A verein-teresting thought experiment? Part 1.

In preparation for a panel presentation coming up at the end of this month, I have been delving back into the complicated and contradictory world of disqualification rulings from around the country.  While the lay of the land is highly inconsistent to a large degree, there are some common themes that can be teased out of how courts deal with such issues.   I hope to find some way to help articulate that at that conference at the end of the month and, if the end product sounds like something that makes sense, will try to elaborate here as well.

For today though I wanted to touch on what might be the most important current one bubbling through the system – the ruling of an ALJ for the U.S Int’l Trade Commission disqualifying Dentons in a patent infringement suit and that, commensurate with its potential import for the mega-firms that proliferate in modern law practice, is generating some real publicity.

Several months ago now, I mentioned something in passing about a consultant who was talking about seeing 10,000 lawyer law firms in the future and the stress and strain conflicts of interest analysis can put on the outer limits of just how big a firm can get.  The vehicle it seems that the mega-firms have been counting on to make such things possible is the Swiss verein.  If you want to immerse yourself with the details and history of that structure, you can go here for a start.  Suffice it to say for the purposes of this post, I’ll stick with the shorthand description the ABA Journal uses in its article today:

 “[A] decentralized structure which allows independent legal entities to share marketing and branding while keeping finances separate.”

My immediate reaction every time I read something like that description, with conflicts of interest in mind, is that it certainly sounds fine in theory but, at base level, something either is one law firm or it is not one law firm.  So, in the back of my head, my thinking has been this: given how imputation of conflicts works under RPC 1.10 and the definition of a “firm” under RPC 1.0, either how a conflict of interest is defined for lawyers and imputed within a firm will have to be fundamentally changed or, at the end of the day, the Swiss verein concept will yield under the weight of problems of conflicts.

Normally, I like to thoroughly read the subject matter I write about before putting up a post, and I have not yet done that with the ruling of the USITC nor Dentons’ motion for reconsideration.  But I have a reason for that, and here comes my thought experiment.  My immediate reaction having only read the media pieces this week (including the quote from Karen Rubin who runs a wonderful blog you should check out here) is that it is absolutely fair to look at how a firm markets and brands itself for purposes of evaluating conflicts of interest.  Tennessee, for example, like many other states has built the concept into the Comment that accompanies RPC 1.0:  “However, if they present themselves to the public in a way that suggests that they are a firm or conduct themselves as a firm, they should be regarded as a firm for purposes of the Rules.”  RPC 1.0, cmt.[2].  We’ve had no problem using that paradigm to evaluate things on much smaller scales like whether a person being held out as “of counsel” to a law firm results in sharing of conflicts and all sorts of situations in which a group of lawyers share office space.

So, here’s the question I’m pondering, is there anything I can possibly read in those materials that would manage a good explanation for why that principle shouldn’t carry over to this situation and damn the consequences?  My plan is to work on tracking down the underlying documents and studying them this weekend and then following up with a post on Monday to “complete” this thought experiment.

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