The Challenge of Conflicts of Interest Checks in Hiring Lateral Partners

For law firms, especially huge ones, a major challenge in the war for talent is performing checks for conflicts of interest when trying to clateral partners. Running such checks is often “the single most difficult job” law firms have, according to Jeffrey Lowe, a legal recruiter for Major, Lindsey & Africa in Washington, D.C. “You have to get it exactly right, not mostly right.”

Large firms typically use a lateral partner questionnaire (LPQ) when seeking to identify potential conflicts of interest during the lateral hiring process. An LPQ typically gathers information such as the lateral partner candidate’s clients and whether those clients have been open to repeat business; how much clients have been billed versus how much they’ve actually paid the firm; and whether the candidate is a particular client’s lead attorney.

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Completing the lengthy questionnaires can create lags in the hiring process, especially if the lateral candidate has a big book of business and is a target of several competing firms. But for sprawling, global organizations that have vast webs of clients, any oversight or misstep can bring enormous consequences. In one example, Dentons is appealing a $32 million malpractice judgment over an alleged client conflict issue in a patent case. In that case, former Dentons client RevoLaze argued that the firm was conflicted because lawyers for a Dentons affiliate represented a company that RevoLaze had sued for patent infringement.

To make things even more fraught, conflicts checks can lead both candidates and firms into very uncomfortable places. If it takes a while for a check to flag a potential hire as too conflicted, the firm ends up with nothing to show after investing significant time and resources. And the candidate may have already submitted their notice at what they see as their former firm, essentially leaving them jobless.

What was once a back-office function is now a dominant force in the hiring process, with staffs of 10 to 20 populating conflicts-check departments. Most positions are paralegals and other non-lawyers, with attorneys taking the most complicated work. But Mary Beth Robinson, a senior vice president with the Attorneys’ Liability Assurance Society, says conflicts checks are worth it even if they’re time-consuming and slow the hiring process.