These recommendations have received far less attention by the states than the proposals for revisions affecting domestic lawyers. 14

The MJP Commission, however, did little to address the problems presented when U.S. lawyers travel to other nations.' 5 Perhaps this was because there was no widely-publicized court decision or disciplinary action to serve as a catalyst to action-a role the Birbrower16 opinion played for domestic lawyers traveling outside their home states. 17 Or, more important, perhaps this is because these are country. " As for foreign lawyers transnational' 8 problems that cannot be solved absent cooperation at the international level.' 9 And, indeed, a significant number of U.S. and foreign lawyers have begun to address professional responsibility issues raised in the transnational practice of law, 20 including unauthorized practice, 2' authority to discipline foreign lawyers,22 and choice of law rules to govern multinational representation. 3

How these transnational professional responsibility issues will ultimately be resolved is by no means clear.2 4 Nevertheless, it is virtually certain that U.S. lawyers crossing national borders will at times be required to comply with the ethics rules of foreign jurisdictions, particularly if they choose to establish an office outside the U.S. 25 If so, then it is increasingly important for U.S. lawyers to understand and appreciate the differences between ethics rules in the U.S. and those of foreign nations. 26 Moreover, as some suggest, the ultimate solution to the problem of "double deontology ' '27 may be to adopt "a single harmonized set of rules to which all lawyers or certain lawyers are subject. '28 If so, then U.S. lawyers will need to be familiar with the traditions of foreign lawyers if they are to effectively participate in the transnational dialogue that will be a necessary prologue to any such harmonization.29

Because conflicts of interest is such an important topic in the regulation of the legal profession in the U.S., it provides a good starting point for comparing U.S. and foreign approaches to professional responsibility problems.3° In this respect, the recent publication of two book-length studies of lawyers' handling of conflicts--one in the U.K. and the other in the U.S.-offers a perfect opportunity to take an in-depth look at two very different approaches to conflicts regulation.3' Moreover, because both books are based on empirical studies, they underscore the importance of understanding conflicts and other professional responsibility issues not only as a matter of doctrine, but also as they affect the day-to-day practice of law. 32 Indeed, one of the major benefits of both books is their emphasis on the law firm as an organization of interest in its own right-one that influences the decisions of individual lawyers in ways not directly addressed by the applicable doctrine.33

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